Alex's politico-economic blogroll: Dirty electorate deals; Labour's dreadful polling (but give them a chance); Why an OCR hike does not mean the NZ$ will jump; Cartoons

Here's my blogroll for the week. Have a good weekend all. Plenty of good cartoons HT Bryce @ liberation.

Media blogs

1. I'll be your back-door man. Paddy Gower from TV3 was keenly doing the rounds in the Press Gallery for his blog this week, so here it is up the top. Dirty electorate deals. One of which will mean ACT gets back into Parliament, and if Don Brash at #1 on the list follows in on Banks' coat-tails, it's anybody's guess whether he'll try and demand the Finance Minister portfolio if ACT somehow holds the key to another Key-led govt.

Gower looked at a few of the deals that have gone down, including Epsom, New Plymouth and Ohariu (x2), which drew a response from Peter Dunne. Here's Gower on Epsom:

This deal involves John Banks the former National man standing for ACT and getting the nod from National for its voters to bring him in. This keeps ACT alive.

It’s pretty much out in the open this deal.

But it's still a shabby deal in my opinion because it is blatant exploitation of a loophole.

ACT most likely can't get 5%. The only way they can survive is if they win an electorate seat - then they get whatever party vote they chased.

I can see this rule being relevant if an MP genuinely won an electorate seat.

But in this case it’s a total jack-up, stitch up and a rort, so I don't think they deserve to get the party vote.

It benefits National, even if ACT poll dismally at 1.3% like they are now that could be two or three seats.

So the good people of Epsom roll over like a pack of schnauzers and do what they are told and vote ACT.

And just in case they don't get what to do, the National Party has chosen John Banks' biographer Paul Goldsmith as its candidate in the ultimate symbol of master and servant.

In another rort of the system Goldsmith will get a decent list spot at the election and a seat in Parliament as a reward for not being a proper candidate and deliberately losing.

Goldsmith has essentially said, in the words of the AC/DC lyrics: "For a fee, I'm happy to be your back door man."

2. They think he knows stuff about the economy. That's one of the reasons voters are gunning for Key apparently. Fairfax's polls in the last week have kicked off a bit of debate, with some commentators saying this could be the final nail in Labour's election-defeat coffin. John Hartvelt at Stuff has a look at why people like the PM so much.

Most of Key's backing is built on the idea among voters that he is a smart guy who knows a lot of stuff about the economy. And when most people look at the evidence - although there are always adverse figures about - New Zealand does appear to have weathered the global financial storm pretty well. Unemployment here is not moving towards double digits; growth is not sub-zero and our heads are not bouncing off a debt ceiling.

From the right

3. Big blow for Labour, and perhaps the Greens...if you can believe Winston Peters. Kiwiblog's David Farrar picks up on a comment from Newstalk's Felix Marwick that Peters has pretty much ruled out a Labour-Greens-NZ First govt. If this is true it is a big blow for Labour. Goff has adamantly not ruled out working with Winston Peters, saying ruling people out was an arrogant thing to do (he then ruled out working with Hone...).

Winston has not ruled Labour out per se, but has ruled out Labour, Greens and NZ First. This suggests he may do a repeat of what he did in 2005 (if he is in a position to do so) and veto the Greens from being Ministers.

The Greens would then have to decide between accepting being screwed over again by Labour, forcing a new election, or allowing a National-led Government to govern. None of them pleasant options for them. So I think the Greens will be hoping Winston doesn’t make 5%.

4. Why whine about the dirty deals? Homepaddock asks what Paddy's got his knickers in a twist over? If parties work together in Parliament under MMP, why not work together in elections too? But it should be all out in the open - the darkness around some of these deals is one of the things which worked Gower up.

One of MMP’s virtues is supposed to be that it encourages parties to work together to get concensus. If that’s good in parliament, why not in elections?

There’s nothing new about accommodations between potential allies and it’s better to have overt deals than covert ones.

There is a risk. National voters put Peter Dunne into parliament which allowed him to be part of the Labour government for nine years.

But if there’s going to be deals it’s better that they’re in the open. That way voters know parties’ intentions and can take them into consideration, or not, when they vote.

5. Make retirement savings compulsory so we can phase out Super. The Veteran at No Minister gives seven things he'd like to happen. I'd definitely agree with numbers 1 and 2. Will have to think about the others. Oh, and number 7, although I'm not sure I actually have a handicap because you have to have kept tab of your scores, and I usually give up counting half-way through each hole.

I reckon our three-year Parliamentary term is one reason we're in such stook. You get in, spend a year figuring everything out, in the second year you start working on proper policies, impliment a few, and by the time the third year comes around you have to start working on the re-election campaign. Forget a referendum on MMP, the referendum should be on electoral terms.

