Paul Kelly in today’s Oz is worth reading. It is a very good example of background writing from deep sources and with a well-earned long perspective. I hope he is correct in his conclusions; he does seem, while not uncritical, impressed with what Rudd has done.
…Rudd has never felt more in command as Prime Minister. He is torching the image of him as a cautious, review-addicted policy wonk. During the past week Rudd has taken a new guise as a crisis manager responding to events, in touch with world leaders, projecting calm and acting decisively.
It is more than a performance. In private, he radiates a new confidence. This has been his best week in political terms, though the wisdom of his decisions will be judged through time.
Understand what is happening here: Rudd is boosting the economy ahead of the downturn. Australians are being showered with good news now, with the bad news yet to arrive. Australia is cutting interest rates and boosting households from the budget to combat the expected decline in activity, profits and investment and the ugly spectre of rising unemployment and household hardship while prices stay high.
For the public this is the phony war phase. The Rudd Government displays a touch of crisis euphoria: the reversion to Keynesian methods beloved by social democrats, sanctioned by the Treasury and a convenient gift that briefly solves Rudd’s political problems with pensioners and households. It is the phony glow that cannot last.
The equivalent of the national security crisis Rudd proclaims is, however, different in Australia as opposed to the US and Britain. The task facing George W. Bush and Gordon Brown has been to salvage their banking systems with bailout packages to recapitalise banks, underwrite lending and buy toxic debt.
Because Australia did not have the same banking crisis, Rudd has been ahead of the curve and he has moved faster on economic policy to prevent a recession in this country…
Beneath the speed of this week’s decision beats a visceral determination: Rudd has no intention of becoming a recession PM in his first term. This is the entire meaning of his action.
The pledge from Rudd and the Treasurer is that they will do “whatever is required” to save Australia’s growth. They are desperate to ensure the first Labor Government since 1996 does not preside over a recession, a fate that John Howard and Peter Costello avoided for the previous 11 years.
In the US and Britain, by contrast, the debate is about the severity of their recessions.
As Prime Minister, Rudd works more closely than did Howard with the two pivotal economic officials, Henry and Reserve Bank governor Glenn Stevens. Rudd’s dialogue with Henry is intense at meetings and on the phone. He wants to establish a trusting relationship with Stevens and has held talks with him at Kirribilli House.
There have been a good number of four-way phone conferences: Rudd, Swan, Henry and Stevens…
For the next several days, any banker you met had only praise for Rudd as a financial statesman. Having delivered for the banks and for the financial system in spades, Rudd then did a political sidestep at the National Press Club on Wednesday and went populist. If anybody thinks Rudd is a one-dimensional politician, they are badly mistaken.
He does populist morality with the self-righteousness of a choirboy. Warning about “extreme capitalism”, Rudd proposed that capital adequacy requirements for financial corporates be geared to executive rewards. That is, the capital requirements should be set steeper for companies that encourage risk taking by higher pay. How it works nobody knows. But it is hard to imagine a more popular idea right now…
A final observation: During the past decade we have been subject in this country to a relentless polemic from many so-called intellectuals about the Americanisation of Australia. These are people, essentially, who do not understand how Australia is run.
The message from this crisis is that there is an Australian model. It is not the American model and it is superior to the American model. It has been crafted during the past generation by the Hawke, Keating, Howard and now Rudd governments.
It is an Australian response to globalisation that is impressive and that should mean Australia is less damaged by the coming crisis than many other comparable nations.
Go and read the whole piece. It seems judicious to me.
Geeky consumer footnote
I notice that The Australian web site is a beast in terms of CPU demands — Firefox was using 90-100% of my CPU resources while that window was open, and dropped to 3-11% as soon as I closed it! So if your computer acts up while reading the Oz you know why!