I suppose I ought to have become excessively rich too. “Ought to”, rather than “could have” or “should have”.
“Ought to” because, although this country has always had its share of people born with a silver spoon in their mouth, it’s also been possible to attain great heights from a lowly start. And, to a great degree, it’s been up to you – but the rules have been changing.
I began writing this as I heard Labour Party leader Andrew Little talk of slashing immigration by the thousands, perhaps 10s of thousands, and of building houses for the out-crowd, and after reading a few items online about the Deep State, the 1% and more rewriting of economics.
Slashing the migrant inflow is easily done, and we won’t have to lift a hand, I’ve been telling people. All we need is for the Australian economy to perk up, and 10s of thousands will be gone again. Including the “pass-throughs”, the people who found it easier to get a New Zealand passport than an Australian one, but really wanted to go to the bigger economy.
Soon the pass-throughs won’t be able to get into Australia so easily though, and we’ll lose their short-term input as well.
Having more people here doesn’t hurt us. Failing to provide for their arrival – or for our “collateral damage”, the people left without home or job or hope – does.
And speculation? It moves on when the opportunities dry up. One way is to increase supply and another, as Mr Little is proposing, is to remove tax inequality.
On building homes, prices & markets
This morning I read various pieces on economics & politics to see where Donald Trump might take us next or what alternatives might gather support, and I made my periodic sortie on to Twitter, visiting long enough to leave a comment on a councillor’s (and National Party conference attender’s) page saying we hadn’t reached record house-building yet, but that consents were high and construction was increasing.
One of the misleading statements on housing statistics recently has been that record dollars spent equates to record construction numbers – ignoring the influences of land & construction inflation (Statistics NZ doesn’t count land in the estimated costs of housing, but it matters to everyone who wants to work to a land:building ratio).
Another misleading theory is that foreigners represent only a tiny percentage of home buyers, so their influence can be dismissed. It can take just one successful bid at auction for the right house on the right street to influence a market, up or down, and a bidder not seeming to care about the price can wield undue influence. There’s been plenty of that in Auckland, but it’s mostly stopped.
You’ll have seen that construction hasn’t started on many of Auckland’s special housing areas with the alacrity the ex-minister kept presuming – there were still catches – and that most of that housing was targeted too high for low-earners to buy in. The US’s tactic to take ownership down to that basement market evolved into an extraordinary rash of worthless subprime mortgages and an international collapse called the global financial crisis, but there are more sensible ways of achieving a wider spread of ownership.
An era of inequality as policy
Since that crisis began, it’s been evident that many of the excessively rich have become filthily excessively rich, and you don’t get invited to go out fishing with them in their tinny because it happens to be longer than a very long wharf, with exclusive entry.
You’ll have read plenty about the 1% grabbing all the money, that it’s not trickling down to the rest of us. And in the US, how the Deep State controls all the levers, but you’re never quite sure who this Deep State is or how to belong to it.
From most articles about this mystical beast, ordinary mortals aren’t invited. Right family, right school, right university, right employer, all of those and you’re in.
You can break in, though sometimes you might have to pick the lock.
It would come as no surprise, given my job, that I’ve conversed with a high proportion of New Zealand’s 1% over the years – some there by inheritance, many on their way up – and they come in a range of political hues, partly, I think, because so many have climbed from a low rung and haven’t followed orthodox courses to the upper echelons.
Those upper echelons exist in both the corporate & public sectors, and paths within the 2 have become closely related, starting when the corporate sector crashed & burned in 1987. In the preceding 3 years, as the neoliberal mindset began to dominate, corporate salaries began to be topped up with various extras such as options, warrants & bonus shares.
Come October 1987, many of the leading companies ceased to exist and bonus shares & options were of no value, but the notion that executives deserved far more pay clung on. It had far less to do with performance than with who held the voting power at company meetings. It was an international affair, enabled by majority shareholdings being under the control of institutions which didn’t disagree with the notion.
The public sector, meanwhile, chased higher executive earnings to maintain staff quality.
The inequality which continues to grow can be rearranged through taxes & earnings ratios (for example, relating the cleaner’s pay to the chief executive’s, much as minimum pay could be worked out on a ratio instead of a fixed figure).
Here, the Deep State constitutes political insiders who include senior public sector executives and corporate, bank & finance sector leaders.
Many of our 1% made their money in the 1980s and kept it, some by the skin of their teeth, and through judicious investment since then have become multi-millionaires.
I reflected today, instead of swearing the oath of poverty by choosing a career as a journalist, I might have turned off at one of the many corners that crop up on your way forward in New Zealand. Into one or another aspect of the sharemarket, or an inside instead of outside position in property, for example. But I didn’t, and so ensured I wouldn’t become a 1%er.
Nor did I aspire to become a member of the Deep State (or anyone inside it to even think of hiring me).
So, having failed right from the first paragraph of this article, I bring you some other writers’ insights on how insiders succeed in growing their position at the outsider’s expense, how the art of propaganda has advanced well beyond the understanding of many of us, and – this one is a dark delight – how people in an inconsequential town in Macedonia played a fake-news role in the US election, and what most unlikely reason drove them to it.
Counterpunch, 15 March 2017: How bankers became the top exploiters of the economy
Quartz, 13 May 2017: 21st-century propaganda: A guide to interpreting and confronting the dark arts of persuasion
Wired, 15 February 2017: Inside the Macedonian fake-news complex