The end of big ideas Labor

People used to be frightened of the Labor Party because it they were all about Big Ideas. The Liberals were most successful when they whipped up fear of these monsters. Look at Whitlam, and how all those ideas stuffed into the bottom drawer over 23 years of opposition (even by deep thinkers like Lance Barnard or Freddie Daly) led to whole new departments and tax hikes.

Now it's clear that the era of Big Policy Labor is now over. Rudd and Rees and all those other four-letter words one might use to describe Labor leaders today show us that Labor has bonsai'd itself into irrelevance.

With the Emissions Trading Scheme, Rudd has produced a weak effort that is not backed up with any sort of social transformation: no new energy-generation industries (and associated jobs, comrades), no education on how you can cut back on your power bills (yes, it's petty but we all have a role to play - in other words, some national leadership would be nice), no incentives for existing renewable-energy technology - and worst of all, no moral leadership in addressing the environmental problems that affect our climate for the worse. Not a scrap of passion from that extinct volcano, Peter Garrett - no power either.

The same thing happened with the Aboriginal apology: yeah, Rudd got the headlines, but nobody is any clearer about what problem the Northern Territory Intervention is trying to solve, let alone how well it might be solving it. Once Labor would have been all about looking at and addressing the causes of Aboriginal injustice and disadvantage: now it's all off-message, look away, look away.

What about all those other Big Issues for which Labor is supposed to be the flame-guardians and standard-bearers? A republic? No. Universal healthcare? There is an idea that has stalled since the recession of the late 1980s, hardly going to get a run now. Immigration reform? Yeah, right. Promise me that the Cordelia Rau/Vivian Solon cases could never recur now, go on. Labour market reform? Arts funding? Substantial reform in education? 15% super? Anything at all?

We could, I suppose, blame all these foundered dreams upon the Global Financial Crisis, but that would be a crock. Whitlam too faced global economic crisis but either crashed through or (mostly) crashed, suggesting there was something of substance in either case. Nowhere is there any evidence that there are big plans to be put on hold. Nowhere is there any evidence that, if the economy bounced back, the Big Ideas would get a red-hot go.

The less said about Rees in NSW, the better. Working people are suffering more in hospital, less well served by schools and dithering about in unsuitable transport because of the Carr legacy (advised by Rees) of government by press release - a pose replicated in other states. Queensland, WA and SA cannot water themselves, Melbourne has Sydneylike transport problems and Brisbane is heading that way too. Tasmania and NSW have governments wholly owned by spivs, as happened in WA under Burke and Joh's Queensland. If Jack Lang could build the Sydney Harbour Bridge in the very teeth of the Great Depression, Rees has no excuse playing silly-buggers with light rail. SMH cartoonist Alan Moir is right to draw Rees with a garbage bin for a head.

All that remains now is for Labor to be shunted into Opposition and to wonder what it was all for, and to struggle for motivation to go on beyond one's own ego - just as is happening with the Federal Coalition.

Yeah, the Federal Coalition. The only power they have these days is the power ascribed to them by Labor for their own inaction - but even that is bogus.

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Sold down the river

There are basically two factions in the Nationals. In NSW they used to talk about a North of the State vs South of the State, or west of the Great Divide versus the North Coasters - but now the battle for the Nationals is joined and, appropriately, it is a national one.

One faction is the Coalitionists, the genteel duffers who have led the party to steady decline but have secured quiet backroom influence with Liberals when in government, when they are disposed to listen. From Doug Anthony through the de-clawed Ian Sinclair to that wombat-in-headlights Mark Vaile, the Coalitionists have been in the ascendancy through sheer weight of patronage ... when the Liberals can carry them into government, that is.

The other faction is the Barnaby faction, the bomb-throwers who think the best way to get loot for their constituencies is to distance themselves from the Liberals and cut the best deal going with whichever major party is most desperate for office.

Given the fact that the Liberal Party does not have the lock on power that it did in the thirty years or so following 1949, it is the latter who have the momentum with them. In South Australia Karlene Maywald has ensured that the country's driest state never goes thirsty again snagged herself a possie in Cabinet, the Labor government falls over itself to help her constituency. In WA, the Nats have ensured that the fruits of the minerals boom are put to good use at least secured a promise that the school might get a lick of paint or that a road from nowhere to nowhere else might become the sort of superhighway that people in the eastern states might visit on their holidays.

The Federal Nats have become as irrelevant to the Liberals as their own moderates are. The Coalitionists in their ranks just want to sit around and lose seats - possibly including that of their own leader, Warren Truss - to the ALP or the independents. On the other hand, Truss and the other Coalitionists would hope to position themselves in order to get back on the gravy train if when the next Coalition government comes around and ride it until that government loses office. The Barnabyites, on the other hand, want to be the brokers of government for the major parties - in the event of a tight race, the major party that concedes most to the Nats wins government of the country.

Tony Windsor, Rob Oakeshott and Bob Katter are honorary Barnabyites (whether they know it or not) and loathe the Coalitionists. If Barnabyites take over the Nationals they may be enticed back, particularly if there is a tight race between Labor and the Libs.

