As regards the election, I’m feeling more optimistic than at any time since the first flush of Lathamania around New Year. Howard looked like a beaten man on TV tonight, and with more than a week still left to go, I think that will sink in with enough voters to make the required difference.

Howard has nothing coherent to offer. His foreign policy is to follow Bush to catastrophic failure[1]. Domestically, he has accepted that the public want services more than tax cuts, but he’s too much of a Thatcherite to change his own thinking. The result is an incoherent spray of spending promises, targeted tax breaks, and so on. The result is that his $6 billion has been generally derided, and Latham’s $3 billion generally applauded. And of course his reputation as a responsible economic manager is gone for good.

Against this, there’s the fact that incumbent governments tend to survive unless there’s a really compelling reason to throw them out. Howard may not be much good, but there isn’t a recession on and the Iraq catastrophe doesn’t affect us directly. Until now, I’ve felt these considerations to be evenly balanced. Now, however, I think the odds are significantly in Labor’s favour.

fn1. Our only hope here is that our jihadist enemies have shown themselves more than a match for Bush in both stupidity and capacity for pointless evil. Their brutal atrocities, many committed against fellow-Muslims, have largely, and perhaps completely, offset the support they have gained as a result of the invasion of Iraq and Bush’s continued backing of Sharon/Likud against the legitimate aspirations of the Palestinians. A large number of Muslims, I think, have the same view I do: “a plague on both your houses”.

I was just watching the Liberal scare ad on interest rates and it struck me that there was a gap in the history between Whitlam and Hawke. What was happening in those eight years?

Suddenly, like a bad memory recovered in therapy, it came back to me. I was paying 13 per cent interest on my mortgage, and the Treasurer was a little guy with big eyebrows. What was his name? Can someone remember? Will this Reserve Bank graph job jog any memories?

UpdateCommenter Peter Martin points to this series on the 90-day cash rate (Excel file) At the kind suggestion of commenter “George”, I’ve made a graph of this series, which goes from the Gorton government to the present day.

The all-time record for high interest rates (23 per cent) goes to the “short sharp squeeze” under the Whitlam government, but Howard, as Treasurer, managed a creditable second place with 21.4 per cent in April 1982.

The peak for Hawke-Keating was 18 per cent under in 1989, but by 1993, interest rates had already fallen back to historically low levels. The oft-repeated claim of Howard-Costello to have lowered interest rates shows up here as completely spurious. A more accurate statement of their achievement would be “preserving the low interest rates we inherited”.

I didn’t hear Latham’s speech but the transcript here seems to hit most of the right notes (thankfully, just a single occurrence of “ease the squeeze”, and it’s not clear if that was actually spoken or is just a topic heading).

Latham has avoided the temptation to get into a general bidding war with Howard. The only new spending announcement appears to be on Medicare. Of course, Howard is spending big here, but he’s hampered by the fact that, for all but the last six months or so of his 30 years in public life, he’s opposed Medicare and done his best to destroy it. He was Treasurer in the Fraser government which actually did destroy the first version, introduced by Whitlam[1].

Given that the economy is going reasonably well, and that national security is rarely a winner for Labor, it’s still, I think, too early to predict a Labor win, especially in the light of the scary Nielsen poll last week. But there’s no doubt that, as far as the battle of ideas is concerned, Howard has conceded defeat already.

fn1. Neoliberals generally bag the Fraser government for having failed to introduce radical free-market reform when it had the chance. But hardly any government has managed, like Fraser’s, to repeal a major social democratic reform in a core area like health.

Today’s TV news had a story about the Anglican and Catholic archbishops of Sydney attacking Labor’s schools policy. Before coming to my main point, I’ll say that I have no sympathy with the view that the churches should stay out of politics. It’s hard to imagine a religious viewpoint that doesn’t have political implications. On the other hand, like anyone else who engages in politics, bishops should remember that if the can’t take the heat they should stay out of the kitchen.

I’ll begin by observing that the Anglican Church (like most of the other mainline protestant denominations) is in a moral position somewhere between dubious and reprehensible when it comes to schools. They own schools which have a huge capital value but yield no return. Those schools could be sold and the proceeds invested to yield a flow of money for charitable works. So they are effectively subsidising these schools by the income forgone.

Subsidising schools would be fine if they were performing the charitable mission laid on them by Christ, of ministering to the poor. It would be reasonable if, like the Catholics, they offered an education to the faithful in general and made efforts to ensure that everyone could get access. But these schools are aimed, quite openly, at the well-off[1]. So church funds, mostly given in charity or on favorable terms by the state, are being used to subsidise education for the rich.

Given his position at the head of, what is, in effect an upper-class interest group, it’s not surprising that the Anglican Archbishop, Peter Jensen, should oppose Labor’s policy. But it’s pretty poor stuff, if not a stunning surprise, that George Pell should prefer episcopal and class solidarity to the doctrine of social justice.

Update The Anglican primate of Australia, Peter Carnley, has disavowed the statement. It’s good to see some debate within the churches. In poltiical terms, I think this issue is a winner for Labor, and I’m glad to see it back on the front pages.

fn1. I don’t claim that there are explicit policy statements to this effect, or that everyone who attends Anglican schools comes from a wealthy background. But anyone who has had any dealings with any of these institutions knows that a privileged student body is taken for granted, and that there are no serious efforts to offer an Anglican education to the poor, with the exception of a handful of scholarship students.

Evan Jones at the University of Sydney has started up a new blog Alert and Alarmed I haven’t decided how to classify it yet. Meanwhile, blogger Tom Vogelgesang (c8to from the comments threads) is running for the Senate as a libertarian

One aspect of the govenment’s spending spree that has attracted relatively little attention is its implications for Federal-State relations. In important respects, these policies are more centralist than anything seen since the Whitlam era. Throughout the health and education sectors in particular, Howard is seeking to get involved in policy areas that have previously been left to the state, and to do so with direct day-to-day control.

But whereas Whitlam was a consistent centralist, these policies are a logical mess. The general line is that the states should be kept on a tight financial leash, but not relieved of any of their basic responsibilities for schools, hospitals, the TAFE sector and so on. Meanwhile, the Commonwealth will provide lavishly funded frills for schools with a “made in Canberra” label, operate a parallel line of Rolls-Royce TAFEs and pick and choose priorities in the health sector.

As I’ve argued before, it would be a good thing for the Commonwealth to take over hospitals, and probably also the TAFE sector. But that means accepting full responsibility for the sector, not throwing a few billion at whatever came up last in the focus groups, while expecting the states to do all the thankless basics. And it should be matched with a complete withdrawal from other areas (school education and highways are obvious candidates).

Here’s a piece I did on the government’s economic record, first published at New Matilda
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As predicted, the Liberals have given preferences to the Greens ahead of Labor, raising the prospect that the Greens might win some urban seats and perhaps hold the balance of power in a hung Parliament. As I’ve observed previously, the Greens have been subject to ferocious attacks, in the course of which they’ve been compared to Communists, Nazis, kooks and vandals. Presumably, a party that would give preferences to Communists or Nazis ought not to be supported by decent Australians.

So will any of those who have denounced the Greens in these terms follow through and advocate a vote against their Liberal allies? Will any of them even condemn the government? I’m not holding my breath.