Death of Neo-Liberalism

[mantra.]

It looks like Rudd is using this financial crisis in Australia to finish off Howard's hubris as the greatest PM, once and for all. He has very cleverly thrown it back at the Liberals and so he should. Neo-liberalism has been embraced for too long and look at the mess it's brought us. The free markets, which brought wealth to a selected few, have felled nations. Rudd's words will be historical and a new platform to further Labor's agenda. I doubt too many will object.

The Prime Minister has vowed to use the "greatest market failure" in 75 years to commit his Government to sensible new market regulation and intervention to stabilise the economy and save jobs.

"The time has come, off the back of the current crisis, to proclaim that the great neo-liberal experiment of the past 30 years has failed, that the emperor has no clothes," Mr Rudd says in a lengthy essay for The Monthly magazine, to be published next week.

"Ironically, it falls to social democracy to prevent liberal capitalism from cannibalising itself," Mr Rudd says.

In a sweeping 7000-word essay, Mr Rudd argues strongly for new government intervention in banking and financial markets, not only in Australia but worldwide, and says the 30-year era of neo-liberal free marketeering is over.

Paul Kelly from the Australian says this of Rudd.

In Rudd's view, social democrats must use a resurrected state power to regulate markets, strike a better balance between public and private interests, embrace Keynesian economics, correct for market failure from the financial system to climate change and invest more in education, health, unemployment insurance and retirement incomes - while supporting open markets and withstanding attacks from the extreme Left and nationalist Right.

He shuns any embrace of old-fashioned socialism. For Rudd, Labor's task is to hold the middle ground - between state socialism and free-market fundamentalism. He argues the failure of neo-liberalism has made the state the primary actor; it must save the financial system, stimulate the economy and impose a new global regulatory regime.

Rudd has put Turnbull on notice. His plan is to convert the global crisis into a historic failure of Liberal Party philosophