Donald Trump made his fortune by speculating in real estate. These days, Christopher Luxon makes a lot of his money the very same way. True, Luxon did also run a neo-monopoly airline during those bygone days when domestic and international air travel was affordable, and consumer demand was at its peak.

Yet what Trump and Luxon also have in common – besides their self proclaimed business know-how – is their lack of any experience in how to kick-start economic growth, especially in the wake of a recession. Their real expertise lies in deal-making i.e. in the re-packaging of wealth that’s been created by others, and on selling it at a profit.

So when Luxon gave a long speech last week about how New Zealand needs to focus on economic growth, you have to wonder whether he knows much about how to walk the talk. Neither Luxon nor Finance Minister Nicola Willis show any interest in fostering the kind of mutually beneficial relationships between central government and the private sector that are essential to creating sustainable economic growth.

Quite the contrary. They both want central government to remove itself from the scene entirely, once it has (a) de-regulated the economy almost entirely, and (b) fluffed the private sector’s pillows by way of tax breaks, regional development handouts, and PPPs that have been heavily weighted in favour of corporate profit-taking.

Historically of course, this country wasn’t built that way. All of New Zealand’s major social and physical infrastructure projects were built by the state. This isn’t merely ancient history. On gaining power in 2008, the Key government began building a $3.5 billion nationwide ultra-fast broadband network. Hard to imagine this current lot doing that sort of thing.

In reality, private sector ownership has usually been more of a barrier to sustainable economic growth than part of the solution. For example: after the calamitous decision to privatise Telecom, the company then used its market dominance over the next two decades to degrade services, stifle creativity and delay innovation – all in order to better enrich its shareholders. Even former National Party leaders have lamented the privatisation of Telecom:

The sale of Telecom in 1990 was a mistake and New Zealand governments have generally proved themselves inept at privatisation, says former Prime Minister and departing NZ Post chairman Jim Bolger...Looking back, he said "some of our privatisations were done for a song. Sir Roger Douglas was worse than hopeless at privatising, to be honest."

Despite this track record, ACT leader David Seymour was still oput there last week peddling the same old quackery of asset sales and privatisation. So...what was Luxon himself urging us to do last week, in order to promote economic growth? You can read Luxon’s peech here. The PM aims to create a Foreign Investment Agency to attract foreign capital, and make it easier for these predators to buy up, or into, our assets.

Luxon also puts a great deal of credulous faith in creating economic growth from more mining. For her part, Willis seemed keen to promote unfettered tourism, although without providing significant government funding to support it. Presumably, local councils (and local communities) will be picking up the tab for the necessary facilities.

Needless to say, the speeches did not address how the government will prevent local and international corporations from capturing the main benefits, while leaving local communities to pick up the scraps and repair the damage.

Shafting the mining model

In this devastating analysis of Luxon’s speech by Massey University academics Glenn Banks and Regina Scheyvens, the authors begin by pointing out Luxon’s false comparison with Australia’s mineral exports:

Luxon wants to see mining “play a much bigger role in the New Zealand economy”, comparing the local sector with the “much higher incomes” generated in places such as Australia. If we wanted these, he suggested, we need to be aware it is “mining that pays” them. But it is simplistic to compare domestic mining’s potential to the industry in Australia, which exports more than 400 times as much mineral wealth as New Zealand.

More to the point, foreign investors also do not operate as charities. When they invest here successfully, the vast bulk of the profits tend to go to parent companies located offshore. To that end, the Luxon model would merely smooth the way for forms of growth that are (a) of limited lasting value to local communities and to the national good, and which would (b) exploit our natural resources in ways likely to cause irreversible environmental harms:

In addition, mineral wealth does not necessarily translate into significant increases in local or even national wealth. This is especially relevant when the local sector is dependent on foreign investment, high levels of imports and offshore expertise for construction and operations, highly volatile commodity prices and generous taxation regimes.

As the Massey duo point out, there is little evidence in this country’s history of a positive link between mining and economic development.

The West Coast has seen the longest continuous presence of large- and small-scale gold and coal mining (for well over a century). And yet the region consistently scores among the worst for socioeconomic deprivation. Mining itself does not create regional development.

Nor, BTW, are the much-touted “precious elements” (essential for EVs, solar panels, smart phones etc) present here on a scale likely to produce significant gains:

The prime minister also gave a nod to the minerals “critical for our climate transition”. While it’s true that “EVs, solar panels and data centres aren’t made out of thin air”, they are also not made in any significant way with the minerals we currently or might potentially mine (aside from some antimony, possibly).

As the authors conclude, the “critical minerals” argument for mining being pushed by both Luxon and the Regional Development Minister Shane Jones “risks being a cloak for justifying more mining of coal and gold.”

Touting Mass Tourism

Similar flaws are evident in promoting mass tourism as an engine for lasting economic growth. We’ve been there, done this:

The Parliamentary Commissioner for the Environment’s 2019 report – titled “Pristine, popular … imperilled?” – warned of the environmental damage that would be caused by pursuing [a “high growth tourism”] approach.

