Very interesting, I too tried a wide variety of courses while pursuing my 'useless' arts degree in Film and Music.
Economics was my best subject in high school (the only one I got scholarship offers for), so I've maintained a passive interest in the field and it has been really disappointing to watch the public understanding of economic policy plummet.
Bernard Hickey is great, and has critiqued both sides for their lazy policy ideas. Another Substacker I'm reading to understand modern economics is Lorenzo from Oz, who mixes his explanations of economic theories with examples from history.
Personally, I think the reason economics isn't widely understood in our generation is that since the rise of 'neo-liberalism' in monetary policy we haven't lived in a 'real' economy.
Policies that call for consistent monetary inflation in the 1% to 3% range from central banks, and a willingness to bail out failing private banks, have steadily eroded public trust in fiscal currency and financial institutions. So, with trust in the value of money declining, people are naturally resorting to more informal trading (barter, bitcoin, etc...) to get by.
A more natural equilibrium for central bank policy on monetary inflation would be -2% to 2%, but both 'neo-marxist' and 'neo-liberal' policy makers are loathe to suggest this idea because a 'negative stimulus' in monetary policy would shrink GDP - the only metric that voters are told to care about in the 'neo-liberal' era.
While it wouldn't be a vote winner in the short term, 'negative stimulus' would very likely lower CPI - and I consider that a much more important inflation metric than monetary inflation or GDP. In the long term, people would likely vote for politicians who made food more affordable for the average citizen. Problem is, you need a politician with the political capital and courage to try something like that...
The upcoming era of geopolitics is going to be very interesting for New Zealand's economy, as food is currently our highest-priced commodity despite the fact we export a lot more than we consume. If Trump does follow through on his promises and this pushes the world into a more isolationist trajectory, surplus goods may actually see the price of goods come down without outside intervention... if we can get the supermarket market under control, that is.
The problem with chasing a negative stimulus is that our economy already feels razor thin and public services stretched to breaking, and may actually be beginning to break under Luxon. Transitioning towards that would be made even more painful by the painfulness of neoliberalism.
Good point, I wouldn't want to see the current coalition government try to balance deflationary and inflationary monetary policy with new ministerial direction to RBNZ. The current ministers for finance don't have the knowledge or skills to pursue a policy like that effectively.
With a pragmatic view of the realpolitik, something our government could do is remind local producers of their priority to the New Zealand people.
One of the weirdest things about food prices is that, while the rent seeking behaviour of the grocery duopoly is a major factor, it is also yet another outgrowth of Rogernomics. Since we removed direct subsidies to farmers in the 1980s, they have charged local wholesalers a similar price to what they can receive in the global export market.
Their argument is that, as they aren't directly subsidised, there is no incentive to sell their stock cheaper to the NZ market and they are profit driven businesses. I'm most familiar with the dairy market because my family was in that industry for many generations, and Fonterra sets their farmgate pricing with a big focus on the global dairy market.
However, as with most 'neo-liberal' arguments, this argument for setting local prices based on global trends ignores the indirect subsidies that farmers receive in the local market from infrastructure development, special tax breaks on capital depreciation, etc...
It also ignores the $1B of annual funding that goes to MPI for biosecurity, food safety, and other parts of the regulatory landscape for food supply. Farm businesses benefit significantly from government budget apportionment, but their public arguments show little awareness of the full extent of these benefits, and no intention of passing their taxpayer funded benefits on to local consumers.
You're right that an isolationist America and Trump's threatened tariffs might lead to excess local food supply and lower local prices, but it is important to consider the high value of NZ agricultural goods in the global market. It is also possible that the excess stock could shift into recently opened 'free trade' markets, like those in the Gulf Cooperation Council: https://www.beehive.govt.nz/release/new-zealand-concludes-high-quality-trade-deal-gulf-cooperation-council-gcc
Highly applicable engineering degrees here. I design industrial robots. However, I’m always fascinated to watch out for when my degrees matter. Virtually everything useful that I use in my real job comes from secondary school physics and maths.
Except for Green’s integrals. I sat in a lecture (I attended few) and thought - who the hell is ever going to use this Green’s integrals stuff about stress distributions around holes in infinite media. My first job out of university was to do with the design of underground coal mines in Huntley. Horizontal holes in the ground. (I was just out of university. Ever since, when going down highway 1, past Huntley, I keep an eye out for cracks in the road that would indicate that I got my Green’s integrals calcs wrong and we are going to fall into a collapsed mine.)
I actually majored in sailing and sitting around being depressed. There were 5 of us in a flat in Albany Rd in Herne Bay ($40 for the whole house, so $8 each) that could have been the set for The Young Ones. The scrim on the walls in my room flapped when the wind blew. It’s long since been gentrified. But I had a small boat at one of the little beaches there and spent my time in it.
