Private equity made headlines recently due to its bid for a share of NZ Rugby and the All Blacks. High profile failures like Toys R Us in the USA and Dick Smith in Australasia have highlighted problems caused by Private Equity.
This article in Vox by Emily Stewart is a scathing indictment of private equity firms. The usual pattern is buying companies, many facing problems, saddle them with even more debt, make a quick profit, and sell them. Even when they bankrupt the company, they walk away with substantial profits, while everyone else loses their shirts or, as Emily puts it, Heads I win, Tails you lose!
Failures are exceptionally high with the larger private equity firms. As per Binyamin Appelbaum of the New York Times; “The big private equity firms that have no idea about the particular industries in which they are investing, they think they can have this cookie-cutter model and make money. That’s where we’re seeing these terrible models happen”.
Statistics cited by Emily is fascinating reading. 20 per cent of public companies that go private through leveraged buyouts go bankrupt within 10 years, compared to a control group’s 2 per cent bankruptcy rate. Employment shrinks by 4.4 per cent two years after companies are bought by private equity, and worker wages fall by 1.7 per cent. Everyone else loses!
This book portrays the life of John Maynard Keynes and how his economic philosophies rescued the world after the great depression of 1929, also how ignoring his advice after World War 1, led us to World War 2 and all it’s horrors.
It also shows how his economic philosphy led us to wide spread prosperity of the developed world from 1950 to 1970 and the rise of a well to do middle class. Keynes died in 1946, but his economics lived on, with the help of influential economists like JK Galbraith.
The fight back of the elites with the help of a few influential neo liberal economists has decimated the middle class and led to a world more inequal than at anytime in recent history.
The inequality and rising poverty have led us to the rise of dictatorial leaders like Trump, increasing risks for democracy and heightening potential for violence. Interestingly the author puts the blame of the current situation on centrist leaders like Clinton and Blair, Obama and Merkel, rather than right wing leaders. Their failure to deliver for those hurt by neo liberal policies, led to normally left leaning workers fleeing to populist leaders like Trump and Johnson.
What kind of world would you want if you didn’t know whether you will be born to a rich or poor family?
This is a question few of us ask today, especially if you are a wealthy or a high earner, from the right side of the tracks.
The latest book by Harvard Professor of Philosophy Michael Sandal is a timely warning that a well-meant focus on meritocracy has gone wrong. Inequality has deepened, opening wide rifts in society. People in despair, failed by traditional politicians from both right and left, have flown to the extremes. Dark clouds of dictators and demagogues are threatening democracy.
People in despair, failed by traditional politicians from both right and left, have flown to the extremes.
Adverse impacts of meritocracy have been exacerbated by other trends over the past 40 years. Globalisation and automation have reduced the number of higher-paying manufacturing jobs traditionally filled by blue-collar workers. The power of multinationals and high-earners has increased due to well-funded lobby groups and laws allowing unlimited spending on political contributions in the USA. The financialisation of the economy has seen obscene income and wealth flowing to a few traders in financial products that add little or no value to the economy. Reducing levels of taxation for high earners, investment incomes and capital gains have increased income and wealth gaps. Lower tax revenues and demonising the poor have reduced social benefits and services like health and education. The reduced power of unions has slowed growth or decreased the real wages of workers.
Meritocracy, Globalisation, Automation, Financialisation, Tax changes, Reduction of welfare benefits, Lobby Groups have widened rifts in our society.
The current wave of meritocracy started with Reagan and Thatcher. They believed that markets will deliver both economic growth and the fruits of the economy to all willing to work. Those who failed did so due to lack of effort and deserved to be poor. The problem deepened with Clinton and Blair, who tried to soften the impact on low-income earners rather than challenge the premise of a market-driven meritocracy. Both Liberal and conservative politicians have focused on meritocracy and education as the primary vehicle for advancement to achieve a good life in society
The economic and social policies adopted by Anglo-American democracies veered sharply away from those of Scandinavia and mainland Europe to an economy and country of winners and losers.
