The “Job Summit”, treating the symptoms, but where’s the diagnosis?

Last Friday, a national “Job Summit” was convened, a basically laudable attempt to gain some sort of consensus about the direction the new National government should take to try and deal with our increasing national economic difficulties (against the background of the worsening global economic crisis) with the idea of trying to prevent as much as possible the inevitable worsening employment prospects. This appeal to others outside of Parliament and his party by John Key for help and input is most welcome; it was not a noticeable part of the previous Labour’s way of doing business, which had more than a whiff of smug authoritarianism throughout its nine years. The New Zealand Herald had an article about this meeting the next day. Among the suggestions was a country-long cycle way to encourage active tourists and employ up to 4,000 people in its construction (apparently John Key’s idea, and quite imaginative), a “public-private investment fund”, training subsidies, a nine-day working fortnight, and various other ideas.

I have no real gripe with this effort, after all, I have for years bemoaned the lack of what I call “public discourse” in New Zealand. Well done, John Kay. I trust this will be the start of a more widespread discussion about the problems we are facing and what we might do about them, and not just with the shakers and movers in society but also in the wider community. It would be nice to see the occasional hour or two of prime-time TV help in this debate, but as I’ve previously noted, this is not likely. (Indeed tonight TV 1 had two consecutive hours of “reality TV”)

However the major qualms about our response to this financial and economic crisis remain. And that is, how did we get in this position? I have yet to hear anyone suggest it was anything other than wicked banks or the sub-prime crisis in the USA. That the whole world economy should shudder to a halt, just because of these factors, seems rather excessive, and no-one in politics, business or the media seem to have got their heads round this.

I write about this in an earlier blog, about economists’ inability to understand reality. The problem is that without understanding what brought us to this pass, how likely is it that the solutions proposed will bring any greater understanding? Certainly, jobs are a worry. This crisis will bring many redundancies, and the process has only started here.

For the last one year I have been doing a locum tenens in a central city practice, and one of my duties has been doing a large number of immigration medicals. What surprises me is how many immigrants are bringing no particular skills with them, they are Chinese chefs, or Vietnamese cleaners, or possess only similar menial qualifications. Why are these people coming here, or more to the point, why are they being allowed to come? I have a major concern about high rates of immigration, previously discussed here. It worries me, now that the predicted crisis arises, and as I have also pointed out before, that many of these new arrivals are, before long, going to have no meaningful employment. Not only is this not fair, but also is going to be very stressful for our society. We have taken it for granted that our multicultural society is going to work through thick, and thin, I only hope those people supportive of high rates of immigration know what they’re doing.

This “Job Summit” is the wrong approach; it is facile and futile. It seems yet again that any discussion about this economic crisis is only capable of dealing with the symptoms, and will never discuss the cause. The underlying assumption is that our previous twenty-five years of monetarist dogma was right, that the corporatist and globalised economy is right, and that what governments are doing is not to interfere with this, but merely to provide the necessary transfusion of money to resuscitate the moribund economy and our wonderful economy will rise from its ITU bed, and bring us ever increasing prosperity, as it did before. Sorry, it’s not going to work like this. Our economy is moribund because its systems are failing, not because it merely needs a blood transfusion.

Morning Report on National Radio discussed this matter. I followed a previous day’s report on the success or not of John Key’s first one hundred days in office. I thought the coverage of this was uncritical and laudatory. The “Job Summit” was given fully twenty five minutes of live saturation coverage. My letter read:

Dear Team,

Is it National Radio's purpose to act as a cheer-leader for John Key or is it possible we might yet hear your critical faculties come to the fore? From yesterday's comments about how brilliantly John has done in his first one hundred days, to this morning's saturation coverage of the so-called "job summit", your team's continued inability to understand the realities of our present economic condition and your uncritical complicity in years of unsustainable and destructive monetarist economic dogma has been, and continues to be, a deplorable failure of your duties as reporters and commentators in providing the public with unbiased and critical commentary as to what is happening in the real world. 

What is happening now was easy to predict, but you failed to, our leaders failed to. If you can't understand the present, how likely is it that you can manage the future? What we are seeing around the world now is a panicked cluelessness on a planetary scale. When is the penny going to drop that we can't do on the way we are? We are on the cusp of an economic, political and social revolution that will fundamentally change all our societies whether we like it or not. We have two options, to continue as we are, and go under, or welcome change, and survive. When are you going to the job properly that you are paid to do?

Yours faithfully,

Yesterday, Nine-to-Noon had a discussion between Laila Harre (a trade unionist – head of National Distribution Union) and Matthew Hooton (freelance writer and political commentator from the right) about this “Job Summit” Both seemed to have some agreement. Matthew said is was a good publicity coup for National and John Key. Interestingly they both were enthusiastic about the bicycle way. Laila talked about Mr Bollard’s stark economic warning. (He’s the Governor of the Reserve Bank.) You can hear the discussion here.

But again, there’s that intellectual refusal to undertake any deeper examination of what is happening. To continue the medical analogy, we are treating the symptoms but we’re not bothering to make a diagnosis. In medicine that’s a recipe for disaster, I would suggest it’s equally a recipe for economic disaster. Our cluelessness permeates every aspect of our present condition. I wrote a short letter:

Dear Kathryn and team,

Forty years of medical practice has only reinforced in me the principle that there's no good treatment without a diagnosis. We have for the last 30 years been told that there's only one way to run an economy, and yet that economy is now moribund. Why? Does this not suggest that this one way of running the economy was wrong, and that our attempts at resuscitation are doomed to failure if we still can't make a diagnosis and understand the reason for this collapse in the first place? I would suggest that what we are seeing now, from your panellists' discussion today to Obama's trillion dollar stimulus package, is yet more economic quackery on a global scale, to follow the global economic quackery that got us in to this predicament in the first place. 

Yours faithfully

Interestingly the old pension “chestnut” comes up for discussion; yet again we have our pension arrangements up for discussion, and the possibility of a moratorium on contributions to the “Cullen Fund”.

As I write this today, 3^rd March 2009, the economic news around the world gets ever more dire, with insurance group AIG reporting the largest quarterly loss in corporate history, US$61 billion, and share markets continuing to tumble. The patient is not responding to its transfusion, better give it some more.

End