Inequality: Fallow vs Rashbrooke

Written By: - Date published: 7:44 am, July 20th, 2013 - 139 comments
Categories: class war, poverty - Tags: , ,

The latest Ministry of Social Development’s report is out: Household Incomes in New Zealand: trends in indicators of inequality and hardship 1982 to 2012.  Yesterday The Herald ran two pieces on the report with very different conclusions – Brian Fallow’s Rising inequality largely a myth and Max Rashbrooke’s Rich get richer. The poor? Have a guess.  So who’s right?

Let’s not beat around the bush – Max Rashbrooke is right. Fallow’s argument is weak for several reasons. First – right out of the gate he sets up a “straw man” to fail (Fallow):

The idea that New Zealand has become one of the most unequal societies in the developed world is just not supported by the data.

No it isn’t supported by the data (though we’re above the OECD median, which is bad enough). But not many people make this claim. The claim that is usually made, with perfect justification, is (Rashbrooke):

Income gaps in New Zealand increased extraordinarily quickly in the 1980s and 1990s, in what was the developed world’s fastest rise…

Spot the difference? We used to have a relatively equal society. We’ve had the developed world’s fastest increase in inequality, but we have a ways to go before we make it to the top of that particularly depressing league table. Fallow spends much of his article debunking his own straw man.

The second weakness in Fallow’s case is his short term view (Fallow):

A standard measure of income inequality is a thing called the Gini coefficient; the higher it is, the greater the inequality. Since the global financial crisis New Zealand’s has whipped around – it fell in the latest survey, reversing a jump in the one before – but the trend line through it is flat at a value of 33.

That “jump in the one before” was to the highest level ever. Here is coverage of the same MSD report from last year 2012:

NZ inequality at highest level

Household incomes dropped and inequality rose to its highest level ever in New Zealand last year, a Ministry of Social Development report shows. … It shows the gap between rich and poor widened substantially in 2011, putting inequality at its highest level ever.

So yes, the 2013 result is lower than 2012 – but we are talking fluctuations around a historic high. And the trend line is “flat” only in the very short term – here is what is has been up to over the last 3 decades (Rashbrooke):

Income gaps in New Zealand increased extraordinarily quickly in the 1980s and 1990s, in what was the developed world’s fastest rise; they then fell a little under Helen Clark, thanks mostly to Working for Families, but since the global financial crisis have been pretty flat.

Fallow makes a similar mistakes comparing high and low income (Fallow):

The average over the past four household economic surveys is that the top decile have received 8.5 times the income of the bottom one, after tax and transfers. That puts us in the middle of the OECD rankings, and lower than Australia and Canada (8.9 times), Britain (10 times) and the United States (16 times).

The definition of income here is household disposable (or after-tax) cash income from all sources. So it includes transfer payments like New Zealand superannuation, Working for Families tax credits and welfare benefits.

The tax and transfer system dramatically reduces income inequality among the working age population compared with market incomes alone, reducing the Gini score by 22 per cent. Again, this is similar to Australia (23 per cent) and not much worse than the OECD norm (25 per cent).

Once again looking at the measure over the short term, and once again stressing that we aren’t top of the OECD (when no one said that we were). Rashbrooke agrees on some factors, but takes a longer view (Rashbrooke):

The report shows that most low-income households have had small – a few hundred dollars a year – increases in their spending money (after taxes and housing costs are accounted for) since the GFC.

Against a backdrop of falling wages and high unemployment (especially in the 2011-12 period for these figures), these very small increases seem to be due to the Government’s tax cuts, and the welfare state insulating some households from the worst of the recession.

Income trends elsewhere are variable. Middle-income households are not much better off than they were a few years ago. People in the upper reaches, those just below the top 10th, have had a decent – $2000 or so – increase in their discretionary cash. They get most of their money from salaries, and those higher salaries have grown despite the tough times. But the top 10th have seen an 8 per cent dip in income, owing to lower returns on their investments, which make up more of their income.

…it’s also worth remembering that none of this changes the overall picture, which is that in the last 30 years, incomes for those at the top have doubled, while those at the bottom have stagnated. Someone in the lowest 10th of the country has, after housing costs, just $11,500 a year to spend. That figure (adjusted for inflation) in 1982? $11,000.

That’s why inequality is now such a live issue.

In short, Fallow’s headline claim that rising inequality is “largely a myth” is completely wrong. In his favour, however, his article actually goes in to some relevant factors in a lot more depth than Rashbrooke, even though it doesn’t exactly help his case (Fallow):

Wealth is distributed more unequally than income. Those in the top income decile receive about 25 per cent of gross income but those in the top wealth decile have 50 per cent of total wealth. …

A richer picture emerges when the report turns to housing costs (mortgage payments, rents and rates).

Housing costs amounting to more than 30 per cent of a household’s disposable income are counted as high and are often associated with financial stress for low to middle income households, the report says. In the 2012 survey just over one household in four had high housing costs. It has been there or thereabouts for the past five years, up from one in five in the early 1990s and one in 10 in the late 1980s.

Both authors are agreed that there is no clear trend in measures of child poverty over the last four years, but once again Rashbrooke puts it in context (Rashbrooke):

In all this, rising housing costs – which have outweighed many other gains – are crucial. They are partly responsible for the child poverty rate stagnating at around 270,000, one-quarter of all children, on the broadest measure (those living in families with less than 60 per cent of the average income, after housing costs). This rate had fallen sharply in the early 2000s, and is important because families under that line struggle to afford the necessities of life, according to both local focus groups and international evidence.

Summing up, Rashbrooke’s headline is by far the more accurate – the rich get richer (sorry David). Final word to economist Bernard Hickey:

NZ shares a big problem with the US and Europe. Our household sectors are still heavily indebted and incomes in the middle and lower income groups are barely above where they were five or six years ago.

Figures this week show NZ’s real per capita GDP is still 1.3 per cent below 2007′s. Most of the gains in any economic recovery have gone to the top few per cent of the population

139 comments on “Inequality: Fallow vs Rashbrooke ”

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  1. muzza 1
    20 July 2013 at 8:55 am

    BF got mauled in the comments section.

    I won’t waste energy with my thoughts on Brian, his articles speak for themselves!

    I wonder if he enjoys writing such dross, or if he actually believes it!

  2. tsmithfield 2
    20 July 2013 at 9:14 am

    Reducing inequality also reduces motivation. Which in turn is bad for society as a whole.

    For instance if beneficiaries and doctors received exactly the same income there would be lots of beneficiaries and hardly any doctors. This absolute equality would be worse for society as a whole.

    • The Chairman 2.1
      20 July 2013 at 9:44 am

      Balance is key.

      It’s not about ‘absolute’ income equality. It’s about reducing the gap (going forward) to a fiscally sustainable level.

      • tsmithfield 2.1.1
        20 July 2013 at 9:58 am

        As per the comment I made below. That would mean you want to reduce inequality, but not too much. I don’t think that would be a sustainable position for you.

        And even if what you say is correct, how do you know we are not at that point already, or perhaps gone past it, and are on the downward slide of the equation (as you see it)?

        • The Chairman 2.1.1.1
          20 July 2013 at 10:13 am

          Look at the nations best era of overall performance and analyze how we achieved it.

        • felix 2.1.1.2
          20 July 2013 at 10:22 am

          tsmithfield, what’s your ideal level of inequality and how do you propose we achieve it?

