John Quiggin

Jonathan Strange and Mr Norrell by Susanna Clarke.

This is a great first novel, set in England during the Napoleonic wars, but with an alternate history in which magic was practiced until the relatively recent past, and is, as the book opens, a respectable topic of theoretical study for the upper-middle classes. This cosy arrangement is upset by the arrival of first one, and then a second, real practical magician. The result is a mixture of fairy story, historical novel and academic tome (the footnotes alone are well worth the admission price) with a total effect that is entirely new. The main action, involving the eponymous magicians, is great fun, and the subplots, which have the sinister edge of all good fairy stories, are even better.

After looking at the reviews on Amazon, I think one thing is clear. If you loved the Harry Potter books, you probably won’t like Jonathan Strange. If like me, you found Harry a pleasant read, but want something more than a readable mass-market kids book then this might be the book for you. Where Harry is Billy Bunter + magic, this is something more like Jane Austen+magic.

You can get it from your local bookshop in both black-on-white and white-on-black versions. For those who like ordering from Amazon, here’s a link or click on the picture above. This is part of Amazon’s associate program, under which I get a miniscule cut, marking my first tentative venture into blog commercialisation. I believe some people have made enough out of this to afford to buy a book for themselves.

Talking in terms of generations (Baby Boomers, X, Y and so forth) is so intellectually lazy that it seems to give practitioners a license to turn their brains off, and speak almost entirely at random. Still, even at its worst, there has normally been some sort of attempt to keep the dates straight. But how about this piece from Bernard Salt of KPMG? Focusing on Generation Y, born over the 15 years to 1991, Salt says Generation Y is too hip for the Boomer humor of “Hey Hey, it’s Saturday” and goes on to observe “Generation Y humour is best encapsulated in Seinfeld.”

So Generation Y is “encapsulated” by a show about neurotic, self-absorbed boomers[1] that started its run when they were still being born (1989), and showed its last episode at at time (1998) when lots of them were more interested in collecting Pokemon cards than in watching sitcoms.

I don’t know why Salt is bothering with poor old Ozzie Ostrich. On this dating system, he could identify the boomers with Bob Hope and Bing Crosby, or for that matter with Lily Langtry and Lola Montez. Will no-one ever call a halt to this nonsense?

fn1.Seinfeld was born in 1954, three years after Daryl Somers

When I first read the eschatological works of Hal Lindsey and others, one of the favorite themes was numerological analysis of the Book of Revelation, in which the EU figured prominently.

And I stood upon the sand of the sea, and saw a beast rise up out of the sea, having seven heads and ten horns, and upon his horns ten crowns, and upon his heads the name of blasphemy.

At the time, the then EEC had six members, so an expansion to seven or ten (which seemed likely) would fulfil the prophecy and signal the impending arrival of the end times. The Whore of Babylon also fitted in, but I can’t remember how. The EU did have ten members between 1981 and 1986, and I remember speculating that Reagan might be the Antichrist – surviving an assassination attempt was supposed to be a crucial sign (Revelation 13:1-2). But the world did not end after all.

Now, thanks to the Economist, I discover that Lindsey was right, except for a reversal of alignment. Arsene Heitz, the designer of the EU Flag advises that it was inspired by Revelation 12:1

A great sign was seen in heaven: a woman clothed with the sun, and the moon under her feet, and on her head a crown of twelve stars.

normally taken to refer to the Virgin Mary. I’d be fascinated to see an apocalyptic Protestant response to this revelation.

As I’ve observed before, irony is always dangerous. In my recent post about good and bad news from Iraq, I referred to impossibly cute kitten stories. This is Belle Waring’s ironic description of the kind of good news story that relies on the fact that even in the midst of war, and even under oppressive dictatorships, life goes on. Farmers plant their crops, children (and kittens) are born and play, and so on. It’s worth remembering this when we get too gloomy about the bad things that are happening but, since it’s true always and everywhere, it isn’t news. So, anyone who makes a big play out of this kind of ‘good news’ is liable to appear dishonest, or at least misleading. A good example is the scene in Michael Moore’s Fahrenheit 9/11 with Iraqi children flying kites and having fun, just before the US invasion. Moore was severely crticised for this and rightly so – the fact that children played games like children everywhere did not tell us anything about Saddam’s regime. The good news stories listed by Arthur Chrenkoff provided another example, with a story[1] which referred to “farmers tilling fields and women walking on roads. Freight trains and major highways.”

