Saturday, November 8, 2014

Economic indices you can use

Have you ever listened to economics yukspeak and wondered what on earth those bankers and commentators are talking about? Someone tells you GDP has grown X% and New Zealand is enjoying an economic boom yet...your pay packet hasn't gotten any bigger and there's a seemingly endless stream of news reports about families living in cars. You know that somehow your world is changing but GDP, inflation and the trade-weighted exchange rate don't tell you anything about how or, more importantly, why.

As a public service, Spiderandme brings you two economic indices you can relate to - indices that tell you something meaningful about your world. 

Foo-foo dogs
First up: the Foo-Foo Index. When we first lived in our low-income neighbourhood, when it came to dogs the most common sight was young brown guys walking the sorts of dogs that feature here. The young men in question would invariably tell you these dogs were pitbulls, but in fact there are very few actual pitbulls in New Zealand, and most of them were South Auckland Specials. But in Auckland's overheated real estate market, these young men are being priced out of suburbs like ours as the middle classes gradually move south because they, in turn, have been priced out of the inner 'burbs. 

How can we gauge the extent of this gentrification, and its implications for those being forced even further south (to, for example, Pokeno)? The Foo-Foo Index can help. For ages the only foo-foo dogs in the 'hood were a pair of white fluffy things that lived up the road. But in the last couple of years the South Auckland Specials have gradually been replaced by foo-foo dogs. The adventurous new residents have border collies and retrievers and the like. Our SPCA brindle boys are now very much in the minority (it seems the middle classes do not get their dogs from the SPCA). And indeed, the rate of turnover of residents in the neighbourhood has shot up, and the number of houses being tarted up is at some sort of record high. So where do the (mostly) nice young men with their supposed pitbulls go to find rental housing? Yes, yes, we know. They cram into sleepouts and caravans in Takanini.

Then there's the Firecracker Index. In the mid-2000s Guy Fawkes here was horrific. Crackers would start in mid-October (no one out South pays much attention to the sale limit) and they would go through to mid-November then go off again at Christmas and New Year.

Crackers are expensive, and in the illusory economic growth of the 2000s people had cash to squander on them. One of the upsides to the recession of 2009-2010 was that cash was scarce and Guy Fawkes was comparatively quiet.  The last two years have been far busier, with people not only celebrating Guy Fawkes itself, but being able to hoard fireworks for later in the year. But this year, despite our rock-star economy, Guy Fawkes has been quieter again. November the 5th was ghastly but the subsequent Friday and Saturday were not as bad as previous years (but still bad enough). There's just not as much money to throw at them.

In some ways the Foo-Foo Index and the Firecracker Index overlap: as the neighbourhood ages as a result of younger people being forced out and foo-foo dog owners moving in, the number of cretins (and I'm looking at you, across the road neighbour) setting off crackers in the street at 10.30 at night reduces. Indeed, many of the crackers we hear are from across the estuary from the as-yet ungentrified Otara and East Tamaki (except for the ones let off by the over-the-road cretin).

Between them the Foo-Foo Index and the Firecracker Index can give you a guide as to whether your neighbourhood is part of the Great Auckland Real Estate Bubble (and its attendant rates increases) or whether you neighbours are feeling as flush as the business press tells them they are. For those thinking a bit further ahead, they must also raise questions about Auckland's continuing socioeconomic (and ethnic) divide.