          • burt 2.1.1.2.1
            20 July 2013 at 12:56 pm

            Is there such a thing as an ideal level ? Perhaps people who think they are god and its their duty to social engineer their perceived ideal are the real problem rather than the natural inequity that is life ?

            • felix 2.1.1.2.1.1
              20 July 2013 at 1:15 pm

              Perhaps I should have emphasised the word your.

              tsmithfield has been asking a very similar question all morning so I though I’d ask it of him to show what a silly question it is.

              As expected, he didn’t answer…

              On social engineering, isn’t everydecision a govt makes social engineering?

              I think it’s fair to say you’d generally prefer govts to leave as many decisions as possible to private entities. In what way is that not shaping society?

            • framu 2.1.1.2.1.2
              20 July 2013 at 1:37 pm

              your right burt! free marketeers are the problem!

            • KJT 2.1.1.2.1.3
              21 July 2013 at 10:26 am

              Gor Burt. You right wingers like being nasty about ideological social engineers.

              I thought they: Basher Bennett, Hekia Parata, Bill English, Don Brash, Rodney Hide, Roger Douglas etc; were on your side.

        • KJT 2.1.1.3
          21 July 2013 at 10:14 am

          Lots of Doctors in Cuba.

          Despite being paid about the same as the local mechanic.

          Rather good ones too, by all accounts.

    • framu 2.2
      20 July 2013 at 10:48 am

      “For instance if beneficiaries and doctors received exactly the same income”
      thats not just a straw man – its an entire straw village

      where is anyone arguing for this, can you find anyone saying it outside the confines of your imagination?

    • KJT 2.3
      20 July 2013 at 11:39 am

      That is a right wing fallacy.

      Right wingers work for the money!

      Which is why they have such difficulty understanding why most of us work for so little. Though they are happy to take advantage of it.

      Most of us, left wingers, work for the satisfaction of doing a good job and contributing to society.

      However, no one here is advocating absolute equality. None of us are saying that Doctors income should be dropped to that of someone who is much less qualified.
      Genuine equality does mean that those who put in extra effort, such as spending extra years of training on a low income, such as Doctors, get more when they are qualified.

      There is no justification, however, for a bean counter in a monopoly, getting 100 times more pay, than the skilled technicians, a much harder skill set to acquire than brown nosing to the top in a corporation, who work for the same company.

      Or someone who does no work at all, being allowed to keep all of the wealth their grandparents acquired.

      • QoT 2.3.1
        20 July 2013 at 6:28 pm

        It’s akin to the conservatives who act like enforcing Judeo-Christian values on everyone is the only thing standing in the way of nationwide nightly bestiality orgies.

        The only logical conclusion is that those rightwingers are essentially lazy, bludging fucks. They know they would throw in the towel the instant our welfare system paid benefits you could properly live on, so they assume everyone else would as well.

        • Saarbo 2.3.1.1
          20 July 2013 at 10:16 pm

          +1
          KJT and QoT

        • KJT 2.3.1.2
          21 July 2013 at 10:32 am

          I think that is pretty much correct. Their goal/dream is to have enough money so they no longer have to work.

          Hence their support for those who have attained that dream. They fondly imagine becoming one of them, living off the efforts of those “silly left wingers” who go to work regardless.

          Unfortunately for them, most of them do not have the intellectual capacity or work ethic to attain it.

          I suspect almost all the right wing apologists on here, and elsewhere, are sad, wannabees!

      • Mike S 2.3.2
        21 July 2013 at 1:17 pm

        It’s a sad, sad place we’ve allowed to be created where a hedge fund manager who offers nothing productive to the real economy whatsoever and in fact damages the real economy of goods and services by taking money out of the real economy and keeping it in the false, financial economy. Who’s job contributes nothing at all to the community at large and is simply about speculation, makes millions of dollars a year, while a doctor or nurse who try to better peoples lives and help the sick and save lives get paid fuck all in comparison.

        Everything is backwards.

      • Murray Olsen 2.3.3
        22 July 2013 at 1:03 am

        I work for the money. I have to. I could probably get more money doing something slightly different, and I also like to help people with things that aren’t necessarily in my job description. I also enjoy most of my work, but I wouldn’t do it for free. I’d be broke pretty quickly.

    • muzza 2.4
      20 July 2013 at 1:00 pm

      TS you’re talking nonsense – Why does America have widening inequality, and less doctors?

      http://www.nytimes.com/2012/07/29/health/policy/too-few-doctors-in-many-us-communities.html?_r=0

    • Mary 2.5
      20 July 2013 at 2:19 pm

      “Reducing inequality also reduces motivation. Which in turn is bad for society as a whole.”

      So are you saying increasing inequality increases motivation? If not, how much inequality is good? How do we know we’ve reached that point? At the point just before the riots start? That would be the optimum of efficiency: peak motivation at minimal cost.

    • Draco T Bastard 2.6
      20 July 2013 at 2:28 pm

      Reducing inequality also reduces motivation.

      No it doesn’t as most people aren’t motivated by money. IMO, it’s likely to increase motivation as the vast majority of people who are presently prevented from innovating get the chance to actually do so.

      In fact, what we’re most likely to see is better management as the fools that are in charge ATM, the ones motivated by money, are replaced by people who actually know what they’re doing.

    • Mike S 2.7
      21 July 2013 at 1:11 pm

      Nobody;’s saying pay doctors the same as beneficiaries. It’s about being fair and sharing the wealth and profit generated by productivity gains with the workers who produce that wealth. if the top level incomes have doubled in the last 30 years then the lowest incomes should have doubled also yet they’ve remained the same. This means those at the top are keeping all the extra productivity gains for themselves instead of sharing it as they used to.

      Inequality is about so much more than just income. It’s also about equality of opportunity, social mobility, health, political power, etc, etc, etc. The fact is that those at the top are in the position of helping themselves or helping everyone including themselves. At the moment they are just helping themselves, which will eventually get to a stage where social cohesion starts to break down.

      Rising inequality is not just bad for those at the bottom, it has been widely demonstrated that it is bad for everyone.

      • Arfamo 2.7.1
        21 July 2013 at 1:22 pm

        +1. Totally agree.

      • Blue Leopard 2.7.2
        21 July 2013 at 1:38 pm

        Mike S
        ++1

        The emphasis on individual gain that we have been ‘sold’ recently is derived from a theory that is turning out to be entirely incorrect i.e. everyone looking after their own interest leads to ‘the general interests’ of society being met without the need for intervention.

        The ‘invisible hand’ far from ‘magically’ helping the smooth functioning of our society, appears to be doing the fingers at us all.

  3. KJT 3
    20 July 2013 at 9:17 am

    This is the dysfunctional and expensive type of mess, unthinking criminals like Key, Basher Bennet, Sancti and Big Bruv want to inflict on us.

    http://www.newscientist.com/article/mg21929250.200-why-is-the-rich-us-in-such-poor-health.html#.UehmOG3DDM8
    “AMERICANS die younger and experience more injury and illness than people in other rich nations, despite spending almost twice as much per person on healthcare”.

    And the same callous disregard for the sick and disadvantaged as the equal mess in the UK.
    http://www.guardian.co.uk/commentisfree/2013/may/31/suicide-welfare-reform-cuts

    You can see why BB supports euthanasia. And it, his support, has nothing to do with allowing old people to die with dignity.

