Wednesday, August 03, 2005



The impact of Rogernomics

From Jim Traue's contribution on Public Address today:

I was in my fifties before I saw my first beggar on the streets of New Zealand. The other members of the panel have a different experience, you are young enough to have grown up with beggars around you. I had seen beggars in the great American cities, Washington, New York, Baltimore, Chicago, Detroit, Los Angeles, when I lived there in the mid-sixties, and in London in my few days there. Whenever I saw one I said to myself, thank God I am a New Zealander, we have managed to solve that problem once and for all. That first experience of a beggar in New Zealand was like being kicked in the stomach. First the involuntary tears, then the desire to hit back at those responsible. It was then that I started developing my ideas on the reintroduction of hanging, drawing and quartering for political crimes against the people.

His comment directly above that about "government-induced unemployment" is horrifyingly accurate as well. It seems that deficits aren't the only thing the right likes to create as a strategic lever for forcing change...

32 comments:

The reforms of the Rogernomics period are internationally accepted as the main reasons for New Zealand's current wealth and position as a first world nation, and have been extensively studied and used as a model for reform around the world.
Why are you kiwis so quick to critisize it?

Posted by Anonymous : 8/03/2005 12:16:00 PM

criticize

Posted by Anonymous : 8/03/2005 12:16:00 PM

Because, dear Anonymous, that wealth has been very unevenly distributed. The appearance of beggars on the streets (also a consequence of the dismantling of the mental health system and Ruth Richardson's benefit cuts, it must be said) is just one manifestation of that inequality.

And unlike, say, the Irish reform experience, (currently a much-discussed topic in NZ politics) there was little consensus around those reforms. So there are many people who never signed up for them who nonetheless have borne the cost.

Posted by stephen : 8/03/2005 12:32:00 PM

I'd have thought that that was clear enough from the quote above: the social cost.

If the price of a more competitive economy is to have beggers on our streets, children going hungry, and the poor dying from third-world diseases just as they did in the nineteenth century, then we don't want one. The economy exists to provide for the needs of people; if "reform" means that it will fail to do that (as it did in the 90's), then that reform is simply not worthwhile.

Posted by Idiot/Savant : 8/03/2005 12:34:00 PM

And what would the social cost have been if these reforms has not been implemented?
As I said, a necessary evil.

Posted by Anonymous : 8/03/2005 12:39:00 PM

I had a similar reaction, 20 years ago, when I saw beggars on the streets of San Diego and was appalled. Thanks to the New Right, it's now a commonplace in NZ. This is not what I want for my country and I will fight the New Rights with everything I have to stop them impoverishing even more of my people.

Posted by Anonymous : 8/03/2005 12:53:00 PM

In contrast with the policies of the Left where almost all are in poverty:
North Korea, Cuba etc

Posted by Anonymous : 8/03/2005 12:56:00 PM

Anon: almost certainly lower. Policy was moving in the same direction, only at a slower, more measured pace, which took more account of the costs of getting here from there. The massive social costs were imposed by the blitzkrieg approach of the Revolutionaries - Douglas, who thought he had to do everything at once because he didn't think he'd get a second chance, and Richardson and Brash, who simply showed a callous disregard for human suffering in imposing their ideology regardless of the human cost.

It was an evil, but it wasn't necessary in any sense. Alternatives were available, but they were ignored. And that is why we will never forgive the Revolutionaries for what they did.

Posted by Idiot/Savant : 8/03/2005 01:04:00 PM

Are you a simpleton, Anonymous? Neither North Korea nor Cuba are relevant examples here. For that matter, what I and others pine for is a centrist economy that recognises the facts of life for a very small country with a low population density. Not communism, or socialism, or any other -ism - merely a pragmatic reining in of the excesses of laissez-faire.

Much of the change we endured in the 80s and 90s was either unnecessary or bungled or far too fast.