Not that this is an issue at the moment. Even Blind Dennis can see the Libs are not an alternative government. This is mainly because they are policy-lazy, not offering an alternative and hiding such plans as they do have like a dowager vouchsafing her modesty. In a party where Tony Abbott is considered an intellectual and Nick Minchin a master tactician, sharp and fresh thinking on Australia today and the policies that might best serve it is too much to expect. Nonetheless, the Liberals will eventually get sick of losing and will toss some of the holdovers from Howard that are a little too precious at this stage, a little too raw this soon after defeat; they won't let Turnbull do that, not now, not yet, and if he pushes it they'll turn on him.

Labor will welcome a decoupled Nationals with open arms, particularly if they split the LNP and return Anna Bligh in Queensland (along with the poster boy for born-to-rule ALP apparatchiks, Andrew Fraser) as seems likely. NSW, Victoria and SA Labor are old hands at managing the Nationals, and if Chris Evans starts consulting some of Labor's experienced Nat-wranglers on Senate tactics, it will be Minchin who'll be a foregone conclusion. Rudd can do that boy-from-Eumundi stuff to build bridges with the Nats better than Turnbull ever could.

At the next election the Nationals will appear refreshed and vigorous by comparison with all those braying kill-the-Nats Liberals like Heffernan or Alby Schultz. Crusties like them aren't the future of anything, and won't win seats from a reinvigorated Nat-Labor alliance. However, they won't accept any blame - that will go to Turnbull, who is done for if he lets the Coalition fall apart. The Liberal Party held its breath when it shackled itself to that monstrous ego, but if he seeks to take the Liberals too far into unknown territory they will not go with him.

Malcolm Turnbull has to demonstrate that he can win seats in the bush, but not to the point where he threatens the Nationals. Turnbull has to paint the big picture on Australia's economic future, while including the rustics as a community-service obligation. Turnbull has to manifest an appeal that will win the Liberals a clear majority of seats in their own right, obviating an looming ALP-Nationals alliance, something that has happened only a few times in living memory and which looks highly unlikely for 2010.

The sole issue on which the Nationals, and the Coalition, will live or die is on water flow into the Darling River. Barnaby Joyce is of one mind with the large-scale irrigators of southern Queensland, and is happy to ignore those rural Australians down-river from St George. If Labor are too, the Nationals will deal with them - but any hope for the Murray-Darling basin will die, and on Rudd's watch, for the most despicably craven political reasons.

The Nationals' worst-case scenario is if they do a deal with Labor, only for them to tank and for Malcolm Turnbull to become the first Liberal Prime Minister since Joseph Cook who doesn't need or want a Coalition with the bushies.

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The big issues

If I was on my game I'd blog about the Mumbai massacre - but I have an article drafted on that, you have to fund your blog habit somehow.

If I was on my game I'd have posted about the historic and, frankly, welcome election of Barack Obama as President of the United States; and the concominant end of the failed Bush-Cheney regime.

If I was on my game I'd blog about Rudd pouring money into uneconomic activities in the name of boosting economic activity.

All in good time. I'm a bit busy with things I can not only observe, but act to improve in small ways. This too will change.

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Turn on and drop out

Telstra has, hopefully, overplayed a weak hand in their bid for the National Broadband Network.

If you want to use your market power to crush competitors, go your hardest - but don't whinge about the prospect of enforcing anti-competition laws. If you are enjoying a monopoly gifted to you by the government, enjoy it - don't complain when the carnival ends, just lift your game. Just because Eddy Groves hasn't learned the lessons he's been taught doesn't mean that Telstra can't and won't go the same way. Incompetence burns market share and credibility, no matter what base you work from.

Hopefully anyone but Telstra get the gig of rolling out the NBN, and unless Conroy is more craven than I think he is then they won't. A letter from the chairman might have been sufficient back when western-district graziers lkike McGauchie ran the country, but it goes against everything that the telecommunications revolution of the past twenty years or so has promised/threatened. A new player has the ability to leapfrog Australia out of the backwater in which Trujillo would have us languish. Telstra is not about best practice in telco delivery - it's about keeping marginally ahead within a market it is actively depressing. It is really hard to respect this approach, let alone rally to its defence.

Yeah, thousands of Australians will lose their jobs if Telstra reverts to its cardigan culture and goes down. Given my earlier comments about the car industry I must seem pretty insouciant about jobs, eh. Then again, that's what you get when history moves on: thousands of Australians lost their jobs in the demobilisations of 1919 and 1945, many more when Cobb & Co and Qintex went to the wall. Nothing kills jobs like mismanagement.

If TransACT win their corner of the continent, it could transform Canberra in ways not foreseen in their bid. Canberra is the second-biggest IT market in the country and to have the country's best broadband will see it become an innovation hub. Canberra's public-service culture isn't ready for this. You are going to have dynamism and stasis side-by-side, economic and population growth - any politician who thinks they can ride such a tectonic shift is kidding themselves.

If a bidder other than Telstra rolls out the NBN, the challenge will be on the incumbents to roll out a solution that beats the winning bidder, preferably before said bidder completes the job. They would also be free to concentrate on the economical parts of the country, the part which bushies call the SCAM triangle (which would have to include SE Queensland these days). This would require a reversal of the sloth of Telstra's traditional culture, or the just-enough-and-whinge culture of Trujillo, McGauchie and Phil Burgess. It will require a realignment of which Telstra is just not capable, and they'll end up begging for the disaggregation that should always have preceded privatisation. If Telstra don't win the NBN contract Trujillo and McGeachie should be sacked immediately.

