Thankfully, I was too young to be materially affected by the Price and Wage Freezes instigated by Muldoon. The old man was self-employed and a lawyer to boot, so the only real difference was the random presents. In a weird twist on the unbirthday motif, Trev would give us shit out of the blue. In spite of not showing the slightest interest in smacking people, Dad gave me a pair of worn boxing gloves one day. Couple of years' ago, I discovered the why of it. It seems one of his clients, a burglar if I remember correctly, had a barter/contra arrangement with him.
Back then, there was no money. The tyrant Muldoon had outlawed reality. Not freezing it per se, merely postponing the consequences. Result? Catastrophic inflation and a mad run on the dollar. A timequake, which the Fourth Labour Government have been taking the heat for ever since. It was a shame that Helen Clark glossed over that time as an aberration at Labour's Ninetieth Anniversary gig at the Beehive earlier this year. Convenient. I'm waiting for someone in Labour to stop apologising. If you have to, defend it, but stop saying sorry. Those times are not these times. The same measures are not required, which shouldn't stop us learning from that path anyway.
What have we learned? Well, nothing it would seem. We're bouncing between Keynesianism and Friedmanism. Never mind that the ceteris paribus of Bretton Woods that clinched Keynes is long gone, and the world economy is in the hands of currency speculators and funds conglomerates. Ignore the fact that Reserve Banks have lost their grip on the money supply thanks to private lending institutions setting their own arbitrary and profitable finance options. Any wood in a shipwreck.
Which leads me circuitously to the storm in a teacup that is the annual parliamentarian payrise. It is not important how much they will earn. It will never be enough. Honestly, I wouldn't wish being an MP on my worst enemy. What is important, is that the increases are on the generous side of the inflation rate. That is very interesting. What if, instead of shuddering along with the various individual and collective employment contracts, wage and salaries were indexed with the CPI?
Of course the CPI would have to be a much more elegant beast than it currently is. Women's shoes, for example, are grossly under-represented in the CPI computations. I am constantly amazed at how much money women spend on shoes. Go Blumsky. There would also have to be a localised adapter, which I like to call the Consumer Services Index (CSI). This would take into account localised factors. CSI: Eketahuna would be lower than CSI: Auckland, if for no other reason than getting the kids to footie and getting a sparky to install the spa costs more.
Doing so would shift the burden of inflation from the central bank to the private sector, who would have a vested interest in suppressing inflation. Unions would have to show evidence of productivity gain in order to strike above inflation.
