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Add up the cost of the two new proposed tunnels in Wellington, fixing its water supplies, fixing Wellington's port and ferry facilities, building endless lightly-used bicycle pathways, reinforcing Wellington's buildings that can never be reinforced sufficiently to deal with the kind of earthquake that can easily be generated by the fault-line they sit right on top of, building an "international convention center" that will never hold much in the way of international conventions since Wellington doesn't have a proper international airport, and you get a figure of way over $10 billion. Is it being funded by Wellington rate payers? You must be kidding - their Council's debt is exploding, and the Transport Minister is already saying his new tunnels will be paid for out of general taxation. Wellington will probably be bailed in a few years, just like defaulting Detroit, another failing city, this time in the US.


Whilst other cities in NZ boom, Wellington City shrinks. To help protect the value of his commercial buildings, more than for any other reason, the guy we all thought was a free market, libertarian right-winger, namely Sir Bob Jones, has now been revealed as embracing Big Government. He's defending Wellington like crazy. Sir Bob wants Wellington to get bigger, filled with even more government workers to lease buildings from him. At least Bob has at last fully revealed his investment strategy - he has relied on socialism for his survival. That is, buy up in Capital Cities, because they "don't die", to quote his newly released words of wisdom. Then negotiate long-term leases with government. Being government, he figures the tenants won't leave, will keep the place tidy & not care what rent they pay, since its tax-payers dollars. The greatest hypocrite of all time, but a genius never-the less. Given how much Bob loves boxing and once famously punched a journalist for interrupting his fly fishing, he should maybe consider giving himself a punch sometime, or at least smack a trout over his face, as punishment for his hypocrisy.


Sir Bob is not telling the whole story. When I lived in Bonn in Germany, it was the capital city of that nation at the time - the center of power in what was then the world's second largest economy (before China surpassed it). During my time there, the capital was shifted to Berlin. Bonn could have been emptied out by the move, although managed to retain a bunch of government ministries. The same should be done in NZ. Wellington can retain its official status as capital, like Berlin is now, but should unequivocally have a bunch of its Ministries moved to Auckland. Social Development, Education & the Ministry for Business, Innovation and Employment should go. Its inappropriate they continue to be based in Wellington. Most of the country's social & educational problems are located in South Auckland. Those Ministries should be moved to Manukau City, which is next door, and by the International Airport. The fewer people going into work in Wellington City the better - then it wont need $10 billion ploughed into it to support the increasing population that it will never achieve. Of course, Sir Bob will try to stop the shift, since he's just come out as against free markets and creating wealth, apart from wealth that comes from taxpayers paying his rent.




Whether the US had elected Democratic Harris or Republican Trump to the White House, the difference in terms of their economic impact on NZ is likely to be small. Why? Trump has successfully shifted the debate toward more protectionism, especially aimed at China, as well as tighter immigration policies. Biden-Harris were scrambling to catch up with him. The US is only the third largest export partner for NZ, at around 10% of our exports, way behind China and Australia. As for concerns raised by prominent US economists about the size of that country's debt and deficits, they have been exploding under both Democrats ad Republicans. In a nutshell, Democrats have been expanding welfare programs, but don't have the guts to sharply raise taxes on Americans, and Republicans are inclined to push for lower taxes, though don't have the guts to cut welfare on the poorest Americans (and are regularly inclined to push up defense spending). Both those approaches, on both sides of US politics, have expanded public debt. My Argentine economist friend and coauthor at Harvard Business School has been predicting a debt (and currency) crisis in the US for years now, due to its huge current (trade) deficits and public debt, much like the kind of crises that have broken out in Latin American countries.


The primary debate in the US, which was raised in a letter written by 400 economists critiquing Trump, and in another letter, written by 18 Nobel Laureates, concerns mostly the potential effect of Trump's policies on inequality. That is a domestic US issue, and not one that has any direct implications for the NZ economy. How can one make sense of Trump's economic policies, especially in the context of NZ? In some ways, one can view them as a mix of traditional right-wing and left-wing ones, which is why the pundits are confused. His idea of tariffing imports is more a left, anti-market policy, whereas his aim to potentially cut taxes, or at least not increase them anymore, is more a right, pro-market policy. Economists preferred way of protecting workers who have lost jobs due to globalization is generally not to interfere with prices and trade - let them flourish and create wealth - but to address the unfairness and equity issues through the tax and transfer system. However, Trump does not want to do that, since it would mean higher taxes.


In many ways, Trumps economic approach can be viewed as wielding out on a grand scale the one National tried, on a much smaller scale, in the NZ election. National wanted to give tax relief to local Kiwis funded by a tax on overseas buyers of our real estate. That is, make foreigners pay for domestic cuts in our taxes. Trump's plan is to do the same, but where the revenues instead come from tariffs on imports. He figures its clever. Target China with tariffs, and so try reducing the economic power of America's great super-power rival; meanwhile get hold of significant revenues in the process, which can be used to hold or cut US taxes, all whilst protecting his voter basis - being working class Americans hurt by globalization. New Zealand's Labour Party, by the way, is promoting an opposite economic strategy. It is to support free trade without imposing tariffs, and fund a larger welfare state through higher taxes. It is closer to the approach that receives more support by traditional economists. Both Trump's & NZ Labour's approaches have a logic to them within their domestic contexts. On the other hand, since National's plan to tax foreign buyers was scuttled by NZ First, it has been left under pressure to both cut taxes and support strong health, education and retirement systems, all funded out of local taxes on a weak domestic economy.

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