    Meanwhile Brian Fallow and other commentators totally ignore the fact New Zealand’s economy would be flat-lining without the Christchurch earthquake.

    National are better economic managers,. Tui moment!

    The right wings own favourite measure, GDP, growth, slows, every time the Government swings towards the type of Neo-liberal mean spirited and anti -social solutions National are now imposing.

    Of course, a few people, notably highly paid contractors, consultants, insurance companies and ex politicians, make big money out if the fuckup.

    $1200 to $16000 dollars for a contractor to find someone a job for a year. FFS.

  4. Wayne 4
    20 July 2013 at 9:17 am

    Radshbroke might be correct about the rate of change, but the situation in the 1970’s was not desirable. We were the most controlled ecomy of the western world, hence David Lange’s comment about running the economy like a Polish shipyard.

    The spread was too flat. And it meant people made poor choices.

    For instance it is not sensible to pay wharfies as much as doctors. The result was that a lot of very able people chose not to go to University. NZ’s productivity was very low, since effort and success was not rewarded (66% tax rates, all sorts of restrictive economic controls such as import licensing etc).

    The result was that NZ was in a slow decline, and the result was the emergency surgery of the 1980’s. I suspect many contributors here forget that we almost had to call in the IMF to bail us out. That was stopped by the fourth Labour Govt opening up the economy.

    Now, I agree there is a debate to had.

    Is there an optimum level of wealth and income spread?

    Are we reasonably close to it, being in the middle of the OECD?

    Are the Scandinavians about right? I note they have made electoral choices intended to widen the spread a bit, since many of them thought their societies were ossifying.

    • tsmithfield 4.1
      20 July 2013 at 9:48 am

      I don’t think it is a very good lefty argument to argue:

      “We want to reduce inequality, but not by too much”

      I think the right’s philosophy of “equality of opportunity rather than equality of outcome” is the right approach. I would be very happy to see every NZer fulfil their full potential and succeed to their maximum in the career that satisfies them most. In that way, we would be reducing inequality and at the same time growing the overall pie. This leads to a healthy, prosperous society.

      The left’s philosophy of redistributing wealth will reduce motivation. This will mean any reduction in inequality will be at the cost of reducing the size of the overall pie, thus making society poorer as a whole.

      • One Anonymous Knucklehead 4.1.1
        20 July 2013 at 10:03 am

        Your “approach” is aspirational, or more accurately, vacuous; that’s why it fails: you propose that nothing can be done, or should be done, so long as you and the people you care about (people who think like you) are all right, Jack.

        Which is why the Right can’t tell the truth about its policies (cf: The Hollow Men): “fuck you” isn’t a vote winner.

        • tsmithfield 4.1.1.1
          20 July 2013 at 10:05 am

          So, do you want to remove inequality totally, or just reduce it, but by not too much?

          • One Anonymous Knucklehead 4.1.1.1.1
            20 July 2013 at 10:14 am

            Let’s take your conceited lip-service to “equality of opportunity” for example. Opportunity is massively affected by environment – the way household income affects your chances of a good education for instance.

            Income inequality degrades equality of opportunity, but don’t worry, I’m sure you can concoct some sophisticated self-serving drivel that will help you ignore the great big hole in your “thinking”.

          • RedLogix 4.1.1.1.2
            20 July 2013 at 10:16 am

            Reduce it. No-one is arguing for total equality. Nor is anyone arguing for absolute inequality … there must be a fairly broad ‘sweet spot’ somewhere in between.

            The debate revolves around where that ideal spot is, and the best way to achieve it. My take on the evidence is that over the last 30 years New Zealand has moved away from the optimum.

            Certainly on a global scale with some 50,000 odd uber-wealthy individuals controlling trillions of dollars of wealth and wielding immense corporate powers …. we are very far from any ideal.

      • felix 4.1.2
        20 July 2013 at 10:16 am

        “I don’t think it is a very good lefty argument “

        I don’t think Dr Wayne Mapp is a very good lefty.

        • lprent 4.1.2.1
          20 July 2013 at 12:11 pm

          “I don’t think it is a very good lefty argument “

          I don’t think Dr Wayne Mapp is a very good lefty.

          Unless you are redbaiter of course. But I think that redbaiter considers that Genghis Khan was a lefty. Oh and that the only good lefty is a dead one.

          Of course it is hard to find anyone around the local blogosphere who doesn’t consider redbaiter really needs some kind of medication.

          • felix 4.1.2.1.1
            20 July 2013 at 12:34 pm

            Redbaiter may well need another term at finishing school to work on his social graces, but are his ideas really that much more extreme than tsmithfield’s or many of the others?

            They’re all promoting a compassionless dog-eat-dog world in which power and control of resources are highly centralised.

            At least Redbaiter openly acknowledges it…

            • burt 4.1.2.1.1.1
              20 July 2013 at 1:00 pm

              They’re all promoting a compassionless dog-eat-dog world in which power and control of resources are highly centralised.

              What, like state controlled monopolies run by CEO’s being paid hundreds of thousands a year with workers on minimum wage and prices inflated to deliver a dividend to the government to spend on pretty plastic cards and photoshopped billboards of dear leader.

              • One Anonymous Knucklehead …
                20 July 2013 at 2:07 pm

                Yes, that’s exactly what we’re proposing. I’m trying to get the numbers to push through the confiscation of everything you own, too.

                • Murray Olsen …
                  22 July 2013 at 1:20 am

                  Count me in, OAK. I’ll falsify the ballot paper and vote seventeen times, just to get my lefty hands on Burt’s frog pyjamas.

              • felix …
                20 July 2013 at 3:32 pm

                burt.

                Find me a lefty who supports

                a) CEOs of state monopolies being paid hundreds of thousands a year, and

                b) workers being on minimum wage, and

                c) inflated power prices being used as an alternative to income tax

                … and I’ll join ACT.

      • One Anonymous Knucklehead 4.1.3
        20 July 2013 at 10:31 am

        Now let’s examine your “smaller pie” assertion.

        1. According to you, countries with higher equality should have lower per capita gdp, and then you woke up.
        2. You are happy to further impoverish people if that means the pie you own 90% of gets bigger (it doesn’t, which leads to the suspicion that you are either delusional or sadistic).
        3. Your attempt to mount a cogent defence of selfishness is a little bit shit.

      • The Chairman 4.1.4
        20 July 2013 at 10:38 am

        ‘Equality of opportunity’ sounds nice but overlooks individual circumstances of members of society.

        For instance, the sick can’t take full advantage.

        We are not all blessed with high IQ’s, therefore can’t all be expected to up-skill to a fiscally sustainable level, .regardless of the opportunities.

        Moreover, there are a number of low skilled jobs that require to be done, therefore no matter how many we up-skill there will be a number of employees working below a living wage.

      • framu 4.1.5
        20 July 2013 at 10:51 am

        well considering that to leverage opportunity requires access to resources, and we know that resources arent evenly distributed how do you propose we achieve this?

        outcome = opportunity + resources

      • framu 4.1.6
        20 July 2013 at 10:59 am

        “reducing the size of the overall pie”

        how? – if i have 100 things and i put them in boxes i still have 100 things

        you could argue (following your line of argument) that the pie wont grow as fast or it might stay the same – but get smaller?

        remember americas greatest rise in living standards, productivity and growth was post WW2 when they had a highly “socialist” govt policy setting that practiced quite a bit of redistribution and central management.

        yes the world is a different place now – but it proves your argument is nothing but snake oil

      • KJT 4.1.7
        20 July 2013 at 12:31 pm

        Equality of opportunity would be nice.