If Telstra win, the Rudd government is shot in terms of credibility on forward-thinking and innovation. They'll take the money and roll it out whenever as Australia slips further behind in terms of telecommunications - and just as backwater status starts to bite economically, Trujillo will piss off with the sort of plunder that leaves us all poorer.

The less said about Conroy's anyone-who-opposes-it-is-a-child-molester firewall, the better. Nobody believes Conroy is any sort of moral guardian, nobody believes the thing will do its intended job, and neither that nor anything else will keep Xenophon and Fielding voting with the government.

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Oo er, he said a rude word

Media coverage of Rudd using the word "deficit", referring to the possibility likelihood that next year's Federal budget will go into that state, has been another piece of press-gallery silliness.

If the government cancelled its $6b handout to the car industry, that would forestall a deficit right away. If you really can't cope with subsidy junkies going cold turkey, add another impost onto the price of petrol (then the absurdity of propping up the motor industry will be revealed).

Nonetheless, this article by Paul Kelly is right. Rudd does appear to want it both ways, at a time when the possibility of a financial position that is both expansionary and defensive becomes less feasible. This is an impression that can only be sharpened over time, in areas beyond the economy:

• Defence: what is the plan in Afghanistan? What is Australia's response to the S-22 Sukhoi (apart from my favoured option, buying it)?


• NT intervention: back to full paternalism or not? The history of Aboriginal policy has been the attempt to impose self-determination without asking the people most affected what that might mean for them, and blaming them for any failure; here is yet another round of a sad old game.


• Health: more doctors/ nurses/ therapists/ paramedics, or bureaucrats? Or both?

A little bit of everything and a whole lot of nothing, it would seem.

I'll believe infrastructure spending when if I see it, and if Rudd was serious you'd expect more progress than has happened so far. Is infrastructure a cost, or an investment? If you can't work that out, your ability to address more complex economic questions is questionable to say the least.

The 2020 summit has melted into air. The next time Rudd wants to gather people together, on tax reform or infrastructure or whatever, people can be forgiven for being cynical.

Perhaps Rudd was never big on consultation, happy to sup with celebrities who kept their opinions lite-brite-'n'-trite (and only conventional-wisdom zombies would assume I'm talking about Heather Ridout). Be it on his own head, then. It will be fascinating to see how long Rudd lasts once the government dips below 53% on 2PP polling.

None of this is to say that the Coalition are ready for government again. They haven't resolved any of the above issues to anyone's satisfaction, and the dead hand of Howard hangs over this Opposition like Fraser's (or McMahon's) never did. Turnbull - and Paul Kelly's article - rely upon historical memories of deficits that are fading fast, and Rudd is spending his political capital wisely in making the case for a deficit. Taking the high ground over the deficit will not get Turnbull anywhere near the Lodge.

These are the issues the press gallery should be exploring. Kerry O'Brien looked idiotic trying to get Wayne Swan to use the word "deficit" before he was ready (all the more so because he failed - could Wayne Swan be the first politician to be able to put O'Brien in the same place as any other journalist?).

At a time when the economic landscape has fundamentally changed, the old political cliches will not do. The wreckage of the career of David Pemberthy, not yet 40, who followed the Mark Day tabloid playbook to the letter and has bugger-all to show for it, should demonstrate to the press gallery that the same-songsheet model is doomed.

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Making excuses

Take this pudding away. It has no theme.

- Winston Churchill

The NSW mini-budget is a whole bunch of press releases looking for an overall set of principles, how to address the fact that NSW is an economic basket case, what to do about it, how not to make it worse. Rees and Roozendaal have shown that it is not patriotism, but toughness, that is the last refuge of the scoundrel.

I have long been critical of Marxists who have skipped past the moderate centre and popped up in the far right to fill its intellectual vacuum. No longer: the extremists have more in common with each other than with the moderate centre. Imre Salusinszky started off on the far left, ricocheted off the right and end up as an apologist for Australia's worst government. I'd rather be politically homeless than be a joke like Salusinszky.

HOW has it come to this? How can NSW be staring at a $915million budget deficit after reaping GST and stamp-duty windfalls from the mid-1990s through the mid-2000s?

Wha'? There I was, having lunch with Bob Carr and enjoying a disquisition on Tocqueville in response to a question about the Parramatta to Chatswood rail line, now you're telling me it's 2008? Wha' happened?

The trend towards corporatisation, begun by former Liberal premier Nick Greiner in the late 1980s and continued by former Labor premier Bob Carr in the mid-1990s, brought an enormous productivity dividend.

However, this productivity growth flattened at the beginning of this decade.

Yeah, because the momentum generated by the Greiner government could only go so far. When you're no longer interested in government, when you're only focused on tomorrow's headlines and being advised by dills like Nathan Rees, you're going to stall. At a time of unparalleled growth in the history of humanity in this decade, there is no excuse for NSW Labor not to have put the infrastructure in place to ensure this state grows.

Payroll tax ... has remained robust in recent years, even as stamp duties have pulled back. It will now decrease, as a result of unemployment, and also as a result of $1.9billion worth of payroll tax relief unveiled in the June budget.

Bloody regressive taxes eh? Just when you need your revenue it's going to fall away! Whose idea of economic good sense is that?