Posted by stephen : 8/03/2005 01:06:00 PM

yeah, i was siting next to jim when he made the comment you quote. the overall conversation was about 'the mainstream' and what is and is not 'normal' in NZL these days.

the gist of the thing, as i remember it, wasn't so much an emphasis on the changes that took place under rogernomics, although he did oppose that, but on the way in which NZL appeared to have come to accept that such things were necessary.

i got the feeling that he was very passionate about having lived in place where this type of thing was extraordinary.

that would also fit with other parts of the post where he talks about NZL undergoing a couple of major watersheds in it's history.

so jim was really railing against that particular mindset which finds poverty a necessary evil to maintain an overall standard of living for the comparative few. i.e. that accepting poverty has become 'mainstreamed'.

Posted by che tibby : 8/03/2005 01:12:00 PM

che, could you give an example of where a mainstream NZ party has believed that poverty was a necessary evil. I think you'll find that both the centre-left and centre-right have always stated their desire to raise the standard of living of everyone - they just tend to advocate different methods.

The argument is that had it not been for the economic reforms introduced by Labour in the 80s NZ would be a complete basket case. Centre-left, social democrate, governments have all tended to come to much the same conclusion on econmic issues, Britain and Germany for example.


And putting down our present social ills to the policies of the 80s and 90s is too simplistic.
I found Jim Traue's tract to be an uninspired and uninformed piece of doggerel.

Posted by Sock Thief : 8/03/2005 01:25:00 PM

Sock Thief: Both parties agree on the neccessity of a monetary policy which condemns an arbitrary number of people to unemployment (and given the sub-starvation level benefits introduced by Ruth, poverty) in order to keep inflation low. I think that counts, don't you?

Posted by Idiot/Savant : 8/03/2005 01:32:00 PM

The Rogornomics bunch didn't have to cut benefits or health spending on little children to achieve their economic desires. They didn't have to chop at the most vulnerable members of society to open up markets and float the dollar.

I don't have a problem with open business markets, I don't see why something unprofitable should be state subsidised (unless it's a core service like health etc.), survival of the fittest business is fine with me.

But it should not be survival of the fittest _person_, there should be some minimim standard of living in a country as wealthy as ours.

Posted by muerk : 8/03/2005 02:07:00 PM

Having my first post-school year flatting in the Wairarapa, picking apples then on the dole, I can remember vividly what the benefit cuts did to small communities struggling already to cope with recession. What still sours the mouth is that people were against further erosions (which is largely why Labour were removed) - then National lied its way into power and accelerated the slash-and-burn approach, conveniently 'necessitated' by the BNZ's problems. Refroms were needed, given that Muldoon left us bankrupt - it's just the way they were carried out -mostly without mandates - that caused so much alienation and suffering.

However, having been kicking around Germany lately, it was eye-opening to see how depressed Germany's economy has become - as a result of refusing to engage in any reforms to a stagnant and moribund social system. 10% unemployment is its own tragedy and ruination of potential - by contrast, we have emerged from the 90s with an economy that can provide for the needs of its citizens without having to borrow to do so.

Until (or if) the global economic system undergoes a complete refit, moving towards an economic framework where cut-throat competition between countries and companies is not the fundament, these choices, between social provision and the growth the market can provide will remain.

As for beggars in NZ, I remain slightly sceptical that we have reduced our citizens to this. Are Winz aware? Are they collecting benefits? The Dom Post asked Wellington's homeless this 3 years ago - most of them were not receiving benefits as they did not have/want a permanent home address. The Bucket Man (r.i.p.) and Blanket man (Wellingtonians will know these two) were both there by choice.

I think weve done pretty well with social cohesion over the last 30 years...

Posted by adrienne : 8/03/2005 02:11:00 PM

Merde! Meant to say: "having spent my first post-school year, IN 1991, living etc..."

a

Posted by adrienne : 8/03/2005 02:15:00 PM

Apropos beggars: as noted above this has at least as much to do with chronic underfunding of mental health services and the disaster of "care in the community". It would be drawing a long bow to attribute that to Rogernomics per se.

