Economist – all calculator with no brain

There are plenty of jokes about economists and none of them are flattering. However the efforts of Massey University economist Greg Clydesdale last week brought this occupation to a new low of disrespect.

The joke repertoire should be expanded as a result but unfortunately reports of his work were largely lost in last week’s pre-budget media fog. This is a pity because his research and conclusions should be widely read and discussed, not because they are enlightening but because of the stupid, irresponsible assumptions he uses in his analysis.

Greg Clydesdale’s research uses a wide range of undisputed government data to claim Pacific Island migrants are creating an underclass and a drain on the New Zealand economy. He says they have poor education, poor health and higher unemployment than any other group. He went on to say Pacific people had “significant and enduring under-achievement” and that migration from the Pacific is making the problem worse.

Not content to stop there he said they are less productive and less likely to contribute to economic growth. They are less likely to start businesses and have lower rates of self-employment. They are over-represented in crime statistics and have higher rates of convictions and prosecutions. They are also more likely to be victims of violent crime and more likely to need Government assistance for housing and income.

He reached the nadir of his presentation saying that for him “of particular concern is the large Polynesian subculture whose educational achievements mean they will contribute very poorly in this regard and because of high fertility and current immigration levels, New Zealand will have a significant population that can contribute little to economic growth.”

It was a remarkable broadside against the Pacific community in New Zealand, delivered without qualification or reservation.

I have no doubt his figures are correct. He presumably knows how to use a calculator but at this level it tells us nothing new. We are all aware the majority of Pacific families are in the lowest socio economic groups in New Zealand and therefore share the negative statistics of all low-income communities. The important thing is that Pacific people are no different in this regard from other families on low incomes be they Pakeha, Maori, Asian or Pacific. 

This raises the more important question of why Pacific people are over-represented in low-income communities. The answers here are more complex and this is where Clydesdale could have made a useful contribution to public discussion. Instead he has confused issues of class and ethnic background. Armed with a pile of statistics, his trusty calculator and a big dose of lazy stupidity he lambasted an entire ethnic group. In the process he overlooked several elephants in the room.

A key assumption he makes is that a person’s contribution to the community can be judged by their income. This is particularly nauseating. The work done by those on or close to the minimum wage is always undervalued. Workers in cleaning, security and general labouring make as great a contribution to the community as anyone else and this can’t be measured by the wage they receive. Why would it?

Clydesdale’s insult adds to injury for these low-paid workers who are so often forced to sacrifice family life and social stability to work long, poorly-paid hours just to bring in enough money to keep their families above the breadline.

The natural follow-on is the assumption that well-paid people contribute more to the community than the lower paid. This is an equally stupid notion. Does anyone really believe that a shareholder who has never picked up a mop actually earns the dividend they are paid by the company which employs a cleaner on the minimum wage? Or that the Telecom Chief Executive contributes more to the economy than the technician who services the phone simply because the CEO has a multi-million dollar income?

It turns out Clydesdale is concerned about immigration and population growth. He says New Zealanders need to debate these areas without the fear of being labelled racist. Fair comment but how does his pathetic attempt to create some sort of ethnic hierarchy in economics help this debate? Instead he lazily skimmed the surface of an important issue and arrived at deeply offensive, completely erroneous conclusions. Instead of interviewing his calculator Greg Clydesdale would have done better had he started some vigorous debate about the value of work compared to the value of shareholder bludging.

Universities are charged under the law with the role of being the “critic and conscience” of society. Greg Clydesdale has dramatically failed in this role. He apparently plans to take his research to present at a conference in Brazil in July. He’d do better to stay home and save us the embarrassment with the added benefit of stopping economists becoming the butt of even more jokes.

 

 

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New Zealand should take up the cause of the Palestinians

By now most of us are aware that this month marks the 60th anniversary of Israel’s formation.

It’s a celebration of independence, statehood and national identity after a 50-year campaign for a Jewish state.

But for Palestinians it’s known as Al Nakba _ the catastrophe. For them it’s the anniversary of their transition from indigenous people to refugees. They grieve for their lost homeland and lost sovereignty.

More than 500 Palestinian villages were destroyed or abandoned as Israel was born after a campaign of terror waged across Palestine by Jewish paramilitary groups such as the Stern Gang and Irgun.

These terrorists weren’t fringe extremists.

They included many prominent individuals, including two who rose to become prime ministers of Israel: Menachim Begin, who headed the Irgun, and Yitzhak Shamir, who was active in the Stern gang.

Millions of Palestinians were driven from their houses and villages to refugee camps around the Mediterranean and around the world.

They have been refused the right to return to their homes or land.

Even today these Palestinian refugee families have keys their parents or grandparents took with them as they locked their homes and fled for their lives.

In Gaza this week young Palestinians created a 10m mock-up of a key as their potent symbol of loss and dispossession.

The local people living in Palestine before 1948, both Jews and Arabs, were never asked what they thought of a segregated land.

