Like drunken sailors

Paul Krugman, observing Bush’s deficit policy made the observation that the traditional Republican critique of the Keynesian case for using deficits to stimulate the economy (that, once you started running deficits, you’d never find a suitable time to stop) was true, but only as regards Republicans.

Similarly, having been announced his conversion to the cause of social democracy a few days ago, 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. Meanwhile, the decision to make the states pay for the National Water Initiative means that basic needs for schools and hospitals will be worse-funded than before. Again, more detail from Chris Sheil

Labor’s correct response here, I would say is not to engage in an item-by-item bidding war, but to announce one big intervention in Medicare, using part of the money already spent by Howard.

Update Monday AM The “drunken sailor” description is irresistibly apt. Crikey used it to, and here’s the Oz editorial

11 thoughts on “Like drunken sailors

  1. Labor’s response that all that government spending will drive up interest rates (presumably by ‘crowding-out’) may not be understood by the electorate even if it is true. As it stands I think John Howard’s best hope is to play on interest rate fears. There are a lot of traditional Labor voters sitting out there in suburbia with big mortgages that are scared to death of higher interest rates.

    It will turn the tables if Latham sells himself as a fiscal conservative but not a bad approach.

  2. The message will not get through in SA except to the point that money which hasn’t been there for the last 8 years is now available – but are these core or non-core promises? – Howard is looking like Brisbane – Power rules.

  3. Hang on, JQ! You’re making the same mistake the Age did a few years ago, when it misrepresented Howard as acknowledging that the monarchy was anachronistic. It had edited out words to the effect “some people think that…”, supposing that Howard would never describe a general sentiment in a detached way, that he would only ever describe what he endorsed, that he was incapable of looking at what he had to work with.

    Yours is the same mistake. You are ascribing a social democrat world view to him, simply on the grounds that he acknowledged what is the prevalent environment he has to work in. While he may endorse it himself, it is just as possible that he is merely facing up to a reality that he would rather change than adapt to – just as with the republican issue.

    You may be tempted to quote Howard again in support of his putative change of heart. Be careful. When I challenged the Age about a repetition of their claim a few months later, they emailed me back citing their own earlier mutilation of his speech. When I pointed out that they had in fact misquoted him, citing a fuller text from the Australian, they never replied.

    On the other hand I suspect Costello can justifiably be accused of buying into the wrong agenda, wrong in terms of his own claimed raison d’etre that is. His party political broadcast claimed that only Liberals could run the economy, and that the economy needed running. While it is self evident that as is it needs running, that is itself a statement of failure in liberal/conservative terms; the underlying problem that ethos faces is how to work itself out of a job, how to make things safe enough that even Latham could do all the running that would be needed (on the assumption that he is what Liberals make out; after all, someone that inept is bound to come along sooner or later, whether ALP of Liberal – the country ought to be made fit enough for any chip shop owner to run).

  4. Ross Gittins has a piece in today’s SMH about the persistence of the popular perception that Liberals know how to run the economy better than Labor. He makes the predictable point about how Howard stuffed things up as Treasurer.

    But unfortunately, the Labor Party continues to suffer for Keating:his vivid negative persona, his facile talent for catch phrases (‘banana republic’, ‘the recession we had to have’) and the egomania that prevented him from palming responsibility for the recession onto the Reserve Bank. He just had to own everything.

  5. The LN/P one claim to economic credentials was running a contractionary fiscal policy in the midst of a boom in order to pay down government debt. There was some merit in attacking Beazley’s Black Hole.
    Some of the growth of the first four years in office was due to higher productivity, but this was inherited from Keating. Most of the growth of the past four years has been based on housing boom based consumption spending.
    They have now blow this policy out of the water with pork-barelling.

  6. I like the line “Crazy John’s going out of Government Clearance Sale: Every must go!” I think I have heard it three times today already.

  7. Why don’t the state premiers EVER point out that the federal govt has no constitutional powers or responsibilities in education and health?

  8. Drinking at the new fiscal bar
    How irresponsible is Howard’s fiscal stance (lots of sharp discussion of the launch ongoing here)? Not very, it seems to me. The subtantive potential problems lie in the nature of the spending (e.g. effectively creating a duplicate government tier in…

  9. The Drunken Sailor and the Invisible Man?
    JOHN Howard yesterday doubled his campaign spending promises in one unprecedented wallop, with a $6 billion package aimed primarily at young families and small business. Both John Quiggin and The Australian editorial today describe it as profligate and…

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