politics thinking too loud

The End of the Obama Presidency

Today marks the end of the Obama presidency, and in some ways, it seems to mark the end of an era – or perhaps more pessimistically, the respite from the decline of an era that effectively ended with the events of September 11th, 2001.

Perhaps we’d been to unwilling to admit it over the last 8 years, but since 2001, the United States of America turned from being a leader for the multicultural, involve-everyone-everywhere sentiment to the navel-gazing self-interested country that its enemies had always accused it of being; where George W. Bush led the country into misadventures and tipping the delicate balance that had held for the 90s in the Middle East into the dumpster-fire, basket-case of a region it seems right now.

Obama’s efforts to revive American interest in the progressive, outward looking world seem an exception – the first years reacting to the financial crisis of 2008 that was never quite a full-blown multi-year recession, followed by the battles with the Republican opposition that organised into a parliamentary style opposition rather than the loose confederation that had always been the operating standard in the US Congress.

Obama’s efforts to rehabilitate America’s image post-W were for the most part successful – despite the ongoing issues in Syria, and the free hand used with drone warfare around the world, the open engagement with the world community and the level-headed leadership was respected. Adults were in charge. For a few years, it seemed like we could put the Bush years down as the anomaly.

Now… now we’re getting Trump and his henchmen. Bush wasn’t the anomaly, he was the prototype – a deep distrust of intellectualism and expertise infecting a populace convinced that things won’t change. The shame is the distrust of expertise, and the necessary recognition of this utility. Watching confirmation hearings for key executive branch positions, it’s clear the people being put in charge of these things have little to no idea of what they’re getting involved in. We’re going from people with deep knowledge and care to people who openly oppose the very notions of the departments they’re supposed to be running.

It’s like their assumptions are that everyone should have an equal chance at trying things, without realising specialist roles and knowledge are useful; the idea of putting a CEO in charge of an organisation and purpose that he or she does not know is not infinitely applicable; experience and excellence in the field of business does not equip one to consider a fundamentally different purpose in the public service space.

Add in Trump’s own openly declared insular views – withdrawal from NATO being on the table, a deep distrust of the UN and international processes, the childish ideas of a wall on a border, the hostility to global trade – and you see America steadily pulling its head in, repeating the experience of a hundred years ago as the post-WWI America retreated. Where they once led by example, now they disown any position of leadership beyond economic and military, both of which are likely to be overtaken soon by China and its particularly control-heavy model of society.

For most of my life, America’s been a presence that shows the way for a free and democratic society. The respect for law, freedom of speech and press, and the willingness of the people to experiment, try, fail, get back up – all ways in which the country and its culture has attracted people the world over for centuries. Sure, there have been foibles and ongoing failures, but now, it appears a dark curtain is falling across the country, and hope that America leads the way disappears.

Russia talks up hegemony in a oligarchical state led by a virtual dictator; Europe bifurcates as the populist movements tear apart international cooperation; China of all countries – the most successful notionally communist country – is a major proponent of free trade; Australia meanders directionless as leaders abandon leading; what hope do we have of solving big international problems like climate change – barring the fact that China itself recognises the costs, and India too commits to skipping the carbon heavy phase of development. With mistrust of expertise in the west though, I fear we just end up mired in the muck.

Today marks as strongly as November 8th did the decline and fall of American exceptionalism; for all that Trump claims to lead America to new greatness, is there anyone outside America that takes this credibly? The life he’s promising is long gone, the world moving on. Whatever comes next does not resemble the 1950s, but that’s what Trump and his followers hope and dream for – an era of greatness for a slice of the population not adapting to the world’s changing tides.

May you live in interesting times, as the Chinese curse goes.

opinion politics rant

The Role of Shame in Politics

And so at long last, we reach US Election Day 2016, when a reckoning has finally come for the American political system – the candidates perfectly set up as the establishment facing the insurgents, the know-nothing Donald Trump squaring off against the know-it-all Hillary Clinton.

How did we get like this?

How did we get from the point where once upon a time, a candidate that was even threatened with being revealed to be cheating on his wife, would step back, stand down, or resign altogether than face the music, to the point where we’re seeing a candidate standing despite those accusations and worse being thrown around, and still he appears to be as close as a 3% gap?

What changed to allow this to happen?

Shame. Or the lack thereof.

