Just Left

Two negotiations, one target: the Internet & our brighter future

This month two important negotiations happen that could affect anyone who uses the Internet.

In Auckland, there is a negotiating round for the Trans Pacific Partnership, a managed economic and trade pact that includes an intellectual property chapter that has to be seen to be believed: that branch of Hollywood known as the US Trade Rep has pushed for things like outlawing parallel importing, and even trying to create property rights in data on the Internet while it is in transit. (Barking crazy stuff, really.)

Half a world away in Dubai, a centuries-old UN organ called the International Telecommunications Union (ITU) is looking at a 1988 treaty for review, with some member states seeking to impose old phone network charging models on the Internet, or legitimacy for snooping on their citizens, or (if you believe the most critical accounts) trying to take coordination of Internet numbering and naming off the private sector and into the hands of governments.

Yawn, so what, you're possibly thinking.

Think again.

The old industries that have been damaged by the rise of the Internet use every means at their disposal to fight back.

Big movies, big music, big telcos, Big Brother: they all hate the changes that the Internet has brought about. They don't like their revenue disappearing. They don't like the fact anyone can publish and distribute their views online to a global audience. They raise fierce claims of piracy and damage.

It's all nonsense, of course. There are more movies, more music, more news sites, more opinion and commentary, more shared expression than has ever happened before. The conditions the old Bigs claim will destroy their industries have done the opposite - even for the Bigs that complain about them.

So why do some governments react in favour of the bigs and the olds, ignoring their citizens interests? Set aside the wishes of repressive regimes to get their sticky fingers on the 'net...

It's a problem as old as economics. When someone has a pile of money they will fight hard to protect it, and by definition they usually have the ability to fight that fight. The NZ experience of this is farmers demanding huge subsidies in the 70s, or the cheap power demands of the aluminium smelter, or rental home owners' aversion to capital taxes.

What would happen if these twin attacks succeed? Easy: more costs for Internet users. Less available content. Less privacy. Less innovation.

It's the open nature of the Internet that people in my line of work have been fighting for. The Internet as it is and should be is a platform founded on ideals of freedom. People follow the protocols and can develop any services they want. Email. World Wide Web. Torrents. Voice. These allow low cost high speed sharing and service all over the globe. Online travel; maps; social media; on and on it goes.

An Internet built on the values of some of the negotiators in the TPP and the ITU would never have taken off. It would not work. The free and open exchange many of us take for granted would not be here today.

New Zealand is on the side of the angels in this so far, in the ITU reliably. The TPP is harder: what if the choice is to trade off the Internet (say through crazy copyright and patent reforms) to get more beef and dairy access?

For me that's obvious: we wouldn't sign, simple as that. Others think we would have to. The cabinet is full of farmers. The temptation to back the old economy, which for all its faults does provide us with an income today, is obvious. Strangling the new economy would be easy in the short term, for there isn't much of it to fight back.

I'd be horrified if that happened, because we are hitting the physical limits of our old economy. There is only so much grass we can grow, coal we can mine, milk we can churn, trees we can chop. There aren't any comparable limits to our imaginations or creativity.

If we want a high wage, clean economy, it won't come from the old. It will come from the new.

That's why these two negotiations matter, so keep your eyes and ears open.

 

Posted with Blogsy

Taming globalisation

2008 changed everything.

The intellectual foundation of the policy framework we have used for thirty years was cut to pieces. The excuses and evasions of those in power across the West delivering stagnant wages, limiting opportunities, allowing asset price bubbles to explode and fertilising the soil that grew the Global Financial Crisis were at an end.

The lesson since is about how hard it is to change to a new approach even when you know the old one is a zombie, a dead thing pretending to live but unmistakeably past it.

If neo-liberal economy is bankrupt and a new thing needs to replace it, where are the points of attack?

One is global trade. What passes for a 'trade' framework has been frozen for over a decade in the 'Doha round' of WTO talks. It isn't a bad framework, and it has a functional institutional structure to drive it -- but it is too liberal to survive unchanged post 2008 and with the rise of developing country power in the international community.

