Well, there’s not much joy in the election results, with the outcome looking a bit worse than the status quo ante. That means another three years of a government that didn’t even deserve a second term, let alone a fourth. Latham ran a pretty good campaign, but couldn’t beat the interest rate scare, and should have bitten the bullet on forest policy much earlier. In addition, the problems of state Labor governments didn’t help.

As for the Liberals, they’ll have an interesting time of it, I think. They’ve made expensive promises, which will be hard to keep and costly to repudiate. And their credibility is now completely tied to low interest rates, something over which they have no real control. As I said in my chapter in The Howard Years

In 1964, Donald Horne described Australia as ‘a lucky country, run by second-rate people who share its luck’. This epigram could be applied, with equal or greater justice, to the Howard government and its term in office, particularly as regards economic policy. Sooner or later, however, this kind of luck will run out.

It hasn’t run out yet, though.

Just about time to break out the red wine, order the pizza and warm up the TV. The hints I’ve seen over at Tim’s about exit polls aren’t encouraging, but we’ll just have to watch and wait.

I’ve just been down to the local school to vote. My totally irrelevant and unscientific observations:

* Voting early(ish). The polling booths have been busy all day. Since the total number of voters can’t change much, it looks as if people are voting earlier than usual

* Return of the true believers. I’ve always had a superstitious belief that attitudes to how-to-vote cards are indicative of something. I saw a string of people walk straight past the Liberal canvasser, which suggests to me that Labor voters are feeling keener than they have for some time.

* I must say it was pleasant to vote the Labor party ticket for once. Next time I’ll go back to my usual practice of carefully ranking all the candidates, but this time I agreed with Labor’s proposed order for the Reps and I trusted the backroom guys to get the preferences right for the Senate.

* Some commenters pointed out that by voting Labor I denied the Greens their allocation of public funding. But I think my defence of their economic policies against the bizarre attacks mounted by the right was worth more than the $2 or so my first preference would have gained them

I’ve been reminded by Blair Fairman (Labor by 6) in comments to the previous post, that I haven’t put up a post calling for election predictions. Actually I did do this right at the start of the campaign but that’s not much use. In the spirit of optimism, I’ll call for predictions to be posted in terms of Labor’s lead over the Coalition in seats (leaving independents and Greens out). The person who is closest will be congratulated (with wild applause if it’s Pete who predicted Labor by 20). Multiple winners are allowed.

Update The winner is Jack Strocchi, who predicted a net gain to the Liberals

In keeping with my Labor party roots, I’ll be down at the local school early to vote, though in the spirit of modernisation, I’ll vote only once. My electorate of Ryan was famously won by Labor at a by-election a few years back, and the local member is thoroughly unappealing, but I don’t suppose there’s any chance of the seat changing hands.

Meanwhile, in the US, Michigan Republicans tried to have Michael Moore prosecuted for encouraging people to vote. He was giving out stunt prizes like clean underwear and noodles to ‘slackers’ who promised to vote and this was, the Republicans claimed, a payment to vote, which is apparently illegal. Police and prosecutors gave the case short shrift, but it reflects a consistent Republican policy of preventing people from voting whenever possible. They hate democracy almost as much as they hate Democrats[1].

Update Jack Strocchi kindly sent me this catalogue of recent crimes against democracy, from the Washington Post a few days ago. I wasn’t aware of any of these particular incidents – there are dozens of others that fit the same pattern.

fn1. Of course, this excludes Southern Democrats like Zell Miller. Virtually all of the old Dixiecrats have joined the Republicans, bringing with them their rich heritage of poll taxes, grandfather clauses and so on.

I’m annoyed that I haven’t received any of the phone or Internet spam being sent out by the Liberals. My concern is that, if they haven’t called me, they may be missing other swinging voters. With any luck, though, their database is sufficiently good to pick out only voters who are genuinely considering the Liberals, then to inundate them with messages night and day.

In the spirit of co-operation, I’d like to point out that not everyone is easily contactable by phone or Internet. A fleet of megaphone trucks, sent out at 5am on Saturday morning, could really have a big impact on the Liberal vote.

I’m working on a review of Doug Henwood’s book, After the New Economy. Brad de Long kindly sent me a copy, and, a mere eight months later, my review is done, at least in draft form. Comments much appreciated.
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Don Arthur, a great but infrequent blogger, has joined the crew at Troppo Armadillo, which will be a great location for him, I think. His first post is a response to my argument that the era of neoliberalism/economic rationalism is over. Don makes a lot of points, and I’m going to start with a relatively easy one. Don says “it’s hard to see a return to the high tariffs of the old Australian settlement”. I agree, but I think the whole notion of the Australian settlement isn’t very useful in relation to the rise and fall of neoliberalism.

What matters is the Keynesian-social democratic settlement adopted after World War II. Australia was one of the leaders in this with the 1945 White Paper Full Employment in Australia, claimed here as

the first time any government apart from totalitarian regimes had unequivocally committed itself to providing work for any person who was willing and able to work

Nevertheless, there was little that was specifically Australian about this settlement.

While Kelly’s name has been widely used, the things he is talking about are more accurately described by Gerard Henderson’s earlier term ‘Federation Trifecta’, consisting of Protection, Arbitration and White Australia[1]. These policies added up to a uniquely Australian policy package in the period before World War II, but their subsequent histories have been very different.
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Quite a few bloggers, and others, have commented on the fact that neither the Iraq war, nor the Free Trade Agreement with the US, both hot topics in the leadup to the election, have played a big role in the campaign. The obvious explanation is that both sides have vulnerabilities that prevent them from raising the issue.
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While I’m busy scanning the electoral tealeaves, quite a few other economists will be anxiously waiting for a phone call from Stockholm. It’s Nobel prize time, and various people have had a go at assessing likely candidates. Brad DeLong says you should pick fields (I think he’s right about this) and goes for the trade trio of Bhagwati-Dixit-Krugman. Tyler Cowen looks at seven candidates. And of course, there’s a betting market

For what it’s worth, I’d like to see Robert Shiller win. However, on Brad’s criterion, it could be argued that he’ll have to wait until “behavioral finance” gets a guernsey. Kahneman’s prize a couple of years ago was in the same general field and this might count against it.

And then, of course there’s Don Luskin