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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.
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.
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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