Achieving pure meritocracy, equality of opportunity is a fallacy. A wealthy family has many advantages; their children start miles ahead in the race of life. Better schools, private tutors, more parent support and access to resources far greater than a child from a low-income family. However, those reaching the top in our economy strongly believe that they did so due to hard work and merit, thus deserve outsize rewards. While those espousing meritocracy envisioned a society with higher social mobility and lower inequality, the actual results have been directly the opposite. More students come from families in the top 1% at Princeton and Yale than the bottom 60%. Two-thirds of admissions for Ivy league universities have come from families with earnings in the top 20%.
Pure meritocracy is a fallacy, children born in a wealthy family start the race of life miles ahead of the rest.
Parents of both rich and poor tell their kids that they will reach their goals if they work hard. The reality is different with sluggish economies, struggling families, poorly funded schools and the high college cost. Income mobility is low, leaving many stuck in these jobs, which are poorly paid and insecure. Profit maximisation rarely takes into account the social cost of laid-off labour.
The relentless focus on merit has impacted those on high incomes as well. Anxiety, depression and alcoholism have taken a toll.
While politicians from both right and left wings have repeatedly spoken about education as the primary vehicle for advancement, opportunities for a better education have decreased for those on lower incomes. Lower tax revenues reduced funding, lowered the quality of education, and made it more expensive by levying higher fees.
Whilst retraining has been promoted as the way forward for those displaced due to globalisation and offshoring, funding provided for this has been minimal. Economies of rural areas and small towns have been decimated. Deaths of despair have soared, along with social ills like drugs and alcoholism.
The rapid escalation of rewards flowing to winners of our society has sharply increased inequality between the elites and those on the bottom rungs, diminished the middle class. Manufacturing jobs that paid a reasonable wage have been replaced with low paid service and retail work. Earnings of blue-collar workers have declined or stayed stagnant while those for top ranks have surged ahead.
Low-income earners are looked down upon as losers by the elites and, at times, by themselves. The dignity of work and respect for them diminished. The value placed on middle-class jobs like teachers, nurses and police have reduced along with their salaries. College degrees are increasingly tied to income and prestige.
Higher wages and tax advantages are hardening into wealth passed onto the next generation. Establishing a hereditary aristocracy.
We need to reverse the trends of the past four decades, raise taxes, provide better essential services and pay better wages for those at the bottom. The lessons of history are clear; we ignore them at our peril.
Annabelle sat on the front patio, oblivious to the pleasant surroundings, the blue skies and the magnificent looking garden; she was brooding and angry. The past few months’ events left her mind in turmoil; she smashed the teacup against the floor, took a few deep breaths to clear her mind. She made her decision. Picked up the pieces from the teacup and went inside the house.
Annabelle finished her packing, wrote a note, stepped out, took one last look at the house, lingering over memories. She got into the car, sighed, shed a tear and drove out.
They lived in a stately six-bedroom villa with a white pebbled driveway. The steel grilled gate at the entrance and granite walls said privacy rather than welcome. The front door, ornate, carved by a Maori artist and the stained glass windows looked as good as they did a hundred years ago. The solid teak floor needed polishing. The sofa seat was torn, the tear hidden by a cushion laid on top. The drapes were faded.
Their house, her house, overlooked the harbour and sat on a hilltop by the sea. This was her ancestral home. Flowering plants lined the driveway, and carpet flowers filled the ground below. Red and white roses, chrysanthemums, camellias, she chose plants carefully every spring. The lawn bordered by shrubs and set off with a sculpture and a pond with water lilies in the middle. Annabelle had spent many happy years here, though the last few years had taken a toll, a toll on her and the house.
Auckland- the City of Sails. New Zealand was a country of sailors and boats, yachts. Black Magic had won America’s Cup again; Peter Burling and Blair Tuke were hailed as heroes. The murky business about alleged misspent funding was settled, although perhaps not to everyone’s satisfaction. The government and the city council spent $200 million for the campaign, even though the city was deep in debt and cutting staff. An indulgence to support people already rich, some opined.
Hundreds of boats from small speedboats to yachts dotted the marina, anchored on the turquoise blue water. A sight that always delighted Annabelle, even though she saw it every day. The people were getting ready for a day on the water, like ants walking on the pier, a hive of buzzing activity. The harbour bridge glistened on the horizon; tens of thousands crossed every day to work in the city.
Annabelle was always dressed elegantly and well-groomed, something ingrained in her. She had aged gracefully. She would usually sit on the verandah after breakfast, with a pot of tea, the soft invigorating breeze setting her up for the day.
