Polity by Rob Salmond

 The most recent Economist has an interesting, thought-provoking piece about the decline of centre-left parties across Europe in recent years. It’s well worth a read.

The headline figure is that social democratic parties, which were the dominant force in European politics as little as ten years ago, have now sunk to their lowest collective support for almost seventy years. The Economist’s graphic, reproduced here, illustrates the changes well, despite a little Y-axis chart crime:

Interestingly, the two recent periods of social democratic dominance in Europe coincide pretty nicely with the last two period of Labour government in New Zealand. It seems social democratic fortunes in New Zealand are mirroring those in Europe, even if the centre-left’s forces in Australia and North America are on a slightly different clock.

So, what’s gone wrong? The Economist thinks there are four things at play:

1. Flagship social democratic policies like miminum wages, progressive taxes, and universal social entitlements are now supported across the spectrum. In short – the left’s won those battles.
2. Rich country economies have changed towards more transient work in increasingly service-based roles, moving people’s economic needs away from traditional social democratic priorities.
3. People around the industrialised world are more supportive of “strident” political candidates, such as Trump, Sanders, extreme anti-immigrant parties in Europe, and so on. With few exceptions, social democratic leaders aren’t cut from that cloth.
4. The growth of self-identity as various forms of “middle class” has reduced affinity with traditionally social democratic notions like “working class,” which in turn affects public affinity with the traditional social democratic project.

I agree those four are all important considerations. I’ve talked about the victim-of-its-own-success factor before. If we have to endure a period of opposition in New Zealand, I’d much rather lose to a party that tries to ape Labour policy at so many turns than lose to a Ruth Richardson-style slash and burn administration.

That’s why as a progressive I’m quietly pleased when I see a National government reduced to crowing over its protection of working for families, increases to the minimum wage and benefits, increases to paid parental leave, and investment approach to social welfare, which is  cited by Bill English as specifically designed to mollify lefties. To be clear, I'm pleased about the "targeting the most vulnerable" aspect of the investment approach, and much less pleased by the "increasing private provision" aspect. 

Even though the progress is much slower than I’d prefer, it’s good to see progressive change happening even when the progressives are out of power.

I’d add a fifth factor for us to remember, too: Tough financial times are, in general, more likely to lead to conservative government. In good economic times, the left tends to do better. That, if I recall right, was a finding of Doug Hibbs in “The Political Economy of Industrial Democracies,” his seminal book on comparative political economy. The GFC of 2007-8 certainly counts as a suddenly-imposed tough economic time, and I think the fact that event happened at the same time as the centre-left started its deep European slide is no coincidence.

Of course the big question for progressives here is less “where did it come from,” and more  “how do we fix it?”

On this score, the article is helpful because the continent-wide nature of the problem suggests that social democrats’ woes in any particular country are likely due to large-scale policy factors as well as particular personalities. Our media likes to heap praise on John Key and derision of the various Labour leaders. Sometimes that will be justified, but the trends indicate there are bigger forces at work, too.

That’s where the large-scale rethinking program in New Zealand Labour may have promise. New Zealand Labour is taking the needs of the new middle class seriously. Instead of asking “how can we make the new situation fit our old strictures” it's asking “how can we change our policies to fit the new group’s needs.” That’s the mindset that lead to Labour’s Future of Work Commission, and that the party is starting to apply in other areas, too.

Long may that bold thinking continue.

The social democratic movement is far from dead, of course, as the success of Obama and Trudeau shows. The big challenge for progressives here and elsewhere is to parse out which bits of the Obama and Trudeau recipies for success are specific to their country and to their particular opponents, and which parts travel well to other places.

Over Easter I got to attend my sister Sarah’s wedding. It was a lovely long weekend catching up with my extended family, with Sarah’s best friends, and with her new relatives. The ceremony was gorgeous, and the party lasted two days.

There was a particularly poignant moment at the reception, when my Dad spoke in his role as Father of the Bride. Sometimes Father of the Bride speeches can be a bit boilerplate, but my Dad had come armed with something real to say.

Dad wanted to talk to the men-with-the-fancy-jobs. There were a few in the room, which often happens when a lawyer marries a surgeon. Dad’s retired now, but he used to have fancy jobs, too. His most senior role was Director-General of Health in the 1980s.