In this case by liberal, I mean stacked in favour of the rich white core economies, and against poor developing ones. The rich export tariff free. The poor face steep market access barriers. This dynamic is what has jammed the WTO: the poor have said "enough is enough" — and for the first time, we have to listen. The same dynamic breaks climate change talks.

New Zealand is on both sides. Quite rich and quite white, we suffer from agricultural trade rules stacked against us. The rich erect barriers and soak farmers with subsidies. The poor suffer the consequences.

So in the face of this freeze at the WTO, the wealthy and powerful are trying to side step it, in part with agreements like the Trans Pacific Partnership Agreement, a cross-Pacific agreement being negotiated as I write. The next round is in Auckland in December.

This deal goes beyond trade. It seeks to limit policy choices in a wide range of areas, to rules that lock the zombie ideas of the 80s into the driving seat for all time (or until unravelled). SoE rules? Investor state disputes? Challenges to public services rights? Threats to environmental control? Copyright term extensions? A licence for Hollywood to tax Google?

It's all in there with more, aside from what you and I would recognise as more normal trade policy.

Countries like NZ face a choice.

Resuscitate the zombie?

Or let it die?

My preference is that we work in the WTO framework to serve our interests and fairness all at once: undoing the bias against primary production, and in favour of rich subsidisers.

Agreements like the TPPA might offer short term gains. But the costs are already apparent. As a small example, look how Australia got gypped in its 2004 deal with the USA. The gains are hard to see, especially with some parts of the US establishment now starting to position TPPA as a China containment strategy.

We don't know how things will change in future. Open trade is almost always for the better, where there is a true level playing field.

NZ ought to focus on that aim through the WTO framework. Not be helping dead ideas march on into a future that leaves Labour ideals - decent jobs, strong public services, democratic government, good environmental stewardship - harder to achieve.

I will be watching the NZ debate with interest...

On the #tppa - The Context

I've been thinking about the Trans Pacific Partnership Agreement (common twitter hashtag #tppa) for a while due to my professional interest in what is happening in international Intellectual Property Law.

This post sets out some of the bigger picture as I see it, and will be followed by a further post about the potential impact of the agreement, and then probably a final post on the implications for Labour's trade policy.

It's slightly heavy going. The takeaway point? Be concerned, and find out more.

What is the #tppa anyway?

The Trans Pacific Partnership Agreement is a "comprehensive" plurilateral agreement (i.e. between multiple countries), being negotiated between some Latin American, North American, Australasian and East Asian states (Viet Nam, Malaysia, Singapore, Brunei, Peru, Chile, the United States, Australia and New Zealand).

It is important to understand first that the TPPA is NOT A TRADE AGREEMENT. It will be called that a lot in the media, but that isn't its purpose. It goes "behind the border" and deals with a huge range of things that are about building comprehensive common standards and platforms in a huge range of areas - electronic commerce, investor-state dispute resolution, telecommunications, banking, services, intellectual property. These are all above and beyond the "trade" related aspects of the agreement.

The timetable is that the negotiators are aiming to finalise an agreement towards the end of this year, around the date of the U.S. Presidential election.

The TPPA builds on an existing agreement, known if memory serves as the P4, though it is in fact being negotiated from the ground up.

Japan, Canada and Mexico have all expressed an interest in joining the agreement, interest which has not so far been reciprocated by the negotiating parties.  The total two-way trade value between the United States and the eight other countries is around $440bn a year, making the value of the agreement reasonably small in the scheme of U.S. and global trade.

So that is what it is. In thinking about it, there are three bits of context to keep in mind with this agreement:

• the geo-strategic situation,
• the nature of globalisation and trade agreements, and
• the future prospects of New Zealand's economy.

Geo-strategic situation: is it all about China?

I am not a geo-politics expert, but it seems to me that part of the web of conflicting ambitions about this agreement relate to whether the purpose is economic, or geo-political. U.S. policy in the Asia Pacific is at least in part about the containment of China. That has to be why China is not involved in the negotiations, at least in part.