Many Jewish groups vehemently opposed the split, as did the local Arab population.

However Britain, which was the colonial power responsible for Palestine, gave in to the terror campaign which culminated in the bombing of the King David Hotel in Jerusalem that killed 91, including 28 British bureaucrats.

The US and UK drove the partition of Palestine through the newly formed United Nations and the scene was set for a 60-year cycle of violence and death.

Arabs who remained behind in the new state have Israeli citizenship which entitles them to a restricted, second-class existence.

They don’t enjoy the same rights to land, marriage or family reunification.

Arab dispossession within Israel continues today, as many are forced to move from neighbourhoods set aside exclusively for Jewish families.

A Jewish person, or someone converting to Judaism, living anywhere in the world, whose family has no connection to the Middle East, is welcomed in Israel and easily gains Israeli citizenship.

An Arab family whose ancestors lived there for thousands of years is denied the same right. Their keys have no currency under Israel’s racially derived laws.

Palestinians have lost 78% of the original Palestine and four million refugees now live on separated, dislocated segments of land on the West Bank of the Jordan River and in the Gaza strip.

Their remaining portions of land are still being carved up for Jewish homes and settlements with the backing of the overwhelming might of the Israeli army.

Israel has become a prosperous, powerful, nuclear-armed country with the unquestioned backing of the US and other countries who see their own global interests tied to a friendly, dependent state in the Middle East.

This has enabled Israel to defy numerous UN resolutions, World Court rulings and international condemnation of its many illegal actions.

Among these are the building of settlements on occupied land, detaining thousands of Palestinians without charge or trial, and of an 8m-high wall which has further annexed sections of Palestinian land. Israel is the new Berlin.

Small wonder neighbouring Arab countries have been in conflict with Israel these past 60 years. Likewise Palestinians continue to struggle for the rights stripped from them.

So what for the next 60 years?

It’s clear to rational observers that the proposal to establish an independent Palestinian state on their broken pieces of land is not possible. No such state could ever be viable.

The Palestinian struggle will continue, but now there is an emphasis on a fight for democratic rights in a secular, unitary state which respects all peoples, races and religions.

It worked for thousands of years before and can do so again.

In 1948 another government came to power with similar ideas of separation, segregation and second- class citizenship.

This was the apartheid government of South Africa, where whites enjoyed full rights but blacks’ rights were restricted to impoverished areas of land called Bantustans, in a similar way to the restrictions of the rights of Palestinians to non-viable enclaves within the West Bank and Gaza strip.

The apartheid regime and its policies were overcome eventually, as must be the policies pursued by Israel.

An international campaign is needed.

New Zealand was once in the forefront of struggles against discrimination. It’s time we were again.

There is no shortage of food, the problem is the price

Rising food prices around the world have dominated the news for the past several weeks. Riots have taken place in many countries as prices rise beyond what families can afford. Here in New Zealand, the rising price of dairy products is at the sharp end, but for the world’s poorest its the price of grain which is critical.

So with food prices rising, there must be a shortage, right? Surely it means more people competing for the same amount of food. This is the conventional view from the market but it’s not true. There is no shortage of food in the world. The problem is the price. The world’s poorest cannot afford to pay for food which is why every night 850 million humans go to bed hungry, with this number rising rapidly.

Last year, the grain harvest worldwide was 2.1 billion tonnes. It was 5 per cent higher than the previous year so with more food surely the price should be falling. But no. Less than half of this bumper harvest is available as food for human need. Most of the rest goes to feeding animals for meat production (760 million tonnes) and providing the growing demand for biofuels (100 million tonnes)

So there is plenty of food but the poor can’t afford it. Hungry kids in developing countries can’t compete with SUV drivers in countries like New Zealand or the appetite for meat in developed countries spurred by the growing middle class in India and China. We are all surely now aware that the grain needed to produce a single tankful of biodiesel for an SUV would feed a family in a developing country for a year.

There have been the predictable calls for genetic engineering to improve food production but just as with the so-called green revolution in the 1960s this is a facade. The food is there but we’ll all die waiting if we leave it to the amorality of the market to sort the problem.

Other calls for countries to open their markets to free trade are just as predictable and just as self-serving and futile. It is the free-market policies demanded of developing countries which go to the very heart of the problem. Pricing food on a world market favours those who can pay more to sustain a higher standard of living with the non-food use of food.

But there are good-news stories amid the gloom and suffering. We are in the middle of Fairtrade fortnight promoted by Trade Aid. It should be an encouragement to all of us to do even the small things we can as individuals to promote a better world in defiance of traditional market forces.

What makes Fairtrade products different is that they are imported from certified producers, usually co-operatives, which ensure a better return direct to the growers. For example, coffee growers in Guatemala and Ethiopia typically receive 10% to 15% more for their products from Fairtrade buyers. In some cases, depending on the world price for coffee, growers have gained up to three times what they otherwise would have received via local markets. Likewise, buying Fairtrade olive oil, dates and almonds from Palestine supports local communities under oppressive occupation.

