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Eddie, obeyed

February 7th, 2013

As last year drew to a close, it seemed quite possible that the Gillard government could be re-elected. The polls were going the right way, the reality of the carbon price had discredited the apocalyptic scare campaign of the Opposition, and the various real or alleged scandals surrounding the government seemed to be fading. The carbon issue is still going the right way, but everyhing else has turned around severely since then: even before the disasters of the last week, the polls had turned bad, pointing to an uphill struggle.

Last week was bad for the government in all sorts of ways, but the Obeid hearings before ICAC were in a league of their own. I was aware of the scandal, of course, but the evidence of Obeid’s total control over the NSW Right, and therefore of the state government, still surprised me. Even more out of the blue was the involvement of two federal ministers, Conroy and Burke. While taking free accommodation from Eddie Obeid looks a lot worse in retrospect than it would have at the time, his dubious reputation goes back a long way.

It’s hard to see how Gillard can credibly promise to clean up this mess. Her long reliance on Thomson and Slipper, the role of the NSW Right in sustaining her power, and, fairly or otherwise, the old allegations about her own career, all count against her. At this point, as Bernard Keane says (h/t Nancy Wallace)

‘If only Labor had an alternative leader who was fixed in the public mind as someone profoundly at odds with Labor powerbrokers …’

Obviously, he’s talking about Kevin Rudd. While it’s late for a shift, the case has become stronger in many ways. Of the people strongly identified with the personal attacks on Rudd last year, Roxon has gone to the backbench, Conroy and Burke are now liabilities, and Swan’s failed surplus push has greatly weakened him.

A simple change of leader would not be enough. Labor needs to excise the tumour that is the NSW Right. If restored to the leadership, Rudd should immediately push for a full-scale intervention into the NSW Branch removing all the existing officials, and putting someone credible like John Faulkner in charge. The whole faction system needs to be reformed or abolished, starting with the dissolution of the NSW RIght. And those compromised by their association with Obeid, Richardson and similar agents of corruption need to be expelled or permanently removed from any positions of power.

I don’t know if it’s too late to stop the election of an Abbott government. But it’s evident that Gillard is not the right person for the job.

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  1. Martin Spalding
    February 8th, 2013 at 12:51 | #1

    JMK @ 47 & 49. I disagree with many of these points. ‘Vision v visionless’ is just a slogan without any meaning or link with messy reality. As has been pointed out on social media and several quality political blogs (eg Political Sword) Gillard has outlined her vision time and time again, it’s just that the media don’t report it properly because they hate her, & voters who don’t like her (because they are Conservatives or Rudd-backers) don’t look for it anyway. Doesn’t mean the vision isn’t there.

    Also, vision isn’t everything – anyone in a modern workplace knows that you need a lot more ‘concrete’ stuff too – good negotiation skills, good relations with staff, knowhow to implement your vision, patience, flexibility, organisation, project management type skills and ability to unite and draw the best out of the team you’ve got, love you or hate you. On all these fronts Rudd was mixed at best and a spectacular failure at worst. Gillard wins hands down against Rudd on these points which is precisely why so many Labor people were compelled to speak out about Rudd at the time of the last challenge. Rudd’s biggest ‘strength’ is a vaporous, Idol-like ‘popularity’ that has little connection to a substantive policy issue.

  2. David C
    February 8th, 2013 at 12:55 | #2

    how did Joh keep getting re-elected in Queensland about 2 elections after it was becoming clear that there was too much cronyism/corruption in his government

    Gerrymandering.

  3. may
    February 8th, 2013 at 13:16 | #3

    you are doing it again!
    exactly the same tone as the run up to the Qld election.

    it’s not enough that the broadcasting industry refuses to report anything not detrimental to the most representative federal govt i can remember,
    academia gets in on the act as well.
    all in the name of “oh we’re above all that grubby polly stuff”,’ we just say it as we see it’.
    ‘look at all they are doing wrong’.

    wake up—we are part of the process.

    get out a recent bank statement—it’s now itemised.
    cash converters share price tanked when the price of short term loans could no longer be limitless.
    the cost of transferring a mortgage is no longer a hip pocket hit.
    trailing commissions on financial products have been curtailed.
    “storm” type financial scams are no longer under the radar.
    the list goes on and on.

    little things legislated in the interests of not only the constituents of the holders of the teasury benches, but everyone.even coalition voters.

    this is the reality of this present govermnent.
    the big picture is a composite and an untoward obsession with only the big stories does a disservice to an accurate acount of the present reality we all share.

    yes there is corruption in NSW (surprise surprise),i’m not so surprised about the current coal big time grab as about the union personnel in the Thompson fiasco who held two positions in the hierarchy and claimed recompense to the tune of six figures for both.
    in a union for the lowest paid workers.

