The New Zealand government loves paying people to dig holes then paying others to fill them in again. Even better if both digging the holes and filling them in are confined to privileged licensees or government servants.
Economists measure this process as GDP. The left likes to see government being active. The punitive media perhaps like the thought of the enforcement spectacles as people dare to dig their own holes or fill them in without supervision. The licencees become passionate believers in the necessity for hole digging and filling.
Meanwhile ordinary people twist their ankles in potholes that emerge spontaneously, as they always have and always will. Others still disappear into deep traps dug by villains who operate with relative impunity because government money and attention is concentrated on infringers of regulations governing approved hole-diggers and fillers.
With all this busyness, no one remembers to ask whether deliberate hole digging and filling adds to the wealth, health or happiness of anyone not doing it. Perhaps even those who make their life work wonder at the end it if it was not a pointless way to spend your one life.
That is New Zealand's financial advisor and financial literacy regime.
Instead of promply imprisoning the most duplicitous abusers of the trust of their clients, and cranking up the penalties under the hundred year old Secret Commissions Act, we adopted an absurdly complicated regime that no investor would ever have wanted to pay for, if it had not been made punishable for an unlicensed person, however wise and experienced, to express views that might affect another's decision on investing or not.
Without a squeak from the useless folk in the human rights industry, and hardly a squeak from the media, those brave defenders of freedom of speech (because they were given a partial exemption) some of the most vital free speech a market economy can ever have was simply prohibited.
That dug the hole. Naturally the few thousand licensed advisors can't hope to maintain the kind of vigorous, spontaneous public discussion that is the only way for a nation to maintain financial sophistication at any level, let alone widespread "literacy". Even private warnings not to trust crooks and idiots who have lost your money, can be unlawful.
Now for the hole filling.
To fill the place of the now unlawful numberless thousands of timely but uncontrolled discussions and informal advice channels of free speech, the government has turned the Retirement Commissioner into the Commission for Financial Literacy and Retirement. A few tireless folk paid to do what formerly was done by countless contributions.
And now, it appears, we have financial literacy levels substantially lower than those of the US, the people we like to think of as ill-educated rubes. And theirs is far lower than in northern Europe.
Alex Tabbarrok singled us out for special mention in this blog post commenting on recent research. Perhaps he is just tweaking the nose of Tyler Cowen, who enjoyed time with Treasury and the NZ Business Round Table, back when those institutions, with the Reserve Bank, competed with an independent Securities Commission to maintain a since-vanished intellectual integrity in our securities law.
If the CFLR had courage and intellect it would advise the government not to waste another cent on filling the literacy holes till free speech was restored. They'd need to urge also meaningful, promptly enforced penalties for fraudulent abuse of a trusted advisor role.
When David Ross can appeal without expecting his non-parole sentence to be doubled, and his family can swan around Wellington in anything but rags, our enforcement is a joke.