The myth of the economic credibility of the Liberal Party

Preface: This piece was originally authored back in November of 2007 before the marked acceleration of the downturn on Wall Street and the associated Global Financial Crisis. On the matter of comments I made regarding the degree to which governments act as economic managers; I maintain my position that by and large, modern Western governments do not act in the same interventionist manner as they did prior to the Keating Government, and much less compared to pre-Hawke governments, both Labor and Liberal. I would add however, that the Keynsian manner in which the Rudd Labor Government, in response to the Global Financial Crisis, engaged in a “stimulation” of the Australian economy during 2008-2009 that constituted a divergence from the comparatively passive economics of the last few decades. This stimulation however, while a legitimate and successful example of economic management, pales in comparison to pre-Hawke government Keynsianism, and was confined to the context of the Global Financial Crisis as a temporary measure.

On the matter of disclosure, I have since resigned from the Australian Labor Party. 

Changes to some of the original text have been made for the purposes of style and flow, however the substance of the arguments remains the same.

***

If after hearing what Howard and Costello have had to say, you’re still willing to have the size of your housing repayments or pay packet riding on this lot (The Howard Government), then you’re either so stinking rich as to not have to care about such things, or you’re just being mislead. There is no reason at all to think that the Libs will deliver “strong economic management” for you.

For most Australians, let’s face it, the credibility of the Government on the economy stems from gut feelings. This is understandable given the complexities of the issue and the amount of spare time working Australians have available to consider such issues. If you are like many, by the time you get home from work and get in front of a newspaper, the net or the telly (assuming the kids or paper work haven’t gobbled up what’s left of your time), you’re already pretty worn out and a long-winded discussion is going to tire you further.

The Libs have been great at exploiting this. With this kind of environment for voters, it understandably takes time for any disinformation the Government have spun to be analyzed in public discourse and exposed as false. By the time the truth is well known, it can be too late. The truth of “children overboard” took time to filter through so that when the facts were out, the election was well and truly over. Scrutiny of the role of DFAT in the AWB scandal was so protracted that by the time DFAT’s role was beginning to surface, people had switched off.

The economy is at least as complex as any of these examples of postponed and protracted public debate.

So I’ll try my best to be concise with your time in mind. Please do follow the links if your curiosity is aroused.

Continue reading

Advertisements

Howard doomed to repeat history?

It has a bizarre kind of symmetry to it.

All is not well with the Australian economy. Sure, monetary deregulation (in a large part thanks to Keating) has kept today’s interest rates from spiking like they did before the 90s, thus rendering election debate on interest rates more-or-less moot. Enterprise bargaining (thanks again Keating) has ensured the growth of our economy; productive growth. The kind of growth that puts the P into GDP (or GNP if you prefer), not growth in speculation, not cost-push inflation simply making the numbers bigger.

Still, things could be better. Whether or not we are experiencing inflation depends on which basket you use to measure the CPI. My own personal basket, if you consider rent, is skyrocketing. I don’t think I’m alone in this.

Debt. Once upon a time, debt used to be a stick that the Libs would beat the Hawke-Keating Govt. with (despite how much the prior Fraser Govt. contributed). Australian private sector debt (as a percentage of GDP/GNP) is worse under our current Federal Government than under any Australian Government in history. And that budget surplus that the Peter “The Grin” Costello is grinning about, well the shine is taken off of it when you consider the black hole in treasury to the tune of 60-odd-billion-dollars of unfunded super that the Federal Government has accrued.

Things could be worse, but things could be better. The Federal Government has nothing to pat itself on the back about when it comes to the economy and let’s face it, working families have it tough and more-so now that it is a lot easier to sack them (and while screwing their pay-packets down may be illegal according to the “Workplace Authority”, the “Authority” is often impotent in making determinations).

So it has to grate on many Australian’s nerves when they see comments like these.

(Source: Howard Facts ‘Never Better Off?‘)

Now Keating’s reforms (monetary and enterprise bargaining) may be things he can be proud of. They did good things for the Australian economy and still continue to do so. But… Things weren’t all that flash back when Keating was PM so getting all puffed-up and proud was probably a bad idea. Just as it’s a bad idea now.

Indeed, Keating was taken to task on his confidence. He was taken to task for his pride. A certain Australian lectured him on this mistake in the lead-up to mid-90s electoral defeat.

Surely then, the words of said Australian would also be pertinent political advice for John Winston “Never Had It Better” Howard!

Ah. The smell of hypocrisy in the evening.

~ Bruce

Disclosure: Bruce Everett is a (pretty nominal) member of the Australian Labor Party.