It is the nature of public shame more than anything in democracies to operate as the public conscience of the politicians. It is not the law that forces a resignation in the face of allegations of adultery, for instance; it is shame that pushes a politician to resign when word comes to light of legitimate but morally dubious donations; it is shame that forces departures that allegations of falsehoods bring to light, no matter how legal it may have been at the time.

It is shame, a somewhat quaint notion intrinsically linked with the quainter notions of honor and propriety. It is with shame that we have driven much of the better behavior without needing to codify it.

It was a key component that drove the first parliaments in England – honor and shame being what for years was enough to bring glory and to end careers. So much of parliament’s rules are mere conventions, and adherence to these is driven by the honor of doing the right thing. Where a parliamentarian would cross a line of honor, the sheer shame of doing so was in it self enough to force change.

Now? Who would bother with feeling shame, if the penalty isn’t there? Where’s the big stick as a result?

Let’s take the concrete example in Australia most recently of George Brandis, Attorney General. Ignoring the Solicitor-General’s advice should be grounds for dismissal due to ministerial dereliction of duty; misleading Parliament should have been sufficient for the shame of those deceitful actions to force Brandis to walk, as apparently it’s not an offence to do so.

Brandis didn’t walk, he didn’t fall on his sword, and Turnbull didn’t dismiss him.

Instead, these days, there’s no shame in it. It’s being able to go to the extremes of previously tolerated behavior, and then keep going, because what’s the penalty?

And thus we have Trump. A man with no shame so much that he keeps getting away with so very much and reaping the reward. We don’t hold Trump to a higher standard; we understand this man is poor and devoid of character in many ways, but it doesn’t matter because he’s on the side that uses shame when convenient and brushes it away. It’s not illegal, why should he apologize?

The outright denial of facts and truth is entirely possible if there’s no shame in doing so. If there’s nothing to say “You lied and you ought not have done that,” then where are we left to go?

Where is the shame in treating humans the way we’ve done in Nauru and Manus Island? Political expediency rules.

Truly, we will need to restore shame to its rightful place amongst the emotions that govern those who would governs us, because without it, Trump isn’t the last on this band-wagon, and that’s a truly terrifying thought.

politics quickie

Did George Lucas predict the current political environment?

A bit more US-centric, but this gives me the shivers:

A long time ago, in a galaxy far, far away, paralyzing political divisions threatened democratic governments. Disputes over free trade, and the free movement of people and goods, were a big reason. Stymied by polarization and endless debates, the Senate proved unable to resolve those disputes.

As a result, nationalist sentiments intensified, leading to movements for separation from centralized institutions. People craved a strong leader who would introduce order — and simultaneously combat growing terrorist threats.

Think we’ve already got Senator Jar Jar Bernadi here in Australia…



Comparing economic records

May 2016 marks 43 years and 6 months since the election of the Whitlam Labor government in 1972, and conveniently provides a mid-point for the two political parties – 21 years and 9 months of government each. Stephen Koukoulas uses this pivot point to provide a detailed comparison of their respective economic performances, and he comes up with more-or-less a dead heat, with a slight edge to Labor:

The overall weighted average quarterly GDP growth rates since 1972 are 0.80 per cent for the Labor Party and 0.77 per cent for the Liberal Party. This shows that the economy grows faster, on average, under Labor than the Coalition by 0.03 per cent per quarter, which is a touch over 0.1 per cent per annum.

Figures are similarly in Labor’s favor for job growth – noting this also includes the recession we had to have.

Something to keep in mind this election season, and for the budget tomorrow.



Gerard Henderson contends today that Malcolm Turnbull has no hope of being Prime Minister after his appearance on Lateline last Wednesday:

Turnbull’s lack of political judgment has blinded him to the fact that his body of support is located outside the joint-party Coalition room in Canberra. Most Liberals and all Nationals parliamentarians who watched Lateline on Wednesday would not have regarded themselves as viewing the performance of a potential prime minister.

There’s something to be said for Henderson: he consistently writes for the insider’s point of view. Henderson’s main contention is that Turnbull stands alone in his view on Climate change, and so he has misjudged the politics of the party that he belongs to, and doesn’t have a hope of regaining leadership.

On December 1, 2009 Turnbull lost the leadership to Abbott by one vote. There is little doubt Turnbull would have survived the year if he had not decided to criticise his senior colleagues. This was widely regarded as poor judgment and mismanagement.

It certainly would be regarded by political hard-heads and those who lust for power at any cost to be poor judgement, but I would suggest that it rather won him many a moderate, centerist voter, myself included. Turnbull stood on principle, and staked his job to it – the result may have been for him to lose it, but it certainly showed him to be a different breed of politician, one rarely seen these days.

