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October 10, 2008

Desperate times call for desperate actions, decisive action and strong leadership. What is not acceptable is to allow things to get out of control. Government's have discovered the public good as distinct from self-regulating markets.

Bellface.jpg Steve Bell

In The Australian Michael Costa observes that:

In this era of globalisation and message-management politics, the key political challenge is to appear to be relevant. Globalisation means the Keynesian-inspired national macro-economic tools of the past are, assuming they ever worked at all over the longer term, largely irrelevant. The political consequence is there is little that the Prime Minister of a relatively small, geographically isolated economy can do to influence global events.

Costa adds that since the effective economic levers under the direct control of national politicians have almost all disappeared, so Rudd ought to try to stop trying to create the perception that he is providing solutions for things substantially outside his control.

Rudd's response to this is that he has in its power to manage the Australian economy so that the growth machine keeps ticking over and the impact of a recession is minimal.

| Posted by Gary Sauer-Thompson at 6:18 AM | | Comments (3)


Costa could have spelt out the options that nation states have to deal with the global economic crisis. What levers do they have?

They can nationalize the banks to create a ring fence around a core group of the most important institutions. Rudd seems to be doing this with his security before cpmpetition

Today's budget stimulus package, on Latteline and
Lindsay Tanner is happily confirming all the bonus paymets etc are meant to be spent, spent, spent; The one thing Jones didn't ask Tanner was, why the exclusion of the unemployed (again).
I know they are concerned with commodity prices falling and feel more activity has to come from within, but it seems to defeat the idea of geing peole to think more soberly about their decisions.
Is buying junk the best way to operate an economy?
Also the unemployed.
Am not on unemployment "benefit", am therefore ok, but really am sad at their treatment on a number rof fronts,icluding since Labor got in ( expected no better from the Tories!).
Is it misinformed prejudice from politicians, or a ploy involving the long-held prejudices of the mortgage belt etc?
Seems to revive the worst of 'eighties and Howardist eco rationalist "sado economics".
Gary, Lyn, Nan, Peter etc- would love to read your takes on the package.

Costa's l view the view that governments have very limited capacity to manage the economy has sure taken a knock of late.

His neo-liberal view is that any pretension to extend that power will not only be self-defeating but also – because of the distorting effect on the proper and unfettered operation of the free market – positively damaging. Governments, according to this view, should limit themselves to those aims – such as the defence of the realm and maintaining the value of the currency – that are their proper concern.

The financial crisis has seen government being a major player in the economy, both as an actor in its own right and as a coordinator of other actors and a maker of policy.