• A Period of Silence Would Now Be Welcome

    In the aftermath of England’s loss to Scotland at Murrayfield last week, a British rugby writer said of Eddie Jones that “a period of quiet reflection, with an emphasis on the ‘quiet’ is now required” – shades of Clement Attlee’s famous rebuke to Harold Laski in the postwar British Parliament when he said, “a period of silence from you would now be welcome”.

    It might certainly be hoped that the observation by former England hooker, Steve Thompson, that the Scotland defeat showed that “England are not as good as they think they are” (or, at least, as Eddie Jones says they are) will be taken on board.  And it might also be an opportune moment to re-assess Eddie Jones’ credentials as a coach.

    It should first be conceded that Eddie Jones inherited an England team at a low ebb, following their disastrous dismissal in 2015 from the World Cup tournament of which they were hosts.  The comparative success they have since enjoyed has no doubt been seen in greater relief than might otherwise have been the case, given what went before – and might partly explain why Eddie Jones has been welcomed as a saviour or demi-god whose every word is treated as gospel and repeated ad nauseam (literally) by an adoring media.

    If we are to make a proper assessment, we should start by taking into account the huge resources, both financially and in terms of player numbers he has had to play with.  Even an average coach should have been able to turn these to account.

    Has he, however, done better than an “average” coach might have done?  Let us first recognise those things he has done well.  Almost all commentators (and his players as well) accept that he has worked hard to make his players fitter (some would even say that he has, on occasions, worked his players too hard, so that they are exhausted by match day).  But England are certainly now up to international standard in terms of fitness (as they may not have been before), though it is doubtful if they now have any advantage in that respect over other top teams.

    As a selector, he has a somewhat spotty record.  He has been loyal to those he likes – Dylan Hartley and James Haskell example – and that is a plus, but he has been slow at times to recognise limitations in those he selects – as in the case of Chris Robshaw – and he has sometimes resisted making more adventurous selections.

    He has clearly succeeded in building the confidence and self-belief of his team, which were sadly lacking when he took over.  But there is a downside to his constant assertion that England are destined for World Cup glory and world number one ranking.  It has certainly helped to build his own image with the English rugby public, but unrealistic expectations can be just as oppressive for the team as downplaying its chances.

    A fitter and more confident England are undoubtedly achievements, but more should be expected of a top coach.  England may be training harder, but are they training to better effect?  Are they building their skills and techniques?  Are they better able to change tactics and strategies mid-game?

    Eddie Jones has shown little aptitude in these respects.  As confident prospects of a Grand Slam and a Six Nations title crumbled in the Scotland game, England’s defensive weaknesses and apparently complete absence of any attacking ideas were clearly shown up.  It may be beginning to dawn on the English rugby public that these deficiencies have to be remedied (and if not by the coach, then by whom?) if England are to compete for top honours.

    The former England loose forward, Neil Back, has warned that, if Jones does not remedy them, England could well lose the remaining two games – against France and Ireland – of the Six Nations Championship.

    We should never forget that Eddie Jones’ stint as Wallaby coach came to an unsuccessful end, which may explain why he so much enjoys the adulation heaped upon him by British media who are unduly grateful for small mercies.  It will come as a welcome relief to the international rugby public if he now refrains from making extravagant and unsupported claims about England’s future international standing and prospects and if the English rugby media treat those claims with a little more scepticism.

    England may yet overcome their current problems and confound us all by soaring to new heights.  If and when that happens, that will be the time to celebrate.  In the meantime, a less garrulous Eddie Jones would be welcome. When it comes to boasting, less is usually more – and timing is everything.  It always works better if it comes after, and not before, actual achievement.

    Bryan Gould

    27 February 2018



  • How to Make the Regional Development Fund An Even Better Idea

    Our new government will have surprised some people with its confident start, and not least with one of its better ideas – the establishment of a Regional Development Fund.  We now know enough about this proposal to recognise just how valuable it will be, not just to the regions but to the whole country.

    That it will deliver a boost to those parts of the country whose economy has been languishing cannot be doubted.  The focus on communications and transport alone, with the special emphasis on rail, will help to bring far-flung areas of the country back into the mainstream, able to share better in the prosperity to which we have all contributed.  And better rail communications will not only keep trucks off our roads but will benefit enterprises such as the Port of Tauranga.

