Defending the indefensible

Written By: - Date published: 12:00 pm, July 16th, 2009 - 44 comments
Categories: labour - Tags: , ,

philgoffIt was disappointing to hear Phil Goff defending the Fourth Labour Government on National Radio the other morning. This was a government whose policies put hundreds of thousands of Kiwis out of work, introduced regressive taxation through GST, began the firesale of our national assets and drove record numbers of our young people to suicide.

Worst of all, they betrayed the voters by undermining the very principles and institutions they’d been elected to protect. No one doubts that changes needed to be made, but the course they chose had nothing labour about it. There was a range of alternatives available to them, but they chose voluntary capitulation to the New Right and they chose to do it in a manner that caused maximum disruption and devastation to New Zealand communities.

Truth be told, the party has yet to fully live down the shame of it. Even with the Right of the party driven out by the mid-90s, Labour under Clark appeared scarred by the experience. It’s been said that it was the traumatic experience of the Fourth Labour Government that gave the Fifth its trademark timidness, not to mention its unwillingness to roll back articles of faith like the Reserve Bank Act and GST.

Thankfully the new generation of MPs and party activists appear to have none of that baggage. Looking towards the Sixth Labour Government you’d think Goff would have given up defending the sins of the Fourth.

44 comments on “Defending the indefensible ”

  1. Pat 1

    “…and drove record numbers of our young people to suicide.”

    Geez that’s a bit harsh. I don’t think even many Righties would pin that one on them.

  2. IrishBill 2

    If you look at the youth suicide rates from the mid eighties through to the late nineties they increase rapidly. So does youth unemployment. Anderton says as much in the linked RNZ package.

    And the reason righties wouldn’t pin that on them is because they were enacting exactly the far right agenda the righties support.

    • Pat 2.1

      Re youth unemployment. I was working in the BNZ in the eighties in various business lending roles. The newly deregulated Banks went into a blind panic over the 1987 sharemarket crash, and forced businesses and farmers out of business. The likes of BNZ basically cancelled the overdraft facilities of businesses overnight, taking away their working capital, and issuing 30 day demands for the overdraft balances. Other times the Banks sent receivers into businesses like shock troops, closing the doors and auctioning everything in site, including light fittings. It was a terrible time and the Banks responses to the economic crisis made unemployment rates, and probably suicide rates, a lot worse than it had to be.

      Contrast 1987 with 2009, and the Banks are taking a much more measured approach. I have seen Bank clients 6 months or more in arrears and the Bank not taking action because they don’t want to capitalise the losses onto their balance sheets, but also because they are giving clients a chance to get through it.

      I’m not sure how the Fourth Labour Government could have modified the Banks responses in 1987 and following years, but having let free market and deregulation out of the bag in 1984, I guess they didn’t think it was the Governments place to intervene in any way.

      • Kevin Welsh 2.1.1

        Pat, I am not sure I would class it as a measured approach. Just try and increase your overdraft to account for the slow down in people paying their bills and you will probably have a different opinion.

  3. Bright Red 3

    Suicide, like crime is often linked to a feeling of being disconnected from society and hopeless. Endemic high unemployment causes those feelings. It’s been shown over and over again that when unemployment goes up so does suicide and crime.

    I think the Right find that hard to stomach because it shows that economics and society are interlinked. That it’s not just a market, it’s something that impacts on people’s sense of being worthy and valued.

    It also shows that while our choices might be individual, the propensity to make certain choices is influenced by wider sociala nd economic events.

  4. The Baron 4

    “There was a range of alternatives available to them, but they chose voluntary capitulation to the New Right”

    Bill, care to explain what these alternatives were? My learning on this subject has always presented a “only one way out of a crisis” viewpoint (both highschool and university). Articulate contrary views are the likes of the “Someone else’s country”, which does a good job of listing all of the impacts that these policies had, but not so good at articulating what the alternatives could have been…

    So, care to indulge my curiousity?

    • So Bored 4.1

      To my eternal shame I was involved in a Labour party branch during the 80s. Basically we left on mass in disgust. You ask the question “what alternatives?”
      That was exactly the line Dodgy Roger and his wrecking crew used, the TINA principle. As naive economic illiterates we could see the results but we had no life basis or learning for constructive criticism.

      Years of hard reading and observation later I can say YES, there was an alternative, we did not have to go down the hard line market approach. Outside of UK few European states countenanced this folly, and remained with well balanced private and state sectors.

