The Prime Minister of Australia, Kevin Rudd recently wrote a 7700 word essay entitled The Global Financial Crisis. It has been published in The Monthly (Feb 2009, No 42). In the essay, written apparently during his holiday, Mr Rudd calls for a new world economic order. (Choke, choke.)
To get a sense of the grandiloquent and grandiose nature of the essay consider the following "lead" in The Monthly:
In "The Global Financial Crisis", Kevin Rudd offers a comprehensive and lucid analysis of the current economic situation. In mid January, while on annual leave, the prime minister wrote this 7700-word essay that brings historical perspective to bear on the causes, precedents and ramifications of the worst financial crisis since the Great Depression. Sheeting home much of the blame to the neo-liberal agenda that has prevailed in Western economies over the past 30 years, he outlines a series of broad reforms - many of which, he argues, must be undertaken on an unprecedented, global scale. This major essay on the most pressing issue of our time is a unique contribution from a sitting prime minister.
"From time to time in human history there occur events of a truly seismic significance, events that mark a turning point between one epoch and the next, when one orthodoxy is overthrown and another takes its place. The significance of these events is rarely apparent as they unfold: it becomes clear only in retrospect, when observed from the commanding heights of history. By such time it is often too late to act to shape the course of such events and their effects on the day-to-day working lives of men and women and the families they support ..."
Well, we are obviously in the presence of greatness. The modern politician seems to represent a breed of people running around in desperate search for a crisis to provide a backdrop before which they can both proclaim and declaim in theatrical flourishes the truly historic times in which they lead. Crises have become little more than photo-ops. Since photo-ops are part of a politician's necessary wardrobe, we had better hunt them out.
Sadly for Rudd, the Aussies have no respect for theatrics--at least other people's. After all, no-one likes competition. So poor old Kevin has had his "photo-op" dissected in the Sydney Morning Herald. All this proves that there are dimwits out there who are obviously unaware of the epoch changing nature of our times and the implicit greatness of those trying to lead the nation through them.
Rudd neo-liberal with the facts
Gerard Henderson
February 3, 2009
So, now we all know how Kevin Rudd spent his summer holiday at Kirribilli House on Sydney Harbour - writing an almost 8000-word article on the global financial crisis for The Monthly.
The Prime Minister's message is a simple one. The world has just witnessed the overthrow of what he terms neo-liberalism, which he defines as "that particular brand of free-market fundamentalism, extreme capitalism and excessive greed which became the economic orthodoxy of our time". Rudd maintains that neo-liberalism triumphed about 30 years ago, when the governments led by Margaret Thatcher in Britain and Ronald Reagan in the United States gave political voice to the "neo-liberal movement of anti-tax, anti-regulation, anti-government conservatives".
Towards the end of his essay, he writes "the political home of neo-liberalism in Australia is, of course, the Liberal Party itself" and criticises John Howard for the Coalition's performance. Rudd specifically castigates his predecessor for failing to do enough to regulate the financial system.
The Prime Minister was scheduled to address the World Economic Forum in Davos, Switzerland, last week. In view of the impact of the global financial crisis in Australia, he withdrew and sent Julia Gillard in his place.
The Deputy Prime Minister addressed a reception there last Thursday and said Australia came to the current financial challenge with many remarkable strengths: "Australia has strong financial institutions. Of the 11 banks around the world that are rated AA and above, four of them are Australian. Australia has an AAA foreign currency rating. We have open and competitive markets backed up by a world-class financial and prudential regulatory system." Gillard pointed out that Australia has an independent Reserve Bank and, at the end of the last financial year, had a significant budget surplus.
Who do you believe? According to the view from Kirribilli, Howard and the Coalition were heavily into neo-liberalism and were opposed to taxation and regulation. But according to the view from Davos, Australia has the best financial regulation system in the world, along with a strong budget outcome which was obviously contributed to by taxation. Since Labor has been in office for just over a year, this cannot be solely the work of Rudd.
The essential problem with Rudd's essay is that it is ahistorical.
"Ahistorical". Now there is a polite way of saying that Rudd has been writing a work of fiction. He has created a fantasy history. True. It is an exciting one. It has demons and evils. It has threats to civilisation. It has the age old battle between good (Rudd) and evil (neo-liberalism). It would have made Tolkien proud.