When my sister was about three months old, Dad felt a strange lump in her belly. The next day, they found out it was cancer. Kidney cancer to be precise, a Wilms’ tumour. The cancer weighed 500 grams, which is absolutely massive in a three-month-old kid. The prognosis was grim.

Dad’s a doctor, and his own medical training had said kidney cancer was a death sentence. He and Mum started quietly preparing for what they thought was inevitable.

But a skilled surgeon, armed with newfangled techniques that weren’t invented when Dad went to medical school, did successfully cut out Sarah’s engorged kidney. The tumor was intact. It seemed not to have leached or spread elsewhere, but Sarah’s poor body was subjected to 18 months of harsh chemotherapy to be sure.

And here’s the thing. Dad went back to work after Sarah’s surgery and, because he had a fancy job, soon trooped off to a World Health Organisation conference in Puerto Rico. It was, after all, an important international meeting.

Dad felt he was simply too busy at work to look after his sick daughter.

That left my Mum dealing with the, ahem, messy side effects of pediatric chemotherapy all alone, not to mention another kid and a part-time job of her own.

At Sarah’s wedding, in front of lots of friends and lots of strangers, Dad admitted that he hadn’t been remotely fair. He described it as one his biggest lifelong regrets. He said he was ashamed of himself. He cried.

He shared his innermost emotions with the room in a way Kiwi males in their 70s have often spent a lifetime avoiding. On the happiest day in the life of the daughter he thought he'd lose, Dad said he was sorry.

Then he looked up, and he sent a message to all the men with fancy jobs in the room:

No matter what happens at work, you’ve just got to be there for your kids.

You don’t have a choice.

Your job might be cool, but it’s not that cool.

You don’t ever get to be too busy when they really need you.

I get why he targeted the men in particular. Most women with fancy jobs already understand that when push comes to shove, the job comes second. All too often, though, us men are too blinkered to see it.

I think the weight Dad put on his work was partly due to the expectations of his generation. Those expectations are, I think, changing for the better, even if the pace of that change is still pretty slow.

When it came my own turn to look after a very sick daughter from 2009, my fancy employer at the time was completely understanding, and let me spend 6-8 hours, every day, at the hospital. And, for my part, I went to the hospital every day, for 6-8 hours, to be there for my kid.

And now, as a single parent, my major client understands and accepts that half the time I’m unavailable from five on the dot, regardless. They’re cool with it, and so am I.

But my Dad’s message is certainly worth sending and spreading. I still know too many people, too many men in particular, who let their jobs dictate the rest of their lives. It shouldn’t be like that, regardless how good the job is. A job is something you do, not something you are.

Good on my Dad for raising it, as uncomfortable is it might have been for him.

He can’t undo the things he regrets, but he can let us all learn from them.

In this morning’s National Business Review (paywalled), Matthew Hooton estimates Labour’s Universal Basic Income Policy could cost up to $86 billion.

This is the latest in a series of escalatingly absurdist claims about the UBI, starting with David Farrar’s $38 billion, John Key’s $76 billion, and Stephen Joyce’s 80% tax rates.

By next week, I expect Cam Slater to estimate the UBI costs $240 billion, New Zealand’s entire GDP.

So, what’s wrong with Hooton’s particular number? Well, let’s start with how he got it:

First, he finds a very high benefit, which is for a single superannuitant living alone ($431.10 a week).

On top of that, he finds a very high extra payment a person sometimes receives if they have a dependent child, which he says is the $107.20 a week a person receives if they’re on the jobseeker’s benefit.

Then he assumes a Universal Basic Income would provide those top-end payments to absolutely everyone, adults and children respectively.

Together, this means a typical family of four would receive a “basic” income of $56,100 after tax, before they’ve earned a cent. To put that in perspective, that’s what a person with a $70,000 pre-tax salary currently ends up with. Fewer than one in five people currently earn that much.

That’s a massive departure from the most-quoted example discussed in Labour’s initial UBI discussion paper, which would guarantee that same family only $23,000.

This is the first of the five most serious flaws in Matthew’s analysis: He stretches the concept of a “basic” income to, and well past, breaking point.