Moreover, government funding would be needed “to manage growth and provide infrastructure, particularly in areas with low numbers of ratepayers:

The need stretches from providing public toilets for busloads of tourists flowing through MacKenzie District, to maintaining popular tracks such as the West Coast Wilderness Trail. A 2024 report from Tourism New Zealand showed 68% of residents experienced negative impacts from tourism, including increased traffic congestion and rubbish.

Elsewhere in the world – in Barcelona, Lisbon, Athens, Kyoto etc – the 21st century has seen local resentment (and organised resistance!) being generated by the impact that mass tourism is having on environmental values, and on the quality of city/neighbourhood life in general.

In sum, there is little evidence that a significant increase in mining and a surrender to mass tourism are viable pathways to local or national prosperity. Mass tourism in particular would jeopardise the pristine settings and the local goodwill that have made travellers willing to endure the long journeys required to get here.

Surely, Luxon and Willis cannot really believe what they were saying last week. Their speeches are best treated as examples of the gaslighting that this government is turning into an art form.

Syria rebuilds

Syria is being given solid reasons for concern about what its new rulers have in mind. According to Reuters, the authorities are using sharia law to train its fledgling new police force, in order to instill a sense of moral values. Clearly though, putting a particular code of Islamic religious law at the centre of policing can only alienate not merely the minorities who profess other faiths, but also the largely secular populations of Syria’s major cities:

"There are many Syrians who will find this concerning," said Aron Lund, a fellow at Century International, a Middle East-focused think tank, when asked about Reuters' findings. "Not just minorities - Christians, Alawites, Druze - but also quite a lot of Sunni Muslims in places like Damascus and Aleppo, where you have a fairly large secular, cosmopolitan population that's not interested in religious law."

Reportedly, the religious foundations of police training are being taken as a sign that conservative forms of Sunni Islam will play a significant role in the promised rewrite of Syria’s constitution. The country’s new leaders have also said that fresh elections could be up to four years away. 

Garth Hudson, RIP

Garth Hudson died last week at the age of 87. Hudson was the multi-instrumentalist, keyboard wizard, tech innovator and last surviving member of The Band. As the Hawks, The Band had been Bob Dylan’s touring group back when Dylan’s use of amped-up electric guitars was still controversial among a small segment of his fan base. Although The Band were Canadians (apart from drummer/vocalist Levon Helm) the group had by the mid 1970s become pioneers of Americana, and were beloved in their own right.

Husdon made a major contribution to all of this. Almost un-noticed at the time, he also made the decision to record the Dylan/Band home sessions that were later to be celebrated as the Basement Tapes. Later, Hudson did not take sides in the bitter dispute between Helm and Robbie Robertson over the latter eventually holding the publishing rights (and thus, receiving all the royalties) to recordings that Helm in particular, had felt to have been group efforts.

In Helm’s view, the royalties dispute contributed directly to the suicide of Richard Manuel, to Rick Danko’s early death, and to Helm’s own difficulties later in life in affording proper medical care. As others have pointed out, if you read theWikipedia entry for The Band’s classic song “ It Makes No Difference” it is hard to disagree with Helm’s point that – even if Robertson wrote the original lyrics and melodies – it had been the collective creativity applied to these compositions that had made the music of The Band successful, both artistically and financially:

Critics have attributed much of the success of "It Makes No Difference" to Rick Danko’s lead vocal. [British critic] Barney Hoskyns considers that "there is something so elemental" in how Danko expresses his loss that it "transcends self-pity". According to critic Nick DeRiso, Danko's vocal manages to express the "lonesome bottom of this song while retaining its sense of reckless emotional abandon," without ever sounding resigned to his fate. Levon Helm and Richard Manuel add harmony vocals on the chorus, adding to the sense of pain.

Hoskyns and DeRiso also credit Robertson's "anguished" guitar and Hudson’s saxophone solo for complementing the effect of the vocals. According to DeRiso, Danko, Hudson and Robertson are all "walking the same fine line — Danko, between torment and utter heartsick disaster; Hudson and Robertson between stabbing attempts at redemption, and a reluctant acceptance."

Hudson’s contributions are just as evident on other staples like “Chest Fever” (that’s him on the Lowrey electronic organ) and “Up On Cripple Creek” which featured Helm on vocals, and Hudson on a clavinet with wah wah pedal and the Lowrey organ.

Hudson found room to chart his own course on a later, lesser known Band cut called “Jupiter Hollow.” On this track, Robertson played the clavinet as if it were a rhythm instrument, while Helm, Danko and Manuel traded vocals. Behind all this, Hudson sent swirling tendrils of synthesiser and organ lines up into the universe.

Hudsonb provided the perfect sonic backdrop for lyrics that (this time) were not set in the comforting cradle of a storied American past. These lyrics were about feeling alone in the face of a vast, alien, and uncertain future:

Jupiter Hollow in the midnight sun

No man of dreams was ever more outdone

Where the swallows circle overhead

And muses gather, by the rivers of the tears we shed

Like a pioneer in a new frontier

I don’t where to begin

Because nobody cares when a man goes mad

And tries to free the ghost within

Basically...under the teeming starlight, it can feel chilly out beyond the camp-fire: “Like a comet I was hurled/living in another world.” Exactly.

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