Readers will be more across the foreign and security policy debate than me, but the important point about that context is this: to the extent that economics is the core of the agreement, the U.S. will push hard for (in particular) Intellectual Property rules, as that is the main area of potential economic gain for them. The other countries will push back. Agreement will be hard to find. If on the other hand the geo-political imperative is what is driving it, then the U.S. will be more likely to accommodate reasonable economic demands from the other countries in the agreement.

Nature of globalisation: less is best.

More globalisation isn't always better.

Dani Rodrik made an argument in a recent book "The Globalisation Paradox" (a Washington Post review is here) that I fundamentally agree with. The TPPA is an example of the constant pressure to try and go beyond freeing up global trade (which I support), and into reducing the differences between countries on a whole range of fronts that up until now have been left to national decision. His view is that globalisation would have more legitimacy, and actually deliver better, if it was in essence "thin" - focused on reducing trade barriers, but leaving democratic governments to regulate the social and cultural elements of their societies as they see fit.

This appeals to me on a number of grounds. One is practical. I think that "subsidiarity" is an awful word that hides a great concept: make decisions as close to the grassroots as you can. There isn't any problem with countries cooperating to do things they can't do by themselves: e.g. freer trade, or tackling climate change, and so on. But there isn't much point in taking things they can do for themselves (e.g. choosing the balance between the interests of creators and users in the intellectual property universe) and forcing decisions on those into complex, slow, multilateral or global forums. Governments are closer and more accountable to the public, and can change things faster.

Another is principled: I think as a matter of democratic choice that most choices SHOULD be available to governments. In trade you generally both gain, but in some of the other areas agreements like #tppa seek to regulate, there can be very one sided gains that just cost some parties a lot, to put money in the pocket of another. IP (intellectual property) is the classic example. The U.S. wants #tppa states to lengthen the copyright term. That would put more money in the hands of U.S. IP producers of old, end-of-term copyrights (like some early Disney stuff) at the expense of consumers who would, once copyright expires, be able to make free use of that content. States should choose that balance, based on what is good for their people. They should not be locked in to choices made in one context that cannot later be changed.

So I suppose my head is at a "thin" globalisation model. Free trade is broadly good. But trying to use international agreements to pick the pockets of the poorer countries is not good. Taking away government ability to choose what suits a country best isn't good either.

Next steps for New Zealand's economy - the future or the past?

The third bit of context is about what comes next for our economy. We are unusually dependent on primary industry today for our exports and our standard of living. We have a very efficient agricultural sector in economic terms.

I don't think that that represents our future. I apologise in advance for the generalisations here, but this is trying to set out some big themes.

Here's why it isn't our future. We are hitting limits. Environmental limits mainly: but also physical ones. There isn't a lot more land to use, and the rising intensity of use of existing agricultural land requires ever increasing inputs - that add to the pollution being caused. Also, our agriculture industry is quite polluting, and is resisting the imposition of simple pricing mechanisms that would force them to start down a less-polluting path.

We can make our best future as an economy by adding value through innovation. A lot of that will happen in agriculture, but it can also happen in other areas: design, music and culture, high value manufacturing, business services, electronic commerce, high value tourism etc.

Those sectors tend to be faster growing than agriculture, and importantly, they are less capital intensive than agriculture - and they create more and better jobs for a given investment than agriculture does.

One way the #tppa could fall would be to give us some limited goods market access to the U.S., say in dairy and in meat. The cost would be tougher IP laws that hurt those new economy sectors I mentioned above.

I think that would be cutting off our future. We should not sign up to an agreement that advantages the old-economy industries with relatively limited growth prospects, and puts barriers in the way of new-economy industries that represent cleaner, greener and richer jobs for people who live and work in New Zealand. We would be doubly disadvantaged: relative advantage would be with industries with a slower growth path, leaving all of us worse off; and the chances of upgrading our economy into a more high-tech and high-income zone would be lost to us.