    just the other day i raised the subject of the downfall of a caravan business.

    the comments were interesting but no one hit on the fact that the cause was not the sale of the park but the loss of unrecognised and unaccounted for contributions of the farmers whose absense took away not only money.

    the subject of economics,to me as i have said before, is arcane.
    trying to make sense of,and apply the findings to the everyday is a trudge.
    and it need not be.
    weighing in as relentlessly critical commentators of a federal government that for all it does not come up to an unattainable level of perfection is doing to work of every interest that will(as we have seen in the process abusing federal and state coalition antics) stop at nothing to aquire power .

    out of every 100 people in the world,97 are worse off,that is they do not have the access to education, medicine food and personal safety,as an Australian person.

    we (and i include myself,on an income that a proffessional person would call risible)

    are rich.

    joining the crow chorus,non stop whinge about how bad they are,conflating all bad news into a stew of impenetrably woebegone negativity is a service to the caste who would like to see all the benefits fought for and won stripped away.

    stop it.

  4. may
    February 8th, 2013 at 13:18 | #4

    rant over.

  5. David Allen
    February 8th, 2013 at 13:33 | #5

    The single most important issue for the coming federal election is the NBN. This project is vital for Australia’s future. An Abbott Liberal government has disqualified itself on this issue alone.

  6. February 8th, 2013 at 13:41 | #6

    @may
    It was a good one, though, may. :)

    And, yeah, I had sort of forgotten the extent of the Qld gerrymander, too.

    As for the “vision” thing in politics: I always felt Rudd’s main vision was of himself as universally acknowledged best PM ever of Australia. But really, the importance of the “vision” thing is oversold in politicians. I mean, really, we all want basically the same things: a decent economy, a welfare and health safety net, a nice environment, etc. The political debate is just really about how to get there, with both Labor and Liberal both being centrist political parties with approaches that are not radical in their differences.

    I think, as with John Howard, people respond to pragmatism, rather than “vision”.

  7. Fran Barlow
    February 8th, 2013 at 15:15 | #7

    Ugh … mod bin … can’t we have a published list of naughty words PrQ?

  8. kevin1
    February 8th, 2013 at 15:32 | #8

    @Fran Barlow
    I can’t avoid thinking “how appropriate” when I see a particular commenter posting under “weak-end reflections.”

  9. Fran Barlow
    February 8th, 2013 at 15:47 | #9

    @kevin1

    Indeed ;-)

  10. John Mainard Kaynes
    February 8th, 2013 at 15:52 | #10

    Marin Spalding – I am not a misty-eyed Rudd supporter Tell me someone else that might work and I’ll listen. You say No to Rudd. I say Gillard is a proven poor campaigner and has limited ability to sell anything. You can’t negotiate what you can’t sell [motivate people to believe in]… Give me alternative because she and her groupers are clueless.

  11. Jim Rose
    February 8th, 2013 at 16:02 | #11

    @David C did the labor party ever win 50% of the vote prior to 1989

  12. Chris Warren
    February 8th, 2013 at 16:08 | #12

    @Jim Rose

    If there is a gerrymander, or other interference, – what is the relevance of 50% of corrupted votes?

  13. David C
    February 8th, 2013 at 17:46 | #13

    Jim,

    I was having a bit of a go. If you look at the wiki on Joh it states this:

    At the 1972 election, the Coalition only saw off Labor’s strongest challenge in recent memory due in part to this redistribution. He thus remained premier even though the Country Party only got 20 percent of the primary vote. However, at this election—and in all other elections held during his tenure—the Coalition’s combined two-party vote was larger than that of Labor.

  14. David C
    February 8th, 2013 at 18:30 | #14

    @Jim Rose
    However if you look at the stats for the ’72 election you’ll notice that while Labor got 49.2% of the two party % it only got approximately 40% of the seats. Which is the whole point of a gerrymander. Or to be nitpicky a malapportionment.

  15. Lyn Gain
    February 8th, 2013 at 19:06 | #15

    I don’t agree John. Gillard may not be ‘the right person for the job’ but it’s too late for Rudd (I am, in fact pro Rudd and thought it was the stupidest most gutless thing the Labor party did to get rid of him when he was on a clear electoral winner with the Super profits tax). What we all need to do now is get behind Gillard. She’s the only hope we’ve got to avoid Abbott. I noticed today that the Government is sending out some superior media releases aimed at exposing Abbott’s current policies. They should keep it up – and we should help them.