I thought that the analogy was obvious enough, and went on to the main point, which was that the election rules presented as good news by Chrenkoff seemed designed to put obstacles in the path of independents and non-government parties. But Tim Blair picked it up and solemnly advised his readers that having searched Chrenkoff’s site carefully, he’d found no mention of kittens at all – I’d made them up!. Even when I spelt out the point in detail in the comments thread, he persisted in observing that the Sweeney story was about farmers tilling fields, and had nothing to do with kittens.

But irony is a double-edged sword. Just as I wrote this the thought struck me that, rather than obtusely missing the point, Blair is ironically playing dumb to provoke controversy. If so, he has obviously managed to fool most of the residents of his comments thread, but that wouldn’t be hard.

fn1. The full story by Annie Sweeney cached here is less absurdly upbeat than Chrenkoff’s extract makes it sound.

If there’s one area where the Howard government’s Senate majority (or near-majority) seems likely to make a big difference, it’s in relation to our working lives. While the government’s commitment to free-market policies has waxed and waned, it has been absolutely consistent in representing the views of employers, whether they have demanded labour market deregulation (as in the stripping back of awards) or tighter regulation (as in anti-strike laws). The government and its supporters would, of course, claim that what is good for employers is good for employees, and there is clearly a good deal of truth in this claim. Still, there are plenty of occasions when employers and employees come into conflict (in such cases, it is more natural to refer to workers and bosses). I plan a series of posts looking at aspects of the government’s reform program, and the state of employment relationships more generally.

Of all the items on its agenda, the removal of unfair dismissal laws, at least for small businesses, is probably closest to the government’s heart. A contested dismissal is something like a contested divorce in the feelings it arouses on both sides, and the government hears all the time from the employer side of the dispute.
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In the dispute over Rocco Buttiglione the head of the European Commission, Jose Manuel Barroso has blinked, deferring a vote which would have seen his entire panel of 25 commissioners rejected by the European Parliament. Barring extraordinary dexterity, it looks as if he will have to either secure Buttiglione’s withdrawal or shunt him to a less controversial job.
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Amid all the dreadful news from Iraq, Australian blogger Arthur Chrenkoff has made it his mission to report the good news. A lot of the time this consists of impossibly cute kitten stories, and those repainted schools we’re always hearing about. But there is some real good news.

And, then, there’s this report on conditions for participation in the Iraqi election, linked by Chrenkoff from Iraq the model
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I’ve been arguing with the Productivity Commission about microeconomic reform and productivity growth for nearly a decade. Our first round concerned prospective estimates of the benefits of National Competition Policy, aka the Hilmer Reforms. At the time these reforms were being debated, the PC (then called the Industry Commission) put out a study estimating that the reforms would permanently raise GDP by 5.5 per cent. I looked at their analysis and found lots of problems, which i discussed in this 1997 paper and also in my book, Great Expectations, and proposed an alternative estimate of 0.7 per cent.

The PC has just released a discussion draft, of a Review of National Competition Policy Reforms and it pretty much splits the difference, suggesting a net benefit equal to 2.5 per cent of GDP. It seems to me that some of the errors I criticised have been fixed either by changes to the modelling, or by the replacement of optimistic assumptions with observed outcomes. Some others remain, though. For example, all the reductions in prices for telecommunications appear to be treated as a benefit from reform even though there’s been a long-term technologically driven trend reduction of 5 per cent per year, going for many decades. In the last few years, the rate of price decline has slowed, and even been reversed.

More on this soon, if I get time.

