Last year's election was a "cost-of-living" election. National's Chris Luxon was elected on the basis of his promise to reduce it. When New Zealanders are asked, "What are your biggest concerns?", top of the list is cost-of-living, followed by crime, inflation & health-care. Regards the PM's trip to Japan, barely a single Kiwi says their current concern is not enough foreign trade, with the likes of Japan.
Luxon's business trip there is not even to do a free trade deal. The deal we did with Japan & other Pacific nations, The Comprehensive & Progressive Agreement for Trans Pacific Partnership, was signed by the then Labour Minister for Trade & Export Growth David Parker, in 2018. NZ'ers now care about the cost-of-living, not trade. Being happy to see the bosses of ANZ Bank, part of the Big Bank Oligarchy ripping us off with big fees on a daily basis, open more branches in Tokyo is not something we are about to celebrate at the moment. Yet that is what PM Luxon wants out of his trip.
The PM should instead be focused on the causes of our high cost-of-living & how to stop them. A major reason is a lack of competition across a swathe of NZ's industries. From the banking oligopoly, to our limited number of International Airports that enjoy significant monopoly powers, to the supermarket duopoly, a construction industry dominated by a small number of firms, to our State-backed national airline with a near-monopoly on domestic routes, to our Universities that have government guarantees due to being "too big to fail", and more, nearly every aspect of our lives has become characterized by rip-off prices & greed-flation, not inflation. When Republican President Roosevelt came to power in the US, industry was dominated by “trusts” whereby a group of affiliated firms handed their shares to a board of trustees to manage. In practice it meant any virtual monopoly. Roosevelt implemented anti-trust reforms which he saw in moral terms. He believed the greatest evil in the US was too much power in the hands of corporate America. His reforms were designed to avert a radical leftist reaction. Roosevelt battled JP Morgan, who had monopoly powers in the rail-roads he owned, and lectured him how he should support his reforms if he did not want a takeover of Wall Street by “the mob, the mob, the mob”. Unless the public believe the free market system is fair, legitimate, and not rigged in the favor of the few, it will be replaced with socialism by popular demand.
Meanwhile, back in NZ, our PM has taken a different path. Had Luxon been around in Roosevelt's times, he's now looking like a man who would've cosied up to J.P. Morgan, called him an "A-list", "senior" figure, wanted to be his friend, and invited him on state business trips. Luxon has revealed to NZ'ers his preferred type of guest: CEO "A-listers" from the most highly concentrated industries in the land. They are the ones with whom he chose to stand shoulder-to-shoulder. The folks with whom he travelled to Japan represent NZ big business at its worst - the cause of our high domestic costs. Who cares what deals they do? How will that increase competition locally? We need many of the big outfits Luxon invited on his trip to disappear; not be strengthened by snuggling up to him and lauded for being "A-listers" who know how to do a deal, unlike the rest of us. Luxon didn't just insult the folks who went on trips when Labour was in office by calling them "C-listers" - he insulted 5 million Kiwis by labelling us all C-list losers. Our true business champions are not the likes of the CEO of Air NZ who crawled to the government for a bailout during Covid. They don't include the bosses of the NZ Super Fund, Christchurch Airport, Auckland Savings Bank & Fonterra. They don't include the army of lawyers & accountants, many of whom are, or have been, partners in big accounting & law firms, who populate our big corporate boards as CEOs & Chairs, yet typically know next-to-nothing about the industry they represent. Whether it be building, telecoms, you name it, more often that not you'll find an accountant or lawyer as the big boss in NZ. These are the A-list non-producer, keep-our-monopoly-power, types embraced by our PM. National better get real or there will be a takeover of NZ by "the mob, the mob, the mob".
Sources:
https://www.rnz.co.nz/news/election-2023/499853/fuel-concerns-rise-but-inflation-new-zealanders-biggest-worry-ipsos-issues-monitor
https://www.nzherald.co.nz/nz/trade-minister-david-parker-is-heading-to-tokyo-this-week-for-the-first-cptpp-meeting/DG5WLNP425SYGEEP4J2DMFEVSY/
https://assets.ctfassets.net/pn8wbiqtnzw9/2shjbWHcpHTVAeUyIiaoyl/966f4d7f995256230573b64ffa091d6d/CPTPP_Agreement_Brochure_June_2020.pdf
Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.
