« profile & posts archive

This author has written 2362 posts for Larvatus Prodeo.

Return to: Homepage | Blog Index

88 responses to “Kevin Rudd's ideological manifesto”

  1. Mark

    Elsewhere: Jason Soon, probably predictably, isn’t impressed, but I think he has exposed some flaws in Rudd’s argument and logic.

  2. Matt C

    To what extent do you think this essay is an attempt to shore up the Government’s eroding support among politically engaged left-wing intellectuals (the people Tony Abbott would call “elites”)?

    I think Rudd’s original two Monthly essays were intended to shore up the support of that constituency by enunciating a clear ideological framework for his leadership. I think, at least in part, that this essay is intended to do the same in the new context of the economic crisis.

  3. Robert Merkel

    I look forward to the full essay expanding on his opposition to protectionism, and how this squares with doling out funds to the car industry because “making stuff” is important.

  4. Katz

    Rudd’s Monthly extract appears to be both an attempt to analyse the alleged failures of the post-keynesian world order and a denunciation of the alleged moral failings of those who operated important sectors of the post-keynesian system.

    There is a grave danger that Rudd will conflate those two ideas, as if had senior operatives of leading financial organisations been less corrupt and greedy, then senior operatives of the post-keynesian system might have chosen correctly at the point of crisis and have escaped collapse.

  5. Mark

    Matt C, I suspect there’s an element of that – and probably also of trying to refute the suspicion that Rudd isn’t really in the Labor tradition and doesn’t stand for anything much. No doubt also it’s supposed to establish his credentials as an intellectual…

  6. Mark

    Katz – I agree with that. The problem with Kevin is that his political analysis (such as it is) too easily slides into a rather unctuous moralism.

  7. myriad

    yeah, occasionally he sounds great – like that quote – but I just don’t believe him, because his government’s actions speak louder than words.

  8. Mark

    Yep, it’s a neat quote, but I’m with you myriad. I see no particular sign that any of this is anything other than business as usual with extra policy wonkery thrown in. It’s basically political positioning.

    Mind you, I wonder whether he’s finally hired a speech writer. It reads better than most of his rhetoric.

  9. myriad

    maybe! Now perhaps he can hire a hypnotist to make him enact all those pretty words rather than all the business as usual stuff.

    I’m just praying at this point that he’ll steal more leafs from Obama’s playbook and invest deep in public infrastructure that will also help tackle climate change as the next stimulus package. It’s far too late and just a blatant bit of frivolous politicking to throw more cash handouts to people. This recession is going to bite for a while. May as well use our comparatively comfortable financial position to build something that is sustainable in all senses of the word.

    But it really saddens me that the above honestly feels like a frail hope here. I’m really gutted at the moment by the absolute lack of any meaningful vision or leadership in Australian politics right now, and also by how the MSM doesn’t even seem to notice.

  10. Fine

    It’s interesting that he uses ‘The Monthly’ as his publication of choice. And ‘unctuous moralism’ is right. The Age currently has a bee in its bonnet about the govt’s failure to properly support solar energy after all its fine rhetoric about climate change. Not a bad bee to have. I wonder if it will acheive anything.

  11. Oz

    Matt C, I reckon that’s all it is. There’s enough caveats like “Won’t throw the baby out with the bath water” “the market still plays an important role” for it to not mean anything. A wishy washy excerpt that has a lot in it to appease to a lot of people, but has comforting buzz words for some like “Keynes” and “social democracy”.

  12. BlackMage

    As Fine said above, it’s interesting that he uses The Monthly. In the Howard era, the Prime Minister would have exposited from the pages of The Australian, then the government’s house organ. There really isn’t a left-wing equivalent to the Oz’s place in the conservative movement; The Age is isolated from Sydney and far more committed to ‘cultural’ politics, and the SMH is a confused mess.

    This could be an attempt to give The Monthly greater legitimacy as the left-wing equivalent to The Oz’s opinion-making role; that is, ideas and policies are formulated through government, then filtered through reliable columnists.

    As for the article itself: as above, actions speak louder than words. Prove it, Kevin.

  13. Oz

    “This could be an attempt to give The Monthly greater legitimacy as the left-wing equivalent to The Oz’s opinion-making role; that is, ideas and policies are formulated through government, then filtered through reliable columnists.”

    The Australian though, with a much wider circulation, can also serve the dual role of testing public opinion.

  14. Paul Burns

    True, Oz, but what Rudd writes in the Monthly will be reported pretty extensively in the MSM just because he is PM. Though, of course, he’s not able to control the spin on it.

  15. EAT THE RICH

    I’m hoping “Social Capitalism” will enter into the popular lexicon. Malcolm will then have to an add saying: “It’s a badge I wear with pride.”

  16. Oz

    “Social capitalism”, while ill-defined, is too close to being an oxymoron to be taken seriously for long.

  17. codger

    Mark,

    I’m sure that during the Hawke & Keating lap dancing years etc they wore tabletop tutus all round but hey…

    Sniff & Chew … the lumps, and spit out the bones here

    Steve Keen dances on Milton’s mayhem yet again
    http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/

    Peter Martin rights history before Mr. Kelly gets to print here
    http://petermartin.blogspot.com/2009/01/saturday-insight-our-problems-are-worse.html

    A little context.

    Oh and Robert @ 3, not to mention the Fed & State $ thrown at the Auto ‘skills shortage’ or perpetual cheap labour err sorry apprenticeship grope perpetual training thingy…not like those norty Yankees & steel, much. Ah the good old days.

    btw Someone needs to caution Julia; her ‘Look at Me, Look at Me’ @ downtown Davos take one…hmm… Anyone for big 3 by Xmas?

