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May 31, 2009
Ross Gittens makes an interesting observation in the Sydney Morning Herald about the style of Rudd's mode of governance. Rudd, he says is just big on everything:
Big on foreign affairs, big on defence, big on education, big on relations with the states, big on Closing the Gap, big on modernising infrastructure and big on a dozen other things" Trouble is, being big in any of these areas costs big money. Trying to be big in all of them costs more than we could ever afford. But Rudd also wants to be big on keeping taxes low, big on being an "economic conservative', big on spending to mitigate the recession and big on getting the budget back into surplus and eliminating the public debt.
And Big on industrial policy to protect old style manufacturing, as in the car industry. Too many Big's Gitten's points out means that Rudd will be forced to choose in terms of priorities:
In the end he'll be forced to choose, and all the argy-bargy of the past three weeks tells us what his choice will be. He's incapable of hiding the inferiority he feels to the Liberals on economic management and the Libs think their best hope lies in skewering him on deficits and debt, so that's what will win in the end.In other words, Rudd will end up delivering reasonably responsible budgets, but will do so at the expense of a long trail of postponed promises and dashed expectations.
Gittens says that all the signs are that defence spending has been deferred in the 2009 budget to hasten a return to surplus. What we are offered is a vision of what the defence force will look like in 2030.
I think that Gittens is right on this. Rudd is on the defensive on spending big since that means debt and deficit, and this debt will slowly work away in the background to undermine the Government's economic management. First, the government's revenue decline means that Rudd and Swan's political preference will be cuts to spending. Secondly, being Big on somethings --such as education --is mostly rhetoric. It is the same with renewable energy:---Rudd and Co are very small on investment in renewable energy.
Rudd and Co are also small on the shift that is taking place in the economy away from routine manufacturing jobs towards towards the knowledge jobs by people who analyze, manipulate, innovate and create. As Robert Reich points out:
These people are responsible for research and development, design and engineering. Or for high-level sales, marketing and advertising. They're composers, writers and producers. They're lawyers, journalists, doctors and management consultants. I call this "symbolic analytic" work because most of it has to do with analyzing, manipulating and communicating through numbers, shapes, words, ideas....On the back of every iPod is the notice "Designed by Apple in California, Assembled in China." You can bet iPod's design garners a bigger share of the iPod's purchase price than its assembly.
Wouldn't it be great if on the back of the new renewable energy technology products is the notice "Designed by X in Australia, Assembled in China." But we know in our hearts that is not going to happen, since for all their talk about making the Big shift a low carbon economy, our politicians just cannot see beyond coal. Coal is king. Australia remains Quarry Australia.
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Gary
re your comment "And Big on industrial policy to protect old style manufacturing, as in the car industry" . Kim Carr + co are very Big on industry policy and looking after the unionised workforce. They point to the future in doing so-- a hybrid car.
Yet as Robert Reich points out on his blog the future of manufacturing is automation:
Factory jobs are disappearing all over the world. Reich says the reason is higher productivity. As productivity rises, employment falls because fewer people are needed. In this, manufacturing is following the same trend as agriculture.
So we should stop pining after the days when millions of Americans stood along assembly lines and continuously bolted, fit, soldered or clamped what went by.