  16. Fran Barlow
    February 8th, 2013 at 21:41 | #16

    Wow — seven plus hours for my post to sit in moderation. I wish I knew what word earned the ban … :-(

  17. Fran Barlow
    February 8th, 2013 at 21:44 | #17

    Maybe it was G@mbling? I’d hate to think I posted the lot below and got sawn off in the last line or two.

    {{{{{{{{{{{{{{

    I can’t believe PrQ that you can be suggesting that the ALP repeat June 2010 with colours reversed. If it was stupid then (it was grossly stupid and offensive as it was abject submission to Big Dirt) it would be even more stupid now. It would again entail Rudd explaining again how an ALP government had lost its way. How could Rudd be the chief of a team of people who swore they’d never serve under him — who said publicly that he was a psychopath? How could Gillard resign without spitting on all the things she claims to have achieved, and admitting that in the end, they were purely about the facade rather than the building?

    The media would ride “ALP chaos” and “fear and loathing” all the way to September. The ALP would be shattered at the polls, because even those people who felt sorry for Rudd could not believe that he could ever lead a united party. If Gillard is dumped — and I don’t agree that she should be — it won’t be Rudd who replaces her. That’s simply a non-starter. Those 70 members of caucus who voted against him a year ago would be humiliated.

    Like you, late last year, failing a catastrophe, I believed that the ALP would win in 2013 — and on much the same grounds. Eventually, the Libs would be forced to admit they had no material, and would fall about squabbling. It seems we have a disaster in the Obeid-MacDonald matter. That disaster is easily enough to ensure that non-committeds vote against the ALP in Western Sydney. Even if the Feds intervene radically, it’s hard to see them getting the job done with the speed required to make that history by September. Tossing their leader and then doing it is just too much.

    Really, this is an existential problem. NSW has been in especially ugly shape since the end of the Wran era. Remember Barry Unsworth? John Ducker? and of course Loosely and Richardson and their younger fan club Roozendale, Gabrielle Harrison. The ALP-property developer links go back a fair way.

    This was always in the pipeline. Had the NSW ALP been routed in 2007 — as they probably should have been — they’d probably be in better shape both Federally and locally here. There could have been a clean out. Maybe Rudd wouldn’t have been rolled. But Debnam and the growing hatred of Howard got them over the line, and placed them well to re-enact a ‘last days of Rome’ redux and the result is clear. NSW offered a four-year fixed term of dysfunctional and corrupt government and now the ALP has an out of control bushfire on their hands.

    Really though, this underlines what happens when a party abandons all pretence at being about anything but pandering to public whims — as defined by the MBCM (mass broadcast commercial media). Once you stop being about striving to implement coherent programs based on some well-conceived ethical paradigm of interest to a significant constituency you are at risk of being taken over by spivs. Far from such things being a liability — it is these things that underpin your party’s integrity — and prevent it simply being a career vehicle for hucksters.

    It’s very clear that such a party could not have considered someone like Obeid or McDonald fit for public office — even if they’d thought their ethics were as pure as the undriven snow. They were rightwing influence-peddling hacks — like much of the party. Had terms like ‘social justice’ and ‘equity’ meant anything more than pretty words in the ALP, they’d have been rejected for membership on purely political grounds and never had the chance to engage in the activities of which they are now accused — unless of course they’d joined the Liberals.

    Really, this comes down to the disempowerment of working people. There simply is no vehicle for working people in this country to participate directly in politics. At most, the workers are sullen observers of an Ashes-style battle between two rival gangs of scoundrels whose main concern is to serve the boss class well enough to gain office and the perks that attend it — including the kind one sees out of Obeid-land.

    It underlines the stupidity of persisting with states long after each of them ceased being colonies of the UK. None of these jurisdictions really has the resources to stand up to Big Mouth, Big Dirt, Big Filth or even Big Spin* or Big Balls**. That in addition to states, we have state upper houses adds a new layer of stupidity and a play pond for hacks who would not otherwise get elected. I know that this is the house where us Greens do best, but frankly, I’d sooner it be dispensed with. How else were Fred Nile or the Shooters going to get their way?

    We need an inclusive and deliberative system for selecting candidates for offcie. It’s as simple as that.

    * The Poker machine/g#mbling lobby
    ** Elite Sport
    }}}}}}}}}}}}}}}}}}}}

  18. Fran Barlow
    February 8th, 2013 at 21:44 | #18

    Ok … lesson learned …

  19. Ikonoclast
    February 9th, 2013 at 07:28 | #19

    @Fran Barlow

    Big balls? Using steroids and testosterone supplements can make the balls shrink. It’s a medical fact. ;)

    I may be cruel but every time I see an elite sportsperson get an unusual cancer or condition I think “Gee, bit of mistake taking all those cheating drugs and hormones wasn’t it?” Frankly, I have no sympathy for them.

