Matt McCarten: Cheerful free-market ride about to nosedive

Those born with a silver spoon in their mouths are likely to stay rich. Photo / Thinkstock

Here's something you may not be aware of - it isn't as if we have more sickening crimes and accidental deaths over the Christmas/New Year period.

It's just that because our politicians take their summer break over this time, our news outlets are left with human tragedies to fill up their space.

Despite these individual heartbreaks, the country seems to run quite well without politicians. But before we start getting ideas about how we may not need them after all, our Prime Minister and the rest of his ministers return to their offices tomorrow.

One of the interesting things over the holidays is that several institutions have been releasing economic and social research.

With political spin doctors not around to run interference, we've had time to digest enough to start to wonder if the mythical good-news world that our Prime Minister has cocooned us in isn't real.

In just the past two weeks, ANZ has said our economy has shrunk to the size it was in 2007; National Bank hopes growth for this year will be 2 per cent, which is half since the Budget; tourism is down 3.3 per cent despite the rugby; and unemployment flicked up in December. Westpac tells us employment confidence is negative; only 9 per cent of workers think they'll get more money this year, down from 31 per cent; consumer confidence has dropped 11 per cent; and NZIER reckons we have a 20 per cent chance of going into recession.

We've been protected because commodity prices have been high. Respected institutions are warning this is about to end, as the world economy starts shrinking. Cynically manufacturing an industrial dispute on Auckland's waterfront can only camouflage things for so long.

So what's our plan for solving these problems? There is none I can see. Selling off our profitable power companies isn't going to be enough. And anyway, if we can get a concerted campaign against such a privatisation agenda, it won't happen.

Deep down, most New Zealanders know the free-market model parroted by our wealthy elite and their political sycophants is nonsense. The result of this ideology has merely created a deepening divide between the haves and have-nots.

The winners in our society have most of us convinced that they are financially successful because they are academically brighter, make the most of education opportunities and have superior personal qualities. Losers, on the other hand, are the opposite; with the added problems of criminal behaviour, addictions and family conflict.

But a major academic study that has tracked more than 1300 individuals was released this week. Children born to rich parents have a better chance in life to be happier, healthier and wealthier then those kids from poor backgrounds. People whose families were rich were by the age of 30 earning an average of $60,000 a year - $20,000 more than those from poor families.

The ideologues, no matter what the evidence, will believe it's the individual's fault. But for the more thoughtful of us, we know that that's only part of the picture.

The study confirms that even taking into account all the parents' and children's human traits, having wealthy parents is a determining factor. Spokesperson Professor David Ferguson says to turn this around we have to address the main problem - income levels.

Twice as many children grow up in poor families now than in the 1970s and 80s, so the disparity will get even worse.

The solution to the poverty gap is for the state to raise enough taxes to fund schools, hospitals and housing. Then have economic policies and industrial laws that aim to create high-waged jobs.

Instead, our economic model requires the opposite. It seems it's now a crime for a worker to have well-paid full-time job. Just look at the waterfront.

John Key will be at work tomorrow to give us his sunny smile and tell us he knows what he's doing.

This is where the Tui phrase, "yeah right", seems appropriate.