Annabelle did charity work, enjoyed working with her circle of friends, camaraderie, chit-chat, and drinking coffee. She loved making a difference for many who needed a helping hand, putting smiles on peoples’ faces and especially the children. Even in a relatively prosperous country, some people were suffering, those left behind. Children were going hungry, lacking proper clothing and textbooks, missing doctor appointments. The massive economic changes in the eighties were not kind to those at the bottom of the ladder. The welfare benefits provided by the state were woefully inadequate. Even the many centre-left governments had done little to help those in poverty. Annabelle wondered why taxes were cut for the wealthy when there were so many who needed help. She also worried about the millennials, a whole generation left behind by rising property prices and rents. The generation gap had become a generation gulf for them.
Annabelle met Zorro at an event to support the needy. He was confident, good looking, charming. A lawyer with the gift of the gab, he had built up a successful practice and connections in the city. Zorro enjoyed working with people from all walks of life. With a penchant for high risk and high profile cases, he loved the attention these cases attracted, the thrill of winning. He aspired to get into politics, lawyers dominated the parliament.
They enjoyed many idyllic years. Moving with elite circles in the city and vacationing in glamorous destinations, getting pampered in luxury hotels. The two of them liked active vacations -hiking, rock climbing, riding bikes and motorbikes. They enjoyed the casinos, poker and blackjack. Annabelle enforced a strict budget on gaming. She wanted to play for enjoyment, not the thrill of winning.
Zorro combed his greying hair carefully; he cultivated the patrician look. Choose a smart casual suit and searched his collection of ties. He was trying to select a lucky one, something he found exasperating; lady luck had been a fickle friend lately. He had come close to winning many times recently and had a strong feeling a big win was coming. Zorro checked his purse to make sure the cash was there. He waited for his ride. His car was an old model and in need of a lick of paint. “Goodbye, Annabelle”, he called out. “Goodbye, Zorro”, she replied.
He was meeting up with James and Mike. They liked to grab a drink before the races, talk about the horses running today. The Hunters bar was packed, as usual; on big race days, many of their friends were there. The plush leather chairs, the faux English pub look, and free bar snacks invited punters to linger. He ordered a double gin and tonic, a stiff drink to settle his nerves. They checked the racing broadsheets, the latest odds and expert predictions, scribbled notes, which hopefully were legible enough to read.
Boxing Day, Alexandra Park– It was a glorious summer day in the southern hemisphere. Azure blue sky with a touch of white clouds. The grass on the track was dark green; water restrictions didn’t appear to affect the immaculate lawn, lovingly cared for by the groundsmen. Today’s races were a prestigious social event among the smart set in the city- business people, lawyers and accountants. Ladies showed off their latest fashions, colourful clothes, topped off with fancy hats of their own creation, especially for this event. The hot summer weather encouraged racy attire and bare flesh. Horse racing was still a glamorous pastime, even if the popularity was dipping, among the younger people.
For some, today was work or a day to mix business and pleasure. Many companies had Corporate boxes. For a few hours, your customers were captive, hopefully in a good mood, lubricated by beer and champagne, and receptive to a soft sale. Entertaining was helpful to build relationships and goodwill. The horse owners loved the prestige and windfalls they would make if their horses won. Owning a horse was a way of flaunting your wealth. Then there were the rich -old money, new money, the aspiring and the pretenders. There was money to be made, friendships formed, and relationships deepened. There was also money to be lost.
The New Zealand government supported horse racing, perhaps the only country with a Minister for Racing and a government handout of $70Mn a year. The Deputy Prime Minister was a passionate horse racing fan, and he loved the campaign donations from the horse owners. Races were broadcast live on a cable TV channel; the betting company was a major sponsor.
The jockeys were primed for a good day of racing. Each had his pre-race routine; many listened to their favourite music. A few said their prayers. Many wore their lucky socks or cap.
Today should be an exciting racing day, with a million dollars on the final race and many times that riding on betting. Commentaries on the news channels were building up the occasion, and punters were hyped up. Sacramento and First Dance were the favourites, with Short Story and Money for Nothing the dark horses. The horses coming out of the paddock looked magnificent, immaculately groomed. They strutted around.