  20. Ikonoclast
    February 9th, 2013 at 07:33 | #20

    More generally, since our entire system (capitalism) is built on systematic, institutionalised and legalised cheating and exploitation, it’s no surprise that cheating has become the norm in every area of political, economic and sporting life.

  21. Bring back Birdy at Catallaxy
    February 9th, 2013 at 07:35 | #21

    On David C’s point, the Labor Party in Queensland was shambolic and unelectable throughout the Nicklin/Petersen era (as has been frankly acknowledged by people such as Peter Beattie and Wayne Goss who did much to turn Queensland Labor around in the 1980s and 1990s). Arguably the main practical effect of the gerrymander during the Joh era was to preserve the Country/National Party’s dominance of right-of-centre politics.

  22. Jim Rose
    February 9th, 2013 at 08:40 | #22

    @David C Qld Labor was lucky. Bathed in luxury

    In South Australia, the playmander was able to keep Labor from power despite Labor winning the majority of votes. Labor needed 55% to win in 1965; lost with 53% in 1962. There were 13 city seats and 26 rural seats since the 1930s.

    Labor rarely won more than 4 seats out of 20 in the SA upper house before 1975.

    Goss won less that 51% of the vote in 1989 in Qld despite grand corruption and the need to build a ministerial wing at the state prisons

    • The Queensland gerrymander was first introduced by the ALP in 1949 to maximise its seats from its base in the provincial cities.

    • After the split in the party in 1957, the Coalition government led by the Country Party introduced preferential voting to take advantage of Labor’s split.

    Voters are surprisingly forgiving of corrupt politicians that are otherwise competent. Throw the rascals out is not the winning campaign slogan we might all hope.

    Plenty are re-elected despite corruption in the US. Politicians are re-elected after time in prison and even impeachment for judicial corruption.

    The Boston Mayor re-elected while in prison was James Curley. Truman gave Curley a full pardon in 1950 for both his 1904 and 1947 convictions.

    There is a website listing the prior felony convictions of members of congress.

    Australians do not know how good they have it. At least convicted criminals cannot run for office.

  23. Julie Thomas
    February 9th, 2013 at 08:54 | #23

    @Ikonoclast

    “cheating has become the norm in every area of political, economic and sporting life”

    The social acceptance of cheating seems to have increased over the past few decades, as the idea of integrity and character being the measure of a ‘man’ has been replaced with the neo-liberal worship of privilege and prestige and their admiration for success built on profit that comes from someone else loss.

    But of course it’s ok for the successful, the special/genius type person to cheat because the profiteers judge themselves to be capable of cheating judiciously and fairly whereas, the type of person who is reduced to seeking welfare would not be able to cheat judiciously and fairly.

    And not only that, but the other person, the failure, actually ‘chose’ to waste their money on gambling, self-medication etc.

    I’m thinking that this is the rationale – the narrative – that enables the successful cheater who has the cognitive capacity to understand that ripping off the less able is what they are doing, to not feel any shame.

    I heard that there is a new ‘diagnosis’ but I can’t remember the name. This new ‘disorder’ that has been discovered, is the opposite of paranoia, the delusion that people are out to harm you. People, like me, who suffer from this new ‘disorder’, believe that other people are out to help them.

  24. Julie Thomas
    February 9th, 2013 at 09:00 | #24

    oh no! My comment is in moderation also and I didn’t swear.

    I feel like I’ve been sent outside the classroom :(

  25. Fran Barlow
    February 9th, 2013 at 09:00 | #25

    @Ikonoclast

    In the case of “Big Balls” I was using ‘balls’ as a metaphor for sport rather than the testes, but I realise now what a clever pun it would have been, had it merely occurred to me before posting. ;-)

  26. Fran Barlow
    February 9th, 2013 at 09:07 | #26

    @Ikonoclast

    since our entire system (capitalism) is built on systematic, institutionalised and legalised cheating and exploitation, it’s no surprise that cheating has become the norm in every area of political, economic and sporting life.

    Very much so, especially since it is the intersection of sport and commerce (Big Pharma, Big G#mbling, Big Retail, Big Dollar) that seems to be the driver of this.

    Like you, I am indifferent to how much they cheat and how they do it. Aside perhaps, from enforcing a suitable tax regime and the criminal law onto elite sport, I’d let them run their own show. But we’re wandering away from Obeid now — though that said … V8 Supercars have now been mentioned.

    Gosh … how surprising … not.

  27. Sir Henry Casingbroke
    February 9th, 2013 at 10:00 | #27

    Elections are always relative; people these days rarely elect the best government but the least worst one. The polls (i.e. Newspoll) for federal Labor worsened because Abbott shut up and reduced his public exposure via stunts.