Michael Egan, who was treasurer under Carr, and Michael Costa, treasurer under Morris Iemma, are formidable economic rationalists. They protected the public purse from most of the lunacies dreamed up by ministers.

No, they were clowns. What a shame that the only policy suggestions on offer were "lunacies", like giving parents a token $50, or getting public sector employees to give some productivity trade-off for their pay.

With that as the intellectual platform for understanding NSW's current predicament, no wonder he comes out with crap like this:

a gaping budget hole caused by the global economic crisis.

No, the gaping hole was caused by sheer indolence on the part of the State Government following the Olympics.

The Government will also collect an extra $939 million by deferring the abolition of a raft of so-called “nuisance taxes” that were supposed to be sacrificed by the states in exchange for the GST in 2000.

Those taxes are so-called, Imre, because they actually depress economic activity. You don't crow about takings that depress economic activity at a time like this.

the Sydney Harbour Bridge and Tunnel will be the first motorways in Australia to use time-of-day tolling ... The measure is designed to improve traffic flow in the Sydney CBD but will also raise $12 million each year.

In my observation, Imre, traffic into CBD Sydney does not only enter from the north. Rees and Roozendaal are playing class-war smart-alecks here, and they have no right to have their figures taken on trust.

On capital spending, the biggest surprise in the mini-budget is a commitment by the NSW Labor Government to build a $4 billion metro rail system in Sydney's CBD and inner west.

When he announced the CBD metro last month, NSW Premier Nathan Rees was hoping the project would be funded by the Federal Government as part of its planned $20 billion infrastructure spend designed to increase national productivity.

Deafening silence from Canberra, Imre. Not exactly a lot of clamour for yet another urban metro (isn't that what the monorail does? Or the Central to Lilyfield tram?) or for the huddled masses yearning for a trip to Rozelle. Do you really think these guys should be taken on face value?

In his speech to parliament at midday _ and his first ever visit to the NSW lower house _ Mr Roozendaal said he had crafted “a tough, decisive and detailed mini-budget demanded by the times in which we live.”

Yeah, he would say that, wouldn't he Imre. You make Glenn Milne look like Chris Masters.

The mini-budget was brought on by a $1 billion collapse in stamp duty revenues, as the Sydney property market sinks deeper into the doldrums, and a $450 million writedown of anticipated GST revenue as families cut back on spending in the face of the global economic downturn.

Also, the parliament's rejection in September of the Government's plan to privatise $10 billion in state-owned electricity assets has meant future capital spending needs to be re-ordered.

That, and 13 years of lazy government - helped by lazy reporting like yours, Imre. O the shame of being shown up by the SMH, here and here.

The Government will also introduce a licence fee for child-care centres of $700 a year for small services and $1100 for large services, to be introduced from 2009-10.

Nice one: just when this sector is at its most vulnerable, Nafe 'n' Eric go stealing food from the mouths of toddlers, and opportunities from their parents. This is clumsy, counterproductive policy at its worst: real journalists and proper oppositions should be all over this.

See Imre, Clenell illustrates by contrast:

"We have crafted a tough, decisive and detailed mini-budget demanded by the times in which we live."

Even though the North West Metro was dumped, the level of capital spending over the next four years only dropped from $57.6 billion to $56.8 billion.

Roozendaal had want to be so, so tough, because he's dopey and ineffective. Right up there with Tony Abbott and Nick Minchin in terms of "tough" and dumb - and politically doomed.

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Stable for days in cars

Here in my car
I feel safest of all
I can lock all my doors
It's the only way to live in cars

Here in my car
I can only receive
I can listen to you
It keeps me stable for days in cars

Here in my car
Where the image breaks down
Will you visit me please
If I open my door in cars

- Gary Numan Cars (1981)

Advertisements for motor vehicles in this country take pains to stress their product is "fully imported", which does not happen in any of the other fourteen countries that can apparently build a car from scratch (nor in any of the countries that can't, presumably, as it would be redundant).

Apart from the Holden Commodore and the Toyota Corolla, all cars manufactured in this country are rubbish. They cost more than they are worth and should not be made. There are better ways to spend six billion dollars for the future of this country than more and more Mitsubishi 380s: why spend it on vehicles when the roads they drive on are so inadequate? Stephen Kirchner is right when he says that investment in the car industry is investment denied elsewhere, but I wish he'd been more specific and less dogmatic.

Why not concentrate on Australian R&D, without the focus on manufacturing? The Toyota hybrid to be made in Victoria is a stop-gap solution because it's not linked to any concerted R&D effort that reduces emissions without sacrificing grunt.

The reason why Labor loves the idea of Australian-made cars is because of the major role that the Australian Manufacturing Workers' Union plays in its affairs. Kill the car industry and a large union with much clout becomes as irrelevant as the French Polishers' Guild. It's clear that a Labor Government will never do anything sensible with the car industry.

The next Coalition government should support R&D and the manufacture of Australian cars that people actually want to buy. There will be some social dislocation within Labor seats (both in communities and in terms of preselections), but we all must make sacrifices. The rustbelts of other countries - including those countries that can go from drawing board to production, etc. - should serve as a warning to those regions within this country clinging to doomed industries. Those communities had a glimpse of their future in the early '90s when the eternal footman held their coats and snickered, they have no right to complain if they have failed to learn that lesson.