The Westminster system is geared towards party lines and groupthink, but occasionally it throws up oddities like our current government, holding on by a slim majority at the mercy of a small band of independents. Each independent truly is so, and their actions have demonstrated as much – they may have agreed to the common cause of the government, but that doesn’t stop each of them having their own agenda. Collectively, that is driving change in Australia (or, well, at least the discussion of it) more strongly than any time in the past 10 years.

Turnbull appeals to many voters who Labor is losing to the Greens – voters who would have once numbered the box for the Australian Democrats, disenfranchised by that party’s collapse as polarisation drove people out of the centre as quickly as the major parties themselves dove for it. Henderson appears to frame it as Abbott’s appeal:

Abbott’s political strength is his ability to appeal to traditional Labor voters in the outer suburbs and regional centres…

Without question, Turnbull’s approach to climate change enjoys considerable support within inner-city electorates, like his own, among well-educated voters in relatively secure financial circumstances. But this stance does not enjoy anything approaching majority support within the Coalition, which is looking to gain votes in the suburbs and regions.

The votes in the suburbs are bought through simple baiting: a tax break here, a government subsidy there, and soon enough the Coalition of “conservatives” resembles nothing so much as a hand-out and patronage machine. Ironic indeed that Labor is cutting hand-outs, where once they stood as proxy for the socialist agenda, while the Coalition argued for fiscal restraint. The heavyweights of the Liberals’ leadership are lightweights on the policy front.

Abbott’s appeal is in opposition, in declaiming the doubts that the government is doing a good job: repeating a thousand pub conversations that once meant nothing, but now appear to define political debate. Abbott does not show why he must be the alternative prime minister; the relentless demonization is to simply bring down the current government in a huff of anger.

Henderson also had a shot at Turnbull’s argument that a conservative British government introduced a cap-and-trade scheme, much as Howard once proposed, by arguing that “we’re not like them… we’re like someone else,”:

Turnbull overlooked the fact that the British economy is quite different to Australia’s. Britain has a large financial services industry, which benefits from trading in energy. Also, Britain does not export coal or iron ore and relies significantly on nuclear energy for power. The Australian economy is closest to Canada’s – where Stephen Harper has just led the Conservative Party to a significant victory with a promise not to proceed with a cap-and-trade scheme until the US does.

This overlooks the fact that we are different again from Canada. Canada too relies on nuclear energy for power – indeed, they are out there as innovators in the field. Canada’s economy is tied to the US in a way stronger even than our own economy is tied to China. And finally, the most cynical view, Canada potentially stands to gain from a marginal increase in temperature, whereas Australia only has reason to fear.

Canada’s northern expanses are vast and unused; warmer temperatures would make more of this accessible, though I can only imagine that is never going to be brought up as a reason to delay in any public or on-the-record discussion. Australia stands to lose – greater droughts, more uncertainty over rain, and destruction of fragile lands at the fringes – the semi-arid areas, the Great Barrier Reef, and the expanses of arable land in the interior turning slowly to salt plains.

I don’t contend for a minute that Australia imposing a carbon price will cause climate change to disappear, but without leaders who at least consider all the aspects of a solution, such as Turnbull has consistently been, we’re not going to be able to influence the outcome at all.

Turnbull might not be able to lead the Liberals and the Coalition as it stands today, but I’d much rather have someone who can think through and hold to a principled stance than an opportunist ready to jump on the latest bandwagon – and that goes for both sides of politics.


Out with the old…

… in with the same old story.

You’ll have to pardon me if I’m somewhat cynical about government, newly elected in a historical landslide, coming in and saying there’s a $4.5 billion dollar “hole” in the budget not revealed by the previous administration, and that means all our policies have to be “reviewed”.

It sounds like the perfect excuse to abuse the broad mandate handed to the incoming government. The spin is already revving up – the “hole” is over forward projections:

In December the half-yearly review of the budget forecast a surplus of $432 million for 2012-13 and $129 million in 2013-14 (see report, page 4).

However, yesterday’s briefings revealed the updated prediction is for a deficit of $405 million in 2012-13, which is forecast to rise to $1.2 billion in 2013-14.

The Treasury briefings show that by 2014-15, the budget will have fallen $2.4 billion into deficit. However, this is beyond the scope of the forward estimates, which only run to 2013-14.

The government reached its $4.5 billion figure by adding up the forecast deficits between 2012-13 and 2014-15.

And further to this is the obsession with a AAA credit rating, for which they say we don’t want to threaten by borrowing. What’s the point of a credit rating if you don’t use that credit?

Labour was full of incompetent fools, but let it not be said that the Coalition is not above petty old politicking.


Getting What They Deserved

I’d say I’m not surprised that we ended up with a hung parliament given the disgraceful campaign we just had, but I’d be lying; the truth was I was expecting more would be swayed by Abbott’s message and we would end up with a coalition of dithering in power, but instead we’ve been given a result that could be the start of a shift in Australian politics.

That of course is the emergence of the Greens as a solid force. With 11% of the primary vote, most of it stolen from Labor no doubt, the Greens have shown themselves to be adept at getting a clear message out: this is our policy, and this is why you should vote for us. Sticking to principles is something that the electorate has clearly endorsed here.

Third parties in the Senate have come and gone before – the Democrats after all had 9 senators just a decade ago, and three elections later disappeared off the map. What gives some hope here however is that the Greens have managed to take a seat in the House of Reps, something the Dems never managed to do.

You could argue that the Greens are but a fifth column for Labor, but clearly what happened in this election was that Labor thought they could get away with shifting rightwards to the centre and could rely on Greens preferences from the left they’ve abandoned to get them over the line. In a few key electorates, this hasn’t happened.

Melbourne, obviously, was the big one, and without a conclusive primary vote Labor was screwed. Two of the seats still potentially up in the air, Denison in Tasmania and Lindsay in Western Sydney, don’t have Greens preferences flowing to Labor and the net result may be a loss of these seats, or a severe cutback of the margin. Labor have been dumped by part of their ideological core because of their lack of principles in attempting to retain power.

The point to be made here is that the previous status quo in Australian politics was unusual by global standards – two major parties (never mind the Nats, who haven’t had an independent voice in years) alone dominating the executive branch of government is rare, with fluid coalitions far more the order of the day and perhaps even could be considered more democratic.

However, that is not to say government determined by a small number of independents is automatically a good thing. The temptation for pork barrelling is great, both for the parties to buy them off and for the independents to demonstrate a return for the electorate, but I think in this case we’re lucky in that the key people are men of principle and intelligence.

Windsor, Katter and Oakeshott appeared simultaneously on the 7.30 Report last night, and performed admirably. Windsor showed gravitas and experience, Katter passion for the people he represents and an independent mind, and Oakeshott an idealism for improved parliamentary process combined with a pragmatism for getting the job done. All three emphasised stable government and the need to avoid a quick re-run of the election (some suggest because there’s only so much campaign funds available to these independents).

Labor’s situation is such that it can afford to breathe a little easier in all this. The Greens MP has indicated that he would prefer to work with them, which gives them one more seat by proxy. If the result in Hasluck falls Labour’s way, that leaves Labor as the only credible side able to form government. Denison may yet fall to Wilkie, and his politics are unknowable – a former Liberal party member, a whistleblower on the Iraq war against Howard, a former Greens member and now standing as an independent. You’d suggest he’s shifted left-wards, but it’s by no means guaranteed.

The independents in the country have made a point about the NBN being favoured, which has me hopeful, as much of Abbott’s economic case is dependent on dropping that to pay for other policies. I personally hope Labor gets over the line on the back of this alone, but the compromises that occur on the way will be fascinating to watch for.

the daily column

Election 2010

It says a lot for this election that I’ve waited until Election Day to say anything about it that goes beyond 140 characters. It has really been that kind of election campaign – a dearth of substance from all sides in an effort to come to power by attacking the other side. It’s not a contest I want to engage in.

Gillard (how could I not have written about this before?!) came to power under circumstances best described as controversial – though far from unprecedented. You don’t have to explain to NSW voters that the leader can be replaced at the drop of a hat. The Liberals have gotten good running out of this.

That said, I understand the reasoning and the political machinery behind this. Rudd was unpopular and with the mining tax was fast making new enemies.  The Labor political machine, spooked once before by Howard’s pincer with Latham over the Tasmanian forestry unions, certainly didn’t want a fight with the mining unions on their hands, especially after they saw what could work with the unions in the 2007 campaign. In a way, the replacing of an underperforming leader is a policy that would be well supported in the market, had the government been a corporation. As it is, the electorate is mostly stunned at the notion, and the “Faceless men” bogey is back.

