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Economics and the lesser of two evils

ROGER BLOCK

It’s hard work watching the 2023 general election campaign.  For that matter, election campaigns have never been easy to watch as humble voters try, usually in vain, to sort the fact from the fiction.

On what might be a seemingly straightforward issue, opposing parties will likely be miles apart on the detail. More often than not, the disagreement swirls around the amount of money already spent, or needed to be spent or promised to be spent, or on the books to be spent … etc. The will to live slowly ebbs away. So does any semblance of trust we may have in politicians to be honest, because you know they can’t all be right. And on it goes.

The claims and counterclaims of how much it might cost to build new roads and tunnels in and around and under Auckland is the most recent case in point. Are we supposed to guess which numbers sound more believable?

There will be more addition and subtraction shenanigans as we trek towards October. Before long, those in government will be making ever-louder demands from those that want to be in government about where they will find the money to pay for their election promises. Those that want to be in government will fire back with questions about why certain projects ran over schedule and way over budget.

It might be hard to believe, but the way we do things here, in our democracy, is much better than in other parts of the world. 

The lesser of two evils

 I refer to recent reports from China and how the authorities there are putting pressure on prominent economists to avoid discussing negative trends, such as deflation, as concerns mount about Beijing’s ability to boost a flagging recovery in the world’s second-biggest economy and our most important trade partner.

Multiple financial analysts and researchers at leading universities, as well as state-run think tanks, said they had been instructed by regulators, their employers and even the media to avoid speaking negatively about topics ranging from fears of capital flight to softening prices. 

Indeed, seven well-regarded economists told the Financial Times that their employers had told them some topics were off-limits for public discussion. If that seems a bit heavy-handed, that’s because it is heavy-handed.

Analysts said growing self-censorship among economic research professionals, on whom investors often rely in a market where reliable data is difficult to come by, underscored Beijing’s efforts to control the flow of information.

China is not alone, of course, as it grapples with any number of economic issues in the post-covid environment but the apparent clampdown on economic commentary follows a string of disappointing data that has undermined investor confidence.  In what some may see as uncharacteristic honesty from the Communist Party leadership,  the domestic economy was most recently assessed as making “tortuous progress”.

Still, that’s progress because they wouldn’t want anything negative getting out to the masses.

This explains the following statement from a senior official at China’s official statistics bureau and the central bank. “Deflation does not and will not exist in China.”

 

If only it were that simple.

 

 

 

Roger Parker
Roger Parker
Roger Parker is the Times-Age news director. In the Venn-diagram of his two great loves, news and sport, sports news is the sweet spot.

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