Kevin Rudd: Australia’s champion prime minister of rhetoric

But Rudd has no real idea how to solve the problems confronting Australia. While he warns against greater protectionism in coming years, as this “exacerbates the collapse in global demand”, he contradicts himself with a recent multi-billion dollar car assistance package intended to promote Australian jobs.

Rudd’s rhetorical support of open trade also ignores the reality that Western nations are losing their productive capacity as they rely more and more on services. Though the decline of manufacturing jobs had slowed in recent years because of strong global growth, the top 21 economies (including Australia and excluding China) lost 7.3 million manufacturing jobs since 2000 (double the losses of the previous five-year period) with the G-7 economies accounting for about 85 per cent of the decline: the US lost 20 per cent, the UK 24 per cent, Japan 12 per cent, Germany 7 per cent, France 11 per cent, and Canada 9 per cent.

While small increases were noted in Taiwan and the Philippines with larger gains recorded in Vietnam, it was China which generated 5 million new manufacturing jobs since 2002 although its gross manufacturing employment levels were lower than during 1998 and 1995 (Joseph Carson, Global Economic Research, April 4, 2008).

Western societies have a simple choice. They either accept freer trade and the reality that many jobs are being lost to nations which utilise their lower wages, or they adopt measures to effectively compete with emerging economic powerhouses, especially when certain developing nations have immense labour cost advantages and little tolerance for the same social and environmental constraints that come from an effective civil society?

But given Rudd’s observation that neoliberal policies have wrongly driven down tax rates and diminished our capacity for necessary infrastructure, will Rudd now raise taxation levels to pay for a variety of economic, social and environmental needs?

Will Rudd spend vast amounts to provide measures that will ease the need for Australians to borrow less given that Australia’s household debt to disposable income ratio increasing from about 38 per cent in 1983 (70 per cent in 1996) to 160 per cent by December 2007?

Will Rudd continue to give higher grants to first home buyers to help inflate house prices, or will he spend vast amounts to help a growing minority afford public-subsidised housing?

Will Rudd still urge trade unions to limit wage claims to aid business investment at a time when the purchasing power of low-skilled workers continues to wane?

Will Rudd offer necessary assistance to help ensure that Australia does not become China’s quarry and Japan’s beach, as he promised prior to the 2007 federal election?

And where is Rudd’s example of an effective social democracy to show us the way? Is it Sweden, which has reduced its level of government outlays from 72 per cent of GDP in 1993 to 56 per cent by 2006? Is it Norway which has invested a considerable proportion of its oil revenue into shares to become one of the richest nations in the world in per capita terms given that its Pension Fund was valued at about $US300 billion by early 2009? Or is it Iceland that spent and borrowed so much that its bank sector quadrupled as a share of GDP between 2000 and 2007 before going broke, and which reduced its corporate tax rate to 18 per cent by 2002 after being 50 per cent at the end of the 1980s.

Kevin Rudd, tell us what policies should have been introduced in the past 30 years to aid Australia’s economic growth and how we could have avoided the same policy pressures as evident in all Western nations. I am sure that Hawke, Keating and Howard would like to know.

And with the US and other Western nations (including Australia) generally supporting freer trade, and no other nation prepared to take over the role of the US currency where all currencies are tied to one which is fixed to the price of gold, what should the US have done instead of abolishing capital controls and fixed exchange rates to make its own economy more competitive?