The Israeli Parliament has voted to support Sharon’s plan for the removal of Israeli settlements from the Gaza strip, and also four of the least defensible settlements in the West Bank. It’s clear enough that Sharon does not intend this as the beginning of either a land-for-peace deal or a unilateral withdrawal from the West Bank. Rather, the idea is to freeze the peace process and remove the obstacles to the annexation of large slabs of the West Bank.

But events have a dynamic of their own. Sharon has broken, probably decisively, with the settlers and may well be forced to break with the rejectionists among his own supporters, such as Netanyahu. He’s going to need support for the fight against them, which will be bitter and possibly bloody. He won’t get that support for a plan based on permanent occupation of large parts of the West Bank, with a wall/barrier/fence cutting a “Palestinian entity” into a series of separate Bantustans. But he probably could get it for something close to Clinton/Barak, with two contiguous states, and border adjustments that brought most of the big “suburban” settlements into Israel in return for a trade of unoccupied land elsewhere, with or without the agreement of Arafat. This kind of policy would drive a wedge into the settler bloc, separating the ideological supporters of Greater Israel from those who just want somewhere to live in peace.

Given the long and miserable history of this dispute, a bad outcome is more likely in the short run. But, as I pointed out a while back, this is a problem with only one solution, and everyone knows what it is (to within a few square kilometres and parenthetical clauses). Sooner or later, that’s where things will end up. Since every day that this goes on adds more recruits to the ranks of Al Qaeda, I hope it’s sooner rather than later. Withdrawal from Gaza is a step in the right direction.

Don Arthur has had an interesting series of posts on religion and politics, including reference to Rocco Buttiglione, a candidate for the EU commission who has come under fire for his anti-gay views, which reflect his Catholic religious faith.

As I’ve said previously, I have no problem with people taking political stands based on their religious views. As far as I can see, almost no-one consistently objects to this. Most people who complain about mixing religion and politics do so only when they don’t like the religious views being expressed. Here for example is Gerard Henderson on Archbishop Peter Carnley, saying

on-elected religious leaders appear all too anxious to get involved with that which pertains to Caesar. It’s a pity, really. For the evidence suggests that clerical types perform at their best in the sacristy.

A couple of years later, he’s busy defending Pell and Jensen, and saying criticism of them is “a new form of sectarianism”. Henderson complains that there are leftwingers who welcome Carnley’s comments but expect conservative Christians to remain silent – this is about as fine a case of the pot calling the kettle black as I’ve ever seen.

But my main point in this post is a simple one. If you can’t take the heat, keep out of the kitchen. In modern pluralist societies, we have a general agreement that everyone has a right to their own religious views. Discrimination on grounds of religious faith is unlawful and even vigorous criticism of religious beliefs is generally considered distasteful. But a lot of religious people seem to expect the same convention to be extended into the political sphere, and to have their views treated with deference because they are religiously based. Consider this,

The Avvenire newspaper of the Roman Catholic Bishops Conference complained that the decision of the European Rights Commission to rule Buttiglione unfit for public office ‘because of what he thinks’ is ‘a sad sign for civilisation – not for religion.’

‘They have discriminated against a person on the basis of his faith and his ideas,’ the paper said.

This would be funny, if it weren’t put forward seriously. If we’re not supposed to discriminate between candidates for public office on the basis of their ideas, what should we do – choose them by lot?

The Bush Administration has finally conceded, on the record, that it decided, for political reasons, not to go after leading terrorist Abu Musab al-Zarqawi in the leadup to the Iraq war. The question remains, which political reasons were decisive?
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I’ve been off the air with database problems for a day or so, and missed some important developments. First, there was the bad news of the first Australian military casualties in Iraq, an unfortunate but inevitable development, given that insurgents are now operating freely throughout Baghdad, and even within the Green Zone. The Zarqawi group has claimed responsibility. This followed the earlier horrific massacre of Iraqi recruits, again claimed by Zarqawi.