      Goff was a junior member, of the then Labour government, where I can never forgive Roger and his ilk, he might be afforded the benefit of the doubt. He has however yet to show where he now stands, and is as bland a closed book as Key. Labour needs more inspirational leadership.

      • Derek 4.1.1

        Hell, even Australia, the darling of the neoliberals in National and ACT, took a more balanced and moderate approach. And look how much better off they are now in terms of wages, productivity and GDP.

        It was Rogernomics and then Ruthanasia that caused the wage and productivity gap with Australia in the first place. We should never forget this and never stop reminding those who want to return to the failed policies of that era as a solution.

        • So Bored 4.1.1.1

          Correct, I lived in Oz for a while and could not get over how much more militant their Unions were, how much less crap the average Oz would take from bosses and government. Hawke and Keating never had anybody in their ranks espousing the line of the Chicago School at the same volume Douglas, Bassett and Moore went at.

  5. BeShakey 5

    Assuming you are talking about the interview I heard, all he said was that change was needed, but it happened with too little regard to the impacts it had on people. Sounds pretty reasonable to me. Or are you suggesting that change wasn’t needed and the Sixth Labour government will see a return to Muldoon’s policies?

    • IrishBill 5.1

      It’s linked. He calls it orthodox and makes no apologies for it at all. All he claims is that the proposals Roger made near the end (but never got to implement) were too radical. He’s implicitly backing the reforms that were implemented.

      • sausage fingers 5.1.1

        ..and never got to implement despite the government having received a mandate to implement them in the 1987 election, and despite them having been passed through cabinet and caucus. Lange revoked them by press conference without reference to anyone.

        • Pascal's bookie 5.1.1.1

          despite the government having received a mandate to implement them in the 1987 election

          That’s some spin, but there’s not much actual evidence for it. 87 wasn’t a ringing endorsement of rogernomics, it was 48 vs 44 percent. Two more words, “No Nukes”.

          We do know that Labour got trounced in 90 with National campaigning on the labour being a bunch of radicals, they then let Ruth loose and saw a massive swing back to Labour in 93.

          The keepers of the neolib dream, ACT, remain marginal, but consistently less popular than the greens.

          • sausage fingers 5.1.1.1.1

            Labour had to get trounced in 1990. Their leader had countermanded cabinet and caucus by press conference with no prior warning. At best, that’s not sending a good message to the electorate.

            Their majority of the vote from 1984 was increased. And all of the structural change had hapeened by 1987. Sounds like a mandate to me.

            • Pascal's bookie 5.1.1.1.1.1

              Nah, Lange was gone in 90 sausage so you can’t blame him, Douglas was back in cabinet, National ran on Decent Society moderate centrism, Labour got smashed. Add it up.

              In 93, post-Ruth, Labour and the Alliance got slightly more than 50%of the vote. FPP saved Bolgers bacon.

              Face it, the evidence points towards neo-liberalism being none too popular.

  6. toad 6

    Too long and complicated to detail on a blog Baron, but try reading Jane Kelsey’s The New Zealand Experiment.

    • The Baron 6.1

      Thanks Toad… I’ll have a look, with the caveat that Kelsey is usually stark raving mad…

  7. Prosperity for All? by Brian Roper is also worth a read

    • Adders 7.1

      And John Ralston Saul’s “The Collapse Of Globalism,” also deals with the NZ experiment.

      • Zaphod Beeblebrox 7.1.1

        He said some pretty nice things about Helen Clark. This is pretty high praise from someone of his stature.

        • Adders 7.1.1.1

          Which is especially noteworthy, in terms of this post, because Clark and Goff were both there at the start of the experiment. Big shoes, it seems, for Goff still to Phil.

    • BLiP 7.2

      Brian Easton’s The Commercialisation of New Zealand is also a great read and details, dollar for dollar, the cost to our society of the implentation of the Chicago neo-con economics.

      Douglas should be strung up and his rotting corpse left suspended in the foyer of 1 The Terrace as a reminder to us all.

      • sausage fingers 7.2.1

        Get with th eprogramme, BLiP. Left wingers are nice people. Apparently, only right wingers call for the murder of their political opponents. Take it to Kiwiblog, mate.