    But it is not just economic activity and output that will benefit.  It will be local employment as well – and more jobs will provide a shot in the arm to retailing, construction, new investment – a veritable virtuous circle.

    And even beyond those considerations will be the benefits to the environment that are clearly being targeted.  Tree-planting on a large scale will boost forestry but will also help us to meet our greenhouse gas target.  The shift in transport policy away from building more roads in favour of updating our rail network will do likewise, as well as reducing the road toll and opening up new development.

    The one fly in the ointment, perhaps – especially for those conditioned by years of being told that cutting government spending is the top priority – is the cost of these measures.  Funding all these initiatives from one dedicated new fund is a good idea, but the money for the fund still has to come from somewhere, doesn’t it?

    Even though it may be clear that the rewards and returns from making this kind of investment in our regions would satisfy even the hardest-headed private investor, the question as to where the money to be invested comes from in the first place will still be asked.

    Well, not necessarily.  You may be surprised to hear that the one thing that governments are never short of is money.  How do we know that?  Because governments all around the world have been creating large quantities of new money for the past ten years or more.  They haven’t called it “creating new money” but have preferred to call it something like “quantitative easing”, but creating new money is what it is.

    When governments have created new money over recent years, however, their aim was usually the limited one of providing money to the commercial banks so that, after the Global Financial Crisis, they could re-build their balance sheets.  But new money created by governments does not have to go on such limited purposes – indeed, creating it to invest in the productive economy so as to produce an immediate return to the country as a whole makes a good deal more sense than just helping out the banks.

    And experience in earlier times and in other countries, has shown just that.  Many countries have in the past created new money to fund increases in output – whether it was Japan re-building its industry after its defeat in the Second World War (and they are doing so again today) or President Roosevelt building American industrial capacity in preparation for that same conflict.  What those countries both realised was that the need and the capacity to increase output both existed, and that it was ridiculous that such an effort should be frustrated for the lack of money, when the government could create all the money that was needed.

    Our own history offers us one of the most important instances of this being done.  In the 1930s, in the middle of the Great Depression, the great Michael Joseph Savage authorised the creation of new money so that thousands of new state houses could be built, thereby providing jobs for the unemployed and homes for the homeless and – incidentally – an income-producing asset for the government.

    As the economist Ann Pettifor (who recently visited New Zealand) remarked, “We can afford what we can do” – in other words, the real constraint is not the lack of money but a lack of productive capacity, and  that constraint, for those who believe in a market economy, is easily overcome.  If the money is there, the capacity will come.  Money is merely a facilitator or enabler and it makes no sense for a government that is ready to create new money for other purposes to decline to do so for productive purposes, if the need is there and the capacity can be built.

    The great economist, John Maynard Keynes was very clear.  Given that the banks create new money every day of the week for their own profit-making purposes, why shouldn’t governments do likewise for the purpose of investing in our productive capacity?  Creating money by the government cannot be inflationary, said Keynes, if it is matched by increased output – and isn’t increasing output exactly what the Fund is designed to do and will achieve?  Why shouldn’t the government use all of its powers to support such a worthwhile goal?

    Bryan Gould

    25 February 2018



  • Welcome Back Super Rugby

    The beginning of a new Super rugby season will be welcomed by most, but not by everyone.  For those not sold on rugby, it can mean long hours on winter evenings, consigned to watching something, in the flesh or on the screen, that may be virtually unintelligible to them.  And, while the summer sun still shines, it will have to compete with the Winter Olympics and the Blackcaps series versus England for the attention of sports fans.

    But those of us who follow and enjoy our national game will have real cause to celebrate.  Six Nations rugby (give or take the odd England defeat at Murrayfield)and Northern Hemisphere club competitions are all very well, but if you want to see the world’s best rugby, displayed week after week, there is no substitute for what Super rugby has to offer.

    The most intense competition and the highest level of skills are to be found in Super rugby, and in domestic derbies in particular.  The Australians and South Africans, Argentines and Japanese, have their part to play of course, albeit with fewer teams this year, but the record shows that they usually contribute no more than supporting roles.

    For the true rugby aficionado, it is not just the outcome of the competition itself that matters.  Yes, of course, we want our teams to win, both each match and the championship as a whole.  But there is much else to look out for, other than the team results, much of it concerning the performances and fortunes of individual players.