  28. Christopher Dobbie
    February 9th, 2013 at 10:11 | #28

    @Steve from Brisbane,

    “I think, as with John Howard, people respond to pragmatism, rather than “vision”.”

    What a load of bollocks! You i.e. the 70% of Australian’s who own/paying off their home got drunk on the asset price inflation helped by the hot money the banks were doling out.

    Talk about rewriting history.

  29. Ikonoclast
    February 9th, 2013 at 10:43 | #29

    @Fran Barlow

    “he bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his “natural superiors”, and has left remaining no other nexus between man and man than naked self-interest, than callous “cash payment”. It has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation.

    The bourgeoisie has stripped of its halo every occupation hitherto honoured and looked up to with reverent awe. It has converted the physician, the lawyer, the priest, the poet, the man of science, into its paid wage labourers.

    The bourgeoisie has torn away from the family its sentimental veil, and has reduced the family relation to a mere money relation. ” – Karl Marx.

    Dare we say that the sportspeople too have been stripped of their halos?

  30. February 9th, 2013 at 13:18 | #30

    @Christopher Dobbie
    You’ve got a different idea of what “vision” is in politics, Chris D.

    My point was that John Howard was not, in my opinion, a politician who dealt in “vision”. Unlike, say, Keating. He was a politician who appeared to bring a common sense pragmatism to most issues, and people responded.

    Wasn’t it even reported recently that he privately told Liberals at some function that he thought the Coalition would be better off just leaving the current carbon pricing scheme in place? He was also pragmatic about the country developing a nuclear industry in future.

    If only we had his pragmatism back in the Coalition, instead of Abbott’s all over the shop populism that is driven mainly by just wanting to differentiate himself from Labor, not what makes sense for the country.

  31. Alan
    February 9th, 2013 at 23:26 | #31

    NSW has been mentioned. The rotating lemma/Rees/Keneally premiership was undoubtedly a disaster. Who drove it? The Terrigals, the sub-faction within the NSW Right that is headed by Eddie Obeid.

    It’s a bit rich for Gillard defenders to claim NSW where as evidence for the electorate’s rejection of leadership change as a way to solve problems. It’s a bit rich because what the people rejected so decisively in NSW was precisely the factional rule that Gillard relies on to retain the leadership.

    Changing to Rudd would not have the same electoral effect as the NSW rotating premiership because it would represent a radical break with the factions.

    I suspect Rudd cannot now win the election, because Gillard and the factions have simply made too many mistakes and alienated too many ALP voters. What Rudd can do is save a lot of the furniture and make sure that the factions do not return to business as usual after the election.

  32. Ikonoclast
    February 10th, 2013 at 06:21 | #32

    @Alan

    The ALP have certainly alienated me. But then my alienation started with Hawke and Keating and their compliance to the neocon agenda laid out by the Omega Project of the Adam Smith Institute.

  33. Jim Rose
    February 10th, 2013 at 07:15 | #33

    @Ikonoclast The best left-wing conspiracy of all is neoliberalism – a conspiracy led by retired and dead professors who, apart from Friedman, its followers had never really heard off. Neoliberal ringmaster Hayek was so obscure that it is hard to find obituaries of him in the major newspapers.

    I suggest you read the biography of keating by john edwards(?) – his economic advisor in the late 1980s.

    Edwards quotes from numerous Treasury briefings to Keating. the Treasury remembered their Keynesian educationswell, as did those at DPMC. the prices and incomes accord was very Keynesian: inflation as a non-monetary phenomenon

    Mentioning Friedman’s name in the 1980s at job interviews would have been extremely career limiting. Not much better in the early 1990s. Back in the late 1980s, Friedman was graduating from ‘a wild man in the wings’ to just a suspicious character in policy circles.

    If you name dropped Hayek in the 1980s and 1990s, any sign of name recognition would have indicated that you were been interviewed by people who were very widely read.

  34. Fran Barlow
    February 10th, 2013 at 08:03 | #34

    @Ikonoclast

    Their open assault on the labor movement — particularly the BLF — plus their acceptance of 45D of the Trade Practices Act, Section 54B of the WA police Act, the Prices and Incomes Accord, the Pilots’ strike matter and so forth — ensured I wouldn’t and couldn’t support them.

  35. Jim Rose
    February 10th, 2013 at 08:19 | #35

    @Fran Barlow The Prices and Incomes Accord ushered in full indexation of wages to the CPI.

    A full CPI adjustment was awarded in only 7 of the previous 19 national wages cases. Shame, Fraser, shame!

    Securing full CPI indexation of wages nation-wide in a deep recession after being unable to secure cost of living increases in the majority of national wages cases since about 1976 does not seem to qualify as wage restraint. What do you think?

