I must keep fighting/Until I’m dying…
(“Ol’ Man River”, line rewritten by Paul Robeson)
When Barack Obama won by nearly 10 million votes and the Democrats gained a slew of congressional seats in 2008, they waltzed into office — to the sounds of Beyonce singing “At Last” — believing the Republican administration of George W Bush to be so discredited by history that they need make no further comment. The politics had been done. Now to get down to what a bunch of super-smart Ivy League policy wonks wanted to do, which was policy implementation.
The stuff they would get done, they thought, would generate its own political rhetoric. Things would get so much better for so many people, they would recognise what a con job the Dubya years had been.
Two years later, on the first Wednesday after the first Monday in November, the Democrats looked back at the previous night’s midterm results and what was, in Obama’s words, “a shellacking” (he had hung around with football-mad Aussie kids, growing up in Indonesia), the loss of the House, a filibuster-proof Senate and a dozen governorships, and realised they’d made a huge mistake.
The politics can never stop in our era. Their “trust” in the people was mostly arrogance. Some of it was incredibly stupid — like sending people a post-2008 cash bonus to stimulate basic spending, and not telling anyone anyone they’d done it! It just went into bank accounts. Tens of millions thought it was some delayed refund or something. When Donald Trump did the same sort of stimulus, he sent out cheques and tried to get his face put on them.
Labor, should it make the Obama mistake, will be screwed, almost from the start.
If this government made up of good, decent people who have nevertheless spent most of their lives in political advisory roles, academia, bureaucracy, and who showed through the campaign that they have to work themselves up to be about a quarter as aggressive as most of the Coalition are naturally — if that government let up on the politics of the present it will be carved up a treat over the next three years, and be staring at a single-term debacle.
Generals, last battles, etc. Last time around Labor thought it was going to win, so put down a marker for “raising taxes” during the campaign, to be able to defend such. Those “taxes”, the goddamn franking credits, killed enough seat challenges to lose the election, and this time nothing was to be left to chance. A commitment to no new taxes, to an expanded social infrastructure and to better fiscal management. The only way all that would work was if the age of cheap global money was going to continue.
Surprise! Once again, a decade-long, right-wing government ran utterly out of puff, just as disaster came into view. Labor had to deal with the crisis the Howard government avoided, and spend years fighting the ridiculous accusation from the right that we would have got out of it anyway. We got out of it, but the world didn’t, until the US and the EU decided to open the spigot with 10 years of quantitative easing — flooding the world with zero-cost cash, only just enough of which got invested, to fill the vast gap in everyday demand created by the decades-long squelching down of wage power.
The rest went to inflate every capital good imaginable, from ninth-order derivatives to start-ups to art and then to housing. Inequality yawned wide, winners and losers were selected, and the latter started wars, selected demagogues and tore suprastates asunder. They tried to turn the QE tap off a few years ago; the world hiccupped, and they turned it back on again.
Now it’s really got to stop, or the whole place will be flooded by cheap capital that COVID and other factors have made it impossible to use up (or, as per the AFR’s Phil Coorey on Radio National, the danger is that a 5% wage rise for the working poor will put us “on the road to Weimar”. Sir Otto Niemeyer lives!). So interest rates will go up, and suddenly we have a trillion dollars of debt, interest on which eats away at the bottom line. It’s true that rates may not go through the roof as per an old-fashioned credit squeeze. But we are such a personally indebted nation that they don’t have to go up by much for many, many people to feel a basic insecurity in their life that they did not feel before.
That is going to be a disaster for Labor, because it will happen on its watch to people who don’t understand the abstract processes and time lapses involved, and it will hit them right where they live. Yet at the same time another constituency — section rent — have looked to, and voted for, Labor (and Greens) to give them a chance to get into a house. Meanwhile there’s a third section: two-salaried working- middle-class couples, enough of whom Labor got back from the Libs, to wipe the latter out in outer Melbourne, Perth and Adelaide. The swingers in thi-, the political swingers in this section, are watching like a hawk for any sign of backsliding on new taxes. As the franking credit debacle shows, some tend to take any movement on tax as an omen.
This situation will be the utmost danger for Labor, because if it goes with the instincts of its centre-right core economists, and its trifecta of promises, it will cut deficit and debt by cutting spending, prosecute a weak case for low income wages growth, and leave the tax take utterly unchanged. That will hit many of its base as an utter betrayal not to mention a real hit on their quality of life.
That’s bad enough as an actual event. But it will be hugely disastrous, a political calamity, if Labor has not established, relentlessly, how we got into this mess: that it is Coalition debt, run up without any sort of infrastructure spending plan, and simply transferred to corporations, some of whom have banked it through JobKeeper excess.
This is the sort of thing Labor will have to do both Howard-style and Keating-style. Howard-style by boring everyone and itself crapless by repeating the same old line “the trillion dollars of debt run up by the Coalition and wasted” in every conceivable syntactic combination. But then it will have to tell a joined- up narrative about the good debt of the 2008 global emergency and what we did with it, and the bad debt run up by a lazy, cynical Coalition as the cheap money flowed.
If Labor people talking about finding common ground — oh that tealed an Obama bell! — really act on that at the political level, they and we are done for. If they feel, whew, we can stop contesting now, stop politicking, they and we are done for.
The asymmetry of modern left and right comes into play here. The modern left is so geared towards communicative, discursive action, it’s always looking for ways to end the fight. The old left, now vanished from the mainstream left, knew the fight never ended. The old right knew it too. And the current right knows it as well, a party from capital, and the market, and winners and losers, through means other than talk. Labor will have to go against its own, the mainstream left’s inner nature and fight on. Sure, it’s got to be done strategically, the moments chosen, but that can’t be used as an excuse for ducking the fight.