        Of course that is the real value of private schools in New Zealand. It is not a better education. The same child would do just as well in a State school. It is getting plugged into the right old boy network.

        • Raymond a Francis 4.1.7.1
          20 July 2013 at 2:01 pm

          So, Michael Cullen rose to the top (almost) of the left tree because he went to a private school.
          Don’t think so
          So, John Key……….but didn’t go to a private school
          So, Hellen Clark…………………….because she went to a private school

          It’s not working, got any real examples

          [Lprent: Epsom Girls Grammer is a private school? Are you trying to compete with Cameron Slater for making crap up for ideological reasons? Perhaps you should check your facts rather than acting like fool.

          Epsom Girls Grammar was and still is a state school which had a boarding facility from early on that was available to kids on a cost recovery basis from rural NZ and for kids with parents on overseas postings. Helen’s parents were farmers and she boarded at EGGS.

          Mount Albert Grammar, where I went to, and eventually Auckland Grammer also had boarding houses and similar cost recovery.

          I’d point out that my mother was a parents representative from Mt Albert on the Grammer schools board for a number of years. Perforce I got force feed some of the budgetary struggles related to maintaining the boarding.

          Perhaps you should look to your own ridiculous examples because they appear to based on foolish myth rather than any kind of accuracy. ]

          • KJT 4.1.7.1.1
            20 July 2013 at 7:05 pm

            The social welfare, and equal education system, that allowed them to reach their positions is being dismantled as fast as National think they can, without losing the next election.

            As for real world examples. Look at the list of company directors in NZ whos who. Where they went to school.

          • Raymond a Francis 4.1.7.1.2
            21 July 2013 at 11:06 am

            Sorry Iprent you are correct of course Epsom Girls Grammar is not a private school and is a State boarding school where children whose parents can afford the fees can board that they can then plug into the “Old Boys/Girls network” is outside my experience

            I very much doubt it Miss Clark used that for her advancement

            Care to comment on the other examples or would you rather attack the man

            • One Anonymous Knucklehead 4.1.7.1.2.1
              21 July 2013 at 11:19 am

              Care to comment on why you think cherry-picked anecdotes (which you can’t even get right) are relevant to a general rule? I’m not expressing an opinion on whether KJT is correct, by the way.

              • Draco T Bastard …
                21 July 2013 at 1:15 pm

                Well, John Key certainly thinks that KJT is correct:

                It might be sick, but it also might be why Key’s children – Stephanie, 12, and Max, 10 – go to private schools. Mostly, he says, that decision was for educational reasons. Their schools have smaller classes and are better resourced than most state schools. But he acknowledges that the connections children make are also important.

                Unfortunately, The Listener have put that article behind the pay wall since.

                • One Anonymous Knucklehead …
                  21 July 2013 at 1:49 pm

                  There’s an inherent problem with your source: he’s been caught lying too often 😉

      • tricledrown 4.1.8
        20 July 2013 at 1:34 pm

        Tsm so your answer is to not allow more people to succeed in life but to follow the free market philosophy of having a continuous pool of unemployed break unions make education and health more expensive so the already well off are the only ones who are aloud to have wealth!
        Show me a country where that works you narrow minded jerk!

    • The Chairman 4.2
      20 July 2013 at 10:07 am

      Alternatively, perhaps the result of more equal pay was our high standard of living and low debt?.

      Perhaps the decline was due to the oil crisis and loss of trade with the UK?

      Moreover, perhaps the result of the 80’s reforms (albeit helping in some ways) accelerated the decline and is largely responsible for where we are today?

      Perhaps the equilibrium we seek can be found in the era when the nation earned more than it spent (current account)?

      • KJT 4.2.1
        20 July 2013 at 12:52 pm

        We are still earning more than we spend in real tradeables. We always did.

        The deficit is because so much of our income goes offshore in finance rates, interest company profits, including those from privatised SOE’s and the rich spending/investing offshore.

        In other words, the total failure of the trickle down theory.

        • The Chairman 4.2.1.1
          20 July 2013 at 1:53 pm

          Exactly.

          But ponder this:

          Does a trade surplus really count when our tradeables are predominantly foreign owned and the fiscal benefit largely heads offshore, resulting in a current account deficit?

          And if such a large sum wasn’t heading offshore, could it be distributed locally in a more equal manner?

          We’ve all seen the headlines (bank profits) and we know where they go, but what does the bank cleaner earn?

          • Colonial Viper 4.2.1.1.1
            20 July 2013 at 1:57 pm

            Same idea with (overseas owned) Telecom. They aren’t firing hundreds of workers because they are making a loss. They are doing it because their shareholders want a boost to their billion dollar profits.

            We are creating an economy where working people are not needed, and those who are still required get a smaller and smaller cut of national income.

          • KJT 4.2.1.1.2
            20 July 2013 at 2:17 pm

            Banking going from 30% of GDP to 60% and rising. Considering banking is almost all overseas owned has a lot to do with it.

            Not to mention lower wages, in New Zealand, equals higher profits, taken offshore, to offshore corporates.

            • Colonial Viper 4.2.1.1.2.1
              20 July 2013 at 2:24 pm

              Where are your 30% and 60% figures from? I know that banking activity is far too high, but that cannot be right.

              • KJT …
                20 July 2013 at 3:33 pm

                Depends on whether you measure it by contribution to GDP (About 18% in 2008, according to stats NZ, Dairy 7%) or the proportion of GDP they take! Average about 60% of every transaction is debt or finance charge related.

              • Mike S …
                21 July 2013 at 1:22 pm

                Yeah, I think the financial industry is around 7-10% of GDP now. (and rising rapidly)

    • KJT 4.3
      20 July 2013 at 11:44 am

      Doctors at the time were paid almost twice a s much as wharfies. At least in part because they were able to go to the Government through the national awards process and say that the wharfies had set a floor.

      Both GP’s and wharfies pay has dropped together.

    • Draco T Bastard 4.4
      20 July 2013 at 2:54 pm

      The result was that a lot of very able people chose not to go to University.

      The correct incentives weren’t in place but money isn’t the correct incentive either. In fact, IME, I’d say that there was a massive disincentive because NZ had, and still has, a very bad attitude to well educated people. The problem was, and still is, social.

      The result was that NZ was in a slow decline,

      Get it right Wayne, it was the entire capitalist system worldwide that was in decline. The Keynesian bandage was starting to fail and capitalism’s tendency to collapse was taking over.

      I suspect many contributors here forget that we almost had to call in the IMF to bail us out.

      And yet all we really had to do was float the NZ$ and have the government print the money at )% interest. Hell, I even think dropping tariffs was a good idea. The real problem is that we kept thinking that we had to borrow foreign money to use our own resources which is complete bollocks.

      Is there an optimum level of wealth and income spread?

      My own feeling on the matter is that it should be around the average wage. Nobody should have an income above $100k and nobody should have an income below 2/3rds of the average wage. To help this we also need 100% employment which means bringing back the 40 hour week although I’d prefer a 32 hour week.

