Sunday, February 8, 2009


These are uncertain times and it seems that anyone brave enough to forecast our immediate future is simply guessing. The Treasury’s economists provide an example
of this. In December 2007 The Treasury was predicting an unemployment rate in 2010
of 3.9%. A year later its forecast of the unemployment rate had risen to 6.4% with an
admission that it could be as high as 7.2%. This illustrates how difficult it is to assess the financial crisis that now grips the world. In human terms these
differences in the rate of unemployment are significant. The difference between a rate of 3.9% and 7.2% is the prospect that a further 75,000 people will be out of work by the end of this year. But these differences are important in policy terms as well. If policy advisors can miss something as major as the worst financial crisis in 70 years, most likely they are missing other important challenges looming on our horizons.
While the short-sightedness of economic forecasters can be attributed to human frailty,the failure to learn from our mistakes is foolishness, and this is the danger here. As Nobel Laureate & economist Paul Krugman noted recently in an article in the New York Times;

“The main thing to realise is that for the time being we really are in an alternative universe, in which nothing would be more dangerous
than an attempt by policy makers to play it safe”.

It seems that while our collective assessment of the problems we face has changed quite dramatically over the past year, the types of thinking and the proposed solutions have not. For example some commentators and politicians would have us believe that tax cuts are as valid a policy solution in times of economic prosperity as they are in times of economic adversity.Within our present economic crises there is also a singular lack of accountability by those who caused it or at least allowed it to happen. General Clifton Shaw, The Salvation Army’s world
leader alluded to this in a recent pastoral letter entitled “Money” where he said:

We hear about the worldwide ‘credit crunch’, caused by lenders failing to be self-restrained when lending to over-keen borrowers who could not afford the repayments. We hear about governments, who often refuse to spend a few millions on good causes or human need, suddenly being able to spend billions to prop up failing financial institutions and large businesses. For most of us it is all baffling, but also deeply disturbing. Ordinary people are losing their jobs, and some are in danger of losing their homes. Despite this, we do not hear of many financial or political leaders accepting personal blame or apologising or offering to
withdraw from public life because their economic policies have led to global recession and hardship for countless millions of people."

There is a danger too that within our present financial crisis we will be offered a set of solutions which have little to do with the challenges at hand but a lot to do with the agenda of those in power. As Barack Obama’s White House Chief of Staff, Rahm Emanuel,has said recently:

“You don’t ever want a crisis to go to waste; it’s an opportunity to
do important things that you would otherwise avoid.”

To guard against such cynicism we need to be certain of our values and we need to be convinced that any proposed agenda for change works to enhance these values and not to defeat them. It is our hope that "Into troubled waters" The Salvation Army’s second annual state of the nation report will be such a stimulus to values that matter.

As the economy shrinks and jobs disappear,the re-emergence of widespread poverty and hardship for our children is more likely. Some communities in New Zealand were already the sites of considerable social stress
during an extended period of economic prosperity. The outlook for these communities as unemployment begins to rise is quite grim. It will take some time to roll out programmes for housing, poverty relief and family support in these communities so it is important to begin these tasks as matters of urgency. The Salvation Army as a long-term partner to Government and communities is committed to contributing whatever it can to this work.
Crises are indeed too important to waste as they do offer the opportunity to be quite
transformational. Let’s not waste this opportunity with responses which lack ambition,compassion and above all imagination.

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