The Lesser of Two Evils

New Zealand Centre for Political Research

The New Zealand Centre for Political Research is a web-based think tank that takes a research-based approach to public policy matters and encourages the free and open debate of political issues.

Politics is full of surprises. You only have to look at the US presidential race to see the truth in that statement. But more on that later.

Here in New Zealand, last week’s announcement by Labour and the Greens, that they have signed a Memorandum of Understanding to showcase themselves as a viable ‘government-in-waiting’, was also a surprise.

In effect, the deal is little more than an agreement to work together to get rid of National – foes united by a common enemy. It is not a coalition agreement as it does not require the two parties to govern together after the election. Nor does it require policy concessions from either.

The Memorandum was touted by Labour and the Greens as a “game changer”. It’s not. The only real difference is that they will be fighting National instead of each other. It poses no new threat to National. If anything it reinforces the scary view promoted by National, that a vote for Labour is a vote for the Greens.

The Prime Minister and his strategists know elections are won in the centre ground of politics through the support of those middle voters, who shop around and support whichever party appeals to them most on voting day. But instead of moving into the centre, as Helen Clark had done to win office, Labour has now teamed up with the most radical socialist party in Parliament.

In spite of being in Parliament for 17 years, New Zealand has never had the Greens in Government – Helen Clark ruled them out during her time in office as being too extreme.

The potential difficulties in terms of policy and positioning for this left-wing accord should not be underestimated.

Taking just one example – Labour recently announced that they too now agree with National, that by preventing councils from ensuring sufficient land is available to meet new housing demand, local authority urban boundaries are the main cause of the nation’s housing shortage.

However, it was the Green Movement’s fanatical aversion to urban sprawl, and their widespread promotion of ‘Smart Growth’ – an ideology based on restricting greenfields development through the creation of urban boundaries – that found favour with council planners and caused the problem in the first place.

So how Labour, a Party that now says it rejects Smart Growth, can present a united approach with the Green Party, which promotes it, remains to be seen.

In effect, the Memorandum of Understanding highlights a deep-seated identity crisis that now faces the Labour Party. Since the Trade Unions gained ideological control of the Party in 2012, Labour’s focus has become more consumed with worker rights. Yet, with many established laws now firmly in place to protect the rights of New Zealand workers, this issue no longer resonates as widely with the voting public as it once did.

As a result, the Party is somewhat stranded – self-focussed and floundering with a grumpy trade union leader who is looking for a cause. All of this is no doubt exacerbating their slide to below 30 percent in the polls.

However, instead of shifting position to widen their appeal and again become the broad church party of old, their union-controlled leadership have decided their future lies to the left – even though there are too few voters out there to win elections.

In fact, Labour stands to be the biggest loser from their deal with the Greens.

For the Greens, being embraced by a more mainstream party is positive – it sends a message that they are no longer considered a whacky fringe party but a serious political player. That will undoubtedly help to shore up their support, especially as the deal also signals to Labour’s left wing supporters that it is OK to vote for the Greens.

But to moderate Labour voters – who don’t want a bar of any association with radical extremists – the agreement will effectively drive them to New Zealand First or National.

In fact, this Memorandum of Understanding will have the Greens smiling all the way to the voting booths in 2017, as they move closer to their goal of becoming the country’s major opposition party.

Meanwhile, in the US, the race for President, which has delivered more surprises than anyone could have predicted, appears to be deteriorating into a choice between the lesser of two evils!

This week’s NZCPR Guest Commentator, a Kiwi who lives in the US, has been closely following the Presidential race. Nicholas Kerr, a marketing consultant with an MBA, is the son of economist Roger Kerr, who had a major influence on New Zealand’s economic direction – and until his untimely death in 2011, was a regular NZCPR guest commentator.

Nicholas has been intrigued by the fact that while the arch-socialist in the race for the Democratic Party nomination, Bernie Saunders, has surprised pundits with his on-going primary wins – attributed not only to support for his campaign pledges, but also to a deep-seated animosity towards Hilary Clinton – it turns out that the countries he likes to say he wants to emulate, through his calls for socialised education, healthcare and more, turned their back on these economically disastrous policies long ago:

“As one of many survivors of New Zealand’s socialist experiment, it’s always surprised me that Bernie Sanders is fond of saying America should look more like Scandinavian countries such as Sweden. Because what’s made Sweden the success it is on many of the metrics Sanders loves to point to aren’t the policies Sanders espouses. On the contrary, the reforms he wants for America are what Scandinavian countries and New Zealand tried and abandoned long ago, because they led to economic misery for us all…

“New Zealand adopted socialism earlier than Sweden and reaped the results. Some have quipped that New Zealand’s version of socialism was taken as far as you can without becoming communist.