Rudd's Labor won its victory not in the rustbelt, but in the sunbelts of the country where growth is being held back through lack of infrastructure. Stopping the mendicant car industry in its tracks would have rewarded the faith of those who put Rudd into office, and who can remove him if when he disappoints them.

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Trashing the brand

The whole idea of a university press is to publish books capable of dealing with weightier matters than are dealt with in today's headlines. Under Louise Adler, MUP books are today's headlines, only with more dead trees to show for them.

There was John Hyde Page's testament to his own silliness, and the fact that Peter Costello's exercise in strident minging could be comprehensively serialised in a few editions of The Daily Fairfax should have alerted MUP to the dangers of the Adler model. Still she ploughs on, raising issues she should have thought about more carefully, raising more questions than she dares to answer:

IN THE past decade or so, the Australian publishing industry has suffered reputational damage from a long line of literary fraudsters ... Authors who fabricate their identity or steal the work of other writers break a contract that is both legal and moral.

Translation: darling! Simply everybody is doing plagiarism these days! The question is to what extent a publisher is obliged to put a book to market knowing that it has been plagiarised. Both the books that Adler refers to there (Helen D's The hand that signed the paper and Norma Khouri's Forbidden love) sold like hot cakes, and on that basis there is no way Adler would dream of pulling Peter van Onselen's All Right, So We Lost: What Do You Want?.

The legal issues are straightforward.

Are you going to sue Julie Bishop, Louise, are ya? Didn't think so. Sabre-rattling is so yesterday.

But the morality of the false authorship brings into question a more profound contract between the writer and reader.

Yes, it sure does. If Adler was concerned about morality she'd pull the book and wear the financial consequences of doing so, to protect the intellectual integrity of MUP. Instead, the next Melbourne Uni student who gets busted lifting an essay straight off the internet should get Adler to brush away any nasty consequences ("so old hat!").

After the 2007 election, MUP agreed with Associate Professor Peter van Onselen that the decimated Liberal Party was an important subject for a book. We certainly did not share the anti-intellectual view of one publishing colleague who suggested books by Liberals were the literary equivalent of a "dog returning to its vomit".

We believed that Liberal politicians would now enter a reflective period, a phase of rigorous self-criticism and reassessment. We accepted this premise for the collection of essays van Onselen proposed to commission.

Adler needs to consult more widely (and so does van Onselen, for that matter). The whole recent history of the Liberal Party mitigates against the premise behind the book, as does the reality of its reception since.

Toward the end of the Fraser government, there were three schools of thought which emerged and began to criticise, in a muted way, the direction of that government: the moderates, the religious conservatives, and the libertarian deregulationists. After Fraser lost in 1983 the gloves were off, especially as preselections were at stake. This warfare continued until 1995.

By 1995 the moderates had gone or been co-opted, the libertarian deregulationists had their go under Hewson and were either gone or pulled their heads in, leaving a sizeable rump of conservatives. The Liberal Party actively sought out candidates for marginal seats who had established networks in their communities but no factional warfare experience within the Liberal Party, who'd accept Liberal candidacy as a franchise and who'd be given all the perks of Parliament so long as they didn't ask too many questions. That was the class of 1996. These people have always been incapable of imagining a Liberal Party without John Howard, in the same way that KFC franchisees can't imagine their brand without the Colonel.

Then, there was the conduct of the Howard government itself: the overarching principle that 'disunity is death' and that any dissent about even the smallest issue is equivalent to outright rejection of everything the Liberal Party stands for. This attitude prevailed to the very end, and had Howard been re-elected last year it would prevail now. There are no schools of thought ready to go in the Liberal Party (I think Tony Abbott's chapter is entitled "Daddy, come back!").

Today, the Liberal Party is in ideological lockdown. The twin global crises of credit risk and terrorism take government into ideologically uncharted waters. Conservative and liberal ideologues are exhausted, as the failure of the Bush Administration shows, providing no help to people like George Brandis who are looking for new ideas to be given a quick spray of eucalyptus oil and adapted for Aussie conditions.

An essay might also be an occasion to display leadership potential to colleagues.

Oh yeah, because the history of the Liberal Party is one essayist after another buffing their intellectual wares. Who's taking whom for mugs now, Louise?

The Leader of the Opposition, Malcolm Turnbull, agreed to contribute an essay. As the deadline loomed, in lieu of an original essay, he suggested we reprint his most recent National Press Club speech. We declined his offer because the criterion for inclusion was that the essays had to be new.

In other words, here was clear proof that the premise under which the book was commissioned was false. Still, Adler ploughed on (I don't blame van Onselen for having a go, but he should have known better).

We certainly did not share the anti-intellectual view of one publishing colleague who suggested books by Liberals were the literary equivalent of a "dog returning to its vomit" ... There is a publishing industry prejudice that Liberals are neither book writers nor book buyers.

Yeah, because what this country needs right now are about half a dozen biographies of H V Evatt, the nutty man of 1950s politics. Mind you, people like that are right to laugh at the idea of bending over backwards to publish Peter Costello's The warm inner glow makes poor light for reading.

It has been disappointing to discover that some politicians are happy to have others do their thinking for them. Even more disappointing has been the cavalier attitude displayed by a few contributors to public debate.

