Wednesday, 12 November 2008

Crampton on Key

At is this piece, Key Kiwi, on the election outcome by none other than our very own Eric Crampton! Eric opens by saying
After almost a decade of economic under-performance and rising voter anger with an administration viewed as out of touch, power hungry and, in parts, corrupt, voters turned out in numbers to toss out the incumbent and elect a younger man who campaigned on a message of hope.

And so New Zealand's Saturday election brought victory for John Key's National Party.
Eric writes
Key worked hard to pull National to the center, shedding policies viewed as extreme ...
But this was a low cost move. Any voters who stopped voting National because of this would most likely go to Act and thus would indirectly be supporting National. Crampton also says
On other issues, Key largely neutralized policy differences between National and Labour by adopting policies very similar to those already in place, or, in some cases, by overshooting Labour.

When Finance Minister Michael Cullen mused that New Zealand's Superannuation Fund, the laudably independent sovereign wealth fund charged with maximizing returns on investment, might be asked whether it would consider increasing the proportion of its assets held in New Zealand, Key jumped a step further to announce that National would mandate that the fund invest 40% of its assets in New Zealand.

The policy played well with economic populists but was roundly criticized by economists.
As I have argued before, this idea from Key was not a great one. But as I also argued, a number of National's economic policies look far too much like those of Labour and in some cases are worse than Labours.

Eric ends by noting
Key's hope is that building good relations now with the Maori Party will pay dividends in later elections where the Maori Party may well play kingmaker. Key may also be hoping that moving slowly with a broader coalition is a better recipe for longer-lasting economic reform than moving quickly with fewer allies. Our hope is that he remembers to move at all.
Here's hoping he does move, and in the right direction. (bad pun intended)

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