I've lost count of the number of times in the past twelve months various mainstream economic 'experts' or media pundits has informed me that the New Zealand economy is coming out of recession.

Even when factories and offices still continue to close their doors for the final time, the cheerleaders for neoliberalism continue to peddle their 'good news' stories.

It's like a new variation on scientology. The devotees of the free market really do think that the ideas in their head influence the material reality and not the other way round. You just have to think the economy is improving and it will happen, Hallelujah!

A more sophisticated take on this lunacy is those who point to an 'economic recovery' in the United States - the struggling powerhouse of global capitalism - and then suggest that this is all good news for the New Zealand economy.

Television One's business commentator Corin Dann is an enthusiastic subscriber to this view. He points to increases in the Wall Street stockmarket as evidence of the United States coming out of recession. And when American companies announce profits, Dann can be relied on to argue that the economic good times are just around the corner for all of us here in little old New Zealand

This is what he says on his blog today:

...the recovery we are seeing is still pretty muted and we have not yet entered the strong rebound phase that typically follows big economic busts.

Although in saying that, one can't help but sense that a proper recovery (similar to that in Australia) is just around the corner.

But Dann is a cheerleader for neoliberalism and he is still labouring under the impression that what is good for Wall Street is good for the rest of us.

But we get a more accurate picture of the true state of the American economy if we look at the job market. This is something that the neoliberal cheerleaders would prefer not to talk about.

Since the Great recession started in late 2007 the American economy has shed nearly nine million jobs and has failed to find a further three million jobs required simply to absorb the new workers (school leavers, university graduates, etc) arriving on the job market.

The picture is even worse than this when we also include the growing number of people who are underemployed. These are folk who are in part time or casual work but who really need fulltime jobs in order to keep their heads above water. They are part of the growing army of working poor.

It doesn't take a economic wizard to work out there would have to be a spectacular recovery to create t over 11 million jobs. This kind of recovery only exists in cloudcuckooland and in the minds of economic commentators who are a sandwich short of a full lunch box.

In fact it has been estimated that if the American economy produced 300,000 jobs a month it would still take over five years for the economy to return to the state it was on the eve of the biggest global slump since the Great Depression. And this assumes that there's no dip in economic fortunes during the five years or so.

The free market devotees also think that somehow the American and the global economies can simply return, intact and unchanged, to the days before the proverbial hit the fan in November 2007.

But a lot has changed.

For a start, the American owners of capital have used the recession to downsize their operations and which has included shedding staff. And they have used the recession to outsource much of their production to countries where wages levels barely rise above sweatshop levels.

As well many Americans who still have jobs have discovered that they have to work more hours for less pay. Redundant workers who manage to find new jobs find they have to accept less pay and conditions simply to keep those jobs.

That's the economic reality and it hardly suggests that the American economy is on the road to recovery. With the American economy unable to provide anywhere near the jobs that are required and many workers suffering wage cuts, there will be no economic recovery based on rising consumption levels.

And we shouldn't forget that American capitalism has had billions pumped into via Barack Obama's massive bailout. It might have saved Wall Street and the banks but it has failed to deliver any tangible benefits to the American working class.

If the economic 'experts' expect New Zealand to bounce off some American-led economic recovery then they will be waiting for a very long time.

What is required is a clear alternative to neoliberalism and the political will to implement it.

Its time to look beyond the failed free market.


  1. Hi,

    The first thing I would like to say is you have a great blog, an infectious and additive read!

    "I've lost count of the number of times in the past twelve months various mainstream economic 'experts' or media pundits has informed me that the New Zealand economy is coming out of recession."

    I've been saying the same about the UK economy for about the same length of time, despite the media, economists and mainstream politicians saying, insisting that we are out or emerging from the worst of this world recession.

    Still unemployment grows (see my last Post)punishing the working class all over the country. For those in work, many have seen wages cut or work longer for less just to keep their jobs.

    The world of capitalism is nothing more than unhinged lunacy, and we workers of the world can do better than this, for the growing maturity of the working class will show itself eventually in a clear recognition by workers in all lands that they have a mutual interest against capitalism and for Socialism.

    Jim Lawrie The Socialist Way

  2. Thanks for the kind comments, Jim. I've been reading your blog with interest. Agree with everything you say about t Brown, Cameron and co.

    Your Labour Party is possibly worse than the one we're lumbered with over here..

  3. Your post sums up my gut feelings about this whole economic situation - unhinged lunacy. Not lunacy from those running the show, just look at how they continually shake up 'the markets' to ensure their continued control and increase in wealth, but the lunacy of the political and industrial governments in buying into this. And perhaps lunacy of us all for allowing this to happen and for not coming together to oppose it!

    An interesting blog, came via Jim's links.


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