Crampton, Walker on policy

Over at Eric Crampton’s excellent blog he did a round up of NZ economic issues.  In this round up he stated:

On the whole, Key’s National government has so far done a lot less harm than have others

I agree.

Paul Walker takes issue with this stating:

This government can, in my view, do a lot better than it is

I agree.

These guys are both completely right.  The government has been relatively constrained in the face of the crisis, which given our priors is a good thing.  However, the policies that they have put through just aren’t good policies as we have suggested here (as even if what they are aiming to do is the right thing to do – there are far better ways of doing it).

If I had to pick a position then I would say I’m currently with Paul – I would rather try to push the government towards optimal policies than accept that what they are doing is “relatively better”.  If everyone was jumping off a cliff would I think it was a better policy for my friend to jump off into a relatively soft area or not to jump at all …

  • I’m very happy relative to my expectations, but not very happy relative to my ideals. How’s that? I don’t disagree with either Paul or you here: the 40% rule is ridiculous; the 9 day fortnight could have been awful (though they’ve restricted it so much that it’s probably not going to be too bad); the bike trail is a bit of a joke (but if it stays within an order of magnitude of current costings, again isn’t too bad). But I was scared that we’d wind up with lots of business bailouts and other such nonsense: hasn’t happened. At least not yet.

    Heck, Bollard’s even started worrying about inflation (for once)!

    Grey skies are gonna clear up, stick out that noble chin….

  • Hi Eric,

    You are completely right – the point you raised was very relevant, I’ve had a few people email me and tell me how much they enjoyed your point of view.

    However, I’ve always stuck to being idealistic instead of pragmatic on the blog – so I thought I shouldn’t really change this late in the game 😉

  • My feeling is that the current government could have done some seriously good things in terms of reforming the economy – 1984 like stuff – and they haven’t. Eric’s right, however, in that what they have done could have been a lot worse and I guess we should be happy about that. But we have to hold these guys to a high standard and point out that there remains a lot to do. And there really are times when Key looks far to Muldoonish for my taste!!!

  • Hi Paul,

    All very true.

    I would take a third route though. Eric is happy they haven’t f’ed things up more while you are focused on good policy they could implement.

    Personally, I am more irritated by the bad policy that has been implemented (even though it is “sort of” minor) than I am concerned about policy improvements. This difference on my part stems from expectations – I expected the government to do nothing, and so was disappointed by the “nine day working week”.

    “And there really are times when Key looks far to Muldoonish for my taste”

    Isn’t the nine-day working week a wage subsidy? Sounds like Muldoon to me 😉

    Of course it is possible to justify a targeted wage subsidy – but you’ve got to have a damned good reason why alternate policies can’t be used!!!!