Adrien – I guess I compare the avergae Joe Blows attitude to Howard versus Keating at the end. Yes a lot of you on the Left may well have hated Howard but the average bloke wasn’t anywhere near as passionate in his feelings for Howard as he was keating. I particularly note the people who went up to Howard in the shopping centres who politely shook his hand thanked him for his service and said “but I won’t be voting for you this time, we need a change”. Versus Keating who they seemed to despise by the end.

In the case of the Chinese the irony was that the citizens of both China and the US would have been better off if China had used its trade surplus to import more goods and grow their internal economy. The additional irony is that there is a real risk that the US will devalue Chinese US$ holdings by printing more money.

Not sure what Harvey Norman should have done but, collectively, Australian business would have been better of if the real value of their employees earnings had risen in line with business capcity to produce. Unfortunately, at the critical time, we had a prime minister who was unwilling to admit that Hawke and Keating had solved the stagflation problem that made Howards time as treasurer hell. Howard appeared to be obsessed with driving real wages down when it would have been smarter to have increased wages while making consumer borrowing less attractive.

Free market ideology contributed to both these problems. The GFC may have been avoided if the WTO had encouraged countries with chronic trade deficits to take direct action to restore their trade balance before it had became a crisis. (I am talking about gradual changes to imports, not dramatic actions that destabilize economies. It may have also have helped if the WTO had put pressure on countries such as China to do something about their trade surplus.

Similar comments apply to wage/tax policies in countries such as Australia. We need policies that link the capcity to produce with customer buying power. We certainly don’t need free market policies that tend to drive wages up and down at the wrong parts of the economic cycle.

If anything, the tax cuts during the Howard and Rudd years have tended to increase the percentage of resources going to the lending pool. Perhaps we should look at extending the stimulus package approach by giving regular payments to those more likely to spend than lend.

I’m ambivalent on the Family Tax benefits etc. It effectively lowered people’s taxes and it was targeted at families but I think suffers from being construed not as a tax cut but a hand out and creates that sort of mentality.

Essentially though on the politics Mark is right the Libs aren’t doing a great job and need to get on the same page as each other quick smart. A common problem with oppositions I’m afraid.

Some of the worst I’ve heard from Hockey. They really have nothing left.

It’s interesting that the Coalition is now making a lot of noise about changes to payments for uni students, tightening eligibility for some students but also freeing money to go towards truly disadavantaged students. The Coalition suddenly cares about the welfare state – well, for kids from upper-middle class backgrounds, at least. Surprise, surprise.

It really sticks in my craw.

Have a look at this from Bill Mitchell, specifically the section headed “Advancement of public purpose.”

“Given the non-government sector will typically desire to net save (accumulate financial assets in the currency of issue) over the course of a business cycle this means that there will be, on average, a spending gap over the course of the same cycle that can only be filled by the national government.”

BBB

However, I think it is a little to pay attention to the statements of various politicians, as opposed to their actions. Most of Howard’s actions, thank god, weren’t as bad as his rhetoric, and likewise most of Rudd’s have not been as good as much of his.

I do think saner heads will prevail in most policy development, as they always do.*

*I say saner, not sane.

II. Most of the Liberal Party believe that “traditional Liberal values” and “whatever Howard did from moment to moment” are the same thing.

III.

Reduced to a few slogans, the Liberals have proved themselves completely incapable of arguing any economic direction which even vaguely makes sense ever since their defeat in November 2007. Turnbull’s comments, and Tanner’s remarks, suggest that the political playing field of the economic game will be a much transformed one over the next few political cycles.

Yep. Mind you, before the 2007 nobody was promising me $900 – but I still voted Labor anyway. It’s funny how things turn out, isn’t it.

Labor seems to understand this.

All of them? The same understanding?

It’s highly questionable if most Liberals even grasp what’s going on.

Indeed it is. I’ve always said that for the Liberals, the road back to government lies over the dead body of Nick Minchin (see II. above). That said, thinking like that last quote will lead you to the place where Keating was in ‘96, incredulous and disgusted at being beaten by a despised opponent. It almost happened to you at state level Mark, surely the closeness of the escape gives rise to considerations of political mortality?

Ohmigod we’re not basing the post-GFC new world order on bartering those funny little eye-talian CARS are we? We’ll all be rooned.

Psssst: actually, Giovanni lent me an old one, but he needs a bit of a hand with a few mill lira, so could you ask die kleine Gretchen to rustle up the sniff of a possble few thou at least?

What you say about this being part of the Ideology Wars is very true. This is an opportunity for well informed progressives (like most of the contributors here) to counter the intellectually dishonest rhetoric of the neo-liberals and to actually shift perceptions towards a fiscal policy aimed at achieving full employment (which is why I think Bill Mitchell’s blogging is so important).

I doubt it will be the final battle, though.