However, there is an underlying commonality with the economic reforms, namely a roughly similar time frame, a programme of radical change, a failure of execution, and a regrettable tendency to dismiss criticism from experts as "capture".

(Eg the notion that doctors should not run hospitals lest they capture those institutions, and that this should be left to the professional management class).

Posted by stephen : 8/03/2005 02:23:00 PM

There were plenty of homeless around prior to Roger Douglas.

As Stephen notes many people living on the streets are there because of mental health policies. But those policies were not the result neo-liberal economics, they were the result of the very liberal view that people with mental illness were being deprived of liberty by being locked away in institutions. Now, the implementtation of that policy did (and still does) suffer from a lack of adequate funding. But it also suffered from being a bit naive - the community is not necssarily any better than the asylum for the menatally ill.

But to cut to the chase, the issues surrounding public welfare are just a bit more complex than what Idiot is suggesting.

Posted by Sock Thief : 8/03/2005 02:41:00 PM

Stephen,
I wasn't referring to your comments, I was making a response to the anon post above mine.
a simpleton? are the derogatary comments really necessary?

mel

Posted by Anonymous : 8/03/2005 02:53:00 PM

When people can stop the knee-jerk equation of mainstream economic policy with North Korea, I'll stop calling them simpletons. Is Sweden North Korea? Is the US, with its extreme protectionism and financial market distortions Cuba? Or Australia, which dragged the chain on monetarist reforms and has yet to attack labour market deregulation? No.

You're right, name-calling makes it hard to have any sort of rational discussion. I'll stop if you will, eh?

Posted by stephen : 8/03/2005 03:14:00 PM

My apologies, the only name I thought I called you was Stephen.
I shall refrain from doing so in future.

Posted by Anonymous : 8/03/2005 03:26:00 PM

um, yeah, sock, you might want to consider that i didn't specify any particular party, and neither did i make a value judgement about it.

you might also notice that i was talking about the public acceptance of poverty.

no one talks about or believes in '100% employment' any more.

Posted by che tibby : 8/03/2005 03:36:00 PM

A competitive economy has nought to do with beggars on our streets. Far more to do with a shift in the distribution of wealth upwards. The shift wealth upward some would say holds back economic development.

Posted by Anonymous : 8/03/2005 04:12:00 PM

Dear Anonymous, by "name-calling" I meant the references to NKorea and Cuba as synonyms for the left. That may not be the best word for it, but I'm stumped for a better one.

Posted by stephen : 8/03/2005 04:28:00 PM

Idiot: Sock Thief: Both parties agree on the neccessity of a monetary policy which condemns an arbitrary number of people to unemployment

Is there an OECD country where that isn't the case? Runaway inflation is not good for the poor either. And we currently have fewer people "condemned to unemployment" than almost any other country.

The 80s and 90s reforms were necessary in concept but quite frequently bungled in practice. The privatisations especially - the Australians did theirs much better.

But there's a limit: National in the 90s got price stability and didn't what to do next but keep hacking away. If National had won the 1999 election they'd have corporatised the roads. It would have been tragi-comic, and not in a good way.

I think the Richardson benefit cuts have hurt us in this way: they lowered the bar on wages. Most of the people bitching about taxes should really be bitching about their rate of pay, which is internationally off the pace. From memory, the proportion of our GDP comprised by wages is lower than that of comparable countries. You could argue that the high employment is related to the low wages, but I'd like to see that proved.

Cheers,
Russell Brown

Posted by Anonymous : 8/03/2005 05:55:00 PM

adrienne said:
"we have emerged from the 90s with an economy that can provide for the
needs of its citizens without having to borrow to do so"

What's up with those record trade deficits we're continually having?
Maybe the government doesn't need to borrow so much, but "the economy"
as a whole just keeps borrowing more and more.