Second, and closely related, the Zarqawi scandal has developed a further, with the Administration finally admitting on the record that the decision not to go after leading terrorist Zarqawi in the lead-up to the Iraq war was politically motivated. Money quote

Lawrence Di Rita, the Pentagon’s chief spokesman, said in an interview that the reasons for not striking included “the president’s decision to engage the international community on Iraq.” (from the WSJ, via Tim Dunlop

With a week to go, it’s probably too late for this disclosure to have any impact on the US election. But if anyone ever refers to George Bush as fighting a war against terrorism, just point them to the Zarqawi story. The failure to go after bin Laden in an effective fashion can be put down to this Administration’s routine incompetence. The failure to go after Zarqawi was simply criminal.

Finally, there was this piece by Barry Cohen, accusing the ALP of anti-semitism. In Cohen’s language criticism of Israel is anti-Semitism and criticism of Ariel Sharon is criticism of Israel. I’m sure examples of anti-Jewish prejudice can be found in the Labor party, but Cohen doesn’t produce any. There are more extensive responses here and here.

It looks as if I’ve got problems with my MT database. I hope to restore full service soon.

I was thinking about the prospects for the US election and also about the probability of casting a decisive vote and it struck me that a situation like that of Florida in 2000 would have had a quite different outcome in Australia. In a situation where there were enough disputed votes to shift the outcome (and no satisfactory way of determining the status of those votes), the Court of Disputed Returns would probably order a fresh election. It seems to me that this is a better way of resolving problematic elections than attempts to determine a winner through court proceedings[1], though I’d be interested in arguments against this view.

In view of the long delay between election and inauguration, this solution would seem to be particularly appealing for the US. However, it seems clear from this page that the American constitutional tradition does not allow for such a possibility, preferring such devices as drawing the winner from a hat, if nothing better can be found. I wonder if there is a reason for this, or if it is just one of those things that doesn’t come up often enough for people to think about fixing it?

fn1. Obviously, once the situation arises, one side or the other will see an advantage in going through the courts, or allowing state officials to decide,and will oppose a fresh election. But ex ante, it seems as if agreeing to a fresh election in such cases would benefit both sides.

It’s time for the Monday message board, where you are invited to post your thoughts on any topic. Civilised discussion and no coarse language please.

Guy at Full Context went to hear Larry Summers talk about the US current account deficit. As he notes, Summers analysis was very similar to the one I presented here. Guy has some useful comments, and notes the following, attributed by Summers to Rudi Dornbusch

Things always happen later than you expect, but when they do happen they happen faster than you expect.

This may not be true of all things, but it is a pretty good description of the way unsustainable economic imbalances are resolved.

Given that Labor obviously has to do something more than wait for the housing bubble to burst, one simple (but not easy!) organisational step would be to abolish factions. That is, membership of any organised factional grouping ought to be treated like membership of a rival political party, as grounds for automatic expulsion. Of course, it would be impossible to prevent informal or secret factions from operating, as they do in all parties. But, to my knowledge, the only major political party anywhere in the world with a faction system comparable to Labor’s is the notoriously corrupt Liberal Democratic Party in Japan, and even here PM Koizumi is largely independent of the factions.

There was a time (from the 1950s split to sometime in the 1980s) when the factional groupings corresponded to ideological divisions. But that has long since ceased to be true. It’s probably true that the average member of the Left faction is a little more likely to favor a ‘progressive’ line on social issues than the average member of the Right and Centre, but that’s about the strength of it. Each of the major factions is subdivided into smaller groups, often little more than extended families, with their retainers and servants.

Nowadays, the factions exist because they exist. No-one is willing to bell the cat. However, this is the kind of thing Latham could take on, and perhaps even win. It would certainly be more in his line than Simon Crean’s lame achievement of changing the union voting ratio from 60 to 50 per cent[1].

fn1. While I’m dreaming, I’d like an end to the formal link between the unions and the ALP. And a pony.

The lower house of the Russian Duma has voted to ratify the Kyoto Protocol. Although some formal steps remain, this was the last real hurdle to be cleared before the Protocol could come into force.