The bars dotted around the ground, and the betting booths did brisk business. Drinks and flutter were an essential part of the race day experience. People were queueing up, ready to part with cash for food, beverage and a chance to win.
Zorro and his friends popped into the bookies first. They had already their picks; they were serious about their racing and betting. An inordinate amount of homework went into selecting horses and the jockeys. They read their notes and the latest news, looked at the horses, how they walked for any clues. Many had placed some bets already, in advance, online. Outside, people without much money placed bets on horses, desperate for a win, to brighten up their lives, even if momentarily. Others played pokies, gambling for the poor.
Zorro and his mates hit the bars; he paid for the first round of drinks and food. Zorro always paid for food; he was generous. They found their places on the grandstand. Races started, and the punters cheered for their horses. The winners whooped with joy. Losers and there were many, unhappy or philosophical or hopeful. Mostly hopeful, although they knew that the house always won while you had to be pretty good or pretty lucky. They knew that winnings were only a fraction of takings; perhaps they were paying for the rushes of adrenalin, the mood swings. Alcohol flowed, the bars were busy, and the bartenders happy. The winners drank to celebrate; happy, even if the drinks and the tips were a bit more than their winnings. The losers, well, they needed a drink or two or three.
Racing was always exciting, win or lose; everyone had a good time. Well, almost everybody. The racing ended, but many continued partying, hitting pubs and bars around.
Zorro got home. He didn’t need to count his cash; his purse was empty. Annabelle was not at home; Zorro picked up the note.
Zorro knew he had to stop gambling; he was in trouble. Deep in debt, two houses, houses inherited by Annabelle, heavily mortgaged to fund the habit. Her father had built up a property portfolio, a successful businessman who had worked hard for his money and made many sacrifices. All that wealth was frittered away. Zorro was good with excuses and lies, to borrow money – business deals, investments, and expanding his practice. His partners at the law firm were concerned; there were many discussions about client complaints. His standards were slipping, he knew, although he vociferously denied.
Zorro knew he needed help, reach out to a psychologist or a helpline or Gamblers Anonymous. The one small step that may help him turn his life around and alleviate the pain of his loved ones.
He picked up the phone—rang his dealer for a fix of cocaine.
If you have a problem with gambling or have a family member or friend who has a problem gambling issue, please call for free 24-hour support, 0800 654 655 or text 8006.
The seventeen prisoners involved in the case have filed a civil rights case against the CEO of Corrections Dept and the Attorney General for breaches of their civil rights and violation of minimum rules for treatment of prisoners
“It is more than 30 years since two landmark reports- proposed transformative changes to Criminal Justice in New Zealand.In the decades since, there have been many reports and reviews; none have led decision-makers to undertake fundamental change”– The Safe and Effective Justice Group(S&EJ), appointed by the Cabinet of Ministers – New Zealand
The Siege
Tuesday 29th December 2020, most New Zealanders were on holiday. COVID free and enjoying the festive season, we flocked to overcrowded beaches and holiday spots.
A group of inmates in a high-security prison in the remote town of Waikeria felt anything but festive. The 109-year-old jail, to be demolished in 2022 and neglected, was to them in an intolerable condition. Amid rising violence, a tinder keg, waiting to explode.
Prison staff received a call from media that a riot might erupt, found nothing untoward, went back to their lunch; soon after, a few fires lit up the exercise yard. The prisoners climbed on the roof and set the rooftop ablaze with burning mattresses. Flames lit up the night sky, an inferno seen from miles away. Seventeen prisoners barricaded themselves and raided the weapons room.
Sirens screaming, firefighters, ambulances and police rushed in; followed by the Prisons’ riot management team and the Police Armed Offenders Squad. The armed offender squad stormed the prison lobbing tear gas grenades and firing rubber bullets. The defences held.
The inmates had leftover food in the kitchen and ‘brown’ drinking water. Set themselves up for a siege, “as long as necessary to be heard,” and issued a manifesto of demands calling the conditions in prison “appalling”.
The CEO of Corrections (Prisons), Jeremy Lightfoot, denied the poor conditions “no complaints received”. The Minister for Corrections, Kelvin Davis, refused to get involved until the incident was over, “an operational matter”. Opposition Party MPs were denied access to the prison. Maori Party MP Rawira Waititi called out the government “let an inhuman environment fester and breaches of basic human rights to occur”.