“If Bernie Sanders really supported Swedish- and New Zealand-style policies that have lifted up both countries from the depths of economic gloom, he’d be campaigning to the right of Hillary Clinton, in much the same space her husband won and retained office. Instead, Sanders is referring to the failed policies of the 1970s that both countries have long since abandoned.”

While Hilary Clinton is now claiming victory in the race for the Democratic nomination, Bernie Saunders has vowed to keep fighting until the Democratic Convention next month. But the fact that he has been so successful in campaigning on policies that have been shown to fail the world over, appears to be more a reflection on the Democrats’ deep dislike of Hilary Clinton, than on the fact that the US is ready to embrace socialism.

In fact a Reuters-Ipsos poll, released earlier this week, shows that in the November Presidential election, almost half of all American voters will be voting for a candidate they don’t like! In answer to the question, “If the election were held today between Clinton and Trump, who’d get the most support?” almost half of voters, who said they would support either Democrat Hillary Clinton or Republican Donald Trump for the White House, would be doing so mainly to try to block the other side from winning!

The poll result showed that 44.3 percent would vote for Hillary Clinton as President, 34.7 percent for Donald Trump, with 20.9 percent undecided.

When Clinton voters were asked the primary reason for their support, while 43.3 percent said they agreed with her political positions, and 11.8 percent said they liked her personally, 41.9 percent said they wanted to keep Donald Trump out of office.

And for Trump supporters, while 34.2 percent said they agreed with his political positions, and 7.4 percent said they liked him personally, 54.9 percent said they didn’t want Hillary Clinton to win.

With Hilary Clinton being a career politician and the epitome of the Washington establishment, while Donald Trump is anti-establishment to the core, the Presidential election is now shaping up to be a battle between a consummate ‘insider’ versus an outspoken ‘outsider’ – a vote for more of the same or a vote for change.

So, what is Donald Trump proposing? Given that the widespread media animosity towards him, and the negative reporting, virtually all we hear about is the wall with Mexico, the temporary ban on Muslim immigration, and his seeming opposition to free trade. So what is it that has propelled this straight-talking, self-made billionaire to win the Republican nomination – and would his message resonate with New Zealanders?

Firstly, the theme of his campaign is making America great again: “America has been great to me, I want to be great to America. I want to put us back on the right course and Make America Great Again!”

He is opposed to political correctness: “Being politically correct takes too much time. We have too much to get done!”

He doesn’t believe in man-made global warming and has vowed to not only reverse President Obama’s climate change regulations, but to “cancel the Paris agreement” – and stop all payments to the United Nations climate change fund.

He wants to unite America: “I will unify and bring our country back together. We will be one.”

He doesn’t want his Presidency to be beholden to the establishment or special interests: “I want to win for the people of this great country. The only people I will owe are the voters. The media, special interests, and lobbyists are all trying to stop me. I am self funding my campaign so I don’t owe anything to lobbyists and special interests.”

Since he says he intends to be “the greatest job-producing president in American history”, what are his pro-growth policies?

He explains that in order to achieve the American dream, he wants to “let people keep more money in their pockets and increase after-tax wages.”

To do that, he proposes tax relief for middle-America, through a simplified tax code: anyone earning $25,000 or less would pay no tax at all. Those earning from $25,000 to $50,000, would pay 10 percent tax. Those earning from $50,000 to $150,000, would pay 20 percent tax. And those earning over $150,000, would pay 25 percent tax.

Furthermore, he wants to lower the corporate tax rate to 15 percent to “unleash American ingenuity here at home and make us more globally competitive”. He says his tax cut would put the US rate “at 10 percentage points below China and 20 points below the current burdensome rate that pushes companies and jobs offshore”.

Donald Trump intends to fund the tax cuts by reducing or eliminating most existing tax deductions and loopholes. He also intends to call for the repatriation of corporate cash held overseas by offering a one-time discounted 10 percent tax rate: “Since we are making America’s corporate tax rate globally competitive, it is only fair that corporations help make that move fiscally responsible. US-owned corporations have as much as $2.5 trillion in cash sitting overseas. Some companies have been leaving cash overseas as a tax manoeuvre. Under this plan, they can bring their cash home and put it to work in America while benefiting from the newly-lowered corporate tax rate that is globally competitive and no longer requires parking cash overseas. Other companies have cash overseas for specific business units or activities. They can leave that cash overseas, but they will still have to pay the one-time repatriation fee.”

On tax, with Hilary Clinton planning to make US taxes more progressive – including offering businesses a tax break as long as they share their profits with workers – and Donald Trump wanting to simplify and flatten all tax codes, American voters will have a real choice. But the question remains, as to whether it will be the quality of the policy agenda that will eventually decide this race for the next President, or an intense dislike of the other candidate. Only time will tell.


Who do you think would make a better US President: Donald Trump or Hilary Clinton? 


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