The Kākā by Bernard Hickey
The stagnant debates in our hermit kingdom of a political economy

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The stagnant debates in our hermit kingdom of a political economy

NZ's 'Bread & butter' economics of 'the rising tide lifts all boats' harks back to the stale debates of the 1990s & 2000s, before the world realised this 'third way' of financialised globalism failed
Australia’s Treasurer Jim Chalmers (left) has published a 6,000 word manifesto called ‘Capitalism after the Crises’ arguing for ‘values-based capitalism’. Yet here in NZ we hear the same stale old rhetoric unchanged from the 1990s and early 2000s. Photo: Getty Images

TLDR: The rest of the world is talking about inflation falling naturally and interest rate hikes ending soon, unlike here, where a moral panic about inflation and debt rages.

Debates about the political economy globally are also way ahead of ours, which remain stuck in the ruts of thinking about the ‘bread and butter’ economics of ‘the rising tide lifting all boats’.

This is 15 years after the Global Financial Crisis, rising inequality, the unequal effects of pandemics and the enforced end of unfettered financial globalism showed that the 1990s ‘third way’ approach of just cutting taxes, repressing the size of Government and getting out of the way of businesses simply didn’t work, either for most citizens or the future of capitalism.

Everyone else has moved on. We haven’t.

That’s evident in this week’s news about slowing inflation, the winding back of rate hikes and a fascinatingly deep and interesting contribution to the debate about the future of the political economy from Australia’s Labor Treasurer Jim Chalmers.

I go deeper into this contrast below the paywall fold and in the podcast above for paying subscribers who support the sort of public interest journalism I do. Come and join us. Paying subscribers can comment and also get access to more of my daily writing daily, our weekly Ask Me Anything chat session for an hour at middays on Fridays (it’s on today) and our weekly ‘Hoon’ webinar with myself and co-host

(it’s also on today at 5pm and the link is below my sign-off).

Elsewhere in the news overnight in our political economy, geo-politics and the global economy:

  • Investors are celebrating a slowing of the Federal Reserve’s rate hikes and market hopes there’s only one more hike left next month, along with fresh talk from the Bank of England that it has probably finished hiking too and hopes the European Central Bank is almost finished;

  • Universities report a surge of enrolments from Chinese students who told their Government this week that they can’t stay at home and study online and must go overseas to get their qualifications; and,

  • Green co-leader James Shaw said last night he wouldn’t contest the Wellington Central electorate in the election on October 14, nominating Wellington City Councillor and rising-star Tamatha Paul to run against whoever Labour and National put up, now that incumbent Grant Robertson is going list-only and Nicola Willis has opted to run in Ohariu.

Stagnation in the hermit kingdom of our political economy

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The Kākā by Bernard Hickey
The latest daily snapshot of the news, detail, insight and analysis on geo-politics, the global economy, business, markets and the local political economy for citizens and decision-makers of Aotearoa-NZ.