Conclusion

So that presents three areas of context. There are others that I don't have time to cover in any depth. There might be nuance you care to share with me that I haven't thought of - I'd love to hear from you if that is the case.

My view is already probably quite obvious. I think there are major risks to New Zealand's future present in the #tppa, the Trans Pacific Partnership Agreement. I'll try and get to some of those specific concerns in the next post, probably over the weekend.

A very nice dinner

I was somewhat mystified to get an invitation in my inbox a few weeks ago asking me to Dinner at the Residence of the Ambassador of the United States of America.

A very nice dinner it was too, last night: a crowd of media/blogger types, who for reasons of discretion I shall not name.  The Wellington post apparently has one of the most developed social media operations in the US diplomatic universe, and I'll admit I've been following some of their stuff for a few months now. That may have been the inspiration for the selection of the guests.

I've never really been in that sort of setting.  David Huebner and his partner Duane McWayne were brilliant hosts, and the mix of guests and Embassy staff mixed nicely together.

If you've not been to the residence and you get a chance, you should go: a particular highlight is the art.  The Ambassador explained that each post gets up to 15 art works which the State Department will borrow and bring to the residence, and that for his choices, he put a young Auckland artist together with a young Los Angelo artist, had them over to each other's cities for a fortnight each way, and got them to pick something that worked for the house.

Work it does. The pieces are marvellous, and the residence itself has a nice mix of informal and formal rooms that set the different pieces off.  The two chose seven pieces each, and if memory serves the fifteenth is a specially commissioned piece in the dining room that is really quite stunning.

The conversation was all around the place: the challenge of Kiwis with spicy food, through to U.S. presidential politics, the religiosity of public culture in the States, connections that social media allow, capital gains taxes and more.

It's funny. You can't always raise things you are most interested in in the context of a light social dinner. At some stage I'd be fascinated to hear his thoughts on the relationship between the Trans Pacific Partnership Agreement negotations and America's strategic interests in the Western Pacific -- but that didn't quite fit last night!

So a pleasant evening all round, a nice way to begin the week. My thanks to Mr Huebner for the hospitality. You can follow him on Twitter too, at http://twitter.com/DavidHuebner.

Prescott goes nuclear

A fascinating blog piece by former UK Labour deputy leader John Prescott here:

http://www.labourhome.org/forum/?p=5366

Some snippets:

But whilst I knew we were short of money I didn’t realise we also lacked the will to fight these elections. The people responsible for this non-campaign – and make no mistake there was no campaign - were Harriet Harman, Caroline Flint, Douglas Alexander and yes, our former Communities Secretary Hazel Blears.

I kept asking the party what was the strategy, what was our message, what was the campaign? I became so concerned I actually wrote to Harriet. Her reply was less than satisfactory. These apparently were the ‘messages.’

For the many v for the few
Grow your way out v cut your way out
On your side v on your own
Substantial leadership v insubstantial salesmanship

And that was it.

It seems the people responsible for our campaign were resigned to defeat and were prepared to use the excuse that we had no money.

and...

Time after time, activists across the country told me there was no message, no campaign and no leadership from the party. This was typified by the resignation of Hazel Blears – our local government minister – going out in a blaze of publicity the day before the local elections.

In her resignation statement, she wrote ‘Get Out and Vote Labour.’

Well you ‘got out’ Hazel but it sure as hell didn’t help our candidates get people out to vote Labour. Neither did brandishing cheques and wearing your heart on your brooch. You weren’t ‘rocking the boat’ you were trying to sink our ship.

And I’ve just discovered tonight that over the last few weeks, James Purnell was not planning for these crucial Local and European elections - he was planning for his own leadership election which he exclusively launched in the Murdoch press.

Not so much a Blarite as a careerite.

The grassroots and the candidates wanted to fight but we, the party, let them down. I’m sure many will quite rightly never forgive us for that.

