PO Box 2 Blackball

Paul Maunder's blog


sustainable economy

Becoming Teflon John

They say about John Key that nothing sticks, and he looks set to become a long serving prime minister, with the opposition unable to damage his standing, or find the wedge that splits open the political middle ground.

The biography on Key produced before the last election was an informative read. We know the basic story: single Mum working at nights, state house, mediocre school student with the ambition to be prime minister, wanting to study economics but Mum saying accountancy was a better option career-wise; and the young graduate, who can’t remember noticing that great ethical battleground, the 1981 Springbok Tour, then seeing a TV documentary on currency trading and saying to himself, That’s what I want to do.

So, what does a currency trader do? The Foreign Exchange market (FX for short) exists ‘to facilitate the exchange of one currency for another’. [1] It’s necessary for multinational companies ‘who need to pay wages in different countries, buy and sell between countries and for mergers and acquisitions.’ It also means we can go on holidays in different climes and change our money at the airport. But this practical use is only 20% of the market volume. The other 80% of trading is speculative, to put it bluntly, gambling by large financial institutions and wealthy individuals, ‘who want to express an opinion on the economic and geopolitical events of the day.’ Right now, they might want to hasten the downfall of Venezuela for instance, or influence the UK referendum on whether to belong or not to the European Union.

All currency trades exist simply as computer entries. Trading involves betting one currency against another. If I think the NZ dollar will increase in value against the Aussie dollar I buy NZ dollars with Aussie dollars and after 24 hours, during which I hope the rate will have increased, I buy Aussie dollars with my NZ dollars. If the rate has increased by 1 cent in the dollar and I have risked 1 million dollars I’ve made 10,000 in a day. You can also put a forward date on the transaction, say a month’s time. If in the meantime, an election is occurring, or a budget, that would up the stakes.

Currency traders play middle men, buying the million kiwi dollars at a rate acceptable to the seller and then, in turn, buying the Aussie dollars. If there’s a differential of .2 cents, they’ve still made a couple of thousand. They’ll win some and lose some, but over a week, they’ll be wanting to make a profit. Of course, there’s research to help: past movements of the currencies and ‘fundamentals’ to take note of, namely ‘the likely effect of economic, social and political events on currency prices’.  It’s a risky business but huge gains are possible. George Soros reputedly made a billion dollars in one day. There are no rules or regulations and it is the largest financial market on earth, 3.2 trillion dollars being exchanged daily. It’s a global poker game for the wealthy.

John was good at it. Like a poker player you’d have to have confidence, an ability to read the opponent and ways of coping with stress.  Some dealers, in order to relax, opt for the high life: sniffing cocaine and taking a call girl to Acapulco for the weekend; but John married his childhood sweetheart, had a couple of kids and saved his money until he had a nest egg which would see him through.

Now for his boyhood ambition, to be PM. He’d been at the heart of the beast, accepted that that’s how the world works (a poker game for the rich) – of course, there’s other stuff going on, droughts, plagues, wars, Springbok Tours, poverty, but they’re not really important, other than their effect on currencies. I mean, don’t sweat them. When you get to be PM, watch out for the fundamentals and past movements. There’ll be colleagues who get tempted by the high life, just rein them in or get rid of them. It’s sort of fun being with celebs and being one. The opposition’s stuck in some time warp worrying about injustice and beggars and people sleeping in cars and stuff, but it’s not actually relevant – the FX is where it’s happening and people know that. Life’s a poker game, a celeb game, everyone wants to be wealthy enough to not have to worry. And they’re all waiting for the chance, waiting for the button to push. Apartheid went away didn’t it? Making a song and dance didn’t do much. The exchange rate did them in. The wealthy said, Whoa boys, it’s not working any longer. So stop the ethical sweating. It’s a waste of energy.