  18. EAT THE RICH

    Oz @16.
    Indeed it may well be an oxymoron. In fact I understand that oxymoron is an oxymoron. Or is that tautology…???

  19. MarkL

    It would be interesting to find out who actually wrote this. Rudd certainly did not.

    Whoever did seems to have forgotten how Mussolini defined his form of fascism,too, which is hilarious when you think about it! Ruddles, rehabbing Musso – too funny.

    I have to agree with Robert (No. 3) – how does this square with Rudd’s frankly ridiculous subsidies to the car industry?

    I also have to agree with Myriad at No. 7, (and with Jason Soon…) the actions belie the words. And the actions reveal a re-run of the Fraser years in terms of too much busy-work to permit the development and implementation of sound policy. Adding the Ruddles infatuation with the news cycle and you get the astonishing record of sweeping anouncemenmts made on the fly and zero actual action that we have seen.

    All of this agreeing having made me (and doubtless Robert and Myriad) slightly queasy, I’ll point out that the very last thing Australia wants if for Krudd and the Komrades to follow the Obamessiah’s incredibly bad stimulus package policy.

    Oh, I have no argument that a stimulus package is a good idea – but after going through the US package I have worked out that (at best) 10% of it is going to economically stimulating spending like transport or energy infrastructure.

    90% (In fact I think slightly more than that) is purest waste, pork-barrel and paying-off-political-supporters politics on a titanic scale.

    Krudd’s idiotic pre-Christmas $10 Bn waste-a-thon did nothing for the long term good of the economy, although Japanese, Korean and Taiwanese plasma TV and games makers, poker machine operators and pubs thought it was OK!

    You could have built 5 new dams and the pipelines to drought-proof the east coast, as well as 4 new thermal power stations to solve the current long-term power shortage and still had a few billion to spend on fixing the national highway network instead.

    Which would have been better for the economy?

    MarkL
    Canberra

  20. charles

    I’m just impressed we have prime minster who can write a 7000 word essay giving a solid position on anything.

  21. charles

    I’d be much more impressed if the money went in to infrastructure instead of plasma TV’s, lets hope Rudd wakes up and stops following Howard’s footsteps. What do we get from Turnbull? Bring forward the “tax cuts” that resulted from the “me to” stuff seen in the last election.

  22. Ian

    You people are a bunch of pretentious wankers. No debate will be entered into. The truth will always be truth.

  23. Fine

    Go Ian. Absolutely brilliant comment. I wish I was as smart as you.

  24. GB

    It’s about time someone said it – and who better than our P.M.? Neo-liberalism is on the run and it just doesn’t make sense for Keynesian social democrats not to come out of the closet. After all, we’ve been spectacularly vindicated.

    Could some kind soul provide a link with an opinion piece in the Washington Post by Eugene Robinson called “Blind Unanimity”? I thought of it as Turnbull gave his response. I know Turnbull has to constantly shore up his right flank, but his response was lame even by his standards. Hasn’t he noticed the zeitgeist has changed just a bit in the last 6 months?

    P.S. Of course John Howard was a neo-liberal. I can’t understand how anyone would doubt that. Howard himself said he was an economic liberal (in the classical sense). Sure, he was an opportunist, but being an opportunist doesn’t preclude being an ideologue (it just makes you a shrewd ideologue). He was our most ideological P.M. – ever. Republicans in the US have been trying to say W wasn’t really a conservative. Rubbish: neo-liberalism, conservatism, or whatever you want to call it has been tested over the last 30 years, and the awful results are there for all to see (Iraq, economic collapse, race riots).

    The culture war stuff was mostly a distraction and a way to stay in power while the real neo-liberal project was going on in the background.

  25. Nickws

    Krudd’s idiotic pre-Christmas $10 Bn waste-a-thon did nothing for the long term good of the economy, although Japanese, Korean and Taiwanese plasma TV and games makers, poker machine operators and pubs thought it was OK!

    You could have built 5 new dams and the pipelines to drought-proof the east coast, as well as 4 new thermal power stations to solve the current long-term power shortage and still had a few billion to spend on fixing the national highway network instead

    MarkL: Far be it from me to criticise someone who has gone General Groves-like through the US stimulus package and identified 90% pork, 10% action, but you’re taking the piss, surely, when you wave your hand and say ‘drought-proof the east coast for less than 10Billion’, right?

    And your answer shouldn’t include reference to how you agree with all the nice people here…

  26. Thomas Paine

    I think the people who didn’t lose their jobs in December and January because businesses got some respite might disagree with particularly ignorant sentiment that the stimulus package was a waste. The two parts of a stimulus package are to help replace lost demand by giving money to spend while you get spending projects underway that when they come online will help fill the demand gap.It takes a whole lot more money to create a new job than to save a job.

    The govt will get much more bang for its infrastructure spending dollars if it is actually stopping jobs from being lost rather than trying to create new jobs. Thus the need to provide some stop gap in the form of a bonus payment or incentive to spend.

  27. Ian

    Fine @ 23 Nice sarcasm mate…loved it. However truth will always be truth.