Ultimately, it will have to find a way to start really collecting taxes from major corporations and resources interests, if it really wants to deliver a better life as well as a better bottom line. Both the taxes actually owed and some new ones. It’s going to have to find a way to do it, without breaking a promise of “no new [personal] taxes”. With the political spectrum now shifted — about 90-60 in the House or thereabouts — this term will be the time to do it, not in a crash through manner but as a first instalment on something that can be taken to the electorate for a full mandate in the next.
“I’m tired of living/but scared of dying” the original line of “Ol’ Man River” goes — rewritten by the militant Robeson. The river itself died because Barnaby Joyce and the Nationals trashed it, and that line too has to be hit for the next year or so.
There is no let up. There is no end, or other, to politics. The smart people know that, they already think that, you say. Read the memoirs of the Obama years. I’m here to tell you: a lot of them really don’t. You never see it coming, the shellacking.
Dead right, however it would require Labor to make a huge shift from the way it behaved in opposition, and it has so far talked about compromise, cooperation and reaching across the aisle – the latter of course being a favourite and fatal obsession of Obama’s administration. So it’s early days and maybe Labor will come to its senses. But I would not bet on it.
Hopefully they talk compromise but follow Guy’s advice.
The Libs are not compromisers with Labor, neither should Labor be with them. You don’t feed Rats if you want them out of your house.
Rat! Let the Investigation under ICAC find the cock roaches that are hiding in shadows of L/NP and let them prosecute them to full extent.
Labor can play nice and leave it to ICAC to do the dirty work.
You seem to believe a robust independent federal integrity commission is inevitable, regardless of Labor, and will do its job whatever Labor is up to. Ha ha bloody ha.
On the contrary the commission will be what Labor wants it to be. And there’s a very good chance Labor wants it to be crippled from the start and kept on a short leash so it does not cause trouble poking its nose in where it’s not wanted. So Labor has strong motives for reaching across the aisle and putting together a bipartisan consensus with the other main parties. Then they will all congratulate themselves and the other parties will praise Albanese for handling a difficult issue like a true statesman, and everyone will be happy. Or, more accurately, every politician who likes the status quo will be happy. And they are the majority in parliament.
I’d like to be wrong. But let’s see what’s actually been achieved by the time the next election comes around before cheering for this wonderful commission.
Sad but oh so true.
If Labor has skeletons then they are accountable. Am sure that Albanese wull not move the goal poats. There are to many factirs un play and he cannot do a Morrison. People are tired if deceit and lies, sick of corruption, dirty dealing. But yeah we will see at years end!
Binning the future stage 3 tax gift to the well off is not a tax rise, surely? Anyway, if Labor can’t sell defusing a time bomb left by the most rejected PM of the most corrupt govt as a win for the nation in the current economic circumstances, after this election result, then they are not up to it.
Oh yes Jack. Not nearly enough talk about this outrageous plan. Surely Labor can just talk and talk about the simple facts of how much revenue foregone it will be, and who the dough will go to. It is, as they say, a ‘no-brainer’!!!
They can freeze/postpone it – till the horrendous books left by the libs are in a better place. To ensure gov’t services can continue without degradation. There, no tax increase, reform not cancelled but just on ice.
Good idea. Support the tax cuts in principle, but have to wait until the economy can afford it. Australians are used to governments that give in-principle support to a policy but say now is not the right time, eg global warming after fires and floods, wage rises when the economy have to wait until the country can afford it, and so on.
Just say the tax cuts, which Labor supported, were legislated pre-pandemic and before the trillion dollar debt bequeathed by the Morrison/Dutton/Joyce govt, but times have changed. “Australians understand that you can’t give away what you don’t have – and since the pandemic and JobKeeper raised the debt to a trillion dollars, the money has already been spent. The Liberal National Govt spent it all.” It’s just not there.
Youve written a good script for them. They have to be sure to all sing from the same song sheet too. The LNP was pretty good at that.
Except that the tax cuts should never have been supported in the first place. It would be insane to make them happen in the future too. Significant reform of the tax and transfer systems need to be implemented. And such reform must address the clear fractures and inequity in the social infrastructure highlighted by the pandemic.
Great stuff, Guy. Labor needs to keep kicking the Libs whilst their down, they’ve created this mess. If they still want to play nice guy, they can do that with the Greens and the India’s
And don’t forget to remind people that Dutton and Ley have never held an economy-related portfolio.
Keep hammering the “Dutton Morrison Trillion Dollar Debt” on every occasion and in every economic press release.
Howard Costello did it in 1996 with the “Beazley Black Hole” which was used to justify abandoning the non-core promises.
First they should get a “Skyhooks” band together and record “Trillion Dollar Debt”.
Then argue that to compete with the Chinese we need to learn from them. ie Invest in BIG infrastructure projects.
NATIONAL power grid.
It would be easy to argue that our defense of our nation demands rail and and highways to quickly move our troops and forces. etc.
Love your work Guy.
Sums up the predicament nicely. Where to start when what needs to be done is starkly obvious?
It is staggeringly difficult to imagine – in the absence of hopium – that those just elected are capable of looking Santos/Origin/AGL etc in the eye and telling them the party is over. That ASX200 firms and their shareholders need to start picking up the tab a little more and they cant keep employing cheap imported labour because immigration levels must be brought back to their long term average. Its even harder to imagine the same frontbench telling the public why, especially the public whose property/ies need to lose 40% in value and it’s for the good of future generations.
Sadly, more likely, the ALP government will pick up the Andrews playbook from Victoria and largely continue business as usual throwing money at ever more expensive band-aids while distracting their progressive wing with crumbs.