SLOPS

You know I hesitate to be cynical about a very serious problem that is making people sick here, in North America and around the world but the perennial media frenzy over yet another pandemic threat really irritates me. It is serious. But we do tend to lose all sense of perspective when these things come up.

I can't put it any better than a viral e-mail that did the rounds a few years ago when SARS was the terrifying spectre of choice:

The World Health Organisation today issued a new warning against non-essential travel to the entire Western hemisphere following renewed concerns about the spread of Severe Loss of Perspective Syndrome (SLOPS). Officials are warning travellers not to visit the UK, the US, almost all of Western Europe, and Canada, following further outbreaks of the disease, which has led to mass panic among the media, thousands of ecstatic children being kept out of school by their credulous and moronic parents, and increased profits for DIY stores as the idiot public rush to bulk-buy face masks and boiler suits.

A WHO spokesman said, “You’d be much better off going to somewhere like Thailand or China, because all you’ve got to worry about there is SARS, and let’s face it, you’re about as likely to die from that as you are to get kicked to death by a gang of zombie nuns.”

The SARS virus has now claimed a staggering 500 lives in only six months, which makes it considerably more deadly than, say, malaria, which only kills around 3000 people every single day. Malaria, however, mainly effects only darkies what speak foreign, whereas SARS has made at least one English person feel a bit iffy for a couple of days, and is therefore considered much more serious.

The spread of SLOPS has now reached pandemic proportions, with many high-level politicians seemingly affected by the disease. The rapid spread of SLOPS has been linked to the end of the war in Iraq and the need for Western leaders to give the public something to worry about. Otherwise, they might start asking uncomfortable questions about domestic issues, and that simply would not do.

World first: gay PM in Iceland

Johanna Sigurdardottir is Iceland's new Prime Minister - and she happens to be gay.

I get frustrated when people like Chris Trotter go on about "identity politics" within the Labour Party.  For me such success is not about identity politics but about social democracy in action.  Johanna Sigurdardottir was clearly the best person for the job. 

The social democratic mission is about ensuring that people have the opportunity to succeed regardless of their background (age, sex, gender, disability, income, family background, religion).  I don't celebrate Johanna Sigurdartottir because she is gay: I celebrate Johanna because she was the best person for the job, and Johanna and the Icelandic people did not let sexuality be a barrier to her success.

Hat tip (No Right Turn)

President Barack Obama

Like many others, I was up at around 5.20am this morning Auckland time to watch the inauguration of my generation.

You expect a good speech from Obama and you are never disappointed. It was not the sort of mushy high-blown rhetoric that some other presidents have used; and you also get the sense that he is not reading words so much as expressing what he thinks and what he intends to do.

I know that all speeches are meant to be like that, of course, but trust me: most don't even come close.

My favourite passages:

We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.

This is the President who can renew the social contract in America, and who in so doing can combine it with the sort of environmental stewardship that secures the future of human life on earth. He is not talking about a small project, this man.

Another:

[T]hose values on which our success depends, honesty and hard work, courage and fair play, tolerance and curiosity, loyalty and patriotism - these things are old.

These things are true. They have been the quiet force of progress throughout our history.

What is demanded then is a return to these truths. What is required of us now is a new era of responsibility - a recognition, on the part of every American, that we have duties to ourselves, our nation and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character than giving our all to a difficult task.

This is a wonderful statement of the idea at the core of progressive left politics: that there is more to life than the self, and that what happens to all of us together matters as well.

It is a speech that stands with the best, and watching it this morning was something I can never forget. If anyone in politics or public life ever thought that the ability to speak to the moment, to persuade and inspire, just didn't matter, then surely the whole trajectory of Barack Obama from his 2004 Convention speech to this morning's Inauguration speech is all that you can need to think again.

If you missed it and want to see it, find it online. You'll find the time well spent.

From the history books... After the War

Below is a column I wrote when Young Labour President, back in 2003, on the Iraq War.

Some of the stuff I wrote in those days was appalling, but this remains an interesting read, as we finally near the end of the Bush presidency.