#1 Retirement savings made compulsory with matching contributions by the employer (or Government in the case of those receiving income support) leading to the gradual phase out of NZ Superannuation.

#2 A four year Parliament.

#3 Term limits for elected members (central and local government).

#4 Medical Insurance payments made tax deductible

#5 Private School fees made tax deductible coupled with a phase out of State Aid to that sector.

#6 Time limits for the dole and DPB payments.

#7 My golf handicap in single figures.

From the left

6. Hey, give us a chance! Eddie at The Standard argues Labour shouldn't be written off just yet. Watch for the dance to the minor parties perhaps? Will support for ACT rise from the doldrums as the election approaches? Will some of those Green-Nats go to the Greens?

Some are linking Labour’s polling to National’s in 2002.

Well, I think it’s worth remembering the other side of the 2002 polls. Labour’s support plunged 13% in the last month of the campaign from 50%+ support to the point where a Nat-led government was a real threat. Then, there was 1996, where Labour went from polling 4th to losing by a hair.

In 2002, it seemed like Labour might be about to put the stake through the vampiric heart of the odd foe. National was in the teens, while Labour polled into the late 50s with the Greens, Alliance, and Progressive as potential supporters to its left. Helen Clark was the most popular PM on record, with support levels the same as John Key’s today.

Then it all started to come apart. It wasn’t so much National, who regained only a few percent. It was the minors. People didn’t want to give Labour all that power but didn’t want National, whom they had just thrown out after 9 years.

7. Boggled by how the masses see National. Idiot Savant at No Right Turn can't figure out why so many more voters think National's better than Labour at economic management.

I'm absolutely boggled by this. To point out the obvious, we have a stagnant economy, 155,000 unemployed, and record high inflation. And the reason we have these things is because National's "response" to the recession was initially to do nothing, in the belief that the market would sort itself out, and then to try and cut our way out of trouble (with the expected result - an austerity-driven recession, just like 1992). By any empirical measure, they are failures at managing the economy - because they are ideologically opposed to the very idea.

And yet, somehow the fact of National's dismal non-performance can't penetrate the dogma that they're businessmen, so therefore they know what they're doing. Quite apart from the fact that most NZ businessmen don't know what they're doing - you have only to look at the dismal performance of NZ businesses to see that - this is simply false. The economy is not a company. Anyone trying to manage it as if it was (e.g. by "tightening our belts" in a recession) is going to drive it into the ground. Which is exactly what is happening now.

8. Trickle-down economics. Yeah right. Danyl at Dim Post isn't too impressed by Michael Hill's comment in today's Rich List that “Could not the Government give us a little freedom to be able to make common sense decisions for ourselves?” 

Cutting back on regulation to help the economy seemed to be a big theme of the rich-listers.

That’s fine. If you ask any selected cohort of people what the government’s policy settings for driving economic growth should be, most of them will (a) have no idea, so (b) answer that the most important thing to do is to have policies that advantage the members of that cohort.

The problem is when people mistakenly think that Sir Michael Hill’s expertise in setting up jewellery franchises means he knows anything whatsoever about macroeconomics, and that he isn’t just advocating deregulation out of pure self-interest in the hope that various suckers will be gullible enough to endorse or even implement his ‘advice’ and make him even richer.

Because we know from incredibly bitter experience that deregulation is not a driver of economic growth. We carried out massive deregulation for twenty years, and we’re routinely celebrated as the most deregulated, freest, best country in the world in which to do business – but instead of sustained economic growth, this reform led to catastrophic market failures like the ’87 share market collapse, leaky homes and the finance company debacle, all of which destroyed far more wealth than the deregulation created. And at the same time, robustly regulated economies like Australia and the Northern European welfare democracies left us for dead.

Economics blogs

9. Matt Nolan at TVHE says Bollard's comments on Thursday were pretty hawkish. I agree. He also has a go at all the people saying an OCR hike would send the NZ$ flying upwards. He's got a point.

Remember something here, the link between the exchange rate and the OCR IS NOT as clear as people act like it is.  Money doesn’t “flow in” to take advantage of “higher interest rates” when the RBNZ increases the OCR – as so much depends on the “demand” for said overseas loans.

Please god, lets remember that someone in NZ actually has to borrow the overseas money for a loan to be made – its doesn’t just wash up on our shores in a bottle and start aggressively lifting our currency through black magic.  Oft times the currency does get pushed up (especially pre-core funding ratio), but in of itself it will not always happen.

Video

10. Two of the greatest dudes and one of the greatest songs of all time. Dylan and Nelson with Pancho and Lefty. Have a good weekend.