  28. Adam Bandt

    Why this persistent counterposing of state intervention and neoliberalism, as if one is the antithesis of the other? From the beginning, the neoliberals understood that markets don’t create themselves: they and their citizen-consumer-subjects require a huge amount of state activity. The German Ordo school, for example, wrote prolifically in the first half of the twentieth century and underpinned German post-war reconstruction. They understood that markets didn’t exist naturally and needed massive state support to function. It appears, however, that Rudd simply repeats the pop-political myth of neo-liberalism’s withering government, whereas during the last quarter of the twentieth century, Rudd’s period of ‘extreme’ neoliberalism, the size, reach and strength of the state actually grew.

    And as to Rudd’s ‘real’ position, recall that Australia’s first minister for deregulation was not a Fraser or Howard acolyte, but was appointed in 2007, just after Rudd swept to power. For Lindsay Tanner there was created a new ministry of ‘Finance and Deregulation’. Soon after his appointment, Tanner said that

    the deregulation remit I’ve got is an acknowledgement that there are negative consequences from regulatory activity … the fact that I as a senior Cabinet Minister have been charged with a formal responsibility of deregulation [for] the first time ever … sends a very powerful signal to the wider business community that we are serious about this. Kevin’s made a lot of this issue.

    And as recently as June 2008, Tanner was blogging pieces with unambiguous titles such as ‘The path to prosperity through deregulation.’ Most distressingly, though, right now the world does in fact need a political economy that takes account of the impending crisis of climate change. Rudd can’t bring himself to ditch his neoliberal blinkers: when saying we can’t throw the free market baby out with the bathwater, he ignores that the previous global ‘New Deals’ involved government stepping in to directly regulate or conduct activities that are now in the hands of the private sector. As we suffer coal-fired power blackouts in a privatised system with a state-created artificial ‘energy market’ – a neoliberal market par excellence, with its absurd auction systems and massive legislative regime needed to create a market from unstorable electrons – we should be embarking on a solar-powered planet-building renewable energy program that would create real, sustainable work. Instead, Rudd creates shadowy new energy trading schemes, where the same financial sector that created a debt-crisis out of bricks and mortar – thereby giving ‘safe as houses’ a whole new meaning – now gets a new carbon toy to play with. There’s no about face here: Rudd has just rebranded neoliberalism itself.

  29. Nickws

    For one thing, the ghosts of FDR and Keynes are conjured up

    Jason Soon, ‘economics blogger’. Gawd help us. Instant Fail, as the teens say.

    Thomas Paine, I think you’ll find that opponents of fiscal stimulus policies are more than happy to take a ‘heads you lose, tails I win’ approach to analysing cost benefits. I saw a yank politician claim that putting money into the IT industry couldn’t possibly help kickstart anything–of course she didn’t represent any of the states with research triangles, corridors, etc.

  30. Mark

    Krudd’s idiotic pre-Christmas $10 Bn waste-a-thon did nothing for the long term good of the economy, although Japanese, Korean and Taiwanese plasma TV and games makers, poker machine operators and pubs thought it was OK!

    MarkL, while there is a case that investment in infrastructure may well have been a better use of the 10 billion than the Christmas bonus, I would point out that it really makes no difference what people spend the money on. It’s still injected into the economy, and people are employed in and businesses make profits too out of selling tvs and running pubs.

    Incidentally, it’s interesting to contrast the criticism from Tony Abbott and Barnaby Joyce on how the money was supposedly going to be spent with Malcolm Turnbull’s current line about tax cuts and letting people rather than governments decide what to spend it on!

    Of course John Howard was a neo-liberal. I can’t understand how anyone would doubt that. Howard himself said he was an economic liberal (in the classical sense).

    Well, I doubt that he walked the talk. WorkChoices, for instance was all about attacking unions and workers but it certainly wasn’t about deregulation and “freedom”. It all depends how you define neo-liberalism, of course, but Howard presided over the highest taxing government in Australian history, the size of the public service expanded, etc, etc. He was assuredly right wing but he wasn’t about small government – in practice anyway.

  31. Mercurius

    A picture tells 7000 words:

  32. Mercurius

    It would be interesting to find out who actually wrote this. Rudd certainly did not.

    “Social capitalism” ??

    It was either Mark Latham, or Spartacus!

  33. Nick

    Krudd’s idiotic pre-Christmas $10 Bn waste-a-thon did nothing for the long term good of the economy, although Japanese, Korean and Taiwanese plasma TV and games makers, poker machine operators and pubs thought it was OK!

    C’mon MarkL, you said you didn’t bite for the MSM line, hook and sinker.

    A small, small, small minority bought plasma TVs.

    A small minority spent it at pubs.

    The small minority that gamble, gambled it away (surprise, surprise, pokie profits were up! they rested their case).

    The majority spent it on their mortgage/rent/utilities/houseshold/groceries/petrol/children’s christmas presents/grandchildren’s christmas presents/anything and everything.

  34. Labor Outsider

    You have to laugh really.

    There are inconsistencies everywhere in that essay not the least of which are that the current economic framework is more a creation of the Hawke-Keating governments than Howard’s; that the supposedly “neoliberal” Howard government maintained effective regulation of the financial sector (acknowledged by Gillard), increased the size of government, doled out more middle class welfare than any PM in history, and was strongly criticised by the Productivity Commission for imposing too many new regulations on businesses; and rhetoric aside, Rudd’s done almost nothing so far to dismantle Howard’s “Brutopia”.

    But, politically, none of that matters. Just as Costello used a temporary spike in the budget deficit in 1996 to successfully brand the ALP as fiscally profligate, Rudd will use the financial crisis to wedge Turnbull and the libs. Turnbull has nowhere to go – especially as he is a former investment banker. He will not be able to criticise Rudd without Rudd mentioning Thatcher and Reagan.