Useless Arts Major here too, and also on ACC which I think may not be quite as bad as WINZ but has moments getting to be. Love your column and asa boomer-adjacent (late-boomer/Generation Jones/ Gen X-adjacent - take your pick) can wholeheartedly say your degree absolutely has value beyond the enjoyment, because you were taught to think. Having employed graduates I can tell you that business grads come in with all the answers and are completely useless. At least Arts grads know to ask questions.
As for Economics-we just need to understand enough and, as with most things, read widely (and wisely as autocorrect would have it), choose who you think is correct because reasons, then make your case. The fact supply-side economics has been largely discredited by reputable economists (Krugman, Picketty, et al.) and supported by the likes of the NZ Initiative. I don’t want to be too pejorative or conspiratorial, but they do seem to have an agenda.
I've been musing away at the differences between "business" and "arts" grads... I'm starting to think there's been a serious flaw in the way we've divided people into people who want to make money and then into people who want to do good/be creative/follow their passions. And to be honest, a lot of artists and creatives and humanities students could be doing better out there if they had some business knowledge!
It's been VERY alarming how the pre-election discussion around NZ Initiatives' extreme neoliberal backing and bias hasn't stopped media and economists from citing them, and from citing them uncritically too. That's been admittedly quite disappointing -- but these think tanks have a very established set up, and it works because it's been perfected over a century. Our correspondents can no more easily wean themselves of ATLAS than our politicians can from Rogernomics, it seems.
OK Subscribed! Because what you say echos my thoughts as I attempt to properly understand the Right - Left perspective of politics. I my mind it does not fit any of what we need, as people, particularly in this world - in this Century.
I think I just signed up............saw my credit card but not sure. Please confirm my yearly sub at such a reasonable rate, and I thanks you for that....but am I on board te waka?
Oh yep, there I is...got the email. I am in and THANK YOU!
the time for talk is now. the time is also for wondering how the arts can figure in possibly cracking open jaded and jarred minds .....as in the polarised and resistant to change society and world we live in................how do we get under the skin, how do we understand why people hold their convictions, bias and prejudices, how do we change that..........I am convinced, creativity, understanding, compassion and the arts speaking .............is a way ahead. Love your mahi Sapphi, and I thank you. I will look into how to support more than reading and restacks. You are a star.
Very interesting, I too tried a wide variety of courses while pursuing my 'useless' arts degree in Film and Music.
Economics was my best subject in high school (the only one I got scholarship offers for), so I've maintained a passive interest in the field and it has been really disappointing to watch the public understanding of economic policy plummet.
Bernard Hickey is great, and has critiqued both sides for their lazy policy ideas. Another Substacker I'm reading to understand modern economics is Lorenzo from Oz, who mixes his explanations of economic theories with examples from history.
Personally, I think the reason economics isn't widely understood in our generation is that since the rise of 'neo-liberalism' in monetary policy we haven't lived in a 'real' economy.
Policies that call for consistent monetary inflation in the 1% to 3% range from central banks, and a willingness to bail out failing private banks, have steadily eroded public trust in fiscal currency and financial institutions. So, with trust in the value of money declining, people are naturally resorting to more informal trading (barter, bitcoin, etc...) to get by.
A more natural equilibrium for central bank policy on monetary inflation would be -2% to 2%, but both 'neo-marxist' and 'neo-liberal' policy makers are loathe to suggest this idea because a 'negative stimulus' in monetary policy would shrink GDP - the only metric that voters are told to care about in the 'neo-liberal' era.
While it wouldn't be a vote winner in the short term, 'negative stimulus' would very likely lower CPI - and I consider that a much more important inflation metric than monetary inflation or GDP. In the long term, people would likely vote for politicians who made food more affordable for the average citizen. Problem is, you need a politician with the political capital and courage to try something like that...
The upcoming era of geopolitics is going to be very interesting for New Zealand's economy, as food is currently our highest-priced commodity despite the fact we export a lot more than we consume. If Trump does follow through on his promises and this pushes the world into a more isolationist trajectory, surplus goods may actually see the price of goods come down without outside intervention... if we can get the supermarket market under control, that is.
The problem with chasing a negative stimulus is that our economy already feels razor thin and public services stretched to breaking, and may actually be beginning to break under Luxon. Transitioning towards that would be made even more painful by the painfulness of neoliberalism.
Good point, I wouldn't want to see the current coalition government try to balance deflationary and inflationary monetary policy with new ministerial direction to RBNZ. The current ministers for finance don't have the knowledge or skills to pursue a policy like that effectively.
With a pragmatic view of the realpolitik, something our government could do is remind local producers of their priority to the New Zealand people.