      I note they have made electoral choices intended to widen the spread a bit, since many of them thought their societies were ossifying.

      If they are it’s got nothing to do with inequality but the fact that the same people are at the top and only people like them can get there. It’s the major problem with hierarchical systems and capitalism is massively hierarchical.

    • Murray Olsen 4.5
      22 July 2013 at 1:14 am

      Lange’s Polish shipyard comment showed that he was at heart a lawyer. Douglas and Friedman were his clients and he was stating their case to the best of his (great) ability. It doesn’t mean he was right. The only thing that was stopped by the first ACT government was the development of our nation. What they began was the process of rot that we still see today. Their heads should be hanged in shame.

      • Colonial Viper 4.5.1
        22 July 2013 at 1:25 am

        With a double irony that he was verbally running down the Gdansk shipyard, home of the very effective labour Solidarity movement.

    • RDE 4.6
      22 July 2013 at 9:49 pm

      “the 1970′s was not desirable”.
      In 1972 New Zealand had one of the highest living standards in the world. We also had a Current Account surplus – something we have not been able to achieve since then. That’s without mentioning the substantially better social cohesion and much lower welfare dependency. Doesn’t sound too undesirable to me.

  5. felix 5
    20 July 2013 at 10:31 am

    “Reducing inequality also reduces motivation.”

    Only in people who are motivated by wanting more than someone else has. Question: are the richest 10% motivated by inequality?

    “Which in turn is bad for society as a whole.”

    Only if you want a society based on everybody wanting more than everybody else. Doesn’t sound like much of a society at all, frankly.

    “For instance if beneficiaries and doctors received exactly the same income there would be lots of beneficiaries and hardly any doctors.”

    tsmithfield, right now we have lots of beneficiaries and hardly any doctors. So whatever we’ve been doing, by your own admission, is building a worse society.

    On that, I agree.

    • tsmithfield 5.1
      20 July 2013 at 11:13 am

      Sure, we haven’t got many doctors now, simply because of the length of training and the high level of intelligence required for the occupation. If beneficiaries and doctors earned the same income, there would be no motivation at all for ideal candidates to make the investment in terms of time and student loan etc to become doctors. So, there would be virtually no doctors.

      But I hold to my position. Inequality does increase motivation. The extreme cases that prove the point are societies where the poor are oppressed and downtrodden to the extent that they are motivated enough revolt and overthrow the tier of society that is oppressing them.

      Given the recent opinion polls, I don’t think NZ meets that criteria.

      The key to motivation that improves outcomes for people is to ensure there are realistic and available opportunities for people to improve their lot in life through education etc. Any such barriers need to be reduced as much as possible or, preferably, eliminated totally.

      • One Anonymous Knucklehead 5.1.1
        20 July 2013 at 11:24 am

        Your “position” is that you are standing on quicksand.

        Compare the list of countries by gdp per capita, and the list of countries by GINI. There is no evidence that inequality increases productivity.

        You’re wrong. Get over it.

        • tsmithfield 5.1.1.1
          20 July 2013 at 11:50 am

          I expect those cases would actually be highly supportive of my position.

          My position is:

          1. That where people perceive themselves as disadvantaged compared to other members of society.

          2. And that there are realistic paths and opportunities that would enable them to reduce or eliminate that perception of disadvantage.

          3. That they will be motivated to take the opportunities available to reduce their perception of disadvantage.

          4. That societies where those conditions are present will be better as a whole than those where they are not.

          If you were to examine those societies you point to, and find that they have lower unemployment, higher average education levels etc, then I would argue this situation has occurred because the conditions I have just explained have existed historically in those societies.

          That being the case, the best way to get from A to B is equality in opportunities rather than outcomes.

          In societies such as India, those preconditions obviously are very lacking. There is a caste system, for example, that arbitrarily restricts opportunities. I would argue that these arbitrary barriers contribute greatly to poverty in their society.

          • felix 5.1.1.1.1
            20 July 2013 at 12:24 pm

            Your position is nothing but a list of religious beliefs, without a shred of evidence to support them.

            You are asking us to ignore all the available data and instead rely on your hunch.

            What a fucking joke.

            • tsmithfield 5.1.1.1.1.1
              20 July 2013 at 12:35 pm

              Actually, my argument fits very nicely with theories of motivation supported by a huge body of empirical research.

              The information relied on in terms of relative prosperitiy and equality of various nations isn’t a reliable basis for the argument that the left is making, and easily can be construed as supportive of my position.

              In case you have lived in a cave for most of your life, correlation isn’t the same as causation.

              • One Anonymous Knucklehead …
                20 July 2013 at 12:49 pm

                Having your one eye firmly fixed on “theories” (aka hunches) of motivation does nothing to acknowledge that “realistic paths and opportunities” are degraded by worsening inequality.

                I predicted you would ‘concoct some sophisticated self-serving drivel that will help you ignore the great big hole in your “thinking”’, and hey presto! You validated my prediction.

                We need better wingnuts.

                PS: you “expect”? Well I didn’t: I checked, and guess what: you have false expectations.

                • tsmithfield …
                  20 July 2013 at 12:57 pm

                  “….does nothing to acknowledge that “realistic paths and opportunities” are degraded by worsening inequality.”

                  So, the answer is to ensure that realistic paths and opportunities exist, and can be easily accessed by all, including those at the bottom of the heap. Simply shifting resources across to those at the bottom of the heap doesn’t improve their situation in the long term.

                  As far as I see it, the left is more into giving people fish. The right is more into teaching people how to fish.

                  I know which one is the most effective solution long term.

                  • One Anonymous Knucklehead …
                    20 July 2013 at 1:09 pm

                    That you can think of a solution that won’t work says what?

                    Oh, that’s right, it says you’re doing your best to undermine the discussion while bringing nothing of value. Which pretty much makes you a walking advert for post-natal abortion, but I suppose everyone has a place in life.
                    .

                    • tsmithfield …
                      20 July 2013 at 1:17 pm

                      Judging by your comments I can see why you want to stay anonymous!!

                      So, are you saying that disbanding the caste system in India that artificially locks people out of opportunities would have no effect? You really are a knucklehead, aren’t you.

                    • One Anonymous Knucklehead …
                      20 July 2013 at 1:28 pm

                      You’re failing the logic test: is that feeble strawman the best you can do?

                      I think so.

                  • Draco T Bastard …
                    20 July 2013 at 3:15 pm

                    So, the answer is to ensure that realistic paths and opportunities exist, and can be easily accessed by all, including those at the bottom of the heap.

                    That’s what the left keep saying and the right keep doing the exact opposite.

                    The right is more into teaching people how to fish.

                    BS, this government has been removing access to education ever since it came in to power.

                    I know which one is the most effective solution long term.

                    Nope, you haven’t got a clue.

                  • felix …
                    20 July 2013 at 3:42 pm

                    tsmithfield, you’re substituting theory for facts.

                    The facts say you’re wrong.

                    I’m really sorry about that mate but it’s just fucking reality. All the hackneyed fishing metaphors in the world won’t get around that.

                    ps your metaphor is way off anyway. A more accurate one:

                    The left is into making sure everyone has a fish, caught themselves if possible and provided regardless if not.

                    The right is into gaining monopoly rights to commercial fishing, paying people shitty wages to work in shitty conditions catching and processing the fish, and selling the produce back to the people for a profit.