    The March 1983 federal election was called ostensibly because of the unwillingness of some unions to abide by the 12 month wage pause initiated by the Fraser government in December 1982.

    Milton Friedman supported full wage indexation. The wage discounts in the Accord were unnecessary in fighting inflation. See ‘Milton Friedman, ‘Using Escalators to Help Fight Inflation,” and his later books such as Free to Choose (p.277). He must have been a secret double agent for the unions?!

  36. Fran Barlow
    February 10th, 2013 at 10:40 | #36

    @Jim Rose

    A full CPI adjustment was awarded in only 7 of the previous 19 national wages cases.

    Which merely goes to show that the union movement was unwilling to put the effort required into achieving those other 12.

    Milton Friedman supported full wage indexation.

    So you’re saying that the ALP was Friedmanite after all? ;-)

    The fact remains that under the Accord, indexation ignored the imposition of the medicare levy on prices, and certainly did not recover wage losses suffered under Fraser. Under Mark 2 of the Accord, the states got reduced Commonwealth Grants, and then reduced provision of services to low income earners, while tax cuts benefiting higher income earners were introduced. This allowed the Federal regime to claim a surplus while blaming the states for going after workers. Meanwhile, other elements of the so-called ‘social wage’ were attacked.

    Then in 1987 a two tier system ended universal indexation. Trade offs in ‘restrictive work practices’ were required to get second tier increases.

    By 1990 the Accord was well enough established and the unions sufficiently weakened to impose a total wage freeze for 14 months. Enterprise Bargaining became the norm, effectively recognising that unions were now redundant. In less than seven years, the Hawke-Keating team had gutted the labor movement and left them almost entirely prostrate before the boss class. Little wonder that Howard and the boss class press remain enthusiastic about the “reforms” of this period.

    Real wages fell substantially, working hours drifted upwards to compensate, the size of unions fell, unit labor costs fell, productivity went unrewardwed and so forth. It’s clear who won out of this, and it wasn’t working people.

  37. John Mainard Kaynes
    February 10th, 2013 at 11:00 | #37

    Keating and Hawke staked workers out on the ant mounds … readying the ground for the conservatives to set the bludgers free

  38. Chris Warren
    February 10th, 2013 at 11:12 | #38

    @Jim Rose

    Unfortunately Smith noted that the social order between workmen and their masters was unequal and that masters must have the advantage, (Bk1 ch8).

    Smith did not recognise how monopolies, cartels, oligopolies would distort political economy, particularly when this led to a form of capitalism not based on Smith’s theory of value.

    If Smith’s theory of value applied to all in economic transactions, and there was no slavery, and no colonial monopolies, {covered more by Smith in Book 4], and no masters having advantages, and no “particular regulations” to distort markets, THEN Smith’s economic utopia may have substance.

    But not otherwise.

    At no point does Smith endorse capitalist expropriation, and, to the contrary, did not endorse slavery.

    Hayek’s concepts cannot possibly apply if one segment of society is exploiting another either domestically or internationally.

    I Pencil demonstrates the inanity of Friedman because before looking for peace and harmony in pencils – you have to ensure that you can distinguish between pencils made by oppressed offshore labour and pencils made by factors valued at local rates.

    There is no harmony in hidden slavery – but you can get mountains of pencils.

  39. John Quiggin
    February 10th, 2013 at 15:41 | #39

    @Jim Rose

    Jim, you’ve made this point before so I just thought I’d check. Are you referring to Thomas Friedman and Salma Hayek here? They were indeed obscure figures in the 1980s. But *Milton* Friedman visited Australia to wide applause in 1975, received the Economics Nobel in 1976, was cited by then PM Malcolm Fraser as an inspiration, and through his advocacy of money supply targeting dominated Australian macro policy for a decade or so. Similarly, *FA* Hayek visited Australia (at Fraser’s invitation), received the Nobel etc. The most influential thinktank in the 1980s was the CIS, local offshoot of Hayek’s Mont Pelerin Society

    Since I’ve pointed all this out to you before, I don’t take kindly to having your bogus claims repeated. This kind of thing is why you are limited to one comment per thread per day.

  40. Bring back Birdy at Catallaxy
    February 10th, 2013 at 17:42 | #40

    Yes, I knew the names of Friedman and Hayek, and the basics of what they stood for, in 1976 when I was still at school, and I recall Hayek’s appearance on the greatly missed Monday Conference that year.

  41. Stockingrate
    February 10th, 2013 at 18:37 | #41

    It is a pity the there is so much focus on a few individuals in Aus politics. I would like to uunderstand where this is not the case and why. It is less so in Switzerland, AFAIK, where there are more referenda, and less centralised power.

