2 December 2005
Economy Gone Sour: Real or Created
Over the last couple of years The Independent's political commentator, Chris Trotter, has attracted quite a following.
For a business paper this is quite an achievement. Chris Trotter is a well-known left-winger, often regarded as being to
the left of the Labour Party. The success of his column has depended on his clear analysis of political events. Readers
certainly know his views are informed by his left wing ideology, but his success is dependent on not viewing every event
through an ideological lens.
This weeks column, (Independent, 30 Nov 2005), appears to step outside these conventions. A conspiracy theorist would be
proud to have authored Mr Trotter's thesis that business has acted in concert to torpedo the economy. He argues that as
a result of the re-election of Labour, business has decided to destroy the basis of Labour's success; a buoyant economy.
He writes:
"If the ballot box were unable to deliver them to from Helen's monstrous regiment of socialist women, well there are
other ways."
This "other way" is an investment strike; "the putting away of cheque-books; the refusal to hire staff; the postponement
of key decisions concerning the deployment of capital".
Trotter cites in support John McDermott ANZ chief economist, who said the effect would be a "very good and very
resilient economy that just stops." Of course, John McDermott did not refer to an investment strike - that is Trotters
take on it.
What is wrong with Trotters analysis?
It implies that businesses act in a conspiratorial manner; that they get together to wreck the economy so National can
win the next election. Of course, Trotter has had to ignore the effects of high level of the New Zealand dollar on the
export sector, increased oil rates, the impact of increased interest rates, the fact that at some time the property
bubble would be pricked, and the inevitable impact that this all has on consumers buying decisions. Mr Trotter might
like to reflect on these real factors in the economy that have reduced confidence.
Businesses are being careful. All the signs are for trouble ahead in the economy. It is not an investment strike that
has happened, it is the adverse economic conditions that are already happening. This will clearly hit the government,
but it is also a challenge for National. Elections don't plop into the hand like big ripe fruit; they have to be worked
at.
Readers of business papers could do with less of conspiracy theories, and a clearer analysis of real economic problems
ahead. On past evidence Mr Trotter is up to doing the hard graft, rather than indulging in political whimsy.
The score so far
Our first PC Madness item was UNITECs requirement that campus bus drivers have to understand the importance of the
Treaty of Waitangi. The head of UNITEC, Dr John Webster defended this stance in a letter to the Herald. He said (25
November 2005):
"The Treaty is central to New Zealand, and our identity as a nation is inextricably bound up with our origins as a
partnership between two different peoples. UNITEC is committed to maintaining that strong sense of partnership,
reflecting it in our teaching and learning, policies, staff training and recruitment. Shuttle bus drivers play a
significant role in our informal communication system - just ask any student or staff member."
At least the students will be able to get back up lectures from the bus driver if they skip a lecture on the Treaty.
Last weeks item on Qantas's policy not to sit men beside unaccompanied children, became hot news this week. Now the
Human Rights Commission will be investigating the whole issue. Lets see what the Privacy Commissioner will do with this
week's example.
ENDS