                  • Mike S …
                    21 July 2013 at 1:28 pm

                    You’re talking through a hole in your arse. The right, over the last 30 years, (and the left to a certain extent) is not about teaching people how to fish.The last thing they want is everyone being good fishermen. The right is about keeping all the extra fish for itself rather than sharing the fish with those who helped catch them.

                    • Arfamo …
                      21 July 2013 at 1:33 pm

                      Seems to me the Right tells people they need to fish but requires them to pay ever increasing exorbitant prices for access to the fishery, and for the hooks, the lines, and the rods.

                  • Murray Olsen …
                    22 July 2013 at 1:30 am

                    Nah, the right is into catching and selling as many fish as they easily can, while stopping anyone else doing it, then poisoning the water.

              • tricledrown …
                20 July 2013 at 1:45 pm

                Tsm your argument is is supported by a popularity contested encyclopedia!
                Going back to the Ropa report in 1987 nothing has changed since the introduction of free market policies poverty has continually increased!
                The Glen report will find the same issues that having 250,000 children being brought up in poverty is a $6 billion Dollar a year drag on the economy!
                if we fix this problem our economy will flourish!
                Alcohols damage to our community$6 billio a year
                Gambling Damage to our community$ 6 billion a year
                Doing nothing Nactional Peter Dumdarse is costing our economy $18 billion a year!
                Doing Nothing is nationals policy !
                Tsm they leave it to ignorant suckholes like yourself to push your putrid propaganda

              • Draco T Bastard …
                20 July 2013 at 3:10 pm

                I’m a great supporter of Wikipedia but things like this do tend make me take the article with a grain of salt:

                This article has multiple issues. Please help improve it or discuss these issues on the talk page.
                This article needs additional citations for verification. (August 2012)
                This article possibly contains original research. (August 2012)

              • tricledrown …
                21 July 2013 at 11:46 am

                the stupid monetarist you haven’t read any stats on either countries who have a more equal distribution of wealth or on states within the US for example!
                If you look at the latest economic stats coming out of the US those with the least wealth distribution have the highest poverty most of those states are controlled by republican governors!
                With the same failed ideology as yourself!

      • KJT 5.1.2
        20 July 2013 at 11:50 am

        Funny that the right wing thinks managers of monopolies, where anything they will not make much difference, have to be motivated to do their jobs by million dollar salaries, while they think that everyone else will be motivated by cutting their pay as much as possible and making their working conditions third world.

      • KJT 5.1.3
        20 July 2013 at 12:00 pm

        It sort of spoils your story TS that the countries in the OECD with the lowest inequality also have the highest social mobility, number of entrepreneurs and GDP increases.

        Since we allowed more of the National income to go to the already wealthy and the finance industry NZ has dropped many places in OECD rankings by almost all measures.
        Sweden, since they decided the answer to, so called, stagnation is to become, less equal. have also been dropping by measures including the favourite right wing one, GDP rise!

        In part at least because it is the middle classes who invest in new business.

        http://kjt-kt.blogspot.co.nz/2012/08/the-wealth-creator-myth-stealing.html
        “Less than 1% of the wealth held by wealthy households in the USA is invested as so called “angel capital”. In reality the wealthy avoid risky start-ups, like the plague. They prefer privatizations of State utilities and financial products where there return is assured by tax payer funding. Those that are too big or too essential for the State to allow them to fail.”

      • KJT 5.1.4
        20 July 2013 at 12:27 pm

        We haven’t got enough Doctors now! because our right wing nut jobs in charge do not value them enough to pay them.

        Preferring to pay administrators more than Doctors.

        Same reason why we are short in all the skilled occupations.

  6. Psycho Milt 6
    20 July 2013 at 10:49 am

    Someone in the lowest 10th of the country has, after housing costs, just $11,500 a year to spend. That figure (adjusted for inflation) in 1982? $11,000.

    I recall pointing out in a recent comments thread that after-housing-costs income for people at the bottom is around the same in real terms as it was 30 years ago, and the consensus of the Standard’s readers was that only right-wing poverty-deniers would accept such a willful misinterpretation of the statistics. Funny how times change, isn’t it?

  7. Santi 7
    20 July 2013 at 11:17 am

    Inequality is a fact of life. It can not be abolished by decree or social engineering.
    Communism and socialism have proven to be outdated ideologies.

    • One Anonymous Knucklehead 7.1
      20 July 2013 at 11:29 am

      Guillotines are a fact of life; they cannot be abolished by reading Atlas Shrugged again.

      Epidemiology, you partisan fool.

    • The Chairman 7.2
      20 July 2013 at 11:53 am

      It’s about reducing it – not abolishing it

      Keynesian capitalism produced our best economic performance and our most equal era.

      • Draco T Bastard 7.2.1
        20 July 2013 at 3:22 pm

        Until even that failed to work. Although, according to Keen, the way that Keynesianism was implemented was corrupted from Keynes’ idea so that it benefited the rich and not society as a whole.

        • KJT 7.2.1.1
          20 July 2013 at 7:01 pm

          Keynesian policies are sort of working in the USA right now.

          I suspect though, they would have worked a lot better if the stimulus had been applied directly, as it was during the “New Deal” than through the banking system

    • KJT 7.3
      20 July 2013 at 12:05 pm

      As we have said before. Socialism works fine. In New Zealand until the 70’s, in the USA when they had the new deal and 91% taxes on millionaires, in the UK in the 60’s, in much of Scandinavia now, Switzerland and North Dakota.

      Capitalism, however, has had to be bailed out by the socialists many times.

    • burt 7.4
      20 July 2013 at 1:03 pm

      Santi is right. Social engineering the society according to the doctrine of our ideology is folly.

      • One Anonymous Knucklehead 7.4.1
        20 July 2013 at 1:14 pm

        Gosh, did clever Santi set up a strawman and then knock it over? Clever clever Santi. One day you might be that clever, eh Burt.

      • tricledrown 7.4.2
        20 July 2013 at 1:52 pm

        So Burt why aren’t you paying your free education costs back to the government as its obvious that you have learned nothing other than put forward failed policy!
        We used to be one of the most socially connected and happiest countries in the world now we are heading down to the bottom of the list!
        because selfishness and greed have taken over!

    • Santi 7.5
      20 July 2013 at 1:40 pm

      Long live inequality, true motor of human progress.
      The Left must accept we’re not all born equal. Oh, oh.

      • One Anonymous Knucklehead 7.5.1
        20 July 2013 at 1:47 pm

        That’s right, some were born with a silver spoon in their brain.

        The Left is way ahead of you, you poor sap.

      • tricledrown 7.5.2
        20 July 2013 at 1:56 pm

        Civilization has come along way through cooperation and community spirit!
        Santi you and your ilk are driving us back to the jungle mentality of dog eat dog society!
        narcissism is your religion!

        • Santi 7.5.2.1
          20 July 2013 at 3:45 pm

          Cooperation and community spirit, yes! But, no to forcing/imposing people to pay for the lazy and those without brains or aspirations.

          • Arfamo 7.5.2.1.1
            20 July 2013 at 4:01 pm

            This whole left wing/socialist/communist vs right wing/neocon/neolib/capitalist labelling is bullshit. Who gives a damn. What’s needed is a fair society where everybody who can work and contribute is able to, and to receive a liveable wage for their labours, and those who can’t, through disability or illness or job loss are given a reasonable level of state assistance, so they are able to live a decent life.