The only signficant holdouts now are the US and Australia. The Bush Administration has, as expected, said it will do nothing, and Howard will presumably follow. The ratification will pose some significant problems for Kerry, who has tried to sit on the fence so far – his position appears to be that he would seek to renegotiate the treaty to make the terms more favorable to the US. Realistically, this is probably a sensible outcome for the world, but I don’t know in practice how a treaty that’s already in force can be renegotiated unless all parties agree, which seems unlikely.

I’ve never been a great fan of Steven Landsburg’s ‘Everyday Economics’ columns in Slate[1]. While he occasionally has something interesting to say, a lot of his columns are what Orwell called ‘silly-clever’, such as this piece defending looting. Economists are often prone to this kind of thing, and it doesn’t do the profession any good in my view, but it’s usually not worth refuting.

Landsburg’s latest piece is in a different category. It’s a repetition of dishonest rightwing talking points about taxation that have been refuted over and over, but apparently need to be refuted yet again. As is his wont, Landsburg seeks to defend a paradoxical claim, namely, that “Bush’s Tax Cuts Are Unfair …To the rich.” He makes a total hash of it.
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Following up on the theme of manufacturing decline, here’s a piece by Ronald McKinnon of Stanford, linking the decline of US manufacturing to the low rate of national savings. I’m not entirely convinced by the argument, which seems to rest heavily on the manipulation of identities that gave rise to the twin deficits hypothesis, but I’ll think about it a bit more.

It is certainly striking that all the English-speaking countries seem to have a broadly similar pattern of large current account deficits, low household saving, and rapid decline in the manufacturing sector (more I think than can be accounted for by long-run structural change). This would be an obvious basis for contagion in the event of a financial crisis affecting the US.

Quite a few people have pointed me to this piece by Barry Cohen which produces the unsurprising conclusion that Labor’s MPs are drawn from a very narrow range of occupations: union officials, 29; teachers, 18; state MPs and ministerial staff, 16; public servants, 14; party officials, 8; lawyers, 8. Before discussion what’s wrong with this, it’s worth pointing out that the situation is not that different on the other side of the aisle. Replace union officials with employer group officials, teachers with farmers and public servants with doctors, and you’d account for the great majority of Coalition MPs and ministers.

Whereas people once went into politics after spending a fair bit of time doing a variety of different things, political office is now part of a small set of fairly well-defined career paths. What’s mroe disturbing to me is that, at least for people who reached the heights of ministerial office, politics was almost always the last stage in a career. Now aspirants to the ministry are setting themselves up with contacts, and obligation networks for the time when they can really make big money, as consultants, lobbyists, chairmen of boards and so on. We don’t have to imagine the effect on public policy – there are already some egregious examples out there.

The only way to fix this, in my view, would be to greatly expand membership of political parties, and the only way to do that would be to give the members a real say in determining policy. Since that’s not going to happen, I don’t see a solution for this problem.

That’s the title of a book-length denunciation of the US-Australia FTA, by Linda Weiss, Elizabeth Thurbon and John Mathews, published by Allen & Unwin. A lot of the material will be familiar to readers of this blog, but there is an interesting chapter on quarantine. It makes the point that our quarantine laws have been successfully defended in the WTO (far from friendly to any sort of restriction on trade) but will now be subject to unaccountable bilateral processes with the US, very similar to the situation with the PBS. Even if you regard the title as a little too apocalyptic, it’s clear that this is a terrible agreement from Australia’s point of view and that, if it falls over on the issue of pharmaceuticals, that would be a very good thing.

Bob Carr has proposed

a new deal on federalism in the wake of the Howard Government’s big election win, offering to hand over responsibility for the health system to the Commonwealth.

In return, Bob Carr says, the Federal Government would give the states total control over schools and TAFE.

This is pretty close to what I’ve been arguing (along with Chris Sheil) for some time) though I tentatively suggested giving TAFE to the Feds.

I don’t suppose Carr gets his policy ideas from blogs, but perhaps there’s some indirect influence somewhere.

