If irrational exuberance caused the 2000 US downturn, irrational pessimism might cause a repeat in New Zealand in 2020.
Tuesday's Herald Mood of the Boardroom survey suggests a business community much glummer than recent data justifies.
Even though most indicators are heading in the wrong direction, NZIER's consensus forecasts are still far from dire. Growth is expected to remain in the 2-3 per cent range for the next three years, unemployment will sit around 4 per cent and wages will rise faster than inflation, which will stay low but above zero.
Perhaps most significantly, access to cheap debt and equity will continue, with yields on everything from 90-day bills to 10-year government stock remaining at historic lows and KiwiSaver funds awash with cash looking for local infrastructure and other projects to support.
Despite this, the Mood of the Boardroom indicates the lowest business confidence since the global financial crisis. This is consistent with ANZ's August business confidence survey, down another 8 points to negative 52 per cent, with firms' own expectations also falling into negative territory.
Employment, investment and export intentions are all dismal. Even consumer confidence, which Prime Minister Jacinda Ardern believes is more important, languishes below its historic average.
Political pollsters are also picking up the doom and gloom. In August, Labour's pollsters UMR Research reported that most people think things in New Zealand are generally heading in the right direction. But extraordinarily, the same report indicated that more of us have a negative attitude towards how the economy is doing right now than positive.
Such scientific studies of consumers and voters at large can't be dismissed as grumpy right-wing businesspeople using business confidence surveys for partisan purposes.
Still, any suggestion that the economy has been doing terribly over the last few months or that certain disaster lies ahead is objectively wrong. Wednesday's Moody's report on the New Zealand economy was warmly welcomed by Finance Minister Grant Robertson.
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The prevailing negative mood demands another explanation.
Reserve Bank governor Adrian Orr and his Monetary Policy Committee must be among the villains. As the Mood of the Boardroom indicated, August's surprise 0.50 per cut in the Official Cash Rate (OCR) to a mere 1 per cent was meant to boost the economy but ended up spooking investors.
If Orr and his colleagues were prepared to take such a radical step, what do they know that mere mortals don't?
This in turn played into existing alarm about the global outlook. Donald Trump's trade war is geopolitically and economically vandalous and the world seems due a recession anyway, yet major central banks have no remaining room for monetary stimulus.
Nevertheless, such fears are not enough to explain the extent of New Zealand's malaise or why our per capita growth is worsening faster than in comparable countries.
After all, our central bank does have remaining monetary room and our Treasury plenty of fiscal room.
The answer, it seems, is something similar to but not the same as the business community's usual anti-Labour sentiment.
Most rowdily, farmers feel under attack on multiple fronts including the proposed Zero Carbon Bill, the planned inclusion of agriculture in the Emissions Trading Scheme and David Parker's radical water quality reforms.
This rural revolt has plunged agricultural confidence down to a horrifying negative 68 per cent even though farmers are the most positive group about their own activity.
A case can be made that dairy farmers are being irrational or even petulant, given that their own atrocious oversight of Fonterra is costing them vastly more than any of Wellington's proposed imposts, but that doesn't make it any more likely they will start spending again.
Similarly, the oil, gas and wider minerals industries may be completely wrong that August's draft Government Resources Strategy and Cabinet paper on the review of the Crown Minerals Act indicates Ardern wants an end to all extractive industries in the very near future.
That still doesn't mean they have any intention of risking shareholders' funds in the meantime, especially after the Coalition's shock move against oil and gas in 2018.
The Government's own recklessness is the chief cause of negative sentiment taking hold in these two major export earners.
More broadly, while the business community may not have much liked Helen Clark ideologically, no one doubted her Government was administratively competent.
For Ardern, the Mood of the Boardroom suggests the abject failure of KiwiBuild and the sluggishness of infrastructure projects have had a wider effect. Even the Government's failure to shift the tax burden away from wages and operating profits towards capital gains sent an adverse message about competence.
With no disrespect to journalists or political commentators, Ardern should be concerned that one of our number, junior minister Kris Faafoi, is ranked her Government's top performer. While Faafoi has done a perfectly adequate job, what does his ranking suggest about the competence of the rest?
This matters. According to another leading polling firm, CT New Zealand, only 9 per cent of New Zealanders are very confident that Ardern's team could competently manage a major economic downturn if — as seems likely — one is on its way from abroad. Nothing better explains the degree of economic disquiet.
Lest the Opposition be let off the hook, it too needs to do vastly more than reheating the leftovers of Steven Joyce's bland Business Growth Agenda, most particularly with respect to Auckland transport and wider infrastructure, if it wants to be taken seriously by the business community in election year.
Once again, Ardern has done a superb job on the world stage this week, charming even Trump. She urgently needs to apply those skills to instil a sense in New Zealand that her Government knows what it is doing domestically.
This is not primarily about her re-election, although it is of course linked. The real problem is that if Ardern can't get New Zealand business out of the dumps, a dangerous decline in the actual economic outlook looks certain.
- Matthew Hooton is an Auckland based public relations consultant and lobbyist.