Sunday, 12 April 2015

Chasing the Green Light

Over on the Standard, the rather pretentiously named mickeysavage highlights the National Party's favourite unicorn - the balanced budget that appears to be eternally receding before us, always just slipping through our fingers:
John Key and National have placed a huge amount of political capital in returning the country’s books to surplus.  Back in 2008 they campaigned heavily on how Labour was going to deliver “a decade of deficits” and it really was the slogan de jour.  According to them Labour’s mismanagement of the economy as the cause of the global financial crisis and not the pure unadulterated greed of a bunch of merchant bankers like Key seeking never ending wealth.
He then provides a list of quotations that illustrate his point very nicely.   Back in 2011 we were assured surplus would be achieved in three years.  That would mean 2014.  But in 2014, we were told “The Government is focused on returning to surplus," and earlier this year, we were promised that “The Government is working towards a surplus and repaying debt,” both of which would rather suggest we had not got there yet.

This from the party, remember, who warned us about the risks of electing Labour in 2008 would lead to a 'decade of deficits.' Nice sound bite, John. It might also do as a summation of your contribution to New Zealand.

Those of us with litereary pretensions might feel this is all a bit reminiscent of the final lines of The Great Gatsby:
And as I sat there brooding on the old, unknown world, I thought of Gatsby’s wonder when he first picked out the green light at the end of Daisy’s dock. He had come a long way to this blue lawn, and his dream must have seemed so close that he could hardly fail to grasp it. He did not know that it was already behind him, somewhere back in that vast obscurity beyond the city, where the dark fields of the republic rolled on under the night. 
Gatsby believed in the green light, the orgastic future that year by year recedes before us. It eluded us then, but that’s no matter - to-morrow we will run faster, stretch out our arms farther. . . . And one fine morning - 
So we beat on, boats against the current, borne back ceaselessly into the past.
It should be remembered that Gatsby was a gangster who ended up dead in his swimming pool, and the narrator, Nick Carraway, a naive fool who couldn't see which he for what he was.

I'll charitably assume John Key and Bill English are more like Nick than Gatsby; I'm sure they believe, really believe, in the green light as well, and they believe that if we just cut a little further, reduce a little more, we'll catch it at last.  Their green light is the surplus, and if it is eluding us now it just means more austerity, until finally, one fine morning ...

The annoying thing (or tragic, if it directly affects you) is that this was all fore-warned. Even I managed to see ho Bungling Bill's ideologically driven austerity drive would be self defeating, all the way back in 2009 when Bll English delivered his first budget (here, here and here).

It isn't just in New Zealand that the right win lie continually about their own economic confidence.  In Britain, George Osborne has signally failed to deliver on any of his annual promises to eliminate the deficit.  Yet he feels we should listen to him when he promises us that he'll boost NHS funding by £8 billion - by 2020. And (sotto voce) if the NHS can find 'efficiencies' (that means nurses and doctors and operations and things like that - trivial and unimportant things in a modern health service). Cast your mind back, dear reader, to the Emergency Budget of 2010, when Osborne told us:
In order to place our fiscal credibility beyond doubt, this mandate will be supplemented by a fixed target for debt, which in this Parliament is to ensure that debt is falling as a share of GDP by 2015-16. I can confirm that, on the basis of the measures to be announced in this Budget, the judgement of the Office for Budget Responsibility published today, is that we are on track to meet these goals. Indeed, I can tell the House that because we have taken a cautious approach, we are set to meet them one year earlier - in 2014-15. Or to put it another way, we are on track to have debt falling and a balanced structural current budget by the end of this Parliament.
Debt, you will note, is not falling. Britain's public debt has, in fact, exceeded 90% - the level we were warned would have a catastrophic impact on growth. At least it would, the Tory argument would go, if Labour were in power.

Meanwhile, the sane argument goes that it would have a catastrophic impact on growth if Reinhart and Rogoff could get their sums right.

Nor has Britain achieved "a balanced structural current budget".  The deficit is still running at 5.8% as of 2013-14.  That is nowhere near a balanced budget.  It is, however, pretty much where Labour's Alaistair Darling wanted it to be at this stage - while Osborne wanted to eliminate the structural deficit in a single term, Darling sought to halve it (Well, to be pedantic - halve the overall deficit and reduce the structural deficit by 2/3rds).  And Darling's goal has almost been accomplished, almost by accident, in spite of the Conservative mania for growth stangling austerity.

And, insanely, the coalition boast about this.  They even make posters about  it:


"The deficit halved."  Not quite the same as "a balanced structural current budget by the end of this Parliament".

And elsewhere, as Paul Krugman points out, the right proffer the same nonsense, time after time:
The 90 percent claim was cited as the decisive argument for austerity by figures ranging from Paul Ryan, the former vice-presidential candidate who chairs the House budget committee, to Olli Rehn, the top economic official at the European Commission, to the editorial board of The Washington Post. So the revelation that the supposed 90 percent threshold was an artifact of programming mistakes, data omissions, and peculiar statistical techniques suddenly made a remarkable number of prominent people look foolish. The real mystery, however, was why Reinhart-Rogoff was ever taken seriously, let alone canonized, in the first place. Right from the beginning, critics raised strong concerns about the paper’s methodology and conclusions, concerns that should have been enough to give everyone pause. 
Moreover, Reinhart-Rogoff was actually the second example of a paper seized on as decisive evidence in favor of austerity economics, only to fall apart on careful scrutiny. Much the same thing happened, albeit less spectacularly, after austerians became infatuated with a paper by Alberto Alesina and Silvia Ardagna purporting to show that slashing government spending would have little adverse impact on economic growth and might even be expansionary.
And, worryingly, what the right sell, the public seems to buy.  I suppose austerity must tap into some self-flagellating instinct in people, the need to be punished for revelling in luxury.  And of course, it is handy when the politicians are  quick to point out that it will be Other People who endure the worst of it.

Astonishingly, with this seems to be the only argument they can offer.  There's nothing beyond the "Reduce spending" mantra.  Keynes, it seemed, never existed in their world - though he's been around so long he surely counts as some sort of a conservative by now.

Which is the real issue here.  The Conservative party - and its analogues in other parts of the world - has been colonised by people who are fundamentally anti-Conservative, and whose intent is a complete neo-liberal reformation.  Some people rather dimly follow their mantra because they are bamboozled by the arguments - I put Bill English in this category.  Others understand it more fully and recognise it as the desired goal.  Their green light is not a balanced budget, but the effective eradication of the state.  And so they lie, consciously, wittingly, saying things they know are untrue and making promises they know are impossible.  Because like fanatics everywhere, they know it is the end, not the means, that is important.  They aren't interested in conservation versus reform - the point of argument between conservatives and progressives - but in destruction. Their bible is Atlas Shrugged, the story of how people with an overwhelming sense of mission and justification destroyed the world for the rest of us.

And as a reward for reading lll that, here's one of the best songs ever written on the subject of green lights:


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