Posted by Anonymous : 8/03/2005 06:21:00 PM

Sock Thief: As Stephen notes many people living on the streets are there because of mental health policies. But those policies were not the result neo-liberal economics, they were the result of the very liberal view that people with mental illness were being deprived of liberty by being locked away in institutions. Now, the implementtation of that policy did (and still does) suffer from a lack of adequate funding. But it also suffered from being a bit naive - the community is not necssarily any better than the asylum for the menatally ill.

I think there's a degree of selective memory going on WRT New Zealand's official attitude to mental illness. The "hospitals" where people were sent were sometimes places of abuse in themselves.

I feel a little close to this, because I've thought about the fact that in the 1960s I could well have been convinced by a well-meaning official to send one or both of my (mildly autistic) children to one of those places. We had a very strong preference for sweeping people out of sight back in the day.

Care in the Community was poorly funded, but I get the impression things have improved a lot (and living in a street where there are still some Housing NZ properties, I have been up close to one or two mentally ill people). The alternative - to sweep people away for the whole of their lives - seems a lot worse.

Cheers,
RB

Posted by Anonymous : 8/03/2005 06:22:00 PM

In my experience the appearance of beggers on the street is less a measure of poverty and more a measure of
1) our willingness ot give to them
2) a greater diversity of things for them to spend the money on
3) independance of many children

Most beggers dont really need the money in the sense you would think with a begger some need the money but when offered a job say no (I offered one guy) and some are intentionally staying out of the system which results in poverty.

Posted by Genius : 8/03/2005 06:54:00 PM

The big psych hospitals were far from fabulous - I have some terrifying stories of Oakley in the 60s from a close relative. However, closing places like Tokanui led to a lot of people being forced out into a harsh world they couldn't cope with. There are success stories from the new way (I used to volunteer at Richmond Fellowship and saw some good things there) and I wouldn't want to see a return to the old days as they were either. But some poor old babies definitely ended up in the gutter with the bathwater.

Posted by stephen : 8/03/2005 09:46:00 PM

The only beggars I have seen are alkies with a bottle within arms reach or glue sniffers - fuck them if they want to do that to themselves its not my problem.

Posted by Anonymous : 8/04/2005 08:47:00 AM

Beggars remain remarkably few and far between on NZ streets ... you can walk up and down Queen St all day & if you were asked for change more than twice I'd be surprised. Cf. Being asked a couple of times every block in some North American cities.

While we have some literal and many marginal homeless, relatively few of them engage in begging (incl. bucketman as I recall).

adrienne said: "As for beggars in NZ, I remain slightly sceptical that we have reduced our citizens to this. Are Winz aware? Are they collecting benefits? The Dom Post asked Wellington's homeless this 3 years ago - most of them were not receiving benefits as they did not have/want a permanent home address. The Bucket Man (r.i.p.) and Blanket man (Wellingtonians will know these two) were both there by choice."

-- Considerable efforts have been made in Wellington to secure shelter and income for the "street people" since that time. Many still go to drink on the streets during the day however.

Posted by dc_red : 8/04/2005 09:07:00 AM

sockie: "There were plenty of homeless around prior to Roger Douglas."

Sockie, I've said this before in regards to your comments on the reforms of the 80s: were you there?

Because your memory of this stuff seems quite different than mine.

Posted by Icehawk : 8/04/2005 01:15:00 PM

Idiot,

If you exercise any control over macroeconomics then you will be influencing the inflation and unemployment rates. And you will at times have to choose a balance between one and t'other. So you can't blame the govt for choosing a balance: what you can blame them for is what balance they chose.

The real complaints are that:

* National in the early 90s combined economic policies which they knew would push unemployment way up with bashing the "lazy bums on the dole" and slashing of benefits.

* Brash, as governor of the Reserve Bank, targetted inflation far too hard, thus inflicting more suffering than was necessary.

Posted by Icehawk : 8/04/2005 01:19:00 PM