The fact is that what he terms neo-liberalism has not prevailed in Britain, the US or Australia. Moreover, if it did, then the likes of Tony Blair and Gordon Brown in Britain, Bill Clinton in the US, and Bob Hawke and Paul Keating in Australia did nothing to turn it back. The conservatives in these three nations did not substantially cut regulation or taxation or spending (along with the welfare state that it underpins). Indeed, in Australia, it was Hawke and Keating who started the economic reform process in the early 1980s. Rudd mentions this briefly in his essay but does not seem to appreciate that this reality undermines his thesis.
The Prime Minister's dalliance with theory has been inconsistent. Writing in The Monthly in November 2006, shortly before he became Labor leader, Rudd used the term "brutopia" - which he linked to Howard - to refer to what he variously termed free-market fundamentalism, neo-liberalism and unrestrained market capitalism. Yet it was never clear what he had in mind.
Rudd is rightly proud of his wife's achievements in business. Yet Therese Rein's business success essentially resulted from the privatisation of formerly government-run employment services. And Rudd chose to sound off against capitalism in The Monthly, which is run by the wealthy property developer Morry Schwartz.
So, clearly, Rudd is not opposed to business, or even capitalism. The Prime Minister made this clear in the lead-up to the 2007 election when he described himself as an economic conservative. But now he has written again, bagging what he now terms "extreme capitalism and unrestrained greed" and criticising conservatives.
The Prime Minister makes some valuable points in his very detailed essay. Certainly there is reason to attack greed, incompetence and inadequate regulation in the financial markets. The errors that occurred have been acknowledged by Alan Greenspan (the former chairman of the US Federal Reserve) and Sir John Gieve (the deputy governor of the Bank of England).
However, what mistakes were made occurred when both social democrats and conservatives were in office. Also, the essential cause of the subprime housing crisis in the US was not harsh neo-liberalism, but rather the misguided attempt to make it possible for low-income earners and welfare recipients to purchase their own homes. This policy was introduced when the social democrat Jimmy Carter was in the White House.
Australia will suffer from the global financial crisis. But our financial institutions are stronger now than they were during the recession of the early 1990s. And the fact that Rudd Labor can readily put the budget into deficit stands testimony to the fact that John Howard and Peter Costello produced strong surpluses during the boom years. This was not achieved by George Bush and the conservatives in the US, nor by the Blair/Brown social democrats in Britain.
Obviously, Rudd and his colleagues are constrained about what they can do to ward off or limit a recession in Australia. But they can do something to junk or delay two pieces of coming legislation that will act as a disincentive to employment. Namely, the re-introduction of unfair dismissal laws covering small businesses and the start in 2010 of what will be a tax on carbon. This would not be a concession to conservatives or neo-liberalism. Just common sense.
Gerard Henderson is executive director of The Sydney Institute.
Now here are the disturbing questions. Does Rudd really believe his rendition of recent economic history? If yes, he is neither intelligent nor educated. Australia is being led by an ignoramus.
If no, (he does not really believe it) why dissemble, distort, or lie? What can his motive be? What is he trying to achieve? One is reminded of the recent Labour government in New Zealand which spent a great deal to time, heat, and energy attempting to demonise Roger Douglas and the economic reform programme of the late eighties and nineties--distancing themselves from it at every opportunity. At the same time, when pressed, they defended and supported pretty much everything Douglas and his successors argued for and achieved (removal of tarrifs, free trade, independent Reserve Bank, Fiscal Responsibility Act, free floating currency, the GST tax regime, and so on). How can such inconsistency, such hypocrisy be justified? What kind of breed of people are modern political leaders?
One is left with the unpalatable conclusion that such economy of the truth and dissembling of the facts is believed to be simply part of the political game--which increasingly requires a willing suspension of disbelief amongst those who play the game (politicians) and those who watch it being played (the people).
It is ironic that Rudd, in proclaiming his new epoch for humanity, employs the same old political acting tricks that establish immediately that the new epoch is nothing more than yesterday's re-run.
Maybe, though, Kevin Rudd will make a lasting contribution to western discourse. Maybe (if the people refuse to suspend their disbelief) his name will become synonymous with new terms to describe the emptiness and vanity of modern political leaders.
ruddism: (n) the act of painting one's times by a politician as momentous in order to project oneself as historic, significant, and important.
ruddite: (n, adj) an extravagant, ridiculous claim to greatness; grandiloquent posturing; Don Quixote-like behaviour.
1 comment:
Thanks very much, from the CC team.
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