Second, Matthew falsely assumes that the current top-end benefit payments should apply to everyone. There’s nothing in the Universal Basic Income idea that requires it is the only support the government provides for people.

If a person has extra costs and/or little opportunity to earn (like the superannuitant living alone Matthew takes his figure from, for example), the government can readily provide the UBI and also something else. This particular case would come with little admin cost, too. So the assumption that leads him to give everyone the same $431.10 is false.

The third error is Matthew starts with pre-tax benefit rates, then uses them to hand out a post-tax UBI. This might seem like a minor, technical error, but it’s huge.

If you fix the error by using post-tax benefit amounts and also assume it’s the only income a person gets, it’s only an $11 billion error.

If you fix the error by taxing the UBI instead, as we currently do for superannuation and benefits, the impact is much larger. That’s because fixing this error pushes the rest of everyone’s income into higher tax brackets. It’s difficult to work out precisely how large the error is, because that would involve knowing everyone’s taxable income, but it looks to be in the region of $20-25 billion. This is, for clarity, a ballpark estimate.

The fourth error is about the child payments. Matthew assumed the current payment goes out per child, whereas in fact it goes out only for the first child. To be fair, that’s only probably a $3 billion error, so it’s minor compared to the others.

The fifth problem is a glaring obfuscation. The costs Matthew leads with are gross, not net. That leads to a more dramatic figure - $86 billion! - but a less informative one.

It’s like saying there were $14 billion of tax cuts in 2010, without acknowledging the GST increase undid most of them.

To be fair to Matthew, he acknowledges this late in the piece, and makes an incomplete nod towards the more informative net cost. He takes $25 billion off the price to account for replacing existing benefits, but fails to account – at all – for the tax changes everyone acknowledges need to form part of any UBI package.

Those five major problems make the cost estimate not worth the one-ply paper it is written on. As I mentioned on Twitter yesterday, two-ply would have been more useful.

The column ultimately provides estimate of a policy that bears little relation to the discussion Labour is having, and is based on wrong-headed assumptions and factual mistakes. If that’s your cup of tea, it seems Matthew’s your guy.

But here’s the thing, and I’m complimenting Matthew Hooton here: He’s far too smart to be this stupid.

I don’t think he honestly believes a UBI in New Zealand would cost $86 billion, any more than David Farrar believes it will cost $38 billion or Stephen Joyce believes it will lead to 80% tax rates.

Instead, all these insane figures are part of a deliberate, coordinated strategy of scaremongering, coming from many of the usual Dirty Politics suspects, aimed at shutting down an important policy debate just as it’s getting started.

But I think the media and the public are smarter than this crowd give them credit for. They can see this con-job a mile off.

Jordan Williams and his cronies have waded into the debate over the UBI. They have a new “study” on the topic, and it’s a doozy.

My personal favourite was the part where author Jim Rose argues a fiscally-neutral UBI will lead people to work less, leading to a massive recession.

Oh noes – massive recession!

So, how does this economic calamity come about? Well – wait for it – it’s because a study found that Swedish lottery winners tend to stop working.

Oh, of course.

Because winning millions in one day is just like $200-a-week-coupled-with-increased marginal-taxes-on-other-earnings.

Those two situations are like peas in a pod.

The audacity of trying to pass off that “argument” as something worth considering backs up my theory – advanced on Public Address yesterday – that right-leaning commentators are emboldened to print utter nonsense because some in the media will print the nonsense anyway 

This is just one more to add to the catalogue of examples why nobody should take the Taxpayer’s Union seriously. Their crime isn’t that they’re partisan. Their crime is they do crappy work.

Sadly, though – the Taxpayers’ Union does ensnare a victim now and then. This time it was Stuff. Here’s the blurb from Stuff’s politics page about the Taxpayers’ Union paper. 

I’m actually impressed at just how many conceptual head-desks Stuff managed to fit into 30 words there. Let’s count them off: 

• The money isn’t free, because marginal tax rates go up to pay for it. That’s been literally everyone’s point!
• There’s no mention in the headline or blurb of the dodgy source for the figures. Not even a “The Taxpayers’ Union says…”
• The Taxpayer’s Union study is, in fact, entirely silent on how much “Labour’s plan to give everyone $211 a week” might cost. Not a squeak.

