And while we’re talking about the inadequacies of the Rudd government, David McKnight has a piece on the significance of the Rudd piece in the Monthly here. There’s an interesting take on the essay from Greg Sheridan, here, as well. It’s perhaps not surprising that Sheridan should think that its ‘historical and intellectual claims are entirely fraudulent’, but there’s a bit of meat in his analysis as well. As Sheridan says,
Much of Rudd’s long essay is an unexceptional account of regulatory failures that contributed to the GFC. But its serious historical and intellectual claims are entirely fraudulent. It was only 18 months ago that Rudd and his senior colleagues were, rightly in my view, lambasting the Howard government as the highest taxing and highest spending government in Australian history. Labor even criticised the Howard government for keeping the top marginal tax rate at just under 50 per cent, one of the highest rates in the developed world.
You cannot credibly then turn round and claim the almost religiously non-ideological Howard government was the embodiment of market fundamentalism, low-tax, low-government extremism, or neo-liberal ideological narrowness.
Indeed. The intellectual weakness of Rudd’s piece is that he’s unable to distentangle his analysis of neoliberalism from his political debt to neoclassicism. Brnnng, brnnng, is that Treasury I hear calling? Or perhaps the Productivity Commission? But Sheridan, too, pulls back from deeper analysis:
Similarly, Rudd’s assertion that the financial crisis was caused only by the adherence of Western governments to neo-liberal economic policies simply contradicts the facts. Banking crises, as Mead shows, are a pretty regular feature of the system. Both sides of politics frequently get regulatory arrangements wrong. Republicans and Democrats both did in the US. The initial impetus for sub-prime lending was the eminently social democratic desire to make sure low-income applicants got housing loans.
Now this is pure Pollyanna. To say that all the drama was simply a routine banking crisis brought about by a bit of democratisation of the loans market isn’t to ‘contradict the facts’ so much as ignore them altogether.