    • The Baron 7.3

      And you too Burro. I did a couple of Roper’s papers at Otago, but had never heard of that…

      Oh and the other suggestions. God, thanks fest 09.

  8. Youth suicide rates are misleading as they include up to 25, who are no longer youths

    . The real increase is in ‘young men’ from 18 -25, who have the higher suicide rates.

    They should leave ‘youths’ to their own category 12-17 only.

  9. Thankfully the new generation of MPs and party activists appear to have none of that baggage. Looking towards the Sixth Labour Government you’d think Goff would have given up defending the sins of the Fourth.

    Ha ha … is this the left’s secret agenda?

    Given the state of the economy and the failure of Muldoon’s policies at the time, it consistently amazes me that Labour is still tearing itself into bits over this.

    More so, it really shows a lack of understanding of the broader context – not only was there Muldoon’s failed policies, but the impact of the UK joining the EEC in the 1970’s was really hitting home.

    As for rolling “back articles of faith like the Reserve Bank Act and GST”, you provide no alternatives so it’s a little hard to criticise. But if you want to turn back the clock, why not go the whole hog and get the Minister of Labour to set wage increases, close shops at weekends, subsidise farmers and inefficicent industries, and control imports.

    • Derek 9.1

      Strawman, Daveski. Boring.

      • Daveski 9.1.1

        Well draw me a picture then of the alternative. It’s easy to say we should not have done what we did. It’s also pointless because something had to be done. More so, the articles of faith IB wants to repeal (with nothing, BTW) are the things that have contributed to economic stability over the last 25 years.

        You may deride the RBA (again, deride without providing another option) but controlling inflation is critical to those on lower wages.

        So what’s the alternative Derek?

        • felix 9.1.1.1

          Well the obvious alternative to GST would be another form(s) of tax – income tax, financial transactions tax, pollution tax, capital gains tax.

          There are plenty of options. No need to be wedded to the concept of GST.

          • Swampy 9.1.1.1.1

            Oh, FTT, that funny money Social Credit policy, does anyone advocate it now except for the dead corpse remnant of Social Credit?

        • felix 9.1.1.2

          (Not that I’m necessarily advocating any of them over GST. Just saying we’ve never been short of other options.)

        • Derek 9.1.1.3

          The idea that low inflation is important for those on low wages is a myth. In times of high inflation you just get bigger pay rises as pay negotiations take CPI into account. It’s people with large amounts of cash sitting around who’re the most concerned about inflation.

          Fact is a single-minded focus on inflation over employment as we’ve seen with the Reserve Bank Act (particularly with Brash in charge) leads to high unemployment. This in turn leads to lower wages. Look at the stats, it’s pretty straightforward.

          The Reserve Bank Act has also failed our exporters. The RBA’s sole focus on inflation (over, say, exchange rate stability) plays havoc with our exporters. That’s what the Manufacturing & Exporters Association is about, they’re a business lobby sick of seeing firms go down the tubes and workers lose their jobs because of the narrow focus of monetary policy.

          Felix has covered off GST too. There are plenty of other ways to increase revenue than to impose a regressive tax that hits the poor the hardest. Remember the 4th Labour govt used the extra revenue to cut taxes for the rich. What a pack of cnuts.

          • Daveski 9.1.1.3.1

            Agree to disagree with the bulk of what you say, particularly re inflation and wages. Those at the bottom of the ladder are less able to negotiate better increases and I think it would be fairer to argue are worse off in a high inflation economy. Heck I’m supposed to be the right wing fascist here and I’m looking after the little guy!

            I do agree that the RBA single focus is an issue. As I think you realise, the focus on inflation is independent of the issue to do with exchange rates although a higher interest rate leaders to demand for our dollar and keeps our exchange rate up.

            The tax issue is not as clear as you make out. I agree that there are other options apart from GST but consumption tax is like democracy the worst option apart from the others. A high tax economy will not deliver jobs (you want jobs) nor investment in production areas (you do want jobs don’t you?). I’m on record as favouring some type of capital gains tax coupled with reducing the 39% envy tax to reduce the distortions in investment.

            • Derek 9.1.1.3.1.1

              It assumes to an extent a unionised workforce, which we had before the 4th Labour govt. But the whole New Right project was founded on deunionising the workforce and destroying any minimum codes like the awards system. That’s another reason our wages collapsed so fast, both in real terms and relative to Australia’s.