  42. Ernestine Gross
    February 10th, 2013 at 22:47 | #42

    Regarding focus on individuals in politics (scandals we are talking about) internationally, the NYT reports on the latest resignation of a minister in Germany on the grounds of plagiarism in the by now former minister’s doctoral dissertation (1980).

    http://www.nytimes.com/2013/02/10/world/europe/german-education-chief-quits-in-scandal-reflecting-fascination-with-titles.html?pagewanted=1&_r=0&nl=todaysheadlines&emc=edit_th_20130210

    PS: So far there seems to be no empirical evidence of sexism in the discovery of plagiarism in Dr Merkel’s ministry (one ‘boy’, zu Gutenberg, former defence minister, and one ‘girl’, Annette Schavan, now former education minister). I write ‘seems to be’ because I haven’t researched this matter thoroughly.

    PS: The NYT article contains a few hypotheses about the ‘German character’. I am not sure these hypotheses aren’t due to a misunderstanding of cultural and linguistic differences. For example, in the US, like in Australia, people call each other by their first names in a workplace. By contrast, in Germany, people address each other usually by their surnames, particularly if there are age and status differences. In English their is the world ‘you’. In German there is the word “Du” and “Sie”, the latter is the formal address, the former is used among family members and personal friends.

    PS: An idle question for an economist: Assume there is a percentage x of any population which, for whatever reason, cheats (= does not truthfully reveal his or her preferences in the jargon of game theory). Assume the source, quoted in the NYT, is correct in its characterisation of the Germans as having a ‘lust for titles’. Assume, I am correct in characterising the Americans (and the ICAC matter) in having a ‘lust for dollars’. So we get two sets of ‘national preferences’, each of which has the x% of people who do not truthfully reveal their preferences. What are the macro-economic implications (eg cost of dispute resolution as reflected in fiscal outcomes), nationally and internationally?

  43. Jim Rose
    February 11th, 2013 at 05:39 | #43

    @John Quiggin Milton Friedman is said to have mesmerising several countries with a flying visit.

    When working at the next desk to the monetary policy section in the late 1980s, I heard not a word of Friedman’s Svengali influence:
    • The market determined interest rates, not the reserve bank was the mantra for several years. Joan Robinson would be proud that her 1975 visit was still holding the reins.

    • Monetary policy was targeting the current account. Read Edwards’ bio of Keating and his extracts from very Keynesian treasury briefings to Keating signed by David Morgan that reminded me of macro101

    See Ed Nelson’s (2005) Monetary Policy Neglect and the Great Inflation in Canada, Australia, and New Zealand who used contemporary news reports from 1970 to the early 1990s to uncover what was and was not ruling monetary policy. For example:

    “As late as 1990, the governor of the Reserve Bank rejected central-bank inflation targeting as infeasible in Australia, and cited the need for other tools such as wages policy (AFR, October 18, 1990).”

    Bernie Fraser was still sufficiently deprogrammed in 1993 to say that “…I am rather wary of inflation targets.” Easy to then announce one in the same speech when inflation was already 2-3%.

    When as a commentator on a Treasury seminar paper in 1986, Peter Boxhall – fresh from the US and 1970s Chicago educated – suggested using monetary policy to reduce the inflation rate quickly to zero, David Morgan and Chris Higgins almost fell off their chairs. They had never heard of such radical ideas.

    In their breathless protestations, neither were sufficiently in-tune with their Keynesian educations to remember the role of sticky wages or even the need for the monetary growth reductions to be gradual and, more importantly, credible as per Milton Freidman and as per Tom Sargent’s end of 4 big and two moderate inflations.

    I was far too junior to point to this gap in their analytical memories about the role of sticky wages, and I was having far too much fun watching the intellectual cream of the Treasury senior management in full flight.

    At a much later meeting, another high flying deputy secretary was mystified as to why 18% mortgage rates were not reining in the current account in 1989.

    Friedman’s Svengali influence did not extend to brainwashing sufficiently this later giant in the field of competition policy into reciting the monetarist creed that the lags on monetary policy were long and variable. The 1988 or 1989 budget papers put the lag on monetary policy at 1 year, which is short and rapier, if you ask me.

    p.s. the local ringmaster of the vast Mont Pelerin conspiracy in the 1980s, which you have outed as the CIS, did not have a full time staff member until about 1979: Greg Lindsey. Their 1st office opened above Uncle Pete’s Toys in St Leonards in 1980.

  44. BilB
    February 11th, 2013 at 06:04 | #44

    As you appear to be talking up an Abbott led government for Australia, JQ, perhaps you should also be discussing the prospect of an Abbott led recession.

