Inequality and its consequences

It is always a pleasure to read in the NZ Listener the column by Rachel Morris, a New Zealander who is executive editor of Huffington Post Highline. Being an expat, she can see things that are not obvious to those of us living inside the national cocoon. We, that is, the New Zealand media, talk about rising house prices, people sleeping in garages or in their cars, child poverty and deprivation on a scale that New Zealanders have not experienced perhaps since the depression of the 1930s. We all, including politicians, agreed that this is terrible, unacceptable, and then file the problem as too big to tackle. Yet it is not the size of the problem but the political will to solve it that is the issue. The consequence of rising house prices is that wealth is shifted from those working for wages to those who have capital which they can invest in property. The inequality that this leads to changes the way people live, both individually and collectively. There are the "haves" and the "have nots" and their lives diverge further and further, with empathy shrinking across the divide. In the US both Bernie Sanders and Donald Trump tapped into this sense of disengagement, and in the UK Jeremy Corbyn and some of his less savoury allies also give political voice to this discontent. In New Zealand, however, there is no appetite for radical responses to the obvious social problems besetting New Zealand society. The housing crisis is eminently soluble. The first Labour government faced an acute housing shortage after the war and they set about building thousands of  state houses, borrowed money, worked with the builder, James Fletcher, and created whole new suburbs that seemed like workingman's paradises. The houses were well designed, strongly built, didn't leak, and were developed around attractive public spaces and communal facilities. If the government would build a few thousand houses, making use of cheap credit available to it, the housing shortage would be solved and the escalating housing prices would come to a halt. Some investors would get burned, the value of their investments would decline and in some cases they would lose their equity. The banks would panic about bad loans. But people, "hard-working New Zealanders", people working for wages, would have roofs over their heads. If there would be a Labour Party in New Zealand that values its heritage, the heritage of Michael Joseph Savage, it would advocate such a radical measure which would do much to alleviate poverty and narrow the gap between the rich and the poor. But this would mean trampling on libertarian sacred cows. It would look to solutions to social problems to the government, not to private enterprise and the market. It would accept that the government and bureaucracy can deliver needed social outcomes more efficiently than private enterprise. The NZ Labour Party lacks the gumption of a Bernie Sanders and risk turning against the prevailing libertarian political canon.