    As long as Rudd doesn’t screw things up (which is a possibility) the financial crisis is a godsend for the ALP.

    Howard is an interesting figure in many ways. He was a genuine dry in the 1980s. But like most politicians, power is more important than ideology, so he traded it in for populism. Classical liberals regard him as a sell-out.

  35. Robert Merkel

    And, in any case, in a lot of ways it doesn’t really matter what the people involved spent their money on, including pokies.

    From an economic perspective, as I understand it there’s bugger-all difference between using the stimulus cash buying the collected works of Joyce (hmmm, the collected works of Barnaby Joyce…) and Derrida, and blowing it down at the pokies, except that more of the stimulus remains in the domestic economy if it’s spent at the pokies.

  36. Behemoth

    Oh get real people. It was an essay knocked off by his private office speechwriters to bolster his credentials in certain sectors. Any PM who finds the time to compose a 7000 word essay is clearly not spending enough on his or her core duties.

    Let’s face it, the main difference between Rudd and Howard is that Kevin’s smarter and far more ruthless. Aside from that, like every Australian PM before them, and like I hope all to come, they’ll throw ideology out the window the moment it clashes with the realpolitik of navigating a country with a population smaller than that of Mexico City through a world in ferrite.

  37. Behemoth

    “..a world in ferrite.”

    Huh?

    I meant “..a world in ferment”

    Fuckin’ spellcheck has a mind of iron.

  38. Katz

    Robert is correct.

    Approximately 11% of the pokies spend goes directly into state government revenues. I imagine that most of the operating costs of running a casino would be spent on local suppliers. And most investors in pokies venues would be local residents.

    Therefore, if the government wants a multiplier effect from their spend, pokies venues are a more efficient distributor than Ben Bernanke’s helicopters.

    However, I wonder how many jobs the spend actually saved. Retailers may have kept on staff. And demand would have been maintained for logistics companies. But it is highly unlikely that businesses would have increased capital expenditure on the basis of the hand-out. Therefore, the effects were strictly temporary.

    The fact of the matter is that credit markets are faltering badly. Until businesses get economic access to credit, unemployment has to increase. Rudd could have held his fire and liberalised access to the dole in anticipation of lengthening queues at Centrelink.

  39. Oz

    Adam Bandt at 28, you stole my joke.

    I look forward to the renaming of the Department of Finance and Deregulation.

  40. PDAA

    Oh, I don’t know, Behemoth. Rudd just came back form a long break, I can imagine him sitting behind his big desk, quill in hand, penning this historic tome. The delusional waffle contained in the extract is very Monty Burns like.

    Rudd isn’t a Social Democrat’s backside but his pokies led recovery is about to put the budget in deficit. Rudd’s essay is about creating a context for that deficit and it appears the MSM sheep are going to swallow the narrative whole. So well done to Rudd and his political skill, bad luck to Australia and its crumbling infrastructure.

  41. GB

    Mark L, how would you have pumped almost $10 billion dollars into the economy on very short notice? And I think our previous PM was hard to beat at paying off his supporters – wasteful spending on private education, massive upper-middle-class (and upper-class) welfare. Rudd’s spending has at least been more worthwhile than, say, Howard’s Seasprite helicopter program. “Whitlamesque” spending, someone called it.

    It’s interesting that you mention Mussolini. How on earth do you think fascism came to power? It didn’t come to power because of the kind of decisive steps Kevin Rudd has taken. On the contrary, it came to power because liberal democracy had broken down and was seen as being unable to handle various crises (oh, and fascists also entered into coaltions with the centre-Right, but that has been forgotten nowadays).

    It’s only the wholesale rejection of neoliberalism that is keeping our economies from sliding into disaster.

    Thankfully we have a decent govenment during this crisis. I suggest you read a little history – I’d be happy to give you a reading list.

  42. carbonsink

    As long as Rudd doesn’t screw things up (which is a possibility) the financial crisis is a godsend for the ALP.

    Sure, as long as presiding over the worst recession in 50 years (and being remembered for that) is a “godsend”.

    Classic quote from Gerard Minack in the SMH yesterday

    “The idea that we were a prudent, sensible country that never indulged in the reckless excesses that the rest of the world did – that is complete crap,” he says. “We partied as hard, if not harder.”

    I see private sector credit fell for the first time in 16 years and the REIV says house prices fell 10% in Victoria last year.

    Its following the Steve Keen script to the letter at the moment.

  43. Nick

    PDAA,

    “pokies led recovery”

    I’ll repeat the same thing I said to MarkL.

    In NSW, pokie spend was up $40m on last December.

    In Victoria it was up $30m.

    In Queensland it was was up $14m.

    In South Australia it was up $8m.

    WA? Say for argument’s sake, another $8m.

    So, total Australian pokie spend roughly increased by $100m or *1 percent* of the government stimulus package.

    (Plasma TV spend at a guess would have been at most ~0.1 percent)

    Yet even Bernard Keane would feel compelled to lap up this News Ltd/Xenephon led dribble:

    “Still, at best there won’t be much if anything left after the pokies and plasmas. But we don’t know.”

  44. PDAA

    Let’s not forget Blu-ray player sales, Nick, what goods a Plasma TV without a Blu-ray player. There were a bunch charities who would have liked to walk away with a slice of the $100 million after their meeting with Julia Gillard last week.

