On The Nation last weekend Steven Joyce insisted he was busy talking to business about export growth; he obviously wasn’t listening to exporters whose number one problem is our over-valued and highly speculated exchange rate.
Joyce described Labour’s sensible approach to taking a fresh look at ways to manage this problem as “voodoo economics.”This only holds if one believes that countries as far from the febrile as Switzerland, Singapore and Denmark are wildly out of line in finding different ways to keep their exchange rates low and stable.
Steven Joyce was most unimpressive as he patronised Rachel Smalley and tried to bully John Hartevelt and Alex Tarrant. His unconvincing attempt at the put-down smacked more of desperate pin-sticking – the “voodoo politics” of the fearful.
National’s old wine in old bottles approach to economic policy looks much more like what Queensland University’s John Quiggin described as “zombie economics,” in his book of that name published last year.
“In the graveyard of economic ideology, dead ideas still stalk the land” says Quiggin. Dead ideas include privatisation and trickle-down economics, and also:
the policy package of central bank independence, inflation targeting, and reliance on interest rate adjustments that have failed so spectacularly in the crisis.
Labour’s economic team are busy looking for real alternatives, in a world that is crying out for them. This week David Cunliffe will be on The Nation. He has just returned from a trip looking at economic development in Denmark; as David Parker leaves to meet world experts with fresh ideas in the US. They make a very good team – very much alive to the new ideas that are so desperately needed.