The prisoners’ families called for the media to be permitted into the prison to counter what they called a false narrative. “They are being treated like animals, only want fair treatment and clean drinking water. They got brown water and stale bread on Christmas day”.
“They got brown water and stale bread on Christmas day”.
The siege dragged on. The prison management adopted an aggressive and much criticised ‘starvation’ strategy of withholding food and water. There were no hostages involved to warrant a softer approach. Passions ran high on both sides of the debate in mainstream and social media.
MP Rawiri Waititi stepped in to negotiate. Let into the prison finally, “after being blocked everywhere I go” and saying, “if the situation turns to custard, it will be entirely the government’s responsibility”.
After a tense six-day standoff, the prisoners surrendered and walked out with MP Waititi. The high-security prison was destroyed and, for some, the reputation of Corrections. Was this a wanton act of destruction by a group of violent men? A cry for help by people at their wit’s end? Or even a noble act of sacrifice to call attention to a severe problem with our prisons.
Was this a wanton act of destruction by a group of violent men? A cry for help? Or even a noble act of sacrifice to call attention to a severe problem with our prisons.
The Maori
The treaty of Waitangi in 1840 promised Maori control over their land and equal status as the European settlers. However, just five years later, the settlers appetite for land led to the Land Wars. When the fighting ended, the Maori had lost 90% of their land. By 1896, an estimated 75% of their population were lost, to war, western diseases and alcohol. Relegated to a subsistence existence, the Maori started migrating to urban areas. They arrived without land, capital and little education. The work they found were low paid, dirty and arduous.
When the war ended, the Maori had lost 90% of their land. By 1896, an estimated 75% of the population was lost to war, western diseases and alcohol.
Only 3% of the prison population was Maori at the turn of the 20th Century when the urban migration started. It reached 21% in 1945. Urbanisation accelerated after the 2nd World War, as did incarceration rates. From 1955 numbers of Māori in prison increased dramatically, reaching over 50% of the prison population consistently from 1980, while only 15% of the population.
Celia Lashley’s book ‘Journey to Prison’ outlines the complexities of why high numbers of Maori end in prison. Poverty, mental health, family violence, crime-prone environments, family influence, drug prevalence, and gangs. The challenges faced getting out of the prison system. Critics argue that the justice system is stacked against Māori at all stages. They are more likely to be arrested, charged, convicted and imprisoned.
Māori in prison are over 50% of the prison population consistently from 1980, while only 15% of the population.
The Poor
“Most prisoners come from neighbourhoods and regions with the lowest deprivation indexes and the highest negative statistics in social policy areas. 50 per cent of people convicted of offences in 2013 lived in the 20 per cent most deprived areas of New Zealand.” – S&EJ
New Zealand’s economy was liberalised in the 1980s. The changes were radical and ideology-driven. Taxes on the wealthy were reduced substantially while welfare benefits were slashed. Housing costs and poverty rates soared.
Dr Elizabeth Stanley, Director of the Institute of Criminology at Victoria University, was critical of the government. “Our best research tells us that crime, including family violence and youth crime, is linked to poverty and inequalities. Many options are already on the table—social assistance reforms, reconfigurations of child support, increased social housing, liveable wages. There is no poverty of ideas. Instead, the political challenge seems to lie in ‘poverty of responsibility…the poverty of caring’. We encourage the government to step up and take responsibility.”
50 per cent of people convicted of offences in 2013 lived in the 20 per cent most deprived areas of New Zealand
Our benefits are among the lowest in the developed world. While the Labour government has increased the minimum wage, their attitude towards beneficiaries is far from kind; working and non-working are treated very differently. Some poverty measures improved in 2020, presumably due to the increase in minimum wages helping the working poor.
The Mentally Ill and the Addicted
“Weknow that the mental health system is broken, as is the justice system.If the health issues, and then mental health issues, had been dealt with, they (prisoners) might not have ended up where they are.” –S&EJ
“62% of prisoners have been diagnosed with mental healthor substance abuse disorder within the last 12 months, of those diagnosed only 46% have received treatment” –Chester Borrows, Chair of S&EJ
At Waikeria, around 75% of prisoners reported inadequate support for mental and emotional issues. Over 85% said no help receive with their drug and alcohol problems. Anecdotal evidence suggests over half of the crimes are committed under the influence of drink and drugs.
