At last Julie Bishop exits the Shadow Treasurer role

After media speculation that intensified over the weekend, Julie Bishop has just announced she is stepping down from the Shadow Treasurer role, and will take up the Shadow Foreign Affairs job.  No mention yet of what Helen Coonan will do or who will take Bishop’s job.  Joe Hockey and Andrew Robb are the hottest contenders.

Bishop was never suited for the job she insisted on having, as is argued in a piece What should we expect from the Shadow Treasurer? on The Political Sword on October 5.  She’s lasted just over four months. The piece concludes: “The old adage applies: ‘Be careful what you wish for.” and is accompanied by some prescient comments.

UPDATE - .Helen Coonan will take Shadow Finance and Joe Hockey will be Shadow Treasurer.  This gives Joe a big leg up towards Coalition leadership should Malcolm Turnbull falter.  Julie Bishop cannot covet that position- she's fortunate to retain the Deputy Leader job.  Joe Hockey's eligibility for leadership was canvassed on The Political Sword in a piece with a strong naval theme Opposition ships docks for repairs on December 9.  It concludes: "Meanwhile Sub-Lieutenant Hockey shines through as the most plausible, personable, articulate and effective crew member, one who would make a good captain.  With youth on his side, with a mind open to contemporary thinking about strategy and tactics, he might be the answer to the HM Opposition’s yearning for a return to naval power."

Why did Janet Albrechtsen write ‘Who is the real Rudd?’

First you may wish to read her piece in The Australian on 10 February.

What is the message she sends about Kevin Rudd?  Her conclusion spells it out: “With philosophical principles impossible to pin down, his only consistent and coherent belief is in political power. Every Rudd position has been determined by how to get it and, now, how to keep it.”  Clearly, she believes that all that counts to Rudd is POWER.

Such strident condemnation warrants some supporting evidence.  Here’s what she advances for her readers to ‘be the judge’.

First she contrasts Rudd’s opposition to the introduction of the GST in 1999 and his comment in 2006 that it was Howard’s ‘regressive consumption tax’, with his contemporary acceptance of it as the prime funding for the states.  Did she really expect Rudd to repeal the GST legislation on his election in pursuit of consistency?  Later in her piece she justifies Howard’s about-face on the GST after his ‘never ever’ rejection, as ‘pragmatism’, which she insists “...was, of course, part of Howard’s political make-up. For example, he rejected a GST only to later embrace it as part of much needed tax reform, despite the political risks.”  So it’s OK to take a diametrically different approach so long as it’s ‘pragmatic’.  Kevin Rudd, please note.

Next, she mentions that Rudd described global warming as “the great moral issue of our time”, and the signing of Kyoto with the conviction that climate change was “the defining challenge of our generation”. Then she describes ‘the Rudd shuffle’ as his reducing “the great moral a meaningless carbon emissions reduction target of 5 per cent by 2020.”  Ignoring the Opposition’s much weaker stance on climate change, she condemns what she perceives as Rudd’s change of position.  She doesn’t see it as ‘pragmatism’ in the face of the global financial crisis and the international response to date.  No, ‘pragmatism’ is Howard’s prerogative.  Keep your hands off pragmatism Rudd.

Then she quotes Rudd’s statement from Opposition in 2007 that a Labor government would be taking legal proceedings against President Ahmadinejad on a charge of inciting genocide when the Iranian President spoke about wiping Israel off the map, but last December announced it would not pursue legal action.  What a shameful retreat.  Could it be that such action was not then considered legally or diplomatically possible or appropriate?  Should Rudd have doggedly stuck to his original intention in the face of changed circumstances and contemporary advice?  Or was Rudd just being ‘pragmatic’.

Her next charge is that Rudd’s intention to take Japan to the International Court of Justice or the International Tribunal for the Law of the Sea over whaling has “evaporated into the political ether of office”.  Should Rudd have stuck to his guns over this issue?  Or was it more fitting for him to take a ‘pragmatic’ approach?

Then she accuses Rudd of getting on board “the responsibility agenda of indigenous politics only after it was politically safe to be on that side of the ideological divide, buffered by black leaders such as Noel Pearson and Warren Mundine.”  No evidence to support this confident assertion is offered.  Then she contrasts him with John Howard who “staked out his ground on the dangers of victimhood politics and the need for practical reconciliation long ago.”  What a joke.  Is she serious?