If you’re reading this, it’s a fairly safe bet that you’re in need of time-management tips[1]. On the other hand, the idea of a blogger giving time management tips is problematic, to say the least. Undaunted by this contradiction, I’m going to offer a few. The details reflect my main activity, which is academic research but may be more or less adaptable to other kinds of jobs.
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One of the features of the post-election that has struck me is its similarity to themes that emerged in the Thatcher years in the UK. For example, Miranda Devine’s claims about youthful support for the Liberals, taken down here by Don Arthur, reminded me of talk about the young fogeys who were redefining cool in the Tory mould. These people would have been in their twenties then, and in their early forties now, but, while some of the individuals who set the tone are still around, the generation they were supposed to symbolise is lost to the Tories. According to Wikipedia, the average age of Tory party members is 65.

This post by Henry Farrell of Crooked Timber makes the point that the Tory attempt to remake Britain in a free-market mould was a catastrophic failure, at least in party political terms.

. By crushing unions, privatizing state industry, trying to shift the North England economy from manufacturing to retail commerce, introducing market reforms to the welfare state, and flogging off public housing, the British Conservatives systematically tried to create a new class of Tory voters that would permanently marginalize Labour. The result was the transformation of the Conservatives into a near-permanent minority – thirteen years later, British voters still don’t trust the Conservative party anywhere near the public services.

Those engaging in triumphalism on the conservative side of Australian politics ought to learn from this lesson

Today’s Fin (subscription required) has the first in a series of articles on Australian manufacturing, by Peter Roberts. There’s an odd disconnect between the front page (and the editorial referring to it) and the body of the article. The opening includes the optimistic declaration

The Australian manufacturing sector is now made up, not of survivors, but successful competitors in home and export markets

But the main body of the article is rather less positive. It’s not surprising to learn that manufacturing has shrunk from about 20 per cent of GDP and employment in 1975 to 12 per cent today. But those who haven’t been following the news may be surprised to learn that manufactured exports are declining in nominal terms, and that as the article notes

there has been a seemingly inexorable rise in the manufacturing trade deficit … concentrated in areas such as chemicals, IT and telecommunications … From a high of $37.6 billion in 2000-01, manufacturing exports slumped to $32.9 billion in 2003-04

That’s a decline of about 15 per cent in nominal terms, more than 20 per cent in real terms and more than 30 per cent relative to GDP. Meanwhile imports have risen above $100 billion. I’ve previously looked at the stagnant export performance of the “elaborately transformed manufactures” sector, much-touted under Hawke and Keating, but this is worse than I had realised.

An economic rationalist might respond by saying that if manufacturing is declining, that must be a reflection of market forces and comparative advantage and therefore desirable. This at least a consistent position, though one with which I have some significant disagreements. But it seems silly to me to pretend that things are going well in manufacturing when the numbers clearly point to a rapid decline in all sectors exposed to competition.

Since some readers want to debate these issues more or less continuously, I’m putting up a special-purpose post covering all issues related to the war on terrorism and the Howard doctrine (whatever you think it is) and also on Genetically Modified crops. Maybe there will be some cross-fertilisation or other exchange of genetic material.

For the record, my view on Iraq is that elections must go ahead in January come what may, and that the occupation forces should be withdrawn as soon as possible thereafter. On GM foods I favor stringent safety testing and compulsory labelling, and would like to see more effort put into developing products that would actually benefit people in poor countries and less into political point-scoring.

Having set this thread up, I’ll keep it running as long as needed, and will move or delete comments on these topics from posts on other issues.

Quite a few commentators have argued that the leftward shift I have described on economic issues in Australia has been matched by a shift to the right on cultural issues. The strongest proponent of this claim has been Jack Strocchi, but the same point has been repeated here and elsewhere. The problem is that culture is a big field, and it’s not clear exactly what we are talking about. So I’ll try to discuss some more specific points.

I’ve previously discussed multiculturalism and republicanism and see no reason to change what I’ve written on these topics.