Over 85% said no help received with their drug and alcohol problems.
Rehabilitation
At Auckland Prison, the Ombudsman found that prisoners spent less than an hour per day on rehabilitation programs; maximum security prisoners got only three minutes per day. Prisoners received approximately half-hour per day of education, with this figure dropping even further for the high security. The people who need help most get the least.
We spent only 3 minutes per day rehabilitating maximum security prisoners.
Recidivism – out of prison and heading back to crime
If you are sentenced to prison once, you are forever a convicted criminal; your name never comes off the Convicted Criminals database. The Clean Slate Act only applies to lighter crimes. Many employers do pre-employment checks for criminal conviction. 60% of prisoners are convicted again within two years, a statistic that has only gone up in the past two decades. Many five-year plans have come and gone without making any impact.
Paying for their crimes
We pay our prisoners princely sums of between 20 and 60 cents an hour. They are expected to pay for basics like tea and coffee, even toothpaste, toothbrushes and shaving kits, phone calls to families at commercial prices.
The Politics
Politics and sensationalism around a few violent crimes, ‘prison populism’, rather than evidence, have driven our laws and prison policies over the past three decades. Dr Wayne Goodall, the Principal Strategic Analyst for Corrections, outlines in his report how law changes reacting to specific incidents have increased the prison population.
The sentenced prison population increased 360%, from 2,000 in 1985 to 9195 in 2017 (before dropping to 7,383 in 2020).
The Inspection
The Chief Ombudsman’s team inspected the Waikeria prison in 2019 and reported. The cells in the high-security wing were ill-ventilated and uncomfortably hot. Cells were rundown and had significant amounts of graffiti. Designed for a single prisoner, they were double-bunked and cramped, inmates unable to sit upright on the bottom bed due to proximity to the top bed. The toilets had no lids. All meals except lunch were delivered to the cells. They ate their meals on the bunk beds near uncovered toilets, unsanitary and inappropriate. The bedding was in poor condition: stained, lumpy and torn pillows, torn mattress covers.
They ate their meals on the bunk beds near uncovered toilets, unsanitary and inappropriate.
Prisoners segregated due to behaviour issues were locked up 22 hours a day, with no time to address these issues. Prisoners had nothing to do all day—conditions deplorable and no improvement since the previous inspection in 2016.
High levels of gangs and violence – a third of prisoners reported being assaulted in prison; most didn’t report fearing consequences.
Dinner was delivered as early as 4pm—some meals were of poor quality. No access to hot water; they made their hot drinks and noodles from hot water in showers. Drinking water was discoloured and cloudy.
No access to hot water; they made their hot drinks and noodles from hot water in showers. Drinking water was discoloured and cloudy.
The gym was poorly ventilated, equipment old and rusty, toilet blocked and dirty, showers were broken. The exercise yards were shabby, with green mould and graffiti.
Libraries facilities are limited, mainly stocked with books discarded by the public libraries. Prisoners in the high-security wing could not request books from the library; what reading material available was unsuitable. They had no access to educational opportunities.
“The High-Security wing is not fit for purpose”.
Norway
BBC’s Emma Jane Kirby wrote about her visit to Norway’s maximum-security Halden Prison. “Can you feel the stretch?” she gently asks a heavily tattooed man as she settles his ruffled T-shirt and smoothes his back with her hand. It could be a yoga class at any health retreat anywhere in the world. “It calms them,” says prison governor Are Hoidal approvingly. “We don’t want anger and violence in this place. We want calm and peaceful inmates.”
Set in beautiful blueberry woods, peppered with majestic silver birch and pine trees. Accommodation blocks and chalet-style buildings of Halden Prison look like a trendy university campus rather than a jail. Each cell has a bed, a small fridge, a bookshelf, a TV, a desk and chair, plus a private bathroom including a shower, a toilet and a sink. There is also a music studio –”Criminal Records”, a garden, a holy room, gym, training room, library, computer room, family visiting house and more. A school offers an opportunity to get a proper education.