Her next argument is that Rudd “morphed into an economic conservative when it was electorally popular to carve out those credentials”, but now “... amid a global financial crisis, when it is fashionable to attack the free market, Rudd’s stripes have changed”, and now “... he is a social democrat...and has turned into ‘a big-spending Keynesian PM’.”  What he was before he morphed into an ‘economic conservative’ is not stated, nor does she think it’s right for him to attack the free market which by all accounts has been criminally manipulated by banks and financiers to their own end to the awful detriment of the entire world economy.  Nor does she acknowledge that many, if not all economists think Keynesian priming of the economy is what economies round the world now need.  She writes like a free-marketeer and an anti-Keynesian.  Does she believe that the financial crisis, no matter how serious it is, does not demand an adaptative response?  No, she suggests that “Billions on cash handouts and ‘social’ spending look like Rudd’s down payments on the next election dressed in the slippery language of ‘stimulus’.”  Slippery indeed!  Has she contemplated the possibility of Rudd being an economic conservative and a social democrat at the same time?  What does she understand by the terms?  The definition of such terms is so imprecise that like Humpty Dumpty the words can be made to mean whatever you want them to mean.  This is not science.

She then castigates Rudd for being hypocritical by not being true to Bonhoeffer’s ideal of not using inflammatory rhetoric that seeks to gain political advantage.  Shame Rudd!

She finishes “Again and again, Rudd has conjured up the imagery of crisis to pump prime his political leadership: saving future generations from climate change, rescuing Australia from Howard’s “Brutopia” and now liberating Australia because ‘the great neo-liberal experiment has failed’.  His war-footing language serves to undermine the confidence that is sorely needed and by not negotiating with the Opposition he exposes the emptiness of his language, given that a true economic emergency would demand genuine co-operation.”  It must be reassuring to her readers that she thinks that ‘crisis’ imagery is over the top. 

There she rests her anti-Rudd case.  How well would she do arguing it in a court of law?  I suspect even junior counsel would soon demolish it.

So why did she write it?  For whom did she write it?  Maybe her editor; maybe to satisfy her own need to strike out against a party and a PM she despises.  But maybe the answer lies in the comments that follow her piece.  She has 329 to date.

Here’s a small sample of the anti-Rudd comments:
Nice digging, Janet.
Anyone with half a brain could tell that KR was all style and no substance from the outset. Rudd really does lack substance. Of course, we were all warned prior to the election.
A pusher of a national socialist agenda? Defining KDudd - look up Adolf Hitler.
A lightweight so far, when compared to Mrs Thatcher and John Howard.
He’s a political cyborg. He believes in everything, yet he believes in nothing.
Janet, thank you for documenting the breathtakingly audacious swings in the doctrine of Rudd.
Well written Janet.  I expect a torrent of derision from the Ruddites will soon be headed your way.
With every day that passes, the emperor’s nakedness is becoming more and more evident.
Great article Janet. In my opinion your best of recent times. It is time this self serving, visionless Kev Quixote was unmasked for the charlatan he is.
Keep it up Janet, love your work.  He is a feeble lightweight masquerading as a leader.

And so on it goes.  You may wish to read them yourself.  If you do, see if you can detect the impeccable reasoning that accompanies the comments, the withering logic. 

Without doing a tedious count of the 329 responses, there seem to be more agreeing with her than disagreeing, but she certainly doesn’t have it all her own way.  But the responses quoted may point to at least one reason she wrote this piece, namely to give those who are anti-Rudd a chance to express their venomous feelings about him, which they do with gusto.  When one reads them there is a consistent theme – this man is no good, was never any good, will never be any good, the people of Australia were deluded, even deceived when they voted him and his party in.  Among many of the comments one can detect anger, great and persisting anger, that the Coalition and Howard were rejected and Labor elected.  It may never subside.

The deception of the public seems to be continuing.  Rudd enjoys continuing high popularity in the polls with an approval rating of around 60 percent, is preferred PM by 42 percentage points (Newspoll 62/20), and currently the ALP enjoys an average 2PP advantage of 18 percentage points (59/41), which if repeated at an election would ravage the Coalition. 

How can so many Australians be so wrong, how can they not see Rudd’s gross and presumably irreparable flaws when Janet Albrechtsen and her supporters can?  Curious.

What is Malcolm Turnbull up to?

An alternative title could have been ‘What is the Coalition up to?’ but it seems as if opposing the Government’s  economic stimulus package is Turnbull’s initiative, possibly urged on by the young turks in the party room who want to take the fight up to Kevin Rudd.  This is understandable as it has looked as if the Coalition has too often rolled over in front of the Rudd steamroller.  But why pick the economic stimulus package against which to flex his muscles?  A coincidence or a carefully crafted action?  He is said to have had two-thirds of the party room behind him, but that means one third were not, amongst them, as we understand it, Nick Minchin and Fran Bailey in the most marginal seat in Australia.  With that level of non-support, Turnbull would need everything to go according to plan.

He acknowledged from the outset that he would take a ‘hit in the polls’; he knew his move would likely be unpopular with the electorate.  His insistence that he did it ‘because it was right’ strains credulity.  If it is right it would be so on ideological or economic grounds, that stimulatory handouts are not effective or not as effective as other measures, such as tax cuts.  The convoluted arguments used to make this case look unconvincing, and would be ignored by most of the electorate.  As there is little prior experience, data is sparse.  What little evidence exists comes from the December stimulus package, which according to some measures has been successful.  Surveys suggest that a significant part of the December package was spent, and the boost in retail sales is evidence of this.  Arguments that revolve around whether it is spent or saved are of doubtful validity, because money saved now to pay off debt will likely loosen up money that can be spent later.

The argument that the package is too expensive and would plunge the country into long-lasting debt lost much of its potency when it was pointed out, and not contested by Turnbull on Channel 10’s Meet the Press on Sunday, that his package would cost $180 billion over the coming years, as against Rudd’s $200 billion, not a massive difference in Federal budgetary terms.

So was the reason for Turnbull's strategy other than ideological?  Was his leadership wobbly in view of continuing poor polls?  Was the end-of-year schemozzle seen as a sign of flawed leadership and lack of party discipline?  Is Peter Costello’s rousing from sleep a sign of resurgent leadership ambitions, or a response to Rudd’s demonization of neo-liberalism and a consequent desire to preserve the Howard/Costello economic legacy?  Are the young turks getting restless, tiring of the irrelevance of opposition?  Certainly Turnbull himself hates irrelevance.

Turnbull was wise to predict a ‘hit in the polls’, because that has been the outcome.  Maybe he hoped it would not be as bad as he publically predicted and he could then claim public support for his position.  More significant than the widening of the 2PP gap from 8 to 16 in the most recent Newspoll, is the narrowing of Turnbull’s satisfaction/dissatisfaction gap from 14 to 6, largely due to almost a quarter of the previously ‘uncommitted’ now recording ‘dissatisfied’.  Essential Research figures are worse still.  They shows the gap changing from a positive 9 to a negative 11, a turnaround of 20 (41/30 to 32/43).  There is also a widening of the preferred PM gap from 38 to 42 points (60/22 to 62/20) in Newspoll.  Essential Research gives a similar result (60/20).  So this ‘hit’ is more of a hit on Turnbull than on his party, although that has suffered too.  How long will this hit need to persist to bring on murmurings about his suitability as leader?  He is not in a much better position poll-wise than Brendan Nelson when he was ditched.  The fact that suitable alternative leaders are not in abundance may save him temporarily.  But, as Possum points out on Pollytics, once a leader ‘tanks’ personally in the polls, it’s hard to recover no matter what the 2PP figure is.

Since taking his stand, insisting that the Coalition would vote against the package in the House and the Senate, thereby having effectively dealt the Coalition out of the action, the Government has been productively negotiating with the Greens and Independents, and laying the blame for the non-passage of the package with all its goodies at the feet of the Coalition.  Turnbull’s aversion to irrelevance had him lamenting that the Government was negotiating with the cross benches but not the Coalition, and calling on Rudd to negotiate with him.  What did he expect after dealing the Coalition out?

Yesterday in Crikey Bernard Keane reported that Turnbull had told the Coalition joint party room that while he was happy to take a short-term political hit, he was willing to negotiate with the Government to pass the package.  If that’s the case, it will look like a major back flip after so publically refusing to pass the package, and likely to further diminish him in the eyes of the electorate and his party room.  It is unlikely that Rudd would be interested in allowing Turnbull a slice of the action if he can get the package through, with agreeable amendments, with the support of the Greens and Independents.  Rudd would know that to let Turnbull have a say, would have him taking credit for having ‘rescued’ or improved the package.  Despite Turnbull’s stated willingness to negotiate, by yesterday evening the minority position of the Coalition in the Senate was to oppose all elements of the package.  The rationale underpinning the strategy Turnbull and the Coalition are employing remains a mystery.

So let’s see what happens over the rest of the week.  It might give us some idea what Turnbull’s really up to, provided there is a clever master plan at all.

Kevin Rudd’s essay on the global financial crisis

This Wednesday past the February issue of The Monthly reached the newsstands.  The lead article, Kevin Rudd’s The Global Financial Crisis, is informative.  Few will read it; those interested in economics and the current crisis should if they want insight into Rudd’s thinking.

I read it unburdened by a profound knowledge of economics, and unfettered by a predetermined ideological position on macroeconomics.  So this is an ordinary man’s view.

First, I was impressed with what seemed to me to be Rudd’s grasp of macroeconomics, his knowledge of its history, and his understanding of the financial crisis.  For our PM to be so literate in these matters is encouraging, even if surprising.  He seems to be a fast learner.  To put his views in writing for all to see is laudable.  No commentator on his essay that I have read has questioned the quality of his narrative, even when they disagree with his position.

The essay is about the ideologies that underpin thinking and reasoning in the field of economics.  Crikey editorializes that the public don’t care about ideologies or any of the historic figures who adorn economics texts.  Of course they don’t.  But does that absolve our politicians from adopting an ideological position upon which their actions are based, and telling us about it.  Of course it doesn’t.  If a leader or a party has an ill defined position, how can logical decisions be made?  And just as importantly, how can outcomes be measured validly if the criteria for success are based on ill-defined positions.  So whether one agrees or disagrees with any position, it is essential that the different ideologies be acknowledged, their history understood, evidence to support or refute them be carefully documented and examined, and above all the context in which the ideologies were born, and flourished or withered, be described.

It is noticeable that some who comment on the conflicting ideologies seem to be already trapped by their own positions, and contaminate their writings with their inbuilt biases. Thus some who have commented on the Rudd essay expend their energies agreeing or disagreeing with Rudd’s position.  Few give a balanced appraisal.

Rudd’s thesis is that the current crisis is the outcome of what he terms ‘neo-liberalism’, which he describes as a “particular brand of free market fundamentalism, extreme capitalism and excessive greed.”   He goes onto say that neo-liberalism’s foreign policy cousin is neo-conservatism.  Neo-liberalism believes in free markets and that they are self-regulating.  External regulation is considered unnecessary, and governmental interference in markets anathema.  Rudd proposes other terms for neo-liberalism: economic liberalism, economic fundamentalism, Thatcherism, or the Washington Consensus.

Any debate about the appropriateness and meaning of  the term ‘neo-liberalism’, or for that matter ‘social democracy’, which he uses to label his position, is pointless since there is no firm agreement on their meaning.  As Wikipedia puts it: “The term [neo-liberal] is most often applied by critics of the doctrine, to the point where one commentator remarked ‘the concept itself has become an imprecise exhortation in much of the literature, often describing any tendency deemed to be undesirable’. The central principle of neoliberal policy is untrammelled free markets and free trade.”  Wikipedia has this to say about social democracy: “Social democracy is a political philosophy of the left or centre-left that emerged in the late 19th century from the socialist movement and continues to exert influence worldwide.  The concept of social democracy has changed throughout the decades since its inception.”  As Humpty Dumpty said in Lewis Carroll’s Through the Looking Glass.  'When I use a word it means just what I choose it to mean, neither more nor less.'  So since Rudd has defined what he means by the terms, they are indeed meaning what he means them to mean.  So let’s accept his meanings.

Rudd asserts that the global financial crisis has become “one of the greatest assaults on global economic stability in three-quarters of a century, a crisis facing the world’s largest private financial institutions, credit markets, debt markets, derivative markets, property markets and equity markets, that is causing not just an economic crisis but an employment crisis and a social crisis”  with long-term geo-political implications.  In support of his argument he quotes Alan Greenspan’s recent mea culpa that his neo-liberal ideology, upon which he based his advice to government as chairman of US Federal Reserve for a decade, was flawed.

Rudd sees social democracy as saving capitalism from ‘cannibalizing’ itself, while recognizing the great strength of open competitive markets.  He believes “the social-democratic state offers the best guarantee of preserving productive capacity of properly regulated competitive markets, while ensuring that government is the regulator, that government is the funder or provider of public goods, and that government offsets the inevitable inequities of the market with a commitment to fairness to all.”  He continues “Social democracy’s continuing philosophical claim to political legitimacy is its capacity to balance the private and the public, profit and wages, the market and the state.”  He insists that if it fails “there is the danger that the new political voices of the extreme Left and the nationalistic Right will begin to achieve legitimacy hitherto denied them.”

He urges a frank analysis of neo-liberalism in the underlying causes of the current economic crisis, and a robust analysis of the social democratic approach to properly regulated markets and the proper role of the state.

Rudd’s stance is aligned with the Keynesian tradition, whereas neo-liberalism is more aligned with Hayek and von Mises

The essay expands on the contrasts between opposing economic theories, and comes down strongly against neo-liberalism and in favour of social democracy as its counter.  

The essay is not just an ideological treatise; it is a political statement that aims to label the Liberal Party as neo-liberal, with all its drawbacks.  Yet only one paragraph is pointedly devoted to this.  It begins “The political home of neo-liberalism in Australia is, of course, the Liberal Party itself.  Over the past decade the Howard government reduced investment in key public goods, including education and health.  It also refused to invest in national economic infrastructure, notwithstanding multiple warnings from the Reserve Bank of the impact of long-standing capacity constraints on economic growth.  The Liberals in government set about the comprehensive deregulation of the labour market – based on the argument that human labour was no different to any other commodity....”  And on it goes.  He does not mention Malcolm Turnbull.

He then contrasts the Liberal approach with Labor’s competing political traditions: “Labor, in the international tradition of social democracy, consistently argues for a central role of government in the regulation of markets and the provision of public goods”  

Those commenting on Rudd’s article, such as the Herald Sun’s Andrew Bolt in Where did our economic conservative go? of 1 February, can’t reconcile Rudd’s claim to be an economic conservative and his advocacy of social democracy.  Rudd defines being an economic conservative as being committed to balancing the budget over the economic cycle, respecting the independence of the Reserve Bank and keeping interest rates low.  The latter two are extant and balancing the budget is still Rudd’s intention notwithstanding a temporary deficit.  So where’s the incompatibility between being an economic conservative and Rudd’s basis for advancing the Government’s economic stimulus package?   Bolt should confine his remarks to what he understands.  But he never lets accuracy of facts or understanding of the issues get in the road of a good story that will appeal to his reader demographic.

So if you get the chance to read Kevin Rudd’s essay, you will likely find it worthwhile, and at least you will become appraised of his views and the basis for his behaviour, words and actions in the financial crisis.  To whet your appetite, the first 1500 words are free online hereAgree with him or not, he leaves the reader in no doubt where he stands.  If he were capable, it would be helpful if Malcolm Turnbull would similarly inform us in the same detail of what ideology and economic theory drives his thinking and actions.  Then we might understand what he says and does, instead of having to speculate, as is the case with most journalists who attempt to comprehend his response to the complex financial crisis in which the world is entrapped.

The truth is that nobody, but nobody fully understands what has happened and why, and still less is sure of what to do about it.  Everyone is flying somewhat blind.  Let journalists, and economists, acknowledge that and desist from being too smart by half, too dogmatic about what to do, too critical of the efforts our politicians are making to reverse the frightening trends we see day after day.  Rudd may not be right, even he admits that, but at least his essay shows us the ideological base from which he’s doing what he’s doing.  Time, not smart-alec journalists burdened with a paltry understanding of economics, will be the judge.