Next, as argued below, I don’t think we are seeing a great religious revival, particularly a fundamentalist[1] Christian revival. Still the census figures give marginal support to the idea of a shift to the right. By far the most significant development in Australia in this respect is the gradual shift away from nominal Christianity, represented by growing proportions of people declaring “no religion” at the census. After rising steadily until 1996, this proportion fell slightly in the 2001 Census, a fact recorded with some satisfaction by George Pell, who apparently sees Satanists as preferable to atheists (I guess there’s just a trivial change of sign involved).

fn1. As I mentioned in my previous post, I’m not too concerned with theological distinctions here. I’m using “fundamentalist” as shorthand to refer to religious groups with a strong emphasis on traditional sexual morality, little concern with social justice, and a willingness to get involved in the conservative side of poltiics. If anyone can suggest a better one-word description, I’ll be happy to adopt it.
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Now that the prospect of Family First holding the balance of power in the Senate has receded (though not in a good way!) there are a few questions I’d like to raise. Reading all the stuff about the rise of movements like Family First, it struck me that I’ve been reading and hearing about this kind of thing for a long time, in two forms. The first is with reference to the growth of conservative/fundamentalist/pentecostalist/evangelical[1] church groups either within or at the expense of mainstream denominations. The second is the idea that these groups will exert increasing political influence, as they do in the United States.

I’ve been hearing the second claim at least since Fred Nile was elected to the NSW Legislative Council in 1981. Even before that, the Bjelke-Petersens drew heavily on support from conservative church groups. And, while the base for the DLP was within the Catholic Church, it had a broadly similar policy position. It’s my impression that there’s a fairly reliable support base of 5 per cent of the population for this kind of politics, and that this proportion hasn’t changed much in many decades.

On the first question, I don’t have any good information, but my impression is that the news stories tend to focus on dynamic and expanding churches, ignoring the fact that there is contraction as well as expansion going on. I don’t think the census gives the kind of breakup that is needed here, but maybe readers are better informed than I am.

While I’m on this topic, Don Arthur has raised some more general issues of interest, to which I hope to respond soon.

fn1. For my purposes, the distinctions here aren’t critical except as they bear on attitudes to political activism or quietism

Looking at the discussion following their election, there are few points I think still need to be made or restated.

First, although the outcome came as a surprise, it’s about what would have been expected on the basis of historical experience in the absence of any knowledge about the parties, their leaders and so on. Particularly at the Federal level, Australians don’t tend to change government in the absence of a recession or other policy failure[1]. The realists like Ken Parish who predicted Labor’s defeat on this basis were right. I noted the general pattern, but thought that the government’s weaknesses were enough to give Labor a good chance. As it turned out, Howard’s decision to match Labor on health and education, combined with the messup over forest policy, wiped out any gains Labor might have made.

Second, over and above the benefits to an incumbent government from economic growth, I think the Liberals have benefited from the real estate boom. Even allowing for a fair bit of ideological crossover, it’s clear enough that the Liberals are more likely to act in ways that help property investors and encourage rising property prices for homeowners. More generally, in all the English-speaking countries, there has been a big expansion in debt-financed consumption, reflected in large trade deficits and supported by high and rising property values. The question of whether this is a sustainable model is a critical one. I’m on the record as saying it is not, but there are plenty of highly qualified people who take the opposite view, most notably Alan Greenspan. Among Australian bloggers, Stephen Kirchner has been most supportive of this view and critical of reference to the property price boom as an unsustainable bubble.

Third, it follows from this that I don’t think the election represents some sort of terminal crisis for Labor. Although several of the Labor state governments have hit rough patches at present (and this hurt Labor federally), Labor still looks like the natural party of government in most states. And, as I’ve already noted, Howard had to move a long way to the left to win, promising to preserve Medicare, assist state schools, expand the TAFE sector and so on.

It will be hard for Labor to win Federally in the absence of a recession or slowdown. But that’s a fact about Australian politics, not a fact about Labor.

fn1. Labor’s defeat in 1996 is sometimes presented as a counterexample. But it’s clear that the 1989-90 recession and the interest rate policy that caused it had not been forgotten then – as Howard showed, it hasn’t been forgotten even now. Labor should have lost in 1990 and 1993, but the Liberals mucked things up both times. 1996 was a referendum on Keating’s whole career, not the period after 1993.