Home > Economics - General, Oz Politics > Blair concedes defeat

Blair concedes defeat

December 13th, 2006

Tim Blair quotes a statement I and others wrote in 1996, criticising expenditure cuts, and saying in part

More attention needs to be given to the role of government expenditure on repairing the nation’s rundown infrastructure, creating jobs and fostering industry and regional development. If necessary, increased taxation and other revenue options should be under consideration. Savage expenditure cuts are economically irresponsible and socially damaging.

As Blair points out^, this is an argument that has now been pretty generally accepted. Most of the cuts we were criticising have been reversed (not without doing damage along the way). Infrastructure spending is now a high priority for governments. Without getting into sterile arguments about whether or not the current Federal government is the highest taxing in Australian history, it’s clear that the idea of radical cuts in public expenditure and taxation, which Blair has long advocated, is politically defunct in Australia.

The case was well stated by one of our political leaders in 2004, when he observed

There is a desire on the part of the community for an investment in infrastructure and human resources and I think there has been a shift in attitude in the community on this, even among the most ardent economic rationalists.

He could just about have been quoting our words from 1996.

As I noted at the time

A new bipartisan consensus has emerged, in favor of the social-democratic policies that have, until recently, been derisively described as ‘tax and spend’.

The only surprise is that it has taken Blair so long to wake up to the fact that he’s on the losing side of this debate.

^ With yet another kind reference to my success in winning a Federation Fellowship.

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  1. December 13th, 2006 at 21:42 | #1

    John, this is a good time for you to clarify your position on the deregulation that has occurred since 1983. That is, to indicate whether you are still a deregulation skeptic, and whether you took on board the critical comments from Fred Gruen regarding your previous criticism of steps that were taken in the direction of economic rationalism.

    It is also possible to accept the case for spending on selected items of infrastructure without accepting that it has to be public money that is spent and without taking on board the whole social democratic agenda. Both parties have indulged in shameless pork barrelling which has resulted in very high levels of government spending but not necessarily spending in the most appropriate places.

  2. jquiggin
    December 13th, 2006 at 21:54 | #2

    Rafe, some of this deregulation was good (removal of a bunch of restrictive agricultural marketing schemes), some harmless (airlines) and some unsound (financial deregulation, at least as implemented in the 1980s).

    On your second point, I agree, though I’d restate the point that the government has been worse in relation to pork barreling than Labor. As I said in 2004,

    Howard is behaving like an economic rationalist’s caricature of a social democrat, spraying billions of dollars around in a combination of interest-group pork-barrelling and half-baked ideas for micromanagement of everything from the TAFE sector to the taxi industry.

    If you’re going to run a social democracy, pick social democrats to do it – they want to make the system work.

  3. Perry
    December 13th, 2006 at 23:28 | #3

    Haw haw. Your brilliant response to Blair is almost worthy of big-league sneermeisters like Brian Leiter or Chris Bertram.

  4. December 14th, 2006 at 02:19 | #4

    Aren’t social-democratic policies still derisively dubbed ‘tax and spend’? They certainly are by me at least.

  5. Ian Deans
    December 14th, 2006 at 05:17 | #5

    Did you even read Blair’s post?

  6. December 14th, 2006 at 05:53 | #6

    You could not have read Blair’s post before you wrote this. If you did, you have willfully misunderstood him.

  7. jquiggin
    December 14th, 2006 at 06:23 | #7

    ID&cb, I think Tim and I understand each other pretty well.

    Perry, Tim’s no slouch in that department himself, but I’m glad you think I had the better of it in this respect.

  8. December 14th, 2006 at 06:24 | #8

    John, you might have mentioned tariffs, for instance do you think we should have pressed on towards zero protection asap?

    As to investment in infrastructure and development,I seem to recall that the Treasurer vetoed a plan for foreign involvement in some major project, as thought it was not in the national interest. In areas like health and education there seeems to be a social democrat belief that dollars are sanctified by passing through the hands of the government, so you want more public funding in a situation where people would be happy to put in their more of their own funds if the system was more favaourable for them – for instance if there were education vouchers so people don’t have to pay a premium to obtain private schooling.