After the War
24 March 2003

Young Labour opposes the current war against Iraq. As we have said elsewhere, it is illegal, immoral and wrong.

But Saddam Hussein's regime is also immoral and wrong. And to see it gone will be no great loss to the world.

The most common theme emerging from those who are supporting the war is that this is somehow a fight for freedom against tyranny; as if those with concerns support Saddam and his works.

I would like to state, for the record, that it is possible to both oppose war, and oppose dictatorship.

And it takes no great genius to realise that this is making the world a more dangerous, and less free place, rather than anything else.

Strange things are stirring as the war moves ahead. I am convinced that the US and UK military operation will see no stunning setbacks; the war does not appear likely to last very long notwithstanding current delays. Unless there is a Stalingrad-esque attempt to stand and die around Baghdad, the days of the regime are numbered. It's no joke when the US armed forces are described as the most powerful in the world, and the idea that a half-starved, sanction-depleted government could stand against American might does not bear serious consideration. We can only hope that reconstruction of an independent Iraq proceeds quickly once the fighting is finished.

Sadly, the war is only the very beginning of a much more difficult set of questions and problems.

The biggest and cruellest joke is the idea that this war will somehow create peace. Every bomb that falls; every innocent civilian killed; will simply feed the terror networks the Americans seem to think they are in the process of destroying. The impression of a religious war, no matter how strenuously denied, is one that will have its consequences. The saddest outcome of this conflict is likely to be a steady worsening in terrorist activity all around the world; targeted to be sure at the aggressors in the current conflict, but making the world more dangerous for all of us.

For me, serious as this is, it is only a secondary consideration. The more chilling issue is the shambles at the United Nations, and the question of American hegemony. The world's multilateral institutions developed after World War Two with peace as their mission, in a world of disintegrating empires, facing the fallout of fascism, and determined never to see a repeat. America was if anything more dominant then that it is now; certainly in economic terms it was, though militarily today's power is more extensive.

The difference between then and now is one in Washington. A far-sighted and clear-thinking US administration realised that it could never win the peace through war. It generously helped to rebuild Europe; treated the vanquished enemy with a large measure of decency and compassion; and put together a system of multilateral institutions designed to build international cooperation and development.

And it worked - it worked wonderfully, for those countries which were part of it, and especially for the Americans and their interests. It saw off the challenge of the Soviet Union; it developed unparalleled economic prosperity. For sixty years the Americans were seen more as friends than as something to be feared; and largely they were.

Today all that good work and reputation is close to being in tatters. A hard headed regime in Washington fails to understand how the world works; lacks the insights and sheer humanity of the victors in the Second World War; and on a host of issues is driving wedges between the United States and the rest of the world.

This war in Iraq is a continuation of that divisive way of doing things; it sets a very chilling precedent in several respects:

• it gives free reign to states to step outside the international legal system, if they perceive it as being in their interests to do so.
• it entrenches the idea that UN declarations and resolutions will only be imposed on America's enemies (Iraq) not their friends (Israel).
• it tells murderous regimes all over the world that if they are disarmed (Iraq) then they are a ready target; if they have weapons of mass destruction (North Korea, Pakistan, Israel etc) then they are safe.
• as mentioned, it will inflame Arab opinion and increase the risk of terrorism around the world, threatening us all.

It also doesn't help the twists and roundabouts that America's objectives in the region are so unclear. Do they want a democratic Middle East? Do they want the harder-line Arab regimes with democratic mandates, and lessened access to oil that would result?

No, of course not. They want - need - that cheap energy. So will we see the toppling of Iraq; the same of Iran; and then the continued propping up of other autocratic regimes to keep the "Arab street" under control?

More likely.

The entire situation reeks of hidden motives, duplicity in language, and danger for now and the future. Once the war is over, the UN must take over the reconstruction of Iraq. Urgent consideration needs to be given how to repair the damage the international law has suffered: the UN must consider reform and regeneration in a new era of unparalleled American dominance. The whole global community needs to stamp out any notion that pre-emption outside the UN Charter is okay, and instead continue to address how the world will deal with regimes it finds repugnant, without destroying the existing framework.