    Rudd is the master of the universe at the moment, he seemingly can spend money wherever he wants, let’s just not pretend that it has anything to do with Social Democracy. In fact Gillard and Crean are O/S at the moment telling Obama that he has no right to spend American tax payer dollars on steel from any one other than the lowest bidder. Social Democrats my foot.

  45. Nick

    “Let’s not forget Blu-ray player sales, Nick, what goods a Plasma TV without a Blu-ray player.”

    What about them? Total Australian Blu-ray player sales were $8m in December. Even if 50% of those were directly due to the stimulus, that’s still only 0.04% of the total package.

    “There were a bunch charities who would have liked to walk away with a slice of the $100 million”

    Hmm, yes I wonder how many of ours did exactly what UK charities did and invested their money into overseas stockmarkets such as Iceland.

  46. PDAA

    In rough figures, about zero would be my guess.

  47. BilB

    Rudd is correct in so much as the last 10 years have seen a frenzy of greed that every one with a toe hold in the property system has been happy to whallow in. The populist idea of the “instant property millionaire” is the flag bearer of this greed. “Buy a property, slap a couple of hundred dollars of paint on it, and flog it off for double the cost” is a theme that even a fifth grader can see the fault in. And Howard has to stand up to his irresponsible failure to apply any regulatory drag to this escalation that has left a substantial section of the community without much hope of sharing the Australian lifestyle of their parents.

    Rudd is, however equally irresponsible in his handling of Global Warming preparation. Rudd has squandered the best opportunity period to act agressively on the environment. Now with the market economy in tatters and the Australian budget nosediving into deficit, there is little hope of either a market driven assault on environment, or a publicly driven one. Rudd’s determination to have a smooth first term and to build his “good guy” image with standard Labour flag waving policies has driven the nail into the environmental coffin. And his pathetic excuse of a white paper has dug the grave for the “Australia” as we know it today.

    Rudd’s essay (from the excerpt above) shows the weakness of those who feel a need to run down others in order to build themselves up, and to hide their failures.

  48. David Irving (no relation)

    BilB, you’ve nailed the reason for my disappointment with Rudd.

  49. Adrien

    the great neo-liberal experiment of the past 30 years has failed
    .
    Here hear.
    .
    So let’s bring back the Great Keynsian Experiment that, um, failed. 🙂

  50. glen

    Didn’t keating want ‘corporate nationalism’? A paternalistic approach to every worker becoming a shareholder? (An approach embraced by Latham.) While Howard juggled a line that on the one hand brought the entrepreneurial and the shareholder together on the micro-scale in the form of the small business owner (everything from newsagency operators to tradies). While on the other hand increasing the division between the elite managerial class and the prole workers. Under the Howard years these divisions were reinforced through other divisions subjacent to these class divisions, such as differences in familial units and most importantly geographically.

    One of the key indicators of where someone lay in these new class divisions is regarding their exposure to risk/uncertainty/contingency, and how that contingency was manifest. The Managerial class saw contingency as something to be controlled and turned into opportunity. The worker proles were afflicted with uncertainty and they carried the burden of negative contingency, while the entrepreneurial small business owning middle class had a mixture of the two.

    I am not sure what Rudd’s grand ideological plan is, but I get a sense from reading between the lines of what has so far been quoted (I haven’t read the essay), that he intends to use regulation to effect a redistribution of contingency. That is, ‘opportunity’ does not remain the sole purview of governmental big business conglomerates and mere window dressing of the impossible future for many worker proles. It is unlikely that the worker proles will ever have proper upwards mobility, but they could at least be afforded some basic relief from the uncertainties that have been burdened with. ‘Social security’ literally becomes a form of active security (not unlike the anticipatory effects of the WoT) warding off negative contingency, rather than a safety net for the hopeless.

  51. Adrien

    It was an essay knocked off by his private office speechwriters to bolster his credentials in certain sectors.
    .
    Yeah maybe.
    .
    I reckon one of Rudd’s aims has been to re-establish the ALP has the blue collar party of choice. And he’s been resurrecting ‘socialism’ to do it. A lot of people in the ALP and like centre-left parties across the world, I’d wager, are secretly rubbing their hands in glee at the GFC because it means they no longer have to swallow neoliberal crow or apologize for existing.
    .
    Rudd’s little schpiel is more than realpolitik rhetoric I reckon it’s probably a manifesto declaring th Return of Social Democracy. I find it very difficult to extract political ideology from economic ‘science’ in the liberal v social debate. But, altho’ I can’t buy the neoliberal explanation of the GFC as stemming entirely from New Deal Fannie Mae I’m also aware that the New Deal wasn’t an unqualified success. And Keynsianism eventually ran aground.
    .
    Seeing this enthusiasm for throwing money around that Rudd displays I wonder if his agenda is as sober as it should be. I also wonder, considering economies the world over are in trouble, where all the money is coming from. And where it’s going. It seems that the US Govt is throwing money at the very people responsible for the mess in the first place. Sans strings. Theoretically that might be justifiable. But in common sense terms it’s just plain stupid.
    .
    You don’t help an alcoholics by giving ’em whiskey do you?

  52. Nick

    “In rough figures, about zero would be my guess.”

    OK PDAA, so you think charities don’t play the stockmarket and therefore lost (like everone else) an average of about 30% of what they’d invested…no need to continue.

    But you can perhaps at least agree to stop using phrases like ‘pokie-led stimulus’, which are simply a gross distortion?