The benefits go much further. More local schools and medical clinics being built. Sustainable development is taking a big step forward in areas where Fairtrade products are sourced at fairer prices.

These products are now widely available but our supermarket chains are reluctant to stock them. Next time you are in the supermarket look for the Fairtrade logo and ask the staff what fair trade products are stocked. A small dig in the market ribs of those addicted to profit-based economics will help lots of people get a fairer go.

Another good news story is Uganda. Amid the world-food crisis, this country in central Africa, which has had such a bloody, turbulent transition from colonial rule, is largely riding out the food crisis by ignoring years of bad advice. Uganda’s rice output has increased 2 1/2 times since 2004 and is expected to reach up to 180,000 tonnes this year. Amid rising food prices globally, the cost of rice in Uganda is much the same as it was before the food crisis.

The reason is tariffs. Against the neo-liberal advice from the likes of the World Bank and International Monetary Fund, tariffs have increased the price of imported rice and dramatically stimulated local food production.

The country is much closer to self-sufficiency and food security and points the way forward for developing countries. There’s an important lesson here for New Zealand, as well.

Labour’s policies continue to keep NZ children in poverty

After eight years of Labour in government how much longer will it take? How much of the economic good times do we need? How many more years before our children can crawl out from under the slag heap?

These are the questions that should have been put to Associate Minister of Social Security and Employment Ruth Dyson last week when the Child Poverty Action Group released its report revealing 180,000 of our children living in poverty.

Instead, the minister simply said the Government had already done a great deal by lifting more than 100,000 children out of poverty through Working For Families but they appreciated more needed to be done. She said she respected the report and its authors and the Government would need time to consider the recommendations. End of story. It was out of the news within 24 hours with no hard questions. The minister got away with just a few comments to assure us the Government was concerned about poverty. And there will be some moves in the Budget but they will amount to nothing more than tinkering at the edges of the issue.

The truth is that Labour has no intention of lifting these children out of poverty because these 180,000 kids are the children of beneficiaries. The Government counts on the lazy prejudices in the community to keep pressure off itself and keep these children in poverty.

It is well understood that for the past eight years Labour has maintained benefits at the grim levels of the benefit cuts of National’s Ruth Richardson in her 1991 mother of all budgets. But beneficiaries and their children miss out at every stage.

The Working For Families package has lifted many families of the working poor out of poverty but the children of beneficiaries get just a few crumbs.

Instead, middle and even high-income families receive a whole lot more for their children.

Putting it bluntly, Labour prefers to give a 10 per cent cut in business tax rates than lift these children out of poverty. Labour prefers to plan tax-cut handouts to benefit working families than lift these children out of poverty. Labour prefers to allow massive repatriation of profits from the likes of Telecom than lift these children out of poverty. Labour prefers to give generous Kiwisaver tax handouts to middle and high-income earners than lift these children out of poverty. And on and on it goes.

Labour has unofficially designated the children of beneficiaries as the undeserving poor. These kids might get an extra half ladle of gruel in the Budget but like Oliver Twist they will get no more.

The same Labour politicians who hammered National Party governments throughout the 1990s as uncaring and uncompassionate are now wearing the same clothes.

The CPAG report packs a lot of punch. It’s a heavyweight challenge to whoever is in power. Its detailed, thorough analysis explodes the usual anecdotal myths about poverty and sheets the responsibility home to the policymakers.

The links between poverty, poor housing, poor health, educational underachievement and general social deprivation are starkly presented in the report.

Paediatrician Dr Innes Asher who spoke at the report launch was irate. She gets angry at seeing children brought to Starship Children’s Hospital with diseases and infections we usually associate with poverty in the Third World. Here in this rich country of ours, kids are as sick as the government policies which keep them ill.

The effects of poverty cycle on through education. The long tail of underachievement in our schools is the long tail of poverty. Despite this, the Ministry of Education focuses on changing teacher attitudes and introducing personalised learning as the solutions to under achievement. Even today, the Minister of Education, Chris Carter, trots out the meaningless mantra that the differences within schools are greater than the differences between schools. He believes poverty is a side issue and it’s important for the Government to believe this myth because any other interpretation would force dramatic changes in policy.

Instead, Labour has made a conscious, deliberate decision to sacrifice the children of beneficiaries in favour of what Don Brash would have called middle New Zealand.

Interestingly, the CPAG report launch was attended by the National Party’s flinty social welfare spokeswoman, Judith Collins, who listened silently through the presentations. It could be that National, in its attempts to brand itself as compassionate and caring, will develop some policies to outflank Labour on the Left. They have done so several times recently on other issues such as their decision to invest heavily in broadband. They could hardly do worse than Labour in supporting the children of beneficiaries.