Nobody who has any sort of awareness of Australian politics over the last twenty years has any excuse for coming out with that. It is the mark of a fool to even be surprised at this development, or to describe the norm as the work of "a few contributors to public debate".

Politicians suffering from print-envy but too self-important to tie themselves to the desk for the necessary time display intellectual bankruptcy and contempt for their constituents.

Politicians who enthusiastically accept an invitation to contribute to a book but fail to acknowledge either their sources or their co-authors cross an ethical border. Is it any wonder that the public loses faith in the political process?

Oh please, not again. Here Adler is complaining about a fundamental law of both politics and publishing: lie down with dogs, get up with fleas. Liberals can't see the link between getting published and getting re-elected, and Adler can't see that publishing such a flawed book diminishes her, MUP, the University of Melbourne, and every scholar who might pick up a MUP book and take it seriously.

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Nothing to show for it

In today's papers we've seen two reasons why the NSW Labor Party is dead, and the Rees experiment has failed. They haven't done enough; and they've committed to do much less going forward than is necessary.

Frank Sartor has positioned himself as the keeper of the NSW Labor flame, and given this effort it looks like the flame is so dim a sudden cold snap could see him off.

NSW Labor is re-enforcing the claim of the Opposition and Liberal-leaning media commentators, that the Carr and Iemma governments were "bad" governments. Little wonder that Labor's voting base is deserting it.

Labor's most consistent policy over the last thirteen years has to keep state politics reporters close to Labor. It seems that the closer they get to NSW Labor, the more Liberal they become. Ask yourself why that is Franky boy.

Bob Carr lamented to a student audience at Sydney University that the government was failing to articulate its achievements, citing the falling smoking rate as an example, down 4 percentage points in the past four years alone, largely due to the good work of the NSW Cancer Institute.

Consistent with general declines in this area over the past decade. Congratulations on finding an area in which NSW did not fail utterly, though.

Add to this that suicide rates have almost halved, alongside big drops in cancer and heart disease death rates, and there seems to be a lot of good news to tell.

No right to claim them as achievements of the Labor government, though.

But despite 88 per cent of public hospital users rating their experience as "good or very good", the Government is reinforcing a perception of a "poor" health system and, hence, "poor" government.

88% of public hospital users see staff run off their feet and shoddy equipment, with scope for improving these eaten up by bureaucrats with no heath-related role - only to supply stats among themselves, or to the Minister's office for a press release. At a time of plenty we had a right to expect more and better.

With hindsight, every government can do better, and every government deals with some challenges better than others.

This is pathetic. Sartor's ego could not admit of error or it would collapse, which made it impossible for him to act as an agent of renewal. It's this sort of skittishness in the face of scrutiny that makes people turn off when the spruiking begins.

it is healthy to acknowledge past errors

Healthier still to fix them, Frank. That's what you were never good enough to do.

No one can seriously question Carr's environmental gains. His was one of the first governments in the world to introduce a greenhouse gas trading scheme; it protected native vegetation and expanded conservation lands.

OK, so we're not allowed to question Carr's environmental policies - but what you can do is ignore them. The greenhouse gas trading scheme is a non-starter, not part of the Garnaut future nor much evident in the present. Native vegetation has always been protected and Carr would assume lands without providing for their upkeep.

It introduced sustainability controls on new housing - saving 40 per cent on water and greenhouse emissions

All we need now is some new housing.

A recent national education survey showed NSW children bettered the national average for all skills and categories measured and, in many cases, topped the nation.

This was the case in 1995, when Virginia Chadwick was Education Minister, and NSW has only succeeded in this field to the extent that it (repackaged, renamed) continued those policies.

Community services and child protection have been improved

This is a lie. These areas have been run down to nothing.

Almost all public hospitals have been upgraded or rebuilt ...

Basic maintenance has been meagre, as you'd expect under a Labor government.

... the health budget more than doubled ...

Given an increasing but ageing population, a baby boom and significant advances in health technologies, not to mention bureaucratic bloat, this can only be described as pathetic.

... and waiting lists for predicable surgery have been slashed.

No, they have been fiddled with until they cease to function as useful indicators of reality.

... the Olympics was an outstanding success and five expressways were completed ...

These were legacies of the previous Coalition government. Again, Sartor is seeking credit for not screwing them up rather than claiming success for Labor.

... critics dwell on teething problems with the Cross City and Lane Cove Tunnels, where the government rightly shifted the risk to the private sector.

These were Labor initiatives, Labor screw-ups. The government was absolutely wrong to shift long-term transport planning to commercial interests that had no interests therein.

But recent changes to planning bodies -

Oh Franky boy, don't even go there, Rees will look after the ALP donors, that's all you need to worry about.

In public transport the Carr government built major bus transitways and started the rail clearway program.

So? A pathetic and desultory effort. At a time of plenty we had a right to expect more and better.

Iemma ... devised the visionary metro line to Rouse Hill. This was to properly connect Sydney's east and west.

The metro line was always the wrong solution of the northwest, and the clowns who spiked the Parramatta to Epping line can claim credit for nothing.

Carr and Egan have been criticised for paying off all the state's debt - $12 billion of it - and not spending more on public transport infrastructure instead. One can agree with that criticism with the benefit of hindsight.

Fine, but the whole idea of you being there was to change that decision at the time, not to mince around it in hindsight.