  53. dumbo

    Rudd has a done a Howard…again

  54. PDAA

    If you can provide some evidence of profligate investment by the Australian community sector, which would make the government want to feed public money through pokie machines instead, then I am happy to continue, Nick.

  55. Nickws

    As long as Rudd doesn’t screw things up (which is a possibility) the financial crisis is a godsend for the ALP

    Yup, it plays into current ALP electoral strategies much like the early ’90s Recession We Had To Have, and the state Labor financial scandals, played into Coalition strategies (save for 1993, of course.)

    My prediction for the next generation-or-so is that for every election the Libs win Labor will win two. At least two.

    Now, if the ALP can only put this embarrassment of richs to work and turn the county into a paragon of efficiency, fairness, and good transferable skilz that make us something more than China’s sandbox…

  56. professor rat

    Rudd, Gordon and Obama are the undertakers of democratic-socialism in the Anglosphere. The last of the meanderthals. None have them have a clue about the massive State bubble underlying the economic bubble. All their political blatherings betray this fundamental cluelessness.

    So whats next post state-capitalism?

    Net enabled libertarian-socialism of course. The sort of anarchism that’s perfect for these new ‘thirties’. The sort of anarchism we saw working in Spain.

  57. zorronsky

    You might give an alky a shot to settle the dts while you get him to rehab. Sooner or later tho’ he’s got to have the pain.

  58. Labor Outsider

    Carbon – you will note that the fall in credit in January was due to a decline in business credit, not housing credit, which is where Keen thinks the bubble is – so things aren’t conforming to his so-called playbook yet. House prices have declined before, they will do so again – what remains to be seen is whether those declines end up being small or large. The best source for house price data in Australia is RP data – and I’m pretty sure that their estimates don’t suggest falls of anywhere near that magnitude.

    Anyway, we don’t need another debate about what will happen to the economy. The more important point politically is, even if there is a deep recession, is who do the punters blame? Rudd is trying to set things up so that if things do go badly wrong, the punters will blame the Libs. And further, whatever policy responses Turnbull comes up with, Rudd will tie them to the “failed policies of the past”.It will be interesting to see how successful he is in that strategy.

    IMHO his success will depend on the depth of any recession we experience. Mild recessions are easier to handle, especially when you can legitimately attribute them to outside forces. It gives governments the excuse to throw some largesse around and then claim credit for the return to growth.

    If things get really bad – Carbon’s worst recession in 50 years scenario – and recent cuts in interest rates and expansionary fiscal policy don’t look to be working – then things will become more complicated. People will ask why the previous government responses didn’t work, Rudd will have to deal with a large structural increase in the unemployment rate, and questions will be asked about dumb policies like the commercial property guarantee scheme (which could cost the government a bucket load if things go wrong).

  59. smokey

    Try telling building workers that Rudd has a new social agenda.

  60. Labor Outsider

    Adrien

    Rudd is no socialist – he is a social conservative and economic populist – he will do whatever is necessary to hold power over the next few years. If say, the banks got themselves into so much trouble that we looked like repeating the recent experience of the UK – he would probably nationalise them – but it wouldn’t be for ideological reasons – and it wouldn’t be permanent.

    As for where the money is coming from. Its pretty simple – global private consumption growth will fall below global disposable income growth over the next few years – the global private savings rate will increase as financials, corporates and many households deleverage. Government borrowing will draw on the increase in global private savings and hopefully use that money wisely to fix some of the imbalances that have emerged in recent years. It will be easier for some countries to do that than for others, but few governments have hit their long-term borrowing constraints.

    As for why the money has to go to the financial sector – that is pretty simple as well – financial intermediation is necessary to help households smooth consumption and facilitate the transfer of some people’s savings into other people’s investment in new capital. Economies don’t function without credit. Unless financial systems are fixed, and many banking sectors are recapitalised, the deleveraging process we are seeing at the moment will go further than is necessary – with awful economic consequences.

    The real question is how you go about it. There, the US and UK have probably gone badly wrong. TARP and other government funds have simply been hoarded by banks, and the underlying problems in balance sheets haven’t been fixed – bad assets are still sitting there. That is where the idea of the good bank – bad bank comes from. IMHO, it will become necessary over the next few months (Quiggin, Buiter and Krugman have both written about this) to nationalise the UK banking sector and most of the US banking sector – throw out the existing management – transfer the bad assets off the nationalised banks balance sheets – sell those assests off gradually over time – wind some of those banks up entirely – and make sure the new institutions begin lending on normal commercial criteria. The banks can be privatised once improvements have been made to the regulatory system to ensure that risk is more closely monitored and there is a framework that makes it harder for institutions to gear up in the future.

  61. allan

    Katz @ 38 “I wonder how many jobs the spend actually saved”

    Well it didn’t save mine. I work in a newsagency and got notice the other day that because of the decrease in takings (magazine sales are way down on last year, even the staples like Women’s Day etc.)some staff would be laid off and others lose hours. The owner will probably make himself ill making up the hours but that’s no longer my worry!

  62. Smiley

    Rudd is correct in so much as the last 10 years have seen a frenzy of greed that every one with a toe hold in the property system has been happy to whallow in. The populist idea of the “instant property millionaire” is the flag bearer of this greed.

    I remember watching Graham Richardson being interviewed on the night of the federal election loss in 1996 and in effect he said that the voters had decided on change because most of them hadn’t won the lotto. And as the property boom developed I often though, hmm, John Howard must have been listening that night. He’s come up with a fool proof method of making a majority of the voters feel like they’ve won the lotto.

