In essays written for The Monthly and Sydney Morning Herald, Prime Minsiter Kevin Rudd has gone to considerable lengths to describe how the Global Financial Crisis (GFC) is the result of the failed policies of neo-liberals and that we must, as decent hard working social democrats, overhaul our public and private institutions to save capitalism from itself.
But who are these evil neo-libs who are running around trashing our economies, putting millions of people out of work, bankrupting financial institutions and smashing the stock markets? I'd like to know where they are hiding so I can give them a good bollocking for all the mischief they've caused.
Mr Rudd reckons the Liberal Party is the political home of the neo-libs. Until he turfed out Howard in 2007, they were sneaking around Parliament House implementing free market policies all over the place, planting the seeds of our ruin.
I've been looking for evidence of these neo-libs in the Liberal Party and, with the exception of WorkChoices, there is very little of it. Neo-libs favour extreme capitalism and unregulated markets; they are anti-regulation, anti-tax and anti-government. The last Coalition government:
- was a big taxing, big spending government;
- increased regulation of financial markets, through the establishment of APRA, a national prudential regulator with extensive powers;
- increased corporate regulation through the CLERP reforms, which regulated financial products, and enhanced disclosure requirements and consumer protection in relation to financial products;
- frequently intervened in the operation of markets - for examples, consider the 30 per cent private health insurance rebate, child care subsidies and first home buyer grants.
Not exactly a neo-liberal agenda.
Nevertheless, the neo-liberal boogey man must be stopped. He has destroyed our society. Only the Labor Party and a social democratic agenda of programmatic specificity can destroy the neo-lib boogey man and lead Australia back to the “promised land”.
The evil neo-lib is a figment of Kevin Rudd's imagination and no amount of lengthy essays will make him real. Rudd has invented a boogey man in the hope of scaring the Australian public away from the Coalition and into his arms. While it may allow him to use sub-headings like "The ideological hypocrisy of the right" in his essays, the facts don't match the rhetoric.
In his two essays on the GFC, Rudd spins a compelling, albeit lengthy, yarn about the failures of neo-liberalism, taking examples from across the globe to support his argument. But he takes a physics-defying leap of logic when he calls for a new political agenda in Australia just because some countries, somewhere, implemented different policies to us that resulted in the GFC.
Rudd is calling for Australia to roll back the neo-liberal policies like those that were put into effect by countries like the United States, and for Australians to put the blame at the feet of the previous Coalition government for those policies and the resulting GFC. The only problem is that Australia never implemented policies even remotely close to those adopted in America. In fact, the even-handed policies of successive governments going back to Hawke and Keating have helped shelter us from the crisis.
The Rudd Government repeatedly tells us that the Australian economy is very well placed to ride out the GFC. There is little Commonwealth government debt, low unemployment, the banks are in pretty good shape, the RBA has plenty of room to lower interest rates further if necessary, and until the GFC struck there was a budget surplus. Some of these factors were the result of Coalition policies and some are the result of good fortune. But surely the credit for being in this position must go, at least in part, to the "neo-libs" from whom Rudd inherited the Lodge? You can't have it both ways, Kevin.
It wasn't always like this. Kevin 07 used to model himself on the Coalition Government, claiming he was an economic conservative and promising more of the same. Fast forward to Kevin 09 and he has given us two lengthy essays espousing the virtues of social democracy and government intervention and the evils of free markets.
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