Say the quiet part loud, for once

This one is for the journalists who subscribe to The Bad Newsletter.

There are quite a few of you, which is gratifying! I think it speaks well of the profession – or what's left of it – that a publication that frequently criticises both media institutions and specific journalists is still subscribed to by those same institutions and people. So today's newsletter is a helping hand, and a shout-out, disguised as the usual furious missive. Put it this way, journos: I know you read this, and I want to know why you're not asking a very specific question:

Mr Luxon, do you want full employment in New Zealand?

There is a vicious, obvious contradiction at the heart of our economy, indulged by both Labour and National-led governments. It's been written about many times, by myself and many others, and yet we seldom see it on the news when politicians are interviewed. The contradiction is that we have a government that denigrates the unemployed – while, simultaneously, we have an economic system that deliberately creates unemployment.

Here are some words I am getting tired of typing: This is not a conspiracy theory. It is mainstream economic and fiscal orthodoxy. You can read about it on the Reserve Bank's website.

By influencing the cost of borrowing, we can influence the economy. We call our work to influence interest rates and the amount of money in the economy 'monetary policy'. 

The fact that the Reserve Bank hikes interest rates in order to increase unemployment often comes as a surprise to people who don't closely follow economics or politics. Many assume that the goal is to have full employment. Nothing could be further from the truth. The Reserve Bank has essentially just one tool at its disposal: hiking the Official Cash Rate, in the hope that businesses will eventually suffer so much from the resulting interest rate rise that they will sack their employees. Unemployment, and the resulting misery it causes in a society where it is unacceptable to not have a job, is intentional.

The economic dogma that rationalises this cruelty, very loosely paraphrased, is this: when everyone has a job, businesses hike prices to make more money. Everything gets more expensive. This is called inflation. Inflation is bad. (Mostly because it makes the rich – who hoard money – less rich, but also because it makes the cost of living higher). Therefore, wage increases are bad, because they cause inflation, and therefore, wages should be suppressed, and the best way to suppress wages is to make sure that people are frightened of losing their jobs so they won't ask for more, and the best way to keep people frightened of losing their jobs is to make sure that there is a permanent pool of desperate miserable unemployed people who'll take any job for low wages, and the best way to make sure that unemployment is miserable is by deploying deliberate, systemic cruelty.

Ignoring the many ethical and logical holes in that argument – don't blame me, blame neoliberal economists who managed to get their cancerous pseudoscience accepted by the world's governing and financial institutions because it suits the wealthy and powerful – it is still more or less an accurate snapshot of the situation we find ourselves in. Beneficiaries are demonised by government, at the exact same time that financial institutions created by government try to increase unemployment.

So here's where we find ourselves. The Prime Minister lambasts unemployed "bottom feeders" and calls for "tough love" while glorying "the dignity of work." Here are his words:

There are 70,000 more people on a Jobseeker unemployment benefit today than there were in 2017. That’s like adding every man, woman and child in Napier onto the Jobseeker benefit in just six years

Simultaneously, that same government removes the Reserve Banks' mandate to manage inflation whilst maintaining "maximum sustainable employment," saying – in Finance Minister and New Zealand Initiative alumni Nicola Willis' exact words:

"Risking higher inflation in the pursuit of unsustainably high employment, just creates the conditions for a more severe hike in interest rates later on to bring inflation back under control."

The increased numbers of unemployed people that Luxon is complaining about is because of monetary policy supported and enacted by his government. He's attacking the previous Labour Government for creating more unemployed people, when his own policies intentionally do the same thing. It is impossible for Luxon not to know this. What's more, if sanctions and job seminars worked, it would be a disaster, by neoliberal reckoning – that might create full employment, which as we've already discussed, isn't allowed. And as they do not and cannot work, the only remaining reason for things like sanctions is to create ever more grinding poverty. As is so often the case, the cruelty is the point.

Governments can't have it both ways; if unemployment is created intentionally by government policy (and it is) then it's cruel to demonise beneficiaries. It would only be even slightly ethically acceptable to be mean to beneficiaries if the aim of government was for everyone to have jobs (and it's not). This is a contradiction. Contradictions create conflict. Conflict, when broadcasted, is spectacle. Conflict and spectacle create emotion, which creates audience interest, which generates clicks. Journalists are being offered a massive ratings win, and yet they're not taking it. It's baffling!

So, journos, here are some questions you can ask about the ridiculous heart of darkness that lies at the rotten core of our economy:

Mr Luxon, do you support full employment?

When he blusters but eventually admits he doesn't, because supporting full employment would call the economist hellhounds down upon on his shiny head:

Why not? Your own speeches talk about the dignity of employment. Shouldn't everyone who needs a job be able to get one?

More bluster, blah maximum sustainable employment blah, inflation blah:

But your government removed the requirement for the Reserve Bank to consider the employment rate. You're creating the unemployment you're complaining about. If the jobs aren't there, why should people be punished for failing to get them?

Bluster bluster, bitter pills, tough love, sanctions, I used to run an airline:

But it's not even working, is it? The Reserve Bank has hiked interest rates multiple times and the employment rate is still high. And the unemployment rate remains near historic lows. It's barely budged. And yet the cost of living keeps getting higher. Shouldn't we be finding a better way to manage inflation than making huge numbers of people miserable?

Er um, KPIs, key results, going forward, ambitious for NZ, greatest country in the world, beaches, barbecues, delivering on deliverables, airline:

So why should unemployed people be sanctioned for failing to get jobs that simply don't exist, because of your own policies?

Airline! I used to run a, did you know, did you know? Airline airline airline

So I ask you, Mr Luxon: if you increase the unemployment rate on purpose, what jobs are these beneficiaries you speak of so dismissively meant to get?

There you go, journalists! An easy bit of conflict all wrapped up in a neat little package. It should rate through the roof. Here's a chance to prove you're more than optics-addled defenders of the status quo, more likely to opine on the oratorial vibes of a politician's speech than the effectiveness of the policies the speech advocated for. Because the purpose of a system is what the system does, and it sure does look like the purpose of the economic system advanced by our current government is to keep five percent of people poor and desperate and miserable, all in the name of a cruel, flawed neoliberal theory about controlling inflation.

I want to give the last words to new Green MP Efeso Collins, who died suddenly today. He was just 49. I hope that the message he gave in his maiden speech will live on, because it's true.

I want to say to this House with complete surety that the neoliberal experiment of the 1980s has failed. The economics of creating unemployment to manage inflation is farcical when domestic inflation in New Zealand has been driven by big corporates making excessive profits. It’s time to draw a line in the sand, and alongside my colleagues here in Te Pāti Kākāriki, we’ve come as the pallbearers of neoliberalism, to bury these shallow, insufferable ideas once and for all. And this, sir, is our act of love.