    But I think that Rudd is playing with fire here. After all he made a point before the election of stating that he is an economic conservative… unless he does a Clinton and quibbles about the definition of “is”.

  63. Ambigulous

    RALLY NEXT THURSDAY – lunchtime – CITY SQUARE

    “What are we saving?”
    “Capitalism!!!”
    “When are we saving it?”
    “Now !!!!!!”

  64. Mark

    Elsewhere: Guy Beres.

  65. Katz

    I’m very sorry to hear of Allan’s (#61) plight.

    I too worked at a newsagency many years ago. It is an intense and demanding trade.

    I fear that Allan’s story will be very common.

  66. Nick

    “which would make the government want to feed public money through pokie machines instead,”

    You do not even know what you’re arguing for or against.

    Not surprising you’re willing to tell (the worst of) lies in the process.

    “Let’s not forget Blu-ray player sales, Nick, ”

    “Let’s not forget Blu-ray player sales, Nick, ”

    Let’s not forget Blu-ray player sales, Nick, ”

    Let’s not forget Blu-ray player sales, Nick, ”

    Fuck off.

  67. Nick

    (sorry, that’s not personal, just PDAA = Xenephon booster until he explains where they don’t collide, we are talking ideology)

  68. PDAA

    Nick, less e-thugging, more evidence of shonky charities who don’t deserve public money as much as pokie machines do, kgo.

  69. GB

    Adrien, many of us Keynesian social democrats are getting a bit tired of this line – pushed by right-wingers – that Keynesian economics has been tried and failed.

    Unlike right-wingers who are now trying to argue that their ideas haven’t been tested since Reagan and Thatcher came along (funny that they were crowing how successful they’d been just a few years ago), Keynesians do have a good case that the problems of the 70s was caused largely by a move to pro-cyclical instead of anti-cyclical policies. In other words, problems were caused by a departure from Keynesian economics.

  70. GB

    ….I should probably have said counter-cyclical policies.

  71. Paul Burns

    I think neo-Keynesian policies are the way to go. We appear to be in a asimilar, though not identical situation to the beginning of the Great Depression, though as I understand it that was more about business collapse and government debt rather than something like the prime-loan stupidity which started this one. Keynes wasn’t perfect. The New Deal wasn’t perfect. But Governments seem to be pump-priming and injecting stimulus packages immediately rather than waiting for things to get worse. It might work.
    (It’s worth noting that here in the 1930s we had the so-called Battle of the Plans, which the conservatives won. And we needed WW2 to help get us out of the mess. Let’s hope we don’t ultimately need another war-led stimulus this time. Besides, there comes a time when defence expenditure outweighing domestic expenditure leads to the collapse of the state, if I’ve got the Paul Kennedy thesis right.)

  72. Nick

    “shonky charities”

    I never said that. It’s your turnaround.

    “who don’t deserve public money as much as pokie machines do”

    Straw argument. Persistence in spite of fact.

  73. Mark

    Please be civil!

  74. danny

    As`far as “Frenzies of Greed” go, I reckon the HR/jobs brokering “industry” that has metastisised to ubiquity over the last 15 or so years is as egregious a example as you’ll find. Kev getting on a horse any higher than a Shetland Pony would be laughable in it’s hypocrisy, given that that industry has been the mother lode of the family fortune. And you reckon they haven’t given the “Instant Property Profits” strategy a bit of a go? Greed isn’t a multi-millionaire first family hitting up the taxpayer for after-school care for the teenager until they were called on it by the Media? I doubt even JWH would have tried that one on.
    Does his economic idealogical manifesto condemn applicability of tax avoidance Negative Gearing to financial arrangements for purchase of non-new housing stock? If not, he’s tugging it, IMO. Talk about charities for shonks.

  75. wizofaus

    “You don’t help an alcoholics by giving ‘em whiskey do you?”

    No, but you do prevent kids from getting measles by injecting ’em with it.

    The infinite power of metaphor…

  76. allan

    Thanks Katz. Nice of you to say so.

  77. Adrien

    GB – Adrien, many of us Keynesian social democrats are getting a bit tired of this line – pushed by right-wingers – that Keynesian economics has been tried and failed.
    .
    Indeed and I’m sure that the right-wingers will get tired of the line that neoliberalism failed. And then it the pendulum will swing the other way and…
    .
    Unlike right-wingers who are now trying to argue that their ideas haven’t been tested since Reagan and Thatcher came along (funny that they were crowing how successful they’d been just a few years ago), Keynesians do have a good case that the problems of the 70s was caused largely by a move to pro-cyclical instead of anti-cyclical policies. In other words, problems were caused by a departure from Keynesian economics.
    .
    I’m sorry I’m calling horsehit. I’ve called horseshit on the other side as well just so’s you know. – http://www.catallaxyfiles.com/blog/?p=4090#comment-118193
    .
    But this denial seems to me to be the mirror image of the similar denial that such a thing as neoliberalism ever existed. That Keynes’ ideas weren’t implemented to the letter gets a big ‘so what’ from me. A very similar ‘so what’ to the protestations that Hayek wouldn’t’ve apoproved of John Howard.
    .
    In general Keynsian economics was deployed from the Great Slump to the late 70s. In general, following that, the dominant policy direction was liberalization. That the critique of Keynsian economics – ie that it produces a huge public sector that clogs up the system and provides nothing but disincentive for innovation – is pertinent does not invalidate the critique of laissez=faire – ie that it creates a feeding frenzy of greed that leads to a big crash. They could both be right.
    .
    I’m not sure. I’ve remained neutral on economics for a couple of years trying to understand it. But one thing I do know by now is that dogmatic thinking pervades the field.
    .
    And another thing I know is: Dogma is crap.