    Will, for example, experienced players who have been absent through injury or for other reasons – Brodie Retallick or Ben Smith or Jordie Barrett – come back as though they have never been away?  Will the emerging stars of last season – Rieko Ioane or Ngani Laumape, or Richie Mo’unga or Asafo Aumua – come back to a new season with all guns blazing again?

    And what new names will emerge – to spark our interest and raise our hopes?  And how will we make good the loss of Lima Sapoaga or James Lowe?  Will Damian MacKenzie make the transition apparently required of him, not only by the Chiefs but by the All Blacks as well?

    Will our established world-class stars – Beaudie Barrett or Sam Whitelock or Sam Cane or Aaron Smith –  effortlessly recapture their high standards?  Will Julian Savea force his way back into the All Blacks or Patrick Tuipulotu cement his place in the squad?  Will Jerome Kaino re-establish his claim to the Number 6 jersey?  Will Augustine Pulu or Brad Weber take up where Tawera Kerr-Barlow left off?  And what will all of this mean for the All Black selectors and their continued quest to fashion a team that will win the World Cup next year, to say nothing of beating England at Twickenham later this year?

    And we should not overlook the Championship itself.  Like many fans, no doubt, I have loyalties to more than one contender and more than one coach.  I will be content if the prize goes to any one of the New Zealand teams, even, praise be, the Blues under Tana Umaga.

    And a question for each of us to answer.  Do we realise how privileged we are to see by far the best team game in the world played by the world’s top players in our own back yard?  What better sporting spectacle can there be than a thrilling contest of skill and spirit and courage, individual brilliance and instinctive teamwork, fought out by players so well-known to us that they are almost friends or family members?

    Rugby is, after all, our national game.  It has that status not just because we happen – men and women, boys and girls – to play it better than anyone else or because it is followed with passion by thousands of Kiwis.  Rugby has, for good or ill – and any objective assessment would strike the balance on the positive side – been a major influence in shaping our national identity.  It has brought our founding races together and it continues to provide a small nation with international standing and a powerful reason for national pride and confidence.

    Welcome back, Super rugby!

    Bryan Gould

    24 February 2018


  • The Candidates’ Dilemma

    As the contenders for the leadership of the National party line up at the starting gate, they are each faced with a dilemma that confronts anyone seeking the leadership of a political party in a democracy.

    This is because – for them – the leadership of their party is presumably not an end in itself, but is merely a stepping stone to the ultimate goal of becoming Prime Minister.  The contenders are embarking, in other words, on a two-stage process that requires them to win two elections in succession and to do so by gaining support from two quite separate and very different electorates.

    The first contest demands that they should convince their own party members and activists that they are the candidate best able to represent and remain faithful to the party’s central values and goals and to sell those values and goals to the wider public; while the second contest will be about  persuading the (largely non-political) wider electorate that they are not so preoccupied with the party battle that they lack the breadth of vision and understanding that will equip them to tackle and resolve society’s wider problems.

    The difficulty is this.  Those whose vote will decide the party leadership are just a very particular sub-set of the wider public; they will tend to be the party warriors, intent on winning the party battle, attaching great importance to ideological issues and requiring evidence that the fight will be carried to the enemy.  They will be looking for proof of single-mindedness, aggression and the strength never to back down.  Politics is, after all, a tough business and it demands the capacity to give, and take, some pretty rough treatment – and I say this with feeling, as someone who stood unsuccessfully in 1992 for the leadership of the British Labour Party.

    But even those voters whose votes decide the leadership (as well as the candidates themselves) will have to have half an eye on the electoral contest yet to come at general election time.  What would be the point of demonstrating to the party faithful all that they might wish in terms of strength and toughness and ideological purity, if it is achieved at the price of alienating those whose support will ultimately decide who wins a general election?

    The contenders, in other words, are fighting two separate battles.  The first is to win the support of their own party’s “attack dogs” – but following immediately, and spilling over from that exercise, is the battle for the support of the uncommitted voters in the wider public.

    That is the dilemma that now faces the contenders, particularly the two who seem most likely to emerge as the front-runners, Judith Collins and Simon Bridges.  It is a dilemma that is, for both of them, extremely difficult to resolve.