  9. Clubbeaux
    December 14th, 2006 at 07:32 | #9

    Still waiting for your explanation for this howler, professor:

    “Both Downer and Howard knew that the AWB was paying kickbacks to the Iraqi regime.”

  10. jquiggin
    December 14th, 2006 at 08:09 | #10

    Umm, the fact that they were told on numerous occasions might have something to do with it. Of course, This information was transmitted in a way that preserves deniability, so no conclusive proof will emerge.

  11. Mork
    December 14th, 2006 at 09:30 | #11

    Cobalt blue: you’re a Blair reader, aren’t you!

    Spotted this gem in the comment thread to Timmy’s post, as part of explanation of why the U.S. budget deficit is a fantastic thing:

    “If the deficit was a problem, the US dollar would have tanked.”

    As the drummer boy of the 101st fighting keyboarders would say, indeed!

  12. Jimmythespiv
    December 14th, 2006 at 12:11 | #12


    While JQ is hardly our very own Arthur Scargill, I would be equally interested in the answers.

    In particular JQ, do you think that the better economic conditions in 2006 are the result of luck, a better global economy, and higher tax revenues, or better economic policies (esp with respect to inflation and RBA independance) ?

  13. morbo
    December 14th, 2006 at 12:20 | #13

    #10 Brilliant reasoning Quiggin! If there’s no evidence to suggest that they had prior knowledge on the actions of the AWB, then that just shows they had prior knowledge but concealled it. Nothing suggests rationality like maintaining your pet theory is correct regardless of the evidence for it or lack thereof.

  14. jquiggin
    December 14th, 2006 at 16:18 | #14

    “If there’s no evidence to suggest that they had prior knowledge on the actions of the AWB …”

    To restate (necessary for TB commenters) they were told on numerous occasions, and chose to ignore the information.

    More to the point, perhaps, given your alleged abhorrence of Saddam, you show a remarkable lack of interest in the fact that Australia paid him $300 million which his successors are now using to kill Iraqis and Coalition troops. You seem entirely happy to accept paper-thin excuses from the Aust government on this point. IIRC, the relevant description is “objectively pro-terrorist”.

  15. sdfc
    December 14th, 2006 at 21:49 | #15


    Where does the money come from for the vouchers?

  16. Graham Fraser
    December 15th, 2006 at 01:48 | #16

    “Australia” never paid him a red cent. The AWB, the UN and Saddam together defrauded the Iraqi people out of this money. If you can’t even get this right, why should anyone with any sense take any notice of anything you have to say? I certainly wouldn’t, it smacks of ignorance.

  17. jquiggin
    December 15th, 2006 at 06:39 | #17

    Umm, so the A in AWB stands for?

    AWB was initially an Australian government instrumentality, and later a quasi-private company exercising governmental powers.

    But, as I say, you don’t seem at all concerned about the fact that Saddam got the money, that Australians acting on behalf of the Australian government helped him, and that Australian government officials and ministers looked the other way.

    To review the predictions yet again

    Endless hair-splitting defences of the government’s actions in this matter will emerge from those who have previously made a loud noise about Oil for Food.


  18. Ian Deans
    December 15th, 2006 at 06:56 | #18

    You guys don’t get it. Nobody cares about this kind of thing – under JoHo, life has gotten markedly better for most Australians. Why would they want to give that up just because some academics think he lied about AWB?

    (And if you don’t think prosperity is why people keep voting for Howard, please give me your theory)

  19. jquiggin
    December 15th, 2006 at 07:05 | #19

    “You guys don’t get it. Nobody cares about this kind of thing – under JoHo, life has gotten markedly better for most Australians. Why would they want to give that up just because some academics think he lied about AWB?”

    At last, an honest answer. Just don’t expect us to listen to you guys when you start talking about what a bad guy Saddam was – as you say, as long as the colour of his (or the Iraqi people’s) money was good, we were always going to take it. Not like those prissy Canadians.

