June 8, 2007
I caught the Lateline interview with Paul Keating last night. It was a gem, a sterling performance, that went beyond just defending his reformist legacy. He starts thus:
Hawke and I have been put out to grass because we had interest rates up in 1989. That's 20 years ago in two years from now. Bear in mind this Tony, Bob and I won the '90 election with interest rates, cash rates at around 16 per cent, housing rates about 16 per cent. I won in '93 when interest rates were not an issue. They were not an issue in 1996. So how come they became an issue in 2004, or in any way an issue now? The answer is because the Labor Party's inability to get across the argument and put it.
So what is the argument? Keating says that:
The real question today with the economy growing so rapidly and unemployment so low is why doesn't the tinder box go off? That is, why don't we get the big bang? The big bang in inflation and in wages back into the old dismal cycle? The answer is because of the structural changes. Nothing to do with Mr Costello's economic management.
The structural change was opening up the economy, floating the exchange rate, doing away with tariffs, and real wage reductions to get that competitiveness. So maintaining low inflation now is all about these structural things.
Today we have a focused group ALP that turns its back on the Hawke Keating years. Keating's response is that:
They'll do him no good. Because in the end those kind of conservative tea-leaf-reading focus group driven polling types who I think led Kim into nothingness, he's got his life to repent in leisure now at what they did to him. They're back, they're back....The Labor Party is not going to profit from having these proven unsuccessful people around who are frightened of their own shadow and won't get out of bed in the morning unless they've had a focus group report to tell them which side of bed to get out.
The current Federal secretary is the author of "don't fight them on interest rates" at the last election. So you wouldn't put much faith in the ALP embracing the Hawke/Keating heritage.
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I was not around for the Keating era, but I wish I was. It seems that we could use a bit more straight talking with this generation of politicians.
I too worry about Rudd taking a cautious approach. He is by nature cautious and surrounding himself with cautious people may not be the way to go.