Of course, as PM you have to take notice of what people are thinking. For that, you’ve got the polling. If they’re really against something, got some bee in their bonnet, well, don’t do it. Doesn’t matter. Win some, lose some. Don’t get into a sweat at the occasional loss. Just keep on eye on the fundamentals. And know that incremental change is worthwhile – the FX operates to the fourth decimal point.

And everyone agrees, really. Is Labour against the FX? Nah. The Greens? Nah. So what are they on about? Trying to sweat the little stuff – workplace laws, environment – stuff like that. Of course, as you move around you do see some shit that makes you think. Syria, ISIS, people who’ve lost the plot, gone sort of primitive, dog eat dog, blood and guts. What war must have been like. Before drones. But the FX’ll sort it out. I mean, it’s dog eat dog, but doesn’t involve fists or rocket launchers. It’s civilised. The only problem is if someone starts attacking that. This Sanders bloke is a bit of a worry, but he’ll go away. Thank God we haven’t got anyone like him in this country.

Right, got to get on the plane again. My daughter’s got a graduation in Paris. Better head off for the weekend. You know, if you’re really smart, you can create a bit of a dynasty. Not bad for a kid from a state house.


Politics as storytelling

Mayday pic

Dairy worker delegates and organisers with Cuban Ambassador.

The Mayday seminar on the way forward for the Coast economy was designed as a story-telling event, to test whether there is a narrative we can begin to inhabit. The seminar was union led, with the unions being joined on the organising committee by Runanga and Blackball community organisations and the Grey District Council Economic Development Unit. This in itself is a story, which questions whether the discussion is necessarily led by managers and political leaders.

The seminar began with union organisers and delegates reporting from their survey of what Coast workers want? It proved to be a coherent story. The well-organised and fully unionised primary teachers want to retain their collective agreement, don’t want to be individualised by performance pay (instead want a better career path), are fully aware of and will resist corporate attempts to colonise the public system via charter schools and corporate product, and are acting in solidarity with support staff to raise the wages and conditions of these valued colleagues.

The health workers are equally committed to their collective, but are suffering stress and overwork from the underfunding of the service, underfunding designed to drive those who can afford it, into the private sector.

In the government sector and in midwifery, equal pay remains a big issue, as does work life balance. Midwives, self employed yet funded by the state, have only had a 2.5% increase in twenty years.

Those outside the state sector want well paid, secure and meaningful jobs, with career paths available. Not an extravagant  request, but one threatened by the increasing trend to precarious shift work, symbolised at its worst by zero hour contracts.

A cultural worker, who because of the nature of the field, has always worked precariously, stated how a Universal Basic Income would assist people faced with precariousness, as well as pointing out the injustice of arts funding being directed to urban areas.

The story told was a coherent one, of a desire for meaningful and secure livelihoods based in the Coast region.

The politicians and executive officers working in economic development were then asked to respond, this constituting another story. Kevin Hague identified the problem: we focus purely on economics, rather than focusing on the needs of people and the environment – the latter focus should then generate the economic system. But otherwise the response was highly individuated:  visions, personal aims and hopes, institutional charters, with two specific proposals for Buller being mentioned: the wood waste to diesel proposition and the incinerator proposal. But there have been community campaigns in Sicily against their poor region becoming the dumping ground for rich regions’ waste. Will there be community discussion and assessment or is any corporate offer to be jumped at? We seemed to be in a story of fragmentation.

The Cuban ambassador then told the story of the extensive and thorough consultation process (which is ongoing) as that country began to restructure its economy – every strata of society, from unions to farmers to students to neighbourhoods responding to a set of proposed changes.

After lunch three young professionals told their stories of ‘living on the Coast’. Nick was brought up here then left to further his education but has since returned, Elena managed to educate herself while remaining on the Coast (at one stage that required enrolling in a Queensland University on-line course) and Te Whaea has come here to teach. Each of these wonderful young people told of their reasons for living here, the advantages and compromises and their commitment to the community. Lifestyle, access to the natural world are balanced against fewer consumer and cultural opportunities. Affordable housing is a big plus. They reported excellent colleagues and mentoring, but Te Whaea felt the lack of visibility of the Maori story and the lack of multi culturalism (Mayor Tony Kokshoorn stated that funds have become available to tell the tangatawhenua story). But the simple fact that these young people were here, enjoying life and are committed to community involvement was a very hopeful story.

