Archives for June 2023 | Josie Pagani



What just happened in Russia

I suppose Putin is calculating whether giving violent and unscrupulous criminals other than himself their own army might come with risks.

Prigozhin has said the unspeakable out loud: that Putin and Russia’s military launched a pointless war, ran it incompetently, and killed tens of thousands, motivated by their own greed and lust for empire and looting. “Evil brought by the military leadership of the country must be stopped,” Prigozhin said. (He stopped short of noting the killing of innocent Ukrainians, including thousands of non-combatants, presumably because he’s fine with that.)

Prigozhin's mercenary army is itself one of the most murderous and brutal forces in the world. He and his men are cynical, motivated by money and self-interest. They aren’t Christian, and they don’t care about Peter the Great. And yet he is one of Russia’s most popular figures. Decades of tyranny, suppression, gulags, and corruption has brutalised Russia in the true sense of the word: to be made brutal. The gangster state makes citizens cynical and apathetic, because caring is pointless, so gangsterism flowers like mould in a petri dish, a virus on a cruise ship.

Josie's stuff column , including the Russian foreign affairs ministry's social media responses to her, is here.

The Huddle, 26 June 2023

Josie joined Trish Sherson and Heather du Plessis-Allan on Newstalk ZB to discuss the Defence Force Boeing 757s to China- in case the first plane broke down, and National is planning to limit the sentence reductions judges can grant to 40 percent, reinstate three strikes and remove taxpayer funding for cultural reports, instead diverting funds into victim support as part of their crime crackdown.

The economy is on a precipice

Our current account deficit, the shortfall between our international spending and earning, has been sitting at around 9% of GDP, far more than the economy is growing. It makes our economy risky. If countries like us don't change early, then eventually change is forced, the impact is always unfair, and the politics become unstable.

What happens when we keep spending more than we earn is that our national debt keeps growing. We can pay off this debt by earning more, which takes time, or by cutting our living standard so that we buy less from overseas, we could sell assets, or we could borrow anew and effectively use the overdraft to pay down the Visa.

We have mainly been doing the last two. This is why our runways are maintained for private jets bringing in buyers to pick off choice land, profitable companies – and airports.

Josie's column is here.

Why we trust our institutions less

With the counter-offensive beginning, it's been a good week for Ukraine. Or, as RNZ would say, it’s been a bad week for Ukraine.

Trust has declined at the same time the government has looked increasingly feckless to voters.

You can tell the way people vote by the way they discuss Michael Wood's shareholding. Labour voters insist no-one cares. If they're right, that tells us how far trust has slipped when no-one blinks at a Transport Minister owning shares in an airport.

Why does this government stumble so often? One reason is that even asking the question is treachery. If you suppress the contest of ideas, you don't get to find out until it's too late where your plans are weak or your opponent has a point. Labour found in the 1980s and 90s that disunity can be devastating, so it never learned the converse: debate can make you stronger, not weaker.

Politics is about how you make people feel, Jacinda Ardern said. How do you constructively disagree with someone's feelings? When you see issues as symbols not substance you end up asking how you feel about promising zero carbon emissions rather than asking whether these policies are likely to achieve it. Only a ‘bad person’ would disagree.

I was on a panel last week with Gluckman and the deputy editor of the Economist newspaper, Ed Carr. Ed thinks journalists should do more reporting if they want to renew trust in media. Get out of the office and talk to people. Real stories reflect our messy, ambiguous reality.

He's right.

Josie's Stuff column is here.

Do the best things first

Voter cynicism rises in direct correlation with the largesse of the promise versus the diminutive nature of the delivery.

As voters lose faith in lofty promises, they turn to autocratic leaders who sound more credible.

Instead of soaring speeches at the UN calling for politicians to deliver all the SDGs, Bill Gates and political scientist, Bjorn Lomborg want the world to prioritise the “best things first”. Stop trying to do everything. Thanks to decades of research into what works, Bjorn's Copenhagen Consensus Center can use data to find the best interventions.

In his new book, Best Things First, economists identify twelve policies globally that deliver huge benefits at relatively low costs. They include trade, and simple interventions like spending $5 billion annually to improve conditions around births. These would save around 166,000 mothers and 1.2 million newborns each year. About $5.5 billion spent each year on agricultural research for the poorest farmers would reduce malnutrition, delivering benefits worth $185 billion annually. Another 4 million lives per year could be saved by 2030 through preventing TB and malaria, and immunising more children. Education would improve with more tablets in schools. Strengthening land ownership rights would increase incomes.

Read Josie's column from The Post here.

Why our productivity growth is a bit rubbish

Having given Treasury grief for their decorative wellbeing work, Josie gives them credit for hosting a global expert on productivity: Chad Syverson from the Chicago Booth School of Business. He added two new explanations for weak productivity:

  • Good managers attract the right talent, come up with new products, and can make tough choices. Using this data, Chad showed that half a dozen highly productive countries also have the most competent business managers. We don't have either.
  • The importance of competition. We're used to thinking about competition affecting the price of products, but it also affects our national income. In competitive markets, innovative businesses sweep away less productive ones, which is tough for the business that closes, but overall leads to resources being switched to doing things that create more with the same inputs. Competition causes innovation, boosts our wealth, and our wages. Now think about most of the businesses you deal with everyday: Supermarkets, banks, phones, power, even parking companies. When was the last time you can remember one of them being put out of business by an innovative upstart? Outside of the retail sector and some agile sectors like retirement care, most of our largest firms supplying the local market are comfortable oligopolies.

Chad reckons we have a chance to turn our productivity dial in the right direction. We're due some transformation, with too many kids going overseas because there’s not enough for them here.

The column is here.

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