A prison officer on a silver micro-scooter greets us cheerily as he wheels past. Two prisoners jogging dutifully, keep pace. Hoidal laughs. “It’s called dynamic security!” he grins. “Guards and prisoners are together all the time. They eat, play volleyball, do leisure activities together, and that allows us to really interact with prisoners, to talk to them and motivate them.”
In Scandinavian countries, the focus is on rehabilitation from day one. Finding employment and adjusting to life in the community are the most critical elements for successful reintegration. The prison conditions are kept as normal as possible. The prisoners wake up by 7 am, can stay up late. Relationships with staff and other prisoners enhance normalcy.
Perhaps the most crucial factor for keeping people out of prison is employment. Prisoners choose from a range of jobs available in prison. They are paid regular wages (In New Zealand, prison pay rates are between 20 and 60 cents per hour!) and encouraged to develop skills. Academic opportunities are also provided as most prisoners have a low education level.
In Norway, the prisoners are paid regular wages; in New Zealand, pay rates are between 20 and 60 cents per hour
Norway’s prison changes are a recent phenomenon following radical reforms in the 1990s, which dramatically reduced reoffending from around 60% to 20% today.
Anglo-American countries have followed a punitive approach to prisons; the USA has the highest prison population globally. New Zealand has the 5th highest prison population rate among the OECD countries, at 199 per 100,000.
Most European countries have opted for a humane, rehabilitation-based approach; have the lowest incarceration and reconviction rates. Germany has a prison population of 77 per 100,000, Sweden 61, Norway – 60. New Zealand imprisons more than three times as Sweden and Norway.
60% of New Zealand prisoners are reconvicted within two years (for Maori New Zealanders, 68%). In Norway, it is 20%, Sweden 34%, Germany 40%.
The Safe and Effective Justice Group(S&EJ) issued their final report in December 2019, calling for radical changes, “gradual replacement of most prisons with community-based habilitation centres”. It warned that significant upfront investment is required. The Corrections Department’s Financial forecasts have no extra funding allocated.
“New Zealanders have delivered us a clear message: we cannot wait another 30 years. We cannot afford another generation of hurt. To create the conditions for sustainable change.”-The Safe and Effective Justice Group
Is this message falling on deaf ears, water off a duck’s back? Is Hokai Rangi just another 5-year plan? Will the riot at Waikeria change anything?
The Corrections (Prisons) Department choose not to comment for this article. They did provide a majority of information requested under the Official Information Act.
Whilst the prison system detailed here refers to New Zealand, a similar punitive system also applies to other Anglo-American countries, probably the USA prison and criminal justice systems are far worse than the others.
New Zealand’s unemployment was less than 1% for 30 years from 1946 to 1976. Now the government, the Reserve Bank and traditional economists settle for 4% unemployment, as ‘full employment’.
This version of ‘full employment’ means 8% youth unemployment and 16% Maori / Pacific youth unemployment. Problems such as family poverty (including children missing meals), mental health, suicide, poor health and reduced self-esteem which accompany the lack of a job are barely acknowledged or debated there as to whether they are too high a price to pay.
Martin Taylor of progressive economic thinktank Digital Strategies who has been working on a jobs guarantee argues this could cost as little as NZ $1.6Bn, approximately 0.5% of GDP. And, this is more than outweighed by the benefits such as dignity of work, improved mental and physical health, improved social and environmental outcomes, boost infrastructure and care work.
Full article by Catriona MacLennan published on Radio New Zealand website, 29th April 2020.
A plain-English guide to what it is and why it’s interesting
“There’s nothing to prevent the federal government creating as much money as it wants” -Alan Greenspan, former Chairman of Fed Reserve, USA
Stephanie Kelton, Professor of Public Policy and Economics at Stonybrook University argues that there is no harm in printing money, there will be no inflation as long as there is unused economic capacity or unemployed labour. Government spending can be used to boost the economy and eliminate unemployment. Inflation can be controlled either by reducing government spending or withdrawing money by increasing taxes.
Explains that highly publicized instances of hyper inflation in pre war Germany and Zimbabwe were due to lack of resources to boost economies, rather than printing money.
While traditional economists still haven’t accepted MMT, what many governments are doing since GFC is printing money.
Government spending can be used to boost the economy and eliminate unemployment.
Social Democracy 