The PM should instead be focused on the causes of our high cost-of-living & how to stop them. A major reason is a lack of competition across a swathe of NZ's industries. From the banking oligopoly, to our limited number of International Airports that enjoy significant monopoly powers, to the supermarket duopoly, a construction industry dominated by a small number of firms, to our State-backed national airline with a near-monopoly on domestic routes, to our Universities that have government guarantees due to being "too big to fail", and more, nearly every aspect of our lives has become characterized by rip-off prices & greed-flation, not inflation. When Republican President Roosevelt came to power in the US, industry was dominated by “trusts” whereby a group of affiliated firms handed their shares to a board of trustees to manage. In practice it meant any virtual monopoly. Roosevelt implemented anti-trust reforms which he saw in moral terms. He believed the greatest evil in the US was too much power in the hands of corporate America. His reforms were designed to avert a radical leftist reaction. Roosevelt battled JP Morgan, who had monopoly powers in the rail-roads he owned, and lectured him how he should support his reforms if he did not want a takeover of Wall Street by “the mob, the mob, the mob”. Unless the public believe the free market system is fair, legitimate, and not rigged in the favor of the few, it will be replaced with socialism by popular demand.
Meanwhile, back in NZ, our PM has taken a different path. Had Luxon been around in Roosevelt's times, he's now looking like a man who would've cosied up to J.P. Morgan, called him an "A-list", "senior" figure, wanted to be his friend, and invited him on state business trips. Luxon has revealed to NZ'ers his preferred type of guest: CEO "A-listers" from the most highly concentrated industries in the land. They are the ones with whom he chose to stand shoulder-to-shoulder. The folks with whom he travelled to Japan represent NZ big business at its worst - the cause of our high domestic costs. Who cares what deals they do? How will that increase competition locally? We need many of the big outfits Luxon invited on his trip to disappear; not be strengthened by snuggling up to him and lauded for being "A-listers" who know how to do a deal, unlike the rest of us. Luxon didn't just insult the folks who went on trips when Labour was in office by calling them "C-listers" - he insulted 5 million Kiwis by labelling us all C-list losers. Our true business champions are not the likes of the CEO of Air NZ who crawled to the government for a bailout during Covid. They don't include the bosses of the NZ Super Fund, Christchurch Airport, Auckland Savings Bank & Fonterra. They don't include the army of lawyers & accountants, many of whom are, or have been, partners in big accounting & law firms, who populate our big corporate boards as CEOs & Chairs, yet typically know next-to-nothing about the industry they represent. Whether it be building, telecoms, you name it, more often that not you'll find an accountant or lawyer as the big boss in NZ. These are the A-list non-producer, keep-our-monopoly-power, types embraced by our PM. National better get real or there will be a takeover of NZ by "the mob, the mob, the mob".
Sources:
https://www.rnz.co.nz/news/election-2023/499853/fuel-concerns-rise-but-inflation-new-zealanders-biggest-worry-ipsos-issues-monitor
https://www.nzherald.co.nz/nz/trade-minister-david-parker-is-heading-to-tokyo-this-week-for-the-first-cptpp-meeting/DG5WLNP425SYGEEP4J2DMFEVSY/
https://assets.ctfassets.net/pn8wbiqtnzw9/2shjbWHcpHTVAeUyIiaoyl/966f4d7f995256230573b64ffa091d6d/CPTPP_Agreement_Brochure_June_2020.pdf
Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.
1 comment:
You are spot on there Professor. The Nats, ably represented by their present leader, are collective do-littles, very happy to follow on with the lazy and potentially disastrous policies that Labour put in place during their catastrophic stint in power. Meantime the little guys, ACT and NZ First try to push the boulder up the hill all by themselves. As that character in ‘Dad’s Army’ regularly said ‘We’re doomed!’
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