The trouble with the stampede to rebrand the Government is that it risks ditching good policies for the sake of short-term political expediency.

If NSW Labor loses the next election its only legacy will be the good policies it fostered. Political gymnastics and spin is never enduring. If that happens Labor's Sussex Street head office will have a lot to answer for.

It has ditched non-policies and flung itself into a void, and as to NSW Labor having anything to answer for - you helped create non-answerable Labor, Frank, Labor that spruiked but did not listen. Thirteen years of achievements press releases have wafted down Macquarie Street and are choking turtles as we speak, Frank. This isn't atonement, it's nothing at all.

A bit like this, really. Rees has been planning to ditch the northwest metro for ages but has not had the guts to announce it. People stopped listening to him once he commissioned the Supercars thing at Homebush. He really thinks that the future of hundreds of thousands of people matters less than the Leg Man from Bankstown.

"Labor's planning policies are putting a city the size of Canberra into Sydney's north-west and now Mr Rees has condemned those people to continued use of buses and cars."

Too right Barry, this is the single biggest failure of thirteen years of planning Sydney. Now, you have to come up with some ideas given that Rees is so discredited.

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No wiser after the event

I'll state my biases up front and declare that the problem comes down to the whole notion of "packaging" or "bundling", whereby high-risk housing loans were presented as low-risk collateralised debt obligations through sleights of hand. Ratings agencies are to blame here, as is the sheer sloth of the institutions involved - if just one had challenged the idea that a CDO made up of high-risk loans could not seriously be classified as a low risk bundle/ package/ other, it would have been a triumph for the lawyers concerned and the whole business could have been unwound in a much less messy way than has come to pass.

Richard Clapton sang "we search for leaders on our hands and knees", and searching for answers on the economic issues besetting the country and the world is little more elevated. However, I do know bullshit when I see it and Stephen Kirchner has helped put some of the problems in clearer perspective, however unintentionally.

In the world according to the Prime Minister, "this culture was never challenged by a political and economic ideology of extreme capitalism". The credit crisis "bears the fingerprints of the extreme free-market ideologues who influence much of the neo-liberal economic elite".

The Prime Minister almost sounds like a conspiracy theorist, blaming the world's problems on shadowy elites and greedy capitalists. Unfortunately, Rudd is not alone in this. Politicians across the world have been quick to point the finger at financial markets and the executives who preside over financial institutions. Even US Republican presidential candidate John McCain has sought to blame Wall Street, which he describes as a casino.

It's one thing to quote someone selectively, but it takes breathtaking stupidity Kirchnerian skill to miss the point of the selective quotes that are used: well, half of them anyway. Rudd was having a go at the US financial markets as well as the US regulators. This includes not only elected members of Congress but also those who work for public-sector agencies charged with regulating the US financial system. Congress passed lazy, watered-down legislation. Regulatory agencies were slow to detect, let alone pursue, breaches of the law. The Administration of George W Bush and the Republican-dominated Congress for much of his term discouraged enforcement of such regulations that there were in the financial markets.

Kirchner could only have supported such a tame approach to financial sector regulation. Do you really want a vigilant set of regulators, Stephen, and would you support a tax system that paid for such? What if there were Congressional hearings in say 2005, with Senators McCain and Obama railing against shonky debt instruments, when neither of them had any experience with the finance sector? What if Richard Fuld or some of the clowns from Bear Stearns (remember them?) had gone to prison around that time? Stephen Kirchner would have been the first to condemn such heavy-handedness by the dead hand of the state (actually, he would have followed closely behind otiose Washington gossip queen Grover Norquist).

What if an Australian financial institution, as recently as last year, had refused to participate in packaged/ bundled/ other shonky debt instruments? Stephen Kirchner would have condemned them as Little Australia protectionists, out of step with the wider world, you just don't get it do you.

It is not surprising that politicians seek to scapegoat capitalism in general and financial markets in particular. Capitalism and free markets have always been objects of popular suspicion, even in a notionally free market country such as the US. Politicians pander to these popular prejudices, not least because focusing attention on supposed market failures diverts attention from their own policy failings.

Here, Kirchner tries to pretend that a recent fundamental philosophical turning point underpinning the interoperation of markets and government did not take place. Alan Greenspan admitted that he overestimated the self-interest of institutions as a mechanism for market self-correction. Greenspan effectively admitted that it was not the regulations themselves, not even the regulatory environment that he had helped create, but the very idea that markets contain self-correcting features (in which Kirchner clearly still believes).

On the one hand, capitalism is accused of elevating self-interest above all other considerations, such as altruism. On the other hand, we are also asked to believe that financial market participants are driven by irrational sentiment that ultimately harms their own interests.

Whatever one's view of human motivation and individual rationality, one needs to make consistent assumptions about human behaviour. People are not altruistic or rational one day, then greedy or irrational the next.

Kirchner underestimates just how many examples there are in both of his "hands", and if he regards this as a paradox then perhaps he has framed his argument wrongly. Wait till he discovers that individuals can be greedy on occasion and altruistic on other occasions! Wait until he confronts the idea that an action can be interpreted as both altruistic (helping poor folk buy their own homes) and greedy (people sucked into obligations they can't afford; financiers "packaging" a high -risk debt as a low-risk one) at the same time.

