Monday, March 14, 2011

Oram on National

Rod Oram had a blistering column in yesterday's Sunday Star-Times (offline), in which he ripped National a new one over its handling of the economy. According to Oram, the government has basically done nothing to keep its economic promises since coming to power, and its reluctance to intervene and preference for leaving the market to sort itself out has seen the recession drag on and on. And as a result, people are losing faith in their economic management.

But it gets worse - because the government's zero-sum, cut everything approach to rebuilding Christchurch means it is likely to screw that up too:

To build a new Christchurch, we need a strong economy; and to build a new economy we need a strong Christchurch. The two tasks are inextricably linked. For example, rebuilding the city using the best urban design and sustainable technology would fast-forward those sectors elsewhere in the economy.

Absolutely, the government must devote the full effort and investment Christchurch needs to recover. But if the government starves the rest of the country of the resources it needs to grow, then Christchurch and New Zealand would be much worse off.

Can we do both? No, says the government. To give Christchurch what it needs, we must cut elsewhere.

Oram calls bullshit on this, pointing out that its just the latest excuse for what they wanted to do anyway, the latest dishonest use of circumstances to justify their pre-existing agenda. And he points out that this abuse of Christchurch's misery will have consequences:
If [the government] says it must cut Working for Families, welfare benefits, student loans and infrastructure investment to help pay for the earthquakes, it will quickly weaken support for Christchurch, demotivate large chunks of the population and hobble the economy.
And that's not something we can really afford either.

As for what should be done, Oram favours active government intervention - the government investing and doing something rather than sitting on its hands. The idea is unlikely to find favour with National, whose current ideology is predicated on the idea that government can't do anything right, and that the economy will sort itself out in the long run. Of course, that approach means abandoning people to suffer. Bu apparently that's just the price you have to pay for tax cuts for the rich...