            Nobody in their right mind objects to entrepreneurs and business developers who take the risks to establish their enterprises reaping greater rewards than those who are content to work a 40 hour week for a decent living, a home with a mortgage, the chance to have and bring up a couple of children, and a few of the ordinary comforts of modern life.

            If a democratically elected government is not delivering this scenario, it’s time to biff it out and get one that does.

            • Santi 7.5.2.1.1.1
              20 July 2013 at 4:04 pm

              If a democratically elected government is not delivering this scenario, it’s time to biff it out and get one that does.

              What Lenin, Stalin or Mao used to say. The same communist rubbish!

              • Blue Leopard …
                20 July 2013 at 4:22 pm

                If a democratically elected government is not delivering this scenario, it’s time to biff it out and get one that does.

                What is Communist about this statement??

                Sounds straight up democratic to me

                ++1 Arfamo

                • Paul …
                  20 July 2013 at 4:29 pm

                  Santi is only saying this bs to get you to bite.

                  • Blue Leopard …
                    20 July 2013 at 4:46 pm

                    In earlier comments Santi is clearly trying to get people to bite, however this comment and the one above of Santi’s appears to be attempting to provide the type of false logic that gets people voting against their own interests, and for policies that create an unhealthy and dysfunctional society.

                    • Arfamo …
                      20 July 2013 at 4:54 pm

                      Yeah well, he’s a dinosaur. Social democracies in which capitalism is regulated to prevent its excesses actually work. But they require the government to have the welfare of both business and society as equally important objectives.

                    • Blue Leopard …
                      20 July 2013 at 5:10 pm

                      @ Arfamo

                      My prediction is that Santisaurus will be inferring you are a terrorist for writing such “heresies” ~regardless that your comment is proven historical fact.

                    • Colonial Viper …
                      20 July 2013 at 6:20 pm

                      Social democracies in which capitalism is regulated to prevent its excesses actually work.

                      Except within 30-40 years, the capitalist elite will be well on the way again to unpicking those regulations and institutions which keep things balanced, and finally infiltrating government so that there are no clear lines left between profit making corporations and the public sector.

                    • blue leopard …
                      20 July 2013 at 6:44 pm

                      @ CV

                      I thought that had already occurred??

                    • Colonial Viper …
                      20 July 2013 at 6:49 pm

                      Yep. I was just making a point that “regulated capitalism” is inherently unstable and will always tend to slide the way the plutocrats want it.

                    • blue leopard …
                      20 July 2013 at 7:26 pm

                      @ CV,

                      All systems have a tendency to erode in time, but I wouldn’t have thought that “regulated capitalism” was particularly “unstable’ in that regard?

                      I do consider the unregulated pure-market capitalism we have just now is unstable, in the sense of causing markets to have more booms and busts.

                    • Colonial Viper …
                      20 July 2013 at 7:35 pm

                      “Booms and busts” = volatility, and volatility is actually extremely profitable for financial traders, even as it destroys governments and businesses in the real economy.

                      but I wouldn’t have thought that “regulated capitalism” was particularly “unstable’ in that regard?

                      Keen speaks of Minsky’s view of this. That an extended period of steady, predictable capitalism always raises expectations for increases in yield/profit, encouraging increased speculation and risk taking. Capitalists lobby for the removal of regulations and rules (“cutting red tape”) on the basis that they are not needed (essentially the success of legislation like Glass-Steagal is used as an argument that it is no longer needed).

                      And we end up back in a massive fraud based debt based depressionary mess (only bigger) just 80 years after the last one.

                    • blue leopard …
                      20 July 2013 at 7:51 pm

                      @ CV

                      Interesting thanks; that sounds like a fair theory!

                    • Arfamo …
                      20 July 2013 at 11:05 pm

                      Yep, CV, that is exactly what happens, and has happened. And the reason we can’t swing the pendulum back to a fairer society again is because there’s no party putting a clear stake in the ground and saying that’s our political philosophy and these are our policies. And not enough people are hurting yet.

                    • Arfamo …
                      20 July 2013 at 11:08 pm

                      Yep, CV, that is exactly what happens, and has happened. And the reason we can’t swing the pendulum back to a fairer society again is because there’s no major party putting a clear stake in the ground and saying that’s our political philosophy and these are our policies. And not enough people are hurting yet.

                    • Colonial Viper …
                      21 July 2013 at 1:00 pm

                      It’s time that left wingers understand that political parties today will provide us with very few answers.

                      Progressive change has always been driven by mass movements of people pressuring the politicians, not by the political parties or the politicians themselves. Abolitionists, suffragettes, the New Deal, ending the Vietnam War.

                      Politicians are not leaders, they are followers.

                      So where is the mass movement of people in this case? They don’t exist. And without that, the political parties – which originally were merely the political wing of those popular movements – will never act in a way consistent with left wing principles.

                    • Blue Leopard …
                      21 July 2013 at 2:05 pm

                      @C.V

                      +1

                      I thoroughly agree with your comment and think your question re where is the mass movement is a pertinent one.

                      There are a few things going against mass movements formulating.

                      The first issue being how people speaking out are being labelled traitors and terrorists; demonstrations such as the mass wall street movement are being treated as illegal (i.e. ending up with arrests)

                      The second issue being how people who are having their rights and conditions most degenerated by the current state of affairs are either working long hours to make end meet and don’t have the time or energy to stand back and work out that it is due to a larger problem than that they just happen to have a poorly paid job. (or are on welfare see below)

                      If people in such a situation have worked out there is something wrong it is unlikely they have the time or energy to become active in the cause.

                      Those that do have the time to work these things out and to speak out will be on some form of welfare (part-time work or unemployed) are increasingly being framed as the lepers of society and thus have little ‘credibility’ with which to make a point.

                      There are also people who are wealthy and have worked out things are wrong, however one needs more than this handful of people to create a mass movement
                      That’s my thoughts on the gnarly question as to why more people aren’t speaking out…

              • Arfamo …
                20 July 2013 at 4:29 pm

                WTF is communist about what I said Santi? For Heaven’s sake. It’s a simple enough concept. Plenty of governments achieved it before the 80’s.

          • KJT 7.5.2.1.2
            20 July 2013 at 6:16 pm

            Being a bit nasty about Brownlee, Bennett, Parata and Tolley etc, aren’t you?

            Should we leave them to starve?

          • tricledrown 7.5.2.1.3
            21 July 2013 at 11:51 am

            spurious examples grinch Pinochet Putin to you

      • muzza 7.5.3
        20 July 2013 at 2:04 pm

        Santi, I’m curious, where did you form these views of yours, and how do you see them benefitting society?

        Human progress – erm, no, no its not, but its sold as that , so peons like yourself will have something to dribble over!

    • Phil 7.6
      21 July 2013 at 8:53 am

      Inequality is not a “fact of life” dumb one. There are no “facts of life apart from those we decide to accept as such.
      Inequality is however a pre requisite for crony capitalism and leads to daft statements from it’s loyal supporters.

  8. captain hook 8
    20 July 2013 at 12:11 pm

    ‘they’ try and disguise inequality by hiding behind the per capita income red herring.
    What about some actual figures on income distribution then we can make our minds up for ourselves or are these just inconvenient facts.

