Dita De Boni 's Opinion

Business columnist, with a political twist, for NZ Herald

Dita De Boni: It's rolling along nicely. Right?

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Illustration / Anna Crichton
Illustration / Anna Crichton

Working in a newsroom, gloomy thoughts about the state of humanity are an occupational hazard.

If we are not being inundated with pictures of terrified, terrorised young Iraqi men or Syrian children every day, we're in a rare lull. And to fill those breaks in the gloom, there's always the Glenn report on our subculture of child neglect and violence. Or another child killed in a driveway. Or a young man bashed outside a small-town pub.

One almost longs for a story about Kim Kardashian's ample butt or Prince George's pudgy-legged waddle, just to break up the incessant grimness. But after we've smiled, we're left reminded our own children will never be minded by kindly English nannies, and our butts are flat and unappealing. It's a no-win situation.

We do, at least, have doughty Bill English minding the public purse, while his boss, John Key, ladles out the good cheer and reminds us we're living in that famous "rock star economy". Yes, we know about factory closures and mass job losses, the way fulltime positions are rapidly becoming contract and part time, and the growing pressure on food banks.

But we still tend to believe she'll be right in matters economic.

But will "she" be right? Because it seems inescapable to conclude that the world is once more heading towards financial disaster.

We all know New Zealand is overwhelmingly dependent on China for our economic prospects, and that a cooling Chinese economy will spell big trouble. When this week it was reported that 49 million Chinese homes - almost 23 per cent of homes in urban areas - are now empty, and that outstanding mortgages on those homes had reached as much as US$674 billion ($778 billion), it seemed the future had already arrived.

According to a Wall Street Journal report, easy credit has fuelled growth in the property sector, upon which China's GDP heavily depends. Levy Economics Institute president Dimitri Papadimitriou, writing in the Guardian, comes to a similar conclusion on a wider scale about the US, which he says will be in a disastrous position when the "tsunami of debt" hits.

Papadimitriou says America is wrestling a "three-headed monster" of weak foreign demand, tight state budgets and high income inequality, and the only way to achieve the growth predicted by the US Congressional Budget Office will be by spending - financed by, yes, even more borrowing.

He says household debt is rising ominously and the fact that 90 per cent of US households are insolvent - "the new normal" - is completely unsustainable. Which leads to a situation that is very bad for all the world, New Zealand not exempted.

What does become clear when paying attention to the news cycle, amid all the sighs of horror and disgust, is that decision makers are being called on to think in radically different ways, if they're to have any hope of tackling some of the biggest problems of our time - the environment, the Middle East, poverty, inequality, even obesity.

The question is, do we have the right leaders to ensure New Zealand is also thinking clearly about the massive challenges ahead? Should they keep on telling us to admire the lovely view as we climb ever higher, or devote more attention to the hazards that could trip us up? Because once it all starts rolling backwards, it's going to take much more than celeb gossip and cute royals to dispel the depression.

- NZ Herald

Dita De Boni

Business columnist, with a political twist, for NZ Herald

Dita De Boni is a columnist, commentator and TV producer/journalist. She first wrote columns for the NZ Herald in 1995, moving to daily business news in 1999 for four years, and then to TVNZ in Business, News and Current Affairs. After tiring of the parenting/blogging beat for the Herald Online she moved back to her first love, business (with a politics chaser), writing a column for Friday Business since 2012.

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