Doing Deals With Mates

Bernard Hickey writes about how the government has a tendency to do deals with its mates in the Herald today. The tone of the piece surprises me for a guy who is an experienced journalist. Of course the government will do deals with its mates while ignoring the plight of people in special interest groups with the ability to lobby!

Yesterday I wrote about why farmers don’t deserve a bailout. The truth is that no one deserves a bailout – Warner Brothers, farmers suffering from drought, manufacturers who can’t produce high value, high margin products and couples who can’t afford to buy in Herne Bay when neither of them produce enough value in the economy to be able to service a mortgage on a house there.

I think that Bernard Hickey doesn’t quite grasp how power is distributed in New Zealand. He completely under-estimates how a National government has no “laissez faire” backbone, but a track record of corporate socialism and “deals for the boys”. The farming special interests – represented by Federated Farmers – are the most privileged special interest group in the country. They are very much primary beneficiaries of “laissez faire that suits National’s mates”.

They don’t really care about the exchange rate to the extent that our inept, baby boomer led manufacturing sector does because their business is not about export revenue or productivity. It’s about farming for capital gains and providing minimal cashflow to service the mortgages on landbacks around South Auckland and the Waikato, for example. Farming stopped being farming a long time ago.

I’d disagree with his comment that “there are more votes in cheap petrol and TVs” because he is implying that the median voter actually thinks about things like this when they visit the polling booth. The reality is whatever handout is more attractive will win on the day, helped by the attractiveness of the political candidate and whatever “feels right” for a sizeable chunk of the voting public.

There are few rational, informed voters. But that’s the price of living in a democracy – we get to be ruled by the opinion of the least common denominator who watches “Agent Anna” or “Seven Sharp” or even “The Rugby Channel”. The smart play is to forget about the voting public and look at what officials can do. They’re the other axis of power in New Zealand, and the question has to be asked – why have the farmers been cut so much slack, unless they were a powerful interest group?

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