This bald fact tells us a number of things. For a start, it tells us that those who speculate on the New Zealand stock exchange have a much firmer grasp on global economic reality than most New Zealand politicians and journalists.
Secondly, it tells us that QE is not the “wacky” policy the Prime Minister says it is. (Unless, of course, John Key regards US Federal Reserve Chairman, Ben Bernanke, as a wacko!)
Most importantly, it demonstrates how vital to the stability of the entire global economy the stimulatory effect of American, Japanese and British QE has become. The mere suggestion that the ‘Fed’ might be on the verge of winding-back its use of QE was enough to send not only the NZX, but just about every other bourse in the OECD, plummeting.
Which raises an equally important question: “Why has Russel Norman abandoned the Greens attempt to legitimate QE as a sensible means of stimulating the New Zealand economy?”
With this thoroughly retrograde decision, Russel has brought to a needless and sudden halt his near faultless eighteen month performance as the Opposition’s most astute economic critic of the National Government.
By abandoning QE, Russel has also deprived himself, the Greens, and any sort of useful ‘Centre-Left’ coalition government, of one of the very few means of mobilising the indigenous capital resources necessary to fund the job-rich, socially-just and “green” economic development New Zealand needs.
Both the Greens’ and Labour’s promises: to put New Zealanders back to work; on a living wage; in clean, green and innovative export industries; while guaranteeing them and their families an affordable home; effective health services; and a progressive, child-centred education system; can only be achieved at the cost of billions of NZ dollars-worth of new state spending.
Russel’s QE proposal: Requiring the Reserve Bank to purchase government issued Earthquake Recovery Bonds to a sum equivalent to 1 percent of GDP (approximately $NZ2 billion) to both assist the Canterbury rebuild and bring down the value of the punishingly over-valued NZ Dollar; was one of the very few practical and non-inflationary funding options available to an incoming progressive government. By taking it off the table, what Russel is really telling us is that the Greens’ and Labour’s promises can no longer be paid for.
When Key challenges Russel in 2014 – as he challenged Phil Goff in 2011 – to “Show me the money!” What will Russel say? Where, apart from the same “Reserve Bank Credit” to which the First Labour Government turned to fund its state house-building programme, will the Greens now turn for the capital resources fundamental to meaningful change?
The Greens have always made it a point of political honour to be absolutely straight with the New Zealand electorate. If they intend to keep faith with that tradition, then their co-leader and chief economic policy spokesperson needs to step forward now and admit that, with QE off the agenda, the Greens’ promise to give New Zealand a clean, green and innovative economy can no longer by paid for and, therefore, will no longer be included in the Greens’ 2014 Manifesto. And, while he’s at it, Russel should also foreswear any ambition to be Minister of Finance in a Labour-Green government.
His claim to that post had real merit while he continued to speak economic truth to power. New Zealand desperately needs a Finance Minister with the courage of his convictions. Someone willing to undertake the slow and painful process of educating the political class out of its neoliberal prejudices. A person with both the patience and the intellectual grunt to out-argue the slavering ignorance of the media’s parliamentary attack dogs. A politician who not only refuses to abandon controversial policies, but who, by calmly explaining them over and over again, finally convinces the voting public of their worth.
Until his decision to abandon QE, Russel came very close to filling that job description. It is, therefore, nothing less than a tragedy that he has either voluntarily, or under pressure from his caucus colleagues, repudiated Green political praxis. Because, with every passing month, the number of New Zealanders who heard Russel speaking about the New Zealand economy and what needs to be done to improve it, and surprised themselves by quietly nodding in agreement, was growing.
The rising shrillness of the Prime Minister’s attacks on the Greens: his palpable lack of logic; and his utter disregard for what is actually happening beyond New Zealand’s shores; was conclusive evidence of how effective Russel’s advocacy for green economic policies had become.
Compared to the almost pathologically cautious (and ideologically suspect) economic policies of the Labour Party’s rather grey finance spokesperson, David Parker, the Greens economic policies came across as radical (in the literal sense of ‘getting to the root’ of a problem) new and exciting. Russel’s crucial insight: that Green policies could only be marketed to “Middle New Zealand” effectively by someone who had mastered the logic and the language of economics; had inspired his masterful reinvention as the Green co-leader who could foot it with the best neoliberal economists the Right could throw at him.
It was Mahatma Ghandi who first identified the behavioural progression of individuals and groups who set their faces against necessary change: “First they ignore you. Then they laugh at you. Then they fight you. Then you win.”
Under the new, economically articulate Russel Norman, the Greens were steadily progressing through the stages of resistance. Indeed, they had been moving quickly into the penultimate stage – that of being fought. Sadly, all Russel seems to have noticed was the laughter of his enemies ringing in his ears.
Russel’s right course of action was to press onwards into the full-scale ideological battle that the Greens must engage in – and win – if they are to ever see their ideas translated into reality. But that was not the course the Green co-leader chose.
The laughter now ringing in Russel’s ears is no longer the nervous titter of the fearful, but the derisive snorting of political foes who have just witnessed a figure of doom transform himself into a figure of fun.
Having being bullied into laying down the banner of radical green economic reform, it is now much too late for Russel to cry: “Give me back my flag!”