How does Stephen Kirchner deal with the paradoxes of the modern world? Hurtle back three centuries into the past:

David Hume noted as long ago as 1741: "Avarice, or the desire of gain, is a universal passion which operates at all times, in all places and upon all persons."

In 1741 the beaver-fur traders of Wall-street did not have the clout to depress markets for credit and real estate in Edinburgh. Hume can be excused for not addressing the issues of 2008, Kirchner cannot.

The advocates of free markets seek to make consistent assumptions about human behaviour and argue that all people respond to incentives. Good people can be led to do bad things and bad people can be led to good things, depending on the institutional setting in which they are located. If we are distrustful of the motivations of people in the private sector, we should be just as wary of the motivations of those in the public sector, not least because the latter have considerably more power over the rest of us. Their mistakes can consequently prove much more costly.

This is sheer intellectual laziness, an unfounded and unsupported assertion. It sounds more like a statement of religious faith, a lunge for solid truth amid a swirling, churning and frightening reality, which might explain why Catallaxy people snarl at you for daring to question a fatuous statement like that.

What we need are institutions that are robust to the inevitable errors of public as well as private actors.

Any ideas? What do you mean, no?

The routine violations of perfect competition are often viewed as automatically justifying government intervention to correct market failure. The inevitable violations of the efficient markets hypothesis also have been used to argue that free markets deliver inefficient outcomes, without bothering to establish whether proposed regulatory interventions are likely to improve on these outcomes.

The best way to guarantee 'perfect competition' is to be transparent about who you are and what you're doing. Most corporate regulation since the 1980s has been geared around this principle: be transparent, disclose up-front, use disclaimers. In the past ten years or so there has, in Australia and the United States, been little in the way of high-level thinking about corporate regulation. Instead, there has been a kind of urban warfare over individual clauses, played out not in open court but by lobbyists in backroom deals. Kirchner would be wrong to blame politicians and regulators for this phenomenon, except insofar as they did not tell the lobbyists of free-market champions where to get off.

Governments and regulators for the most part rely on the same information and the same methods for analysing that information as the private sector. This is why regulators and governments are no better at avoiding mistakes than the private sector.

This does not follow logically at all. It is possible for two parties to have access to the same information and for one party to make better (however you might quantify that) use of information than the other. Again, this is a statement of faith.

But the private sector has the distinct advantage of a focus on the bottom line. This is a powerful incentive to avoid mistakes, but only when the costs of those mistakes are borne privately rather than publicly.

Have you learned nothing from the failure of Bear Stearns, Lehman Brothers, Northern Rock? Nothing? Such companies cannot be said to fail privately. Perpetrators of such all-encompassing failure cannot expect, cannot demand to have their yearning for privacy respected. If a thief who steals $100 is tried in open court, so too the fool who sends a company, an economy down the tubes must be examined publicly, if for no reason other than this does not happen again, that actions have consequences. Can the man who flaunts his wealth credibly seek privacy?

Markets also have the advantage that they are self-correcting.

No, Stephen, they do not. No correction is possible in the current market without government intervention. This is not an assertion of faith, it is a shriek of denial.

Falling US house prices are the market's way of correcting the oversupply in US housing. US house prices began responding to this oversupply well before the problem was recognised by regulators or by government.

The US housing market is not in equilibrium, and any disequilibrium cannot be sheeted home to government.

In credit and other financial markets, the present crisis can be interpreted as a global re-pricing of risk following an extended period in which risk was incorrectly priced. Again, no government or regulatory intervention was required to set in train this market correction. We may not like the price signals generated by markets in the context of the credit crisis, but that does not mean the market is not working or the price signals are wrong.

Yes it does actually. It isn't just the price of credit that's the issue. Australia has not engaged in subprime lending to the extent as has happened in the US, yet Australian lending has not only been repriced but actually restricted. The whole idea of the US government's intervention was not just that credit would be repriced but that the supply of credit between institutions and within the market would actually dry up. Please understand this Stephen: government, politicians and regulators, have stepped in to avoid market failure.

If there is a role for government, it is in facilitating the re-emergence of these private markets, without crowding them out or standing in the way of the market adjustment process.

I love the arrogant assumption behind the If there. It's a straw man to expect that regulators are seeking a non-market solution, or to "crowd out" such market as remains. Such an assertion also puts the finance market in breach of one of the fundamental laws of both politics and economics: beggars can't be choosers.

This is why you work to avoid market failure: the alternative is the humiliation of being regulated by government. CIS does the market no favours by seeking to remove this threat.

The financial crisis is as much a failure of regulation and government intervention as of markets and should be a humbling experience for governments and regulators, no less than for market participants.

Market participants have the consolation of bonuses, even in the face of catastrophic failure, which is not open to government employees. Sometimes you just have to cop the superiority on the chin. If resentment of this treatment avoids market failures going forward, so much the better.

Stephen Kirchner is an intelligent man wedged in an ideological crevasse. The idea that government has no role to play in the global financial crisis is nonsense, as is the idea that it must be more respectful to those who have led us here. The CIS and all of its research fellas should be adapting their ideology to fit current and foreseeable reality. Peter van Onselen tried to do this; he only had the thin intellectual soil of the Liberal Party to work with he had almost set himself up for failure. Kirchner, with the Lost Boys of the CIS and Eye Pee Yay to draw upon, has no excuse for embarrassing himself so publicly.

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