  20. Ian Deans
    December 15th, 2006 at 07:21 | #20

    I didn’t say that; I said nobody cares whether Mr Howard lied. Surely as an academic, you would know better than to draw conclusions that aren’t supported by the facts – wouldn’t you, professor?

  21. wilful
    December 15th, 2006 at 08:21 | #21

    This is funny to watch – to any independent observer Howard, Downer and Vaie were either criminally incompetent or lying their pants off, either way they directly benefited Saddam Hussein, and this is supposedly only of concern to left-wing academics?? Jezus guys, you’re losing a lot of your self-anointed moral clarity here.

    BTW I’m neither left-wing nor an academic, and I think it stinks)

  22. Fred Z
    December 15th, 2006 at 08:34 | #22

    Us prissy Canadians had plenty o’ pigs at the trough in Iraq. Plenty o’ lefty liberal snouts snorkeling up the swill too. Perhaps mostly lefty liberal connected types.

    A google of ‘Maurice Strong’ Iraq should get you a taste. Old Maurice is a swill snorkeler of whom every Canucki can be proud. And envious. Also, check out http://www.smalldeadanimals.com/archives/001306.html for some chit chat about connections between our Prime Minister and Power Corporation and Oil for food.

    Nah, when it comes to underhanded theft and corruption, a Canehjan lefty is worth three Aussies, easy.

    Anyway, to the point: Blair gotcha, and your reply was a hoser reply, eh, you hoser with your intellectual pants around your ankles. Hoser.

  23. jquiggin
    December 15th, 2006 at 08:41 | #23

    I know how to draw inferences that are supported by the facts, and I infer that if you don’t care whether Howard lied, you don’t care that Saddam got the money. If there is an alternative construction you can put on the facts, feel free to put it forward.

  24. Ian Deans
    December 15th, 2006 at 08:57 | #24

    Well your (incorrect) inferences aside, you’ve still missed the point. Keep on whinging, Quiggy.

  25. jquiggin
    December 15th, 2006 at 09:22 | #25

    This is great! The Canadian wingnuts are prepared to convict their PM on the basis of a string of links so tenuous that even some of their commenters won’t swallow it (if I’ve got it right, his son-in-law has something to do with a company that has shares in a company that has interests in a French bank that has been criticised for not doing a good job of oversight of Oil-for-Food). Meanwhile, for TB and company, it’s the three wise monkeys. As Ian says no-one cares whether or not Howard knew all about the payment of bribes to Saddam or whether or not he lied about it.

  26. FDB
    December 15th, 2006 at 09:58 | #26

    Funny to see the calibre of argument you get in comments from a post that mentions Tim Blair.

    Back to the sheltered workshop, boys!

  27. December 15th, 2006 at 10:45 | #27

    How’s the solid gold hat that your grant provided going, Quiggles?

    Socialism sure is the ducks guts when you’re a beneficiary rather than a provider.

    And if any of you think the current federal government is an economic rationalist one, you’re daffier than I ever thought- big taxing, big spending and wtter than a fish’s foreskin. Not one of those losers would have gotten a cabinet post in a Thatcher government- which beggars the question when are we going to have our neocon revolution? The UK had Thatcher, the US had Reagan, where’s ours?

    There’s an awful lot of bloated public “assets” in dire need of liquidation or demolition.

  28. sdfc
    December 15th, 2006 at 14:08 | #28

    Have you got a solid gold hat John?

  29. Michael Sutcliffe
    December 15th, 2006 at 16:37 | #29

    it’s clear that the idea of radical cuts in public expenditure and taxation……………..is politically defunct in Australia.

    Are you delusional? This idea is stronger than it’s ever been in the last 20 years. The Howard government’s success is partially due to preaching this doctrine and delivering the odd tax cut. Overall, they don’t walk the walk, but they certainly talk the talk, and the voters love it. It’s your version of social democracy that is politically ddefunct.