              Good to see we’ve got some agreement on the RBA and exchange rates. Even the US isn’t stupid enough to make its central bank focus entirely on inflation, even at the expense of employment and economic growth. It was pure ideology and just goes to show how far out of whack these guys were with reality. Talk to an exporter some time, they’ll tell you all about it.

              The fact you call the 39% rate an envy tax shows there’s not much point discussing this with you. It’s called progressive tax. Learn to deal with it.

              Other countries have far higher taxes than New Zealand (try looking at the stats for a change) and have comparable or stronger economies. We’re one of the lest taxed nations in the world – fact.

            • Swampy 9.1.1.3.1.2

              “It assumes to an extent a unionised workforce, which we had before the 4th Labour govt. But the whole New Right project was founded on deunionising the workforce and destroying any minimum codes like the awards system. That’s another reason our wages collapsed so fast, both in real terms and relative to Australia’s.”

              Not done by the 4th LG which reintroduced compulsory unionism (it had been abolished the year before the election by Jim Bolger) and brought in the Labour Relations Act cementing in those changes.

              If you’re going to talk about Norway you might actually note their oil revenues, we don’t have that sort of guaranteed national wealth from natural resources like some places do.

        • Draco T Bastard 9.1.1.4

          Well, I’d start by saying bring back into public ownership all the SoEs that were sold off. They were set up as state assets for several reasons the major one being that it was an investment in the community – everyone would be better off (which they were) even if they ran at a loss (which not all of them were).

          Ban foreign ownership – it just makes the country poorer.

          Mandatory pay rises every quarter in line with the CPI – you’ll see inflation being controlled then.

          Bring back the laws that prevented free-riding on unions. You’ll probably see unionism go up again. (Contrary to what the right say unionism was never compulsory in NZ – you were just much worse off if you didn’t belong to one).

          Reign in the banking industry. Getting rid of fractional reserve banking would be the first step and secondly by making sure that the government never borrows money again (they really don’t need to).

          • Greg 9.1.1.4.1

            Your joking right? If you can find a shred of evidence for any one of those assertions I’ll be very suprised?

          • Swampy 9.1.1.4.2

            Actually yes, union membership was mostly compulsory, and was remade so by the 4thLG after Jim Bolger had stopped it in 1983. People had to apply to courts if they wanted to be exempt from membership, a guy I knew at the time had a high profile case involving the Cleaners Union which he won on religious grounds.

            Compulsory unionism mainly existed because the Labour Party of the era wanted a guaranteed income source. The power of unions in the party having been steadily eroded over many decades.

            Having all those SOEs government owned is a ready recipe for governmental abuse of privilege, all running guaranteed monopolies protected from competition and therefore accountability and subject to the worst kind of pork barrelling, Think Big anyone?

  10. cha 10

    Whanganui was decimated by the actions of Douglas and Prebble and every month there would be another round of redundancies followed scenes at the local pubs straight out of the last scene of Alan Bleasdales’ Boys from the Blackstuff.

    The hopelessness of peoples situations was truly awful and anyone who thinks that the actions of the Fourth Labour Government will be forgotten…..oh wait…, they were forgotten and we the sheeple here in Whangavegas elected Chester Borrows….

  11. The Law will be after you for the “Wh” heresy…..

  12. The Pepper Block Kid 12

    Except Whanganui City didn’t elect Borrows. The wider electorate, all the way up to the southern slopes of Mt Taranaki, elected the MP John Key forgot. Whanganui City comprehensively voted for Hamish McDouall. Beats me why the good folk of the river city want a right wing mayor and a left wing MP, but the city’s vote was all McDouall except the nearest booths to Mayor Michael’s house on Snob’s Rock.

  13. Swampy 14

    It’s easy to say Labour in opposition is this or that when everyone knows the truth is they have to win voters in the centre, they can’t afford to go hard to the left as the trade unions and other left wing activists would like. That is why Helen Clark did not roll back major policies of her previous administration and why Goff knows that he simply cannot afford to do so either.

    Likewise having Andrew Little as the party president does not presage a hard left shift any more than Jim Anderton did back in the mid 80s.

    As the 1984 election campaign would have reeled in electoral support all across the political spectrum it is political folly to suggest Labour should have only implemented exclusively left wing policies, the failure of the Greens and Anderton’s mob to win significant electoral support shows there is not much ground level support.

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