    Its pretty obvious that the election of Liberal governments in the Eastern states has led to a turnaround in economic activity in Australia from blasting through the GFC towards being the next Western nation to be stuck to the GFC tarball. I would fully expect the implimentation of Abbottnomics (we can’t talk about policies as they have none) to put Australia into full speed economic reverse towards the vortex of rising unemployment, business performance recession, fiscal collapse and accelerated property value decay.

    Is this how you would stack up 2014′s prospects, or do you have a rosier assessment for the future based on Campbell Newman’s leadership successes?

  45. John Quiggin
    February 11th, 2013 at 08:58 | #45

    @Jim Rose: Having tried in the past to set you straight on things, I’m not going to repeat the attempt.

    But for anyone following, Jim has shifted the ground from talk about monetary targeting (the policy favored by Milton Friedman and dominant in Australia from the mid-70s to the early 80s) to inflation targeting (which began in the early 1990s, after the failure of monetary targeting and an intervening period of confusion).

  46. John Quiggin
    February 11th, 2013 at 09:00 | #46

    @BilB I’m not sure what you mean by “talking up”, but an Abbott government looks like to folllow the same pattern as Newman. However, as you say, Abbott has no policies so his direction is unpredictable.

    In the absence of the kinds of changes mentioned in the original post, which might avert what seems inevitable otherwse, we’ll just have to wait and see.

  47. BilB
    February 11th, 2013 at 09:22 | #47

    The sharp turnaround in state govt. expenditure in NSW and QLD with Newmans layoffs have combined to put strain on the Federal budget to guarantee the failure of the surplus pledge. Compound to that over hyped mineral mining performance and a federal Government incompetently slashing budgets and laying off employees, and I expect to see a slight downturn become a full scale recession.

    Australia has so many significant industries on life support for one reason or another, it won’t take much of a tilt of the tank to have the liquidity flood to the deficit end. Retail’s horror Christmas is a telling indicator of our delicate economic balance.

  48. Ernestine Gross
    February 11th, 2013 at 11:54 | #48

    “Nick, obeyed” may be a future headline for a thread on NSW unless the current Premier “ties him down”, as suggested by a reader of the smh’s article on Greiner’s public critique of the NSW planning methods.

  49. Socrates
    February 11th, 2013 at 13:47 | #49

    As usual the logic in JQ’s post is hard to argue. I think the rot started right back when Mark Arbib and Karl Bitar scampered into Federal Labor politics, escaping what was then already the obviously sinking ship of NSW Labor.

    I’d suggest that there was never much chance Gillard would take action against the very faction that put her in power, but it sems that would make me a Rudd supporter. That is the price of living in a world where every preference represents one half of a binary choice between two polar opposites. I must be careful not to read books admonoishing Stalin, else I accidentally become a Hitler supporter.

    I agree that an Abbott government will be terrible, but Labor’s right seems to prefer that prospect ot a Rudd government. In fact, Labor’s infighting and corruption is so high profile in the media that Abbott will hardly face media scrutiny between now and election day.

  50. may
    February 11th, 2013 at 15:00 | #50

    Socrates :As usual the logic in JQ’s post is hard to argue. I think the rot started right back when Mark Arbib and Karl Bitar scampered into Federal Labor politics, escaping what was then already the obviously sinking ship of NSW Labor.
    I’d suggest that there was never much chance Gillard would take action against the very faction that put her in power, but it sems that would make me a Rudd supporter. That is the price of living in a world where every preference represents one half of a binary choice between two polar opposites. I must be careful not to read books admonoishing Stalin, else I accidentally become a Hitler supporter.
    I agree that an Abbott government will be terrible, but Labor’s right seems to prefer that prospect ot a Rudd government. In fact, Labor’s infighting and corruption is so high profile in the media that Abbott will hardly face media scrutiny between now and election day.

    the coalition will not face any scrutiny in any case.

    the broadcasting policy for this country is to talk up the coalition and the non-coalition voices are conspicuous by their either absense or widdly back-foot who-do-we-blame.

    aside from voices Talking Up the non-coalition,

    a concurrent,accurate conversation on the subject of Showing Up the coalition would be nice.

    eg.

    which lawyer would you like to represent the interests of some one working for a living at an average wage?

    some one who did that before entering parliament?
    or
    some one who represented the interests of the asbestos industry?

    in the continuing story of yet another corruption betrayal of trust, can we see a bit more of the spotlight on the business/conservative ethos that drives this sort of thing.
    after all,the people who ostensibly represent the interests of the people who labour have shown themselves to be working in the interests of the business of individually collecting stonking great piles of cash.
    and
    the political ethos,instead of working for all,seems to be an ancient levantine business model grafted(heh) onto the Oz model.

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