One of the weirdest things about food prices is that, while the rent seeking behaviour of the grocery duopoly is a major factor, it is also yet another outgrowth of Rogernomics. Since we removed direct subsidies to farmers in the 1980s, they have charged local wholesalers a similar price to what they can receive in the global export market.
Their argument is that, as they aren't directly subsidised, there is no incentive to sell their stock cheaper to the NZ market and they are profit driven businesses. I'm most familiar with the dairy market because my family was in that industry for many generations, and Fonterra sets their farmgate pricing with a big focus on the global dairy market.
However, as with most 'neo-liberal' arguments, this argument for setting local prices based on global trends ignores the indirect subsidies that farmers receive in the local market from infrastructure development, special tax breaks on capital depreciation, etc...
It also ignores the $1B of annual funding that goes to MPI for biosecurity, food safety, and other parts of the regulatory landscape for food supply. Farm businesses benefit significantly from government budget apportionment, but their public arguments show little awareness of the full extent of these benefits, and no intention of passing their taxpayer funded benefits on to local consumers.
You're right that an isolationist America and Trump's threatened tariffs might lead to excess local food supply and lower local prices, but it is important to consider the high value of NZ agricultural goods in the global market. It is also possible that the excess stock could shift into recently opened 'free trade' markets, like those in the Gulf Cooperation Council: https://www.beehive.govt.nz/release/new-zealand-concludes-high-quality-trade-deal-gulf-cooperation-council-gcc
Highly applicable engineering degrees here. I design industrial robots. However, I’m always fascinated to watch out for when my degrees matter. Virtually everything useful that I use in my real job comes from secondary school physics and maths.
Except for Green’s integrals. I sat in a lecture (I attended few) and thought - who the hell is ever going to use this Green’s integrals stuff about stress distributions around holes in infinite media. My first job out of university was to do with the design of underground coal mines in Huntley. Horizontal holes in the ground. (I was just out of university. Ever since, when going down highway 1, past Huntley, I keep an eye out for cracks in the road that would indicate that I got my Green’s integrals calcs wrong and we are going to fall into a collapsed mine.)
That’s fascinating! It’s funny what you bring out of education — it’s never what you think you are.
I actually majored in sailing and sitting around being depressed. There were 5 of us in a flat in Albany Rd in Herne Bay ($40 for the whole house, so $8 each) that could have been the set for The Young Ones. The scrim on the walls in my room flapped when the wind blew. It’s long since been gentrified. But I had a small boat at one of the little beaches there and spent my time in it.
Useless Arts Major here too, and also on ACC which I think may not be quite as bad as WINZ but has moments getting to be. Love your column and asa boomer-adjacent (late-boomer/Generation Jones/ Gen X-adjacent - take your pick) can wholeheartedly say your degree absolutely has value beyond the enjoyment, because you were taught to think. Having employed graduates I can tell you that business grads come in with all the answers and are completely useless. At least Arts grads know to ask questions.
As for Economics-we just need to understand enough and, as with most things, read widely (and wisely as autocorrect would have it), choose who you think is correct because reasons, then make your case. The fact supply-side economics has been largely discredited by reputable economists (Krugman, Picketty, et al.) and supported by the likes of the NZ Initiative. I don’t want to be too pejorative or conspiratorial, but they do seem to have an agenda.
I've been musing away at the differences between "business" and "arts" grads... I'm starting to think there's been a serious flaw in the way we've divided people into people who want to make money and then into people who want to do good/be creative/follow their passions. And to be honest, a lot of artists and creatives and humanities students could be doing better out there if they had some business knowledge!
It's been VERY alarming how the pre-election discussion around NZ Initiatives' extreme neoliberal backing and bias hasn't stopped media and economists from citing them, and from citing them uncritically too. That's been admittedly quite disappointing -- but these think tanks have a very established set up, and it works because it's been perfected over a century. Our correspondents can no more easily wean themselves of ATLAS than our politicians can from Rogernomics, it seems.
OK Subscribed! Because what you say echos my thoughts as I attempt to properly understand the Right - Left perspective of politics. I my mind it does not fit any of what we need, as people, particularly in this world - in this Century.
I think I just signed up............saw my credit card but not sure. Please confirm my yearly sub at such a reasonable rate, and I thanks you for that....but am I on board te waka?
Oh yep, there I is...got the email. I am in and THANK YOU!
the time for talk is now. the time is also for wondering how the arts can figure in possibly cracking open jaded and jarred minds .....as in the polarised and resistant to change society and world we live in................how do we get under the skin, how do we understand why people hold their convictions, bias and prejudices, how do we change that..........I am convinced, creativity, understanding, compassion and the arts speaking .............is a way ahead. Love your mahi Sapphi, and I thank you. I will look into how to support more than reading and restacks. You are a star.