With an election called so soon, there was no real chance for Gillard to have established herself as incumbent PM, and so we have a farce of a campaign where both parties are pretending to be oppositions. Each side is playing a low-risk, high-attack campaign which puts the leaders front and centre in a presidential-style election that bears no relation to the actual voting method. Most telling for me was a colleague filling out a postal vote asking where Gillard was on either the House of Reps or the Senate ballot – that’s not how the voting system works, but for many they can’t see this until they get a how-to-vote card in hand.

The Coalition has led with a simple slogan that Abbott trots out over and over, but fades from my memory almost as soon as it’s out of mind. Stop the boats, end the waste, pay back the debt, something something. Their policies are defined by what they will do to oppose Labor’s current actions, be it on the boats, broadband, or hospitals. The only policy that goes beyond is for paid parental leave, where Abbott comes in with a policy that is simultaneously left and right wing: maternity leave at full salary-matched pay. A tax on big business to pay for a social entitlement is left; paying people at their full salary, instead of an equal payment across the board (Labor’s policy), fundamentally right-wing. Breathtaking.

Labor on the other hand offers…. not much, really. Gone is the ETS in any reasonable time, gone is any pretence to a fair and balanced refugee policy. The policies being sold are the ones which already are in motion – the NBN, the Health Network, and further pushes on the education front. The attack has been focused on the straw-man of Work Choices returning, which I find unbelievable given the Liberals knew the extent of the rejection at the 2007 poll. Labor have been no more inspiring than the Liberals, offering the status quo as an argument while trying to campaign without their legacy due to their fresh dumping of Rudd.

Gillard stumbled hard after the election campaign started over the manner of Rudd’s replacement, and then faced derision over the Real Julia punt. Abbott has managed to skate through without any headline bumbles as he simply avoids anything where he could screw up. That the man campaigning to be future PM did not show at the release of two significant policies, broadband and, well, the entire financial plan shows the sheer opportunism. Here is a man and a party that cannot say that it has a full grasp of the policy it is relying on the attack their opponent’s key policies.

The media is no less to blame. The headline presidential show of Gillard and Abbott running around the country (in Abbott’s case, quite literally) attracted the media, while real policy debates at the National Press Club went ignored by all but the most serious. Perhaps the apex of this shallow focus was the attention given to Mark Latham acting as Channel 9 journalist – the focus was on the media process, not on the election process. I remember being told as a kid that if you respond to the bully, he will act up more – so why did Latham get any attention at all? I didn’t see a single contribution, positive or negative, from him.

There has been no meaningful economic debate at the highest level, the focus entirely being on the meaningless size of the budget. There’s been no debate on foreign policy beyond the meaningless focus on the boats. There’s been nothing on arts, science, defence, infrastructure, agriculture, or industry, all serious policy areas and key ministries. The debate on gay marriage has been shut out entirely.

The blame for shallowness of the debate and the election can in some part be put at the feet of our election system. The rule of the marginals, you could say – it would be in Australia’s best interest for every seat to be a marginal, the government at all times at risk of being shoved out. Right now though, the marginals are focused on the fringes of cities, suburbia filled with families. The nature of swinging voters in these seats is to simply ask, “what’s in it for me?” and wait to be rewarded. I now live in a marginal seat, and all the advertising locally has been focused on that exact question.

I don’t want to see Australia’s destiny ruled by the marginal seats. Self-interest has been the order of the day for far too long: what is good for the family in outer Sydney or Brisbane or Melbourne isn’t necessarily good for the nation. Population growth is not so onerous yet that we need to make a significant cutback and label the population ministry “sustainable”. Governments can borrow money in the order of billions and not struggle to pay it back over a reasonable time frame – the analogy I prefer is that we need to make a renovation, so we’ll borrow some money from the proverbial bank to build it now, and repay it later with a bit of interest. If you simply save and save and save, you’re going to be stuck in your shabby little house from the 80s for years.

The other analogy should come from business: capital investment. We’re investing this money now because it will pay off in the future. I’ve heard Gillard mention that term exactly once. Abbott would have you believe that Australia needs no public capital investment, and that the private sector will provide. It certainly hasn’t provided so far, so why should it now?

I’m pretty sure I’m going to vote the Greens as my first preference. They’re not perfect – many of their policies take a good idea and extend it to the left. Were they to play a significant role in government, these would need to be moderated by a sense of reality. Nonetheless, their policy platform sits far closer to my ideal than Labor or Liberal. A national broadband network without the stupid filter; investment in education through an increase in the mining tax; compassionate treatment of refugees; and of course, most of all, an ETS that makes some real difference – punish the polluters in order to make them change their ways.

Everyone pretty much knows a vote for the Greens is ultimately a vote for Labor, and that’s disappointing. Labor does deserve to be punished for its presumption of its support base. The Liberals however don’t deserve to be rewarded for blind opposition. I suspect if Turnbull had still been the opposition leader and we were still having the same election we have today, I would have wavered, but Abbott? Are you kidding me?

Here’s hoping for PM Gillard to be returned tomorrow, or we shall learn how truly self-centred Australians really are.


The Decoupling of Reality on the Right

Between the birthers, deathers and the general right-wing lunacy on show in the US, I think David M. Green picks up a few important threads that we’ve seen:

Can we really live in a country populated by so many fools, people who can so readily, proudly and belligerently be made into tools of their own destruction? Can the greatest political, economic, cultural and military power on the world’s stage possibly be so incredibly backward at its core?

This is what I don’t get: where have all these … nutjobs come from? What makes these people, who ostensibly have some education, behave in such an irrational manner, especially over a topic as apparently uncontroversial as health care?

[W]hat seems to me new about this moment is the political road rage, the thuggishness of masses of Americans who not only are venting about insane nonsense, not only are undermining their own interests acting as marionettes of laughing corporate predators, and not only are taking down democracy around themselves in order to do so, but are in fact also destroying the entire Enlightenment project of rationality-based management of public affairs as well. The single most frightening characteristic of this movement, to my mind, is that fact that no amount of evidence or logic could persuade these folks to abandon the lies they’ve attached themselves to[.]

It’s certainly astonishing to me that these people are arguing against a government service. Virtually everywhere else in the world, government services are considered good, exemplary even. You pay taxes, and in return the government provides services. Sure, commercial entities might be able to do the same deal, but at least you know with the government they’re not looking to make a buck out of it.

But I think the point being made above is that some time in the last 40 years, logic disappeared from the public sphere. It’s as though the last generation to witness truly involved war refused to educate their children about some basic things about respect for others and their views; that or some were taught too well and ended up on the left side of the nominal fence, while those who didn’t pay attention to lessons about humility and the importance of reason ended up on the right side. That or these people truly are pawns of a vaster conspiracy.

Anywho, go read the whole article before I repeat it word for word.

opinion politics

Caveat Lector

A response to this rather infuriating article:

Paul Sheehan has a rather glaring contradiction in his article on Monday, accusing “Comrade Rudd” of being a great illusionist. To claim on the one hand that the Prime Minister falsely represented himself as an economic conservative, but argue on the other hand that following Keynes’ General Theory is not economic conservatism appears somewhat contradictory.

Keynes’ ideas of macroeconomics had been largely displaced by Milton Friedman and the Chicago School of Business’ laissez-faire monetary approach since the 70s, so it seems that a return to older ideas would indeed conform to the ideas of conservatism in the field of economics. Applying the approach used to solve the Great Depression of the 1930s seems like the very model of conservatism.

It is also telling to read the full text of Niall Ferguson’s quasi-blog-post. Sheehan very selectively quotes from the source, which is primarily focused on proposing a solution for America and its banks.

Niall Ferguson’s article focuses on the fact that the US and UK governments are deeply indebted, along with their banks. He proposes that the US Government effectively seize American banks known to be holding large volumes of potentially bad debt, rewriting mortgages in more favourable terms for borrowers, and reprivatizing seized banks in 10 years. It’s an idea that is widely circulated, and has the backing of Paul Krugman, the Nobel Prize for Economics winner for 2008.

Does Sheehan expect that Kevin Rudd follow this example for the Australian banks? The solutions Sheehan hints at in Ferguson’s “solution” have nothing to do with Australia and the Government’s attempts to stimulate local demand, and would have Sheehan screaming about socialism by any other name. To imagine that these solutions could be brought about without increased government spending and debt is also fatuous.

Australian banks not affected to the extent of their international peers, for which regulation is but one factor, so Ferguson’s proposed solution is largely irrelevant to Australia, despite the allusions Mr Sheehan draws to solutions which “space precludes listing.” Ferguson’s contention that more debt is a problem, which Sheehan has latched onto, is only to set up the argument that the further debt should be targeted more directly at fixing bad loans in America. Paul Sheehan seems to have missed that part.

Caveat lector – let the reader beware – ought to proceed Sheehan’s article.