Whatever happens, in a way completely unlike September 11 2001, it seems all too safe to say that things will never be the same again. The values bases of Europe and America are shown to be too far apart to paper over. Much work needs to be done, and it's our generation that will wear that effort - as well as the consequences of the current mess.

New Zealand's position has been simply outstanding. One can only hope that in the hard conversations and rebuilding to come, Helen Clark can play as much of a role as Peter Fraser did in the aftermath of 1945. Cooperation on the world stage is in peril now, but rebuilt it must be. America has proven in the past that it can be compassionate on an unparalleled scale. America does not have to put the rest of the world on edge; but that requires changes in American politics and leadership which will be the subject of another column.

Change is vital. Otherwise, peace will remain a dream, and this Iraq campaign will be remembered as the time when the lights went out - not all over Europe this time, but all over the world. I fear we will not see them lit again in our lifetime, if this doesn't get sorted out.

the end of the Washington Consensus

If anyone was in any doubt about the impact the financial crisis is having on the world and on world politics, one only has to look at what happened in the UK on Monday to get the answer: big changes are on the way.

Had you suggested even a year ago that a UK New Labour government would signal a new 45p in the pound income tax rate on high income earners; increase payroll taxes for public services; ramp the budget deficit up to 118 BILLION pounds sterling and cause part of that by a cut to the VAT rate.... you would have been dreaming, in fantasy land.

But then a year ago, if you had suggested that the United States government, sort of in the hands of the Republicans, would offer $700bn as a bailout of the banks, followed a month later by $800bn more purchase of distressed assets, I and everyone else would probably have suggested you had gone barking mad.

The simple fact is that for thirty years the West operated in a fantasy land of its own making. We thought we could borrow and hope forever, to bridge the gap between rising expectations of living standards, and lackluster per capita economic growth.

People, smart people, honestly thought that liberalising markets was always the right thing to do - even in finance, and that even the creation of more and more assets that were more and more distant from the real economy was good for finance and good for the rest of society.

The events of the past year or so, which have really come to the fore in the past few months, put paid to that for once and for all. The whole neo-liberal framework of "leave it alone" is now shown to be what those of us on the left generally argued it was: bankrupt.

People have now come rather hurriedly to the realisation that it is only the State as the embodiment of the public interest that can withstand the shocks and unravelling that is to begin. Which is why the debate in Britain today and in the United States during the whole course of the Presidential election campaign highlighted rather more fundamental differences than has been the case.

Briefly, in democratic politics we now have a social democratic view that says the state must intervene to protect the public interest, and we have a neoliberal view that says we should keep the state in its box, except for the current crisis.

It gives me great comfort to belong to a party and a movement whose principles are the right ones to deal with this crisis and to make sure that the recovery from it is designed with the public interest in mind, rather than the financial interests of those who gambled and lost being protected once again.

Of course, at home in NZ it is a bittersweet intellectual victory, because we've just lost the ability to put those principles to work. The upside is that the work of the past nine years has so changed the National Party that it has little choice but to work in the framework of moderate, social democratic values that the New Zealand public support.

The extent to which the new government remains true to what they said in the campaign, as opposed to the rather more savage and offensive liberal extremism that still beats in the chests of National's true believers (and their ACTivist sidekicks), is the extent to which it has a chance of winning the next election. Any deviation back to the horrors of 1990s extremism, ignoring the lessons of this financial crisis, will do NZ great damage, and lead to a very big repair job for the incoming Labour government.

Our task as an opposition will be to spell out clearly why it is that our values are the best fit for generating the recovery New Zealand needs once the storm has passed, and why, unlike any of the other parties, our arguments are actually ones that a) will work in practice, and b) we believe in.

...

Been travelling for work, it's conference season. The next conference is in India. I am not convinced it is worth going there, given yesterday's horrific events. Maybe home early which would be fantastic.