  78. PDAA

    I am persisting in search of fact, Nick. I am waiting for the evidence to support your inferences at posts 45 and 52 about the financial responsibility and by inference, suitability to receive public funds of Australia’s charitable institutions. Your link to The Guardian proves nothing other than how far you will sink to deflect criticism away from the government. It’s pretty clear who’s doing the boosting on this thread.

  79. Adrien

    LO – Rudd is no socialist – he is a social conservative and economic populist
    .
    It doesn’t matter what Rudd believes, it matter what he does. Keating joined a party that said it was a Democratic Socialist outfit. Menzies established one that definitely did not aspire to such.
    .
    Yet in economic policy terms Menzies was postively pink compared to Keating. Funny old world innit?

  80. Adrien

    LO – Viz your explanation of where’s the money coming from?
    .
    Are you saying thatbgovts will borrow money from banks to help, um, the banks. Or are is it going to be approrpriated in the national interest.
    .
    Is it time to buy gold and bury it in the backyard again?

  81. Nameless

    A good refutation of Rudd’s thesis: http://www.onlineopinion.com.au/view.asp?article=8489

  82. Labor Outsider

    Adrien, governments don’t borrow money primarly from commercial banks. Their bonds are auctioned and the purchases are held all over the place – mum and dad investors, superannuation funds, foreign governments, etc. Banks are a big part of capital markets, but by no means the only part.

    To everyone else, I’d to get this straight – Keyensianism in the economic sense is not about the long-term size of the government sector – it is primarly an explanation of how the self-correcting mechanisms of economies can take a long time to work, if at all, and that in the mean-time, governments can use demand management policies to speed that adjustment up.

    The failure of the 1970s was that policymakers were so used to thinking in terms of effective demand, that they didn’t realise that what they were facing was a supply shock. As a result, as unemployment increased, they attempted to stimulate the economy in the traditional way, which ultimately generated stagflation – because the natural unemployment rate was rising. Policymakers at that time effectively believed that there was a long-run tradeoff between unemployment and inflation – whereas there is only a short-run tradeoff. In practice, policymakers need to be able to differeniate supply shocks from demand shocks – because the appropriate responses are different.

    The origins of the current shock are very complex. But part of the problem is that policymakers and economists spent far too little time worrying about unsustainable growth in asset prices, excessive gearing, and how credit risk was distributed. Regulators were too far behind financial innovators and the growth of cross-border financial instutions. Excess savings in many developing countries that ended up funnelled into property markets rather than productive investment also played a role. We are now paying a price for all of that now.

  83. GB

    Hey Adrian, you sound like a decent, thoughtful sort of bloke. I don’t think we’re all that far apart.

    My point is that if you push Keynesian economics too far you in fact end up doing the opposite of what Keynes prescribed. Putting your foot firmly to the floor while the economy is already basically at full employment would have horrified Keynes.

    The reason why Australia did so in the ’70s had a lot to do with politics. First, Billy McMahon’s pre-election budget was very inflationary (Liberals forget that when attacking Whitlam). And we had a social democratic party out of power for a generation that was trying to catch up with what was considered a normal welfare state in other first world countries (read “The Lucky Country”, we actually weren’t that great on issues surrounding poverty during the Menzies years – no suprise!).

    Whitlam tried to correct his mistakes by appointing Bill Hayden, but both were wrong as far as Keynesian economics is concerned.

    I don’t think right-wingers can argue their deregulation agenda hasn’t gotten a run. They’ve been successful both in doing away with financial regulations and preventing regulation from keeping up with innovations in the financial sector. It’s been tried, it failed, we’ve all lost 20% off our super as a result.

  84. GB

    P.S. I’m sure Bill Hayden got up by a caucus vote and wasn’t, strictly speaking, appointed by Whitlam, but you know what I mean.

  85. TimT

    It’s interesting he uses ‘The Monthly’ as his publication of choice.

    It’s interesting ‘The Monthly’ let him use them as a publication of choice; if they’re not careful they’ll just become a propaganda sheet for Labor-in-Power, just as the Windschuttle Quadrant seems to have become a propaganda sheet for the Howard-Government-in-Opposition.

  86. joe2

    Tim T @85, ‘Quadrant’ did not just become a rampantly partisan publication with one suckhole hit; it greased its way, stealthily, up the leg of the right wing pant.

    I cannot identify one propaganda sheet for the government presently – though a flotilla of conservative ghostships – so I would suggest, ‘The Monthly’ is safe.

  87. GB

    The Monthly has been pretty hard on Tasmanian Labor, so I don’t think there’s much danger of hackery. Any other publication would have killed for the article, given the attention. I’ll certainly buy it.

    I’ve got to start buying the Monthly more often – it’s a great little magazine. I’d really like to see people on the Left support it and it become an institution. We should hassle librarians to take out a subscription if it’s not at our local libraries.

  88. adrian

    Agreed GB. I’ve never understood the criticism of The Monthly from some quarters. Sure it’s not perfect, but it deserves our support in its attempts to redress the balance in the Australian media landscape.

    Speaking of the meeja, I hope you all enjoyed Rupert’s latest tirade – this time blaming the decline of the US education system on – you guessed it – the teacher unions. Who woulda thought?