    Judith Collins exemplifies the point.  She is reported as opining that the National party has moved “too far to the left,” a view calculated to appeal to the National party’s conservatives and ideologues.  Her problem is that while it may appeal to party members who want to see a tougher line – the party’s “red necks” perhaps – it may not play so well with those voters who are not so committed.

    It is, of course, a view that fits well with her carefully cultivated image as a tough operator –remember her role as mentor to Cameron Slater and how she seemed positively to relish the soubriquet of “Crusher” Collins.  But even those party members who would welcome that kind of aggressive approach might pause to wonder whether the floating voter will be attracted or repelled.

    Simon Bridges is another instance.  His reputation largely rests, for good or ill, on his aggressive performances in various television studios.  Many of his supporters will welcome and celebrate his “take no prisoners” approach but what will be seen by some as strength will seem to others to be combativeness for its own sake.

    In either case, sweetness and light would certainly be in short supply – and the lesson of our current politics is that our voters want to be led by people they like.  John Key cannot be resurrected (I think) but some of his famous affability might not go amiss.

    Bryan Gould

    17 February 2018



  • Why Do We Allow Banks to Make Huge Profits and Decide Economic Policy As well?

    Banks are, as we know, very profitable institutions.  Last year, the big five banks operating in New Zealand made a combined profit of over $5 billion.

    Reactions to this news will vary from one person to another.  Many will say “good on them”, and “just as well – we want our banks to be profitable, so that our money is safe” and “they provide a reliable service which we should be prepared to pay for”.  But many will have little idea as to how these profits are made, what happens to them and what is the true role of banks in our economy.

    The first point to grasp is that four of the” big five” banks are Australian-owned, and that last year they sent back across the Tasman to their Australian owners $3.485 billion.  It is as though there is a massive vacuum cleaner that is sucking this huge sum out of the New Zealand economy and depositing it back in the Australian economy where, as well as unbalancing our balance of payments and adding to our indebtedness,  it works to the advantage of Australian investment in new productive capacity.  Little wonder that, by virtue of this $7 billion adjustment (whereby we give up $3.5 billion and they gain $3.5 billion), the Australians enjoy a higher living standard than we do.

    The second point is that the profits are “earned”, not because the banks provide a service of this value but because the banks have a unique monopoly power – they alone are able to create new money, which they do every time they make a new loan, usually on mortgage.  They do not, as many people believe, lend money deposited with them by one group of people to another group of people who pay interest on their borrowings.  When a bank lends you money, it doesn’t actually send round a cartload of $50 dollar notes to put in your account.  It simply writes a bank entry that authorises credit of the agreed amount to be drawn down from your account, and then it makes its profit by charging you interest on the money it has created out of nothing.

    The truth of this is now established beyond all doubt by an excellent research paper published by the Bank of England.   What that paper demonstrates is of huge consequence to our economy.

    This is because money created in this way is by far the single most important source of new money in our economy and therefore has a major influence on issues such as the rate of asset inflation (particularly for property and especially houses) and inflation more generally, and on the affordability of housing.  We, and our political leaders, may think that they are in charge of economic policy but they are actually just operating on the fringes; the real running is made by the banks.

    As well as the price we pay in terms of the bank profits that many see as excessive and that are then transferred across the Tasman, in other words, we concede to these Australian-owned banks the major influence over how our economy develops, with the result that, because lending on mortgage is more profitable than lending to industry, a large proportion of our national resource is diverted into house purchase rather than into productive investment.  We cannot hope to improve our productivity in comparative terms while this bias in our economy remains.

    We suffer, by virtue of the current role of the banks in our economy, not only an economic loss, but also a partial loss of the power of self-government.  We have less control of where our economy is heading than a truly sovereign country has a right to expect.  The amazing thing is that this huge influence over our economy is achieved – through their unique ability to create new money – by private (and in this case foreign-owned) companies in the course of pursuing their own private profits, and that they are allowed to do this without any democratic control whatsoever.

    Our politicians, however, seem unconcerned; they are happy to disclaim any responsibility for this important aspect of economic policy and to rely on the ignorance of the public to allow the situation to remain undisturbed. Wouldn’t it be good to think that our new government might take a fresh and more critical look at it?

    Bryan Gould

    17 February 2018