• The only way you get to a marginal tax rate of 56% is if you ramp-up the UBI to not only be $300 per adult per week but also include $86 per child per week as well.
• That means the statement “$211 a week means 56% taxes” is demonstrably untrue. Nobody in the story, except the blurber, said anything remotely close to that.

 Oops.

I’m not going to wade into the debate over whose fault the flag failure was. My views are what you’d expect them to be.

Instead, I’ve been interested in the reaction from National-aligned commentators, from National-aligned commentator John Key on down. Their clear strategy is to breathlessly repeat one conjoured-up, focus group tested excuse after another, in the hope of muddying the waters. But they’ve over-egged the pudding, and the excuses come off as shrill and transparent. Two quick examples: 

1. A yes / no option. When we decided on our electoral system in 1992 and in 2011, the referendum had a question “Do you want change, or not?” It’s a reasonable question to ask when you’re, you know, considering change. Lots of people asked for that option to be repeated for the flag, not least because both almost all polls showed a majority happy to stay with the status quo, and we could have all saved some money. National thinks that asking for that option somehow doomed the process. Exactly how is left mysteriously unsaid…
2. It’s all Labour’s fault. National’s people say John Key’s inability to unite even his own party, let alone other parties, behind his pet project was all the fault of the evil manipulative Labour party, which elsewhere they prefer to call vapid and ineffective. I’d say if a senior politician wades prominently into a debate and takes a side, they shouldn’t be surprised when it becomes part of the political discourse.

As well as spinning like a top on this particular issue, the National commentariat wants desperately to change the subject. Anything else will do. That’s why they’ve jumped with so much gusto over Labour’s non-announcement about a non-policy.

To be sure, the Universal Basic Income is a big idea, and worthy of discussion and critical comment. But again the National apparatus has over-egged their response.

Both David Farrar and John Key said definitively the UBI would “cost $38 billion.” Nobody asked them where that figure came from, and the New Zealand Herald, NBR, and NewstalkZB repeated that figure uncritically in their coverage. ZB gets a very special award for their lack of critical thinking, ending their report with:

But Prime Minister John Key said he's looked into the numbers and it's "unaffordable and it's barking mad".  

"Basically it would cost $38 billion dollars, it might cost 76 billion." 

(To be be fair to John Key, I’m very impressed he managed to say “$76 billion” without a Dr Evil finger-curl there.)

I’m not suggesting Labour’s cost estimates should get fawningly repeated, too. They shouldn’t. But I am suggesting that treating politicans’ figures with a grain of salt is a healthy habit for journalists, no matter who’s spouting the numbers. 

Not everyone fell into Key’s trap, however. Here’s today’s Dominion Post editorial 

Prime Minister John Key, for his part, is certainly wrong to call the idea "barking mad" and to give it a $38 billion price tag. That is just absurd gamesmanship – the cost of the policy depends entirely on its details, which can vary greatly. Various Right-wing heroes, including the economist Milton Friedman, have endorsed a version of it.

Ahem, “indeed.”

David Farrar has also been repeating a second, equally absurd claim about UBI. He says it would require incomes above $48,000 to be taxed at 82%. That’s utter nonsense. He even admitted it to me, and to Russell, on Twitter last Thursday.

But on Sunday he was still repeating, repeating, repeating that lie, saying “Labour’s UBI would need an 82% tax rate on those earning over $48,000.”

He knows it’s a lie, but he’s repeating it anyway.

And that’s what gives away National’s strategy. Both on the flag and on the UBI, their coordinated response is to lie over and over again, and trust enough people will reprint the lies until they become truthy.

So, how does an opposition respond? Well it can’t stop National telling the lies, because Voltaire. And only the most boring and small-thinking oppositions say so little that there’s no opportunity for malignant mischief from their opponents.

I think the opposition’s best option is to name the behaviour, over and over again. It works in parenting, and it works with this.

They say sunlight is the best disinfectant. So when National infects our public conversation with lies and excuses, I’ll be here on Public Address providing a little ray of sun.