  9. One Anonymous Knucklehead 9
    20 July 2013 at 1:00 pm

    The Left needs to stop trying to win debates with people who are only interested in manufacturing doubt. Millsy’s approach to them makes much more sense.

  10. One Anonymous Knucklehead 10
    20 July 2013 at 1:37 pm

    Right wing positions on inequality:

    “It’s a good thing”. (Tsmithfield at 5.1)

    “It’s minimal, and anyway we have just the right amount of it under National” (Wayne at 4.)

    “It’s natural.” (Santi at 7.)

    “The science isn’t settled.” (Gosman on various previous occasions.)

    We need better wingnuts, goddamnit!

  11. burt 11
    20 July 2013 at 1:57 pm

    No it isn’t supported by the data (though we’re above the OECD median, which is bad enough). But not many people make this claim. The claim that is usually made, with perfect justification, is (Rashbrooke):

    Oh, remember back circa 2000 it was our objective to get into the top half of the OECD ladder… That was apparently a grand ambition of dear leader but now …. It’s bad enough to be in the top half … We should be top right….

    • One Anonymous Knucklehead 11.1
      20 July 2013 at 2:02 pm

      Oh, well played! I see what you did there! You are cleverer than Santi!

      Everyone give Burt a pat on the head.

  12. Macro 12
    20 July 2013 at 2:55 pm

    “Fallow makes a similar mistakes….”

    No he doesn’t rOb – he’s well aware of the lies he is telling. He’s just spinning for all he’s worth. Because he knows in his heart of hearts what is the truth but chooses to “rationalise” an impossible position.
    If he were to concede, what is in fact reality for the majority of New Zealanders, he would have to admit that the economic system in which he firmly believes and places his trust, is in little more than a useless ideology of unsound practices.

    • Paul 12.1
      20 July 2013 at 4:20 pm

      He’s invested too much in the lie to be able to anything other than spin for a living.
      He’d lose his job if he wrote otherwise.

  13. Macro 13
    20 July 2013 at 3:54 pm

    “The idea that New Zealand has become one of the most unequal societies in the developed world is just not supported by the data.”

    Yes it IS supported by the data.

    It depends on how you measure inequality –

    If we were to rate countries by the gap in income between the richest 20% and the poorest 20%, perhaps the most understandable metric of inequality, then NZ scores very badly, with the richest earning on average 6.8 times that of the poorest (2003 – 2006 data) compared to Japan where the rich earn on average 3.4 times that of the poorest. As for ts’s argument that lack of money is a motivational factor – well that immediately flies out the window when presented with that fact.
    On this metric we are only ahead of Australia 7 times, UK, 7.2, Portugal 8.0 and the USA a whopping 8.5.
    (Data from UN “Human Development” Reports for the years 2003 – 2006)

    • Rosetinted 13.1
      20 July 2013 at 9:04 pm

      Macro
      Is it that our inequality is growing faster than any other developed country?
      Lack of money is indeed a motivational factor – for seeking solace in the bottle, the needle, nostrums from the chemist or on prescriptions, eating fattening comfort food (usually cheap) ie white bread and price reduced take-aways, etc.

  14. QoT 14
    20 July 2013 at 6:35 pm

    I couldn’t stand Fallow’s article. It was basically, “I’ll take an extreme example of statements about inequality (i.e. that NZ is *the* most unequal society) and by showing that we’re not the worst in comparison to other countries which are also doing pretty shittily in terms of inequality, I’ll draw the conclusion that inequality isn’t a big deal.”

    And of course he and his editors don’t understand how the fucking internet works, so it’s not like he bothers to link to any supporting evidence for his statements, we’re just meant to sit back and go “Oh, mighty Brian Fallow, you are an Economics Editor for the NZ Herald and thus unquestionable!”

    • Draco T Bastard 14.1
      20 July 2013 at 7:30 pm

      And of course he and his editors don’t understand how the fucking internet works, so it’s not like he bothers to link to any supporting evidence for his statements, we’re just meant to sit back and go “Oh, mighty Brian Fallow, you are an Economics Editor for the NZ Herald and thus unquestionable!”

      That’s how journalism has always been though. They’ve quoted a person here and there but they’ve never had to actually mention the research. This will, I hope, change as people get more information from the internet and research becomes more readily available to everyone. If it doesn’t then more and more people will become aware of the pure BS that we’re presently seeing from the journalists.

      Of course, the other option is that the government puts in regulation stating that such articles need to link to the research and statistics. That would, I think, end the BS.

      • QoT 14.1.1
        20 July 2013 at 10:51 pm

        That’s how journalism has always been though.

        I know, but the problem is seriously exacerbated these days with comments – people in Fallow’s article were posting the link to Rashbrooke’s to refute him – and the fact that online stuff sometimes is the news – e.g. when John Armstrong had a fucking whinge about “evil bloggers criticising me” but failed to link to those bloggers (Gordon Campbell and Bryce Edwards, hardly the same thing as a QoT or Zetetic).

        It just shows up their born-to-rule-the-narrative attitudes even more strongly.

        (Personally I think regulations around linking to research would do wonders, especially in the area of science reporting.)

        • KJT 14.1.1.1
          21 July 2013 at 12:51 pm

          Seems to me, when it was called reporting, there was an attempt to report the news accurately. Nowadays, “Journalism” consists of regurgitating press releases without any fact checking, or it is simply interviewing their typewriters.

          Often the opinion columns are the only ones worth reading, as they contain more factual information, or at least the bias is obvious, than “the news”.

          I agree that so called news reporters, unless it is obviously a personal opinion piece, should have to give references.

          If they are professionals, as they claim, we should expect the same standards as we expect from an undergraduate essay. No unsupported ideas, a list of references and fact checking.

          A large proportion of unpaid bloggers actually meet those standards. I don’t think it is too much to expect of “Journalists” who are paid to inform us/sell advertising space..

  15. aerobubble 15
    21 July 2013 at 12:52 pm

    Auckland is situated on a volcanic field, on a isthmus, with large sprawling single height homes. Why hasn’t it grown properly, why is it there at all, what was the free market thinking!
    I mean you’d rather build on safer land, you’d rather build where you can add underground, and bypassed, etc. How did Auckland suffer a car lot on its best habour parade for decades???

    Simple, the same reason why our media is so distorted, so corrupted. We do not as a nation balance the wealthy, who need a counter balance to stop themselves from running off in greed ridden counter to their interests adventurism, with a BBC, Guardian newspaper…

    For me NZ is summed up presently, nolonger by a car lot where a Sydney Opera house building should be, but by the car cult of noisy engines. Cars made less efficient, that exude noise, vibration, that disturb sleep, that erode the roads with excessive vibration, that bring on early onset deafness in the kids of those car owners, all because they would have been putting their hard earned cash into buy a home, servicing a mortgage, but instead are either sitting pretty on several rentals or have given up any chance of home ownership due to temporary and insecure low paid work. That’s the ‘inequality’ engine driving into the heart of the nation. The greed of Auckland, its nature geography plus the tax regime, fuel housing price madness, reward land banking, hold a veto over development of higher density living.

    For me NZ isn’t about running a lean efficient economy, its all about those making money desperate to stop NZ from being run lean and efficiently for all, and are willing to push the risks and social malaise onto the majority. And they can do it because they are for the most part a small group of media, a herd of right wing talking heads. A stable of them, rewarded by the wealth to force more wealth into the hands of people like them.

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