Of course there had been an elephant in the room, the neo liberal master story: that the economy and the political system should facilitate large, usually multinational corporations, to exploit labour, society and the environment in order to return a profit to an increasingly small number of people. We had avoided this story but were reminded of it by Karen Davis as she told of the dairy industry expanding to Chile and China and developing unsustainable farms on the South Island East Coast during the price boom, leading to cows being turned into machines, an inevitable over supply and the inevitable bust (politely called market adjustment), but during which bankruptcies, suicides and community implosions occur. As well, dairy farmers pay very little tax. But we didn’t want (and shouldn’t want) to be sucked into this story.

Three local small business people then told their stories, all equally moving and entertaining: of the creation of the iconic Blackball businesses which had proved sustainable and involved risks, guile and passion, of the absolute integrity of the Garden Shop and its body of skilled workers; of the Putake Honey people, moving from the higher echelons of the corporate world to bee keeping in Marlborough and now the Coast (supported by DWC), because life wasn’t making sense in the flash Sydney apartment. They were stories of passion and commitment, and stories based here.

Finally, there were two possible stories introduced: one the co-operative model developed by the Australian union movement, where union networks provide a committed market for a collectively created product; the other the social enterprise model, where the community organisation grows into a business serving local needs. It is a model which is now at the centre of the economy in many of the marginal rural areas of Scotland.

In the reflection process, there was a feeling of hope, based on the stories of committed people choosing to live here and making that choice a viable one. Damien O’Connor made the point that a change of government is required. It does require political institutions supportive of both collectivism and individual aspiration within that collectivism.

And it was here that there appeared a different beast in the room, the notion that the political party, if you like the story of representation, must originate from within the stories being told, rather than telling a story outside these stories. And of course, the story of socialism developing social democracy was of this nature. As soon as it diverted it disastrously failed. The environmental movement is another such story. Once again, as soon as it diverts it begins to fail.

How this story can be told is another story, yet to be told. Perhaps we could begin with a West Coast charter. Here are some suggestions of what might be in it.

  • That the Coast recognises the special place of tangatawhenua in the history and culture of the region;
  • That the Coast upholds unionism and the value of collective agreements to ensure equity and collaborative management;
  • That the Coast upholds the principles of pay equity;
  • That the Coast values work-life balance and flexible working schedules which contribute to that balance, as well as career paths in all work sectors;
  • That the Coast upholds the public ownership of education and health services, requests adequate funding and that collegiality be preserved;
  • That the Coast, realising an inevitable seasonality in some sectors, the pressures involved in small business and the precariousness that results, is supportive of a Universal Basic Income;
  • That the Coast celebrates and supports sustainable small business loyal to the region and passionate about quality and service;
  • That the Coast celebrates young people committed to the region and to their life here;
  • That the Coast will seek ways and means for a range of online tertiary education to be available to its young people in a supportive environment;
  • That the Coast insists on a regional royalty payment for materials extracted here;
  • That the Coast encourages local processing and the adding of value to materials extracted here;
  • That the Coast recognises the uniqueness and value of its environment and insists on sustainable practices in all areas;
  • That the Coast welcomes investment and corporate ventures but will scrutinise ventures according to the above values;
  • That the Coast in order to rectify the rural/urban divide requests population based access to funding in cultural and research and development areas;
  • That the Coast requests its remoteness and special needs be recognised in the funding of the health and education sectors;
  • That the Coast welcomes refugees from war torn and oppressive regimes and will enter partnerships that enable their transition to our community.

Wouldn’t it be great if such a charter were to be discussed at all levels of Coast society?

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