  30. jquiggin
    December 15th, 2006 at 17:01 | #30

    Habib, if you dislike our current government so much, why don’t you take up the point with your friends at Tim B’s (quite a few of whom have visited here)? They all seem to think Howard is pretty good, and Tim rarely writes anything to disabuse them of this idea.

    Michael, perhaps you didn’t click on the link. Howard no longer even talks the talk on expenditure cuts, and, as you imply, his tax cuts amount to not much more than handing back bracket creep.

  31. Habib
    December 15th, 2006 at 18:39 | #31

    Been there, done that I think you’ll find there’s not a lot of dyed in the wool JWH fans there, it’s more a case of the lesser of two evils. I have repeatedly referred to the Howard Govt (and the Liberal Party in general) as Labor Lite. I don’t think there’s ever been a truly conservative/Jeffersonian liberal party in this country, and the Republicans in the US are hell-bent on becoming social democrats, which is why they got hosed in th mid-terms. The only people who really like big government are those who benefit from its largesse- even the welfare-addicted start to think twice when the bureauracy starts to slip its tendrils into every facet of their lives, like anti-smoking legislation and poker machine limits.

    Lets face it, if 90% of government dissapeared overnight, very few of us would notice, nor miss its passing; the extra beer vouchers would be welcome as well.

  32. mG
    December 16th, 2006 at 10:53 | #32

    Oh, man Habib, i wish we had a computer simulation where we could test that scenario out. Or even better, alternative worlds.

    My prediction would be closer to 40 percent – and then only if the remainder increased starkly in quality

  33. Mr Kennedy (Kennedy)
    December 17th, 2006 at 08:51 | #33

    “(if I’ve got it right, his son-in-law has something to do with a company that has shares in a company that has interests in a French bank that has been criticised for not doing a good job of oversight of Oil-for-Food).”

    No, you don’t have it right. Prime Minister (now former PM) Jean Chretien’s son-in-law’s father is/was the biggest shareholder in France’s TotalFinaElf oil company–a company that was totally in bed with Saddam Hussein. That’s why Chretien embarrassed Canada when he refused to liberate Iraq.

  34. December 17th, 2006 at 10:29 | #34

    If the theory of evolution is correct, one would expect humanity to require less supervision and support rather than more with the passage of time. Unfortunately due to the seeming increasing levels of stupidity and dependence, I’m beginning to think the creationists have got it right, with the rider than homo sapiens was knocked out as a gag. It kinds of explains Australian Idol, conspiracy theories, enviromentalism, Diana Spencer worship and communism.

  35. Majorajam
    December 17th, 2006 at 11:16 | #35

    Not to mention the shrill wingnuts Tim Blair permits to post on his site, or it goes without saying, the windbag himself.

  36. chrisl
    December 17th, 2006 at 11:17 | #36

    I’ll go with 50%. This would also halve the number of comments to blogs. ie blogs were invented to give public servants something to do

  37. rog
    December 18th, 2006 at 20:36 | #37

    JQ says “AWB was initially an Australian government instrumentality, and later a quasi-private company exercising governmental powers”

    AWB was once a govt body which was fully privatised and is now an entirely private company owned by wheat growers and with capital being raised from public investors via the ASX.

    The govt are no more responsible for activities of the AWB as they are for the activities of Landmark.

    To infer that John Howard and Saddam Hussein can be condemned by the same argument is bizarre.

  38. jquiggin
    December 18th, 2006 at 20:58 | #38

    “Jean Chretien’s son-in-law’s father” – why stop there? Via Mitochondrial Eve, JC is personally related to Saddam himself, not to mention Hitler, Stalin and Judas Iscariot.

    Seriously, this is a totally different black helicopter theory to the one I linked, which was about BNP Paribas.

    Rog,I’d point in detail why the government is responsible for AWB’s actions, but at the end all I’d get is the same point made by Ian Deans that no-one cares if Howard is lying. You obviously don’t, and neither do 95 per cent of Australian supporters of the war, so let’s just leave it there.

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