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What an interesting article. Apparently Kevin Rudd is directly addressing the question of whether he is an economic conservative and linking it to his current policies. I think this is the first time I’ve heard him directly link the two concepts, which is dangerous – because that means people will start making connections too.

Is Rudd so stung by Liberal accusations that he is a reckless spender that he feels like he needs to explain himself? Or have the Liberals successfully gotten under his thin skin? Either way, it seems foolish to directly address the issue and blow away all perception that he is an “economic conservative”, whatever that means. When he unexpectedly cut spending by $1.4bn during the campaign, it so completely threw off Howard’s game that it alone would have won him the election. People didn’t know what it meant! Is he a supply-sider? Heavens to Betsy! Is he just a Keynesian, just lowering spending during the boom? It was the very ambiguity of the phrase that made it successful. And he’s dashed all that by tieing it directly to the very loaded word of Keynesianism.

Just as interestingly is the fact that Rudd considers Keynesianism to be economic conservatism. By and large in the economist’s world, Keynesians are to the left and monetarists to the right. We may not have the radicals like Paul Krugman or Ron Paul here in Australia, but there are clear differences. The neoclassical/Keynesian fusion is very fragile indeed. It is only in politics that Keynesianism could be considered ‘conservative’ once you include the unideological politicians on both sides who just want to pork-barrel, and once you include the socialists in the Labor Left and National Party. Perhaps he’s simply trying to redefine what the field means for the uneducated masses, who surely are unaware of the distinction. After all, I imagine most economics graduates are unaware because its not really taught in universities.

It’s very interesting. And for the record, I fully agree with Rudd’s broad. Government has a role in stimulating spending during recessions and providing vigorous microeconomic reform where possible. I may just differ on how exactly to d that.

Also, Andrew Robb, the new Shadow Finance Minister has said that the business community considers Ken Henry to be the de facto Treasurer (because Wayne Swan’s not up to the job). I’m not particularly surprised, but the follow-up comment is what gets me:

“He’s seen as a sort of de facto treasurer because I think there’s no confidence in the ability or understanding of Wayne Swan and Kevin Rudd and Lindsay Tanner in the essential running of an economic program in the country. Ken Henry is dictating many of the decisions and that leaves a perception that he is more partisan.”

As I think I’ve said in the past, Ken Henry was widely abused during the Howard years by the left as being a very partisan appointment. He was quoted as allegedly saying that the (Liberal) party’s interests were more important than Australia’s interests. In fact, it was widely thought (by commentariat on both sides) that Henry would resign upon the election of the Rudd government

And because I like to round things out, here’s an interesting article about Glenn Stevens.

And yes, the surfeit of posts today is because I have an assignment due.

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2 Comments

  1. Bah you pre-empted me. I was going to write something about how inappropriate it was that both Ken Henry and Glenn Stevens, being top public servants were being very loose-lipped with their thoughts (even though I broadly agree with what they say)

    Is the opposition trying to mend fences with Henry by stroking his ego? After trashing him for the past year and a half I don’t think he’ll be that easy to win back.

  2. Hahaha, I post so much I can’t help but have pre-empted you at some point.

    And is someone feeling too constrained by the APS values and wanting the top public servants to stick by it too?

    I dunno, you raise a good point. But I think there’s a fine line – Kenny passed it with his global warming comments, and Glenny passed it with his personal comments, but till now I think they were fine.


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