In an article in The Weekend Australian of 7-8 March titled PM's cheap money shot Malcolm Turnbull responds to Kevin Rudd’s essay in The Monthly, The Global Financial Crisis – (first 1500 words of the Rudd essay here). Turnbull’s piece is worth reading as it gives tentative insight into his thinking, tactics and ideological position, more the former than the latter. You be the judge.
It’s an article in three pieces – an initial somewhat emotive and sarcastic condemnation of Rudd’s propositions, then an objective account of how the sub-prime mortgage problem emerged, starting with Fanny Mae and Freddie Mac, followed by a return to a condemnation of Rudd and some personal invective thrown in for good measure. The contrast between the middle and the rest of the piece is arresting. Did someone else compose the middle? It doesn’t sound like Turnbull-speak. [more]
The beginning is heavy with sarcasm. He sees the PM “Imagining himself once more in a heroic pose” , casting himself as a “great socialist hero, carrying the banner of social democracy and striking out against the wickedness of neo-liberalism.” ,“...imagining himself battling off communists to the Left, fascists to the Right, clad only in a suit of shining ideological purity.” And so on until he declares: “The essay in The Monthly is such a poor piece of work and has been so widely ridiculed and debunked, it is difficult to believe he imagined it would be regarded as a serious contribution to the debate about the global financial crisis.”
He then condemns Rudd on the contemporary issue of the economic stimulus package: “The gross domestic product numbers for the December quarter showed growth was negative. It was perfectly plain that the $10 billion December cash splash had been almost entirely saved: household savings were higher than they had been for many years. So the cash splash had failed as an economic stimulus. What was Rudd's response? ‘We cannot swim against the tide'.’" And on his favourite theme on the evils of going into debt that our kids and grandchildren will have to repay, Turnbull confidently asserts “These borrowings will undoubtedly result in higher taxes and higher interest rates in years ahead.”
Then, presumably to sensitize readers to a later thrust and to counter Rudd’s allusion to neo-liberalism, he places in juxtaposition the words ‘privatisation’, ‘deregulation’ and ‘promotion of competition’, as if he saw them connected. “If privatisation, deregulation, promotion of competition are symptoms of neo-liberalism then Paul Keating and Bob Hawke, Howard and Peter Costello have a lot in common.”
He concludes that “Rudd's thesis is wrong in every respect”; indeed it’s “nonsense”, and gives us his assessment of the cause of the financial crisis: “At a fundamental level the crisis arose because of too much cheap money being available for too long.“ So there it is – Rudd’s essay is wrong in every respect and is nonsense, but Turnbull has the diagnosis - too much cheap money.
After some further argument about low interest rates and high levels of debt he segues into the sub-prime mortgage mess which he describes accurately.
Then he launches a further attack “Like a bent copper, he wants to fit up the Liberal Party with the crime of causing the crisis. Similarly, he wants to take aim at me as the leader of the Liberal Party, point to my career in business and investment banking and thereby link me with the downturn in the US. There is no word in English adequate to describe Rudd's audacity here -- but it is certainly covered by chutzpah, a wonderful Yiddish word that describes bare-faced, shameless behaviour. A classic definition is a man who kills his parents and then seeks clemency from the court because he is an orphan.” Pretty heavy stuff. Perhaps a later sentence explains why he wrote this: “But to add to that effrontery, we see him [Rudd] every day in the parliament denouncing neo-liberal extremism as he describes me as 'the member for Goldman Sachs'."
For his coda he relates that “the Howard government closed the Commonwealth Employment Service and outsourced its functions to the private sector, and one of the private firms that benefited conspicuously from this deregulation was the Rudd family business.” Here thereby implies that outsourcing (privatization) is deregulation, which it is not. Wikipedia defines deregulation as “a process by which governments remove, reduce or simplify restrictions on business and individuals. It is the removal of some governmental controls over a market.” and privatization as the “process of transferring ownership of business from the public sector (government) to the private sector (business).” Clearly, outsourcing (privatization) and deregulation are quite different; either Turnbull doesn’t know that or he’s being disingenuous.
He ends by declaring Rudd’s essay ‘absurd’. He dismisses it out of hand.
So does Piers Akerman in one sentence in an incoherent piece in Saturday’s Daily Telegraph, Turnbull brevity beats rambling Rudd: “In a 2569-word essay in The Australian, Turnbull shredded Rudd’s economic strategy, his philosophical core and, finally, in little more than a paragraph, his character.”
So what is Turnbull’s thinking, tactics and ideological position? Why did he write this? Is it a reaction to the ‘Goldman Sachs’ and ‘merchant banker’ jibes? Is he that thin skinned? Or did he write it to placate those in the party who want to preserve the Howard legacy? Was he ideologically effronted by the Rudd essay? Or was it the rising internal doubts about his leadership that prompted him to take on Rudd over his essay? Who knows? Does Turnbull?
What then are his tactics? He attempts to demolish Rudd’s arguments, but seems more intent on demolishing Rudd himself. There is more sarcasm than reason. In his finishing flourish he commends “the Rudds, especially Theresa Rein, on their success” which he says has been “greatly enriched by the privatisation and outsourcing of government services”. He is thereby able to attach his latest label “ the wealthiest Prime Minister Australia has ever had.” and lay the 'hypocrite' tag brutally across Rudd’s chest as he suffers in Turnbull’s pillory.
Turnbull’s ideological position is more difficult to define. One could assume he is a free marketeer, but how enthusiastically he accepts the need for regulation is unclear. Indeed he does not attempt to articulate his ideology. We presume he has one. Everyone, including his party colleagues, would like to know it.
So what will be the likely consequence of his article? Piers Akernam and other rusted-on Liberals will applaud. Labor supporters will likely dismiss it as a personal attack with poorly argued underpinnings. The rest will probably be ‘ho-hum’. Except for one thing – bringing Therese Rein into it. Although Turnbull sought to praise her success, as he did again in a Channel 9 TV Sunday interview when Laurie Oakes tackled him on it, the public may not be impressed. His colleagues may question his political judgement. His article might backfire more for this reason than the flaws in it. Already this is beginning. Turnbull should hope it will quickly die a natural death.
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