Meanwhile, in Queensland, Labor is marching towards a defeat that has been inevitable ever since Bligh’s post-election announcement, in 2009, of a massive, and economically unjustified program, of asset sales. Despite the fact that most of them are going to lose their seats, and that the policies violates both election commitments and Labor policy, hardly a single member of the Labor Caucus has opposed this, or even dissented from the retribution dealt out to the ETU and others who did stand up.
A new sandpit for long side discussions, idees fixes and so on.
It’s past time for another Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.
In the wake of the Labor leadership ballot, I tried to think a bit about new directions for public policy in Australia. My conclusion, in short, is that there aren’t any. I’ve hammered the point that Gillard is a policy-free zone, and even her supporters haven’t pushed back on this. I have to concede though, that while Rudd’s challenge speech was impressive in many ways, he also failed to produce much in the way of new ideas.
The problem isn’t just one for social democrats and Labor supporters. Abbott is the worst kind of poll-driven populist, and Turnbull, the only person on the conservative side of politics who has anything resembling a clue has been permanently marginalized.
Finally, there’s the policy elite represented by the Fin, the Oz and the various establishment thinktanks and policy talkfests. After thirty years, they haven’t come up with anything better than the tired old 80s agenda of market-oriented reform, competition and productivity, encapsulated in Workchoices, rejected by the Australian public in 2007 and totally discredited by the GFC.
The Greens are the best shot, but under current conditions they can’t hope to do much better than their current role of supporting a minority government and/or holding the balance of power in the Senate. That gives them the chance to make a small number of non-negotiable deamnds (eg carbon price), and to exercise some influence. But in broader areas like economic policy, they remain marginal. Even though they have some good ideas, they aren’t treated as serious players in this field.
The best that can be said is that, as long as the terms of trade continue to boom, the cost of missed opportunities will not be all that great. Australia remains a lucky country, run by second-rate men (and now also women) who share its luck.
By contrast, US politics seems to be opening up to the ideas of the left, at the same time as the Repubs are spiralling off into the Delta Quadrant. All in all, a lot more color, interets and hope than the drab prospects before us.
A couple of points that have emerged in the debate over the Labor leadership need a response
First, there’s the claim that there are no policy differences between Rudd and Gillard. This is often presented as if the two had independently arrived at the same position. In fact, as the equation in the post title implies, it’s because Gillard is a policy-free zone. Her independent ventures into policy making amount to a disastrous set of pre-election moves on carbon policy (no tax promise, consultative assembly, cash for clunkers) and a series of failed attempts to resolve the asylum seeker problem. Now that the Rudd agenda has mostly been passed or abandoned, Gillard has no policies whatsoever, a point I made some time ago. Her abandonment of the Gonski report, which she used as an excuse for doing nothing when she was Education Minister, is typical.
Second, and with somewhat more justification, there’s the fact that Gillard has been successful in getting policy passed where Rudd failed. The unusual circumstance of a House of Reps minority has led most people to overstate the relative difficulty of Gillard’s task. She has needed the Greens and three of five independents, normally being Wilkie, Oakeshott and Windsor. Rudd needed the Greens, Xenophon and Fielding, which was obviously harder. It’s true that Rudd made the mistaken choice of freezing out the Greens and trying to negotiate with the Liberals, which made no sense given that the Greens were bound to hold the balance of power sooner or later. A more comparable test is that of asylum seekers, where Gillard has done no better than Rudd, arguably worse.
*This equation was allegedly written by a notable, but somewhat obscure economist with his own name in the place of Rudd, and that of a better-known researcher in the same filed in the place of Gillard
A showdown over the ALP leadership, and therefore the Prime Ministership, has been inevitable for some time, and Kevin Rudd has finally brought it on, resigning as Foreign Minister in the face of direct personal attacks from Simon Crean (himself, apparently, a covert contender for the top job) and others.
Readers won’t be surprised to learn that I support Rudd. I have two reasons for this.
First, whatever his problems with interpersonal relationships and administration, Rudd is a serious leader with ideas for Australia’s future. Gillard has shown herself to have no ideas worth the name. Her policy agenda has consisted, almost entirely, of implementing policies introduced by Rudd.
Second, Gillard has totally lost the trust of the Australian people and if she leads the government to the next election, there is no chance whatsoever of a Labor victory. The result will be the election of Tony Abbott, someone who matches Gillard in terms of a lack of any consistent principles or concrete achievements, but adds to it a reactionary ideology and determination to undo the policies brought forward by (Rudd) Labor. Labor’s only chance of retaining office is to go back to Rudd.
Anyway, feel free to have your say
Robert Carling and Stephen Kirchner have a letter in today’s Fin, responding to my piece last week, which restated points I’ve made on the blog (for completeness, it’s over the fold). The letter is notable for not responding to any of my criticisms of Alesina, and for backing away from his previously unimpeachable authority.
John Quiggin’s criticism of us (“Tales of austerity ring hollow”, Opinion, February 16) warrants a response. We referred to Alberto Alesina’s work not because it is the only or last word on this topic, but because it is an example of a much larger literature in support of fiscal austerity (or less pejoratively, “fiscal consolidation”).
It is incorrect to suggest that the case for consolidation “rests largely on the work of Alberto Alesina”. We could also have cited a lot of other empirical as well as theoretical work, as indeed does Alesina himself.
A full examination of the International Monetary Fund and Organisation for Economic Co-operation and Development literature over the years reveals a more nuanced view than Quiggin suggests (not that the IMF or the OECD are the final arbiters anyway). We recognise nuances that we could not canvass in a 600-word article.
One is that the arguments about fiscal consolidation have to be tweaked depending on country circumstances and the credibility of the policymakers. Greece, for example, will suffer from fiscal consolidation, but that is partly the fault of the exchange rate straitjacket they are in.
But, in general, we stand by our basic proposition that fiscal consolidation is essential to the economic rehabilitation of countries with large budget deficits and unsustainable public debt burdens.
The only point worth noting is that the “pejorative” term “fiscal austerity” isn’t mine, it’s from the title of Alesina and Ardagna’s 1998 paper “Tales of fiscal consolidation: can austerity be expansionary”. If austerity is now a pejorative it’s because people know what it means, while “fiscal consolidation” remains a vaguely defined euphemism. Readers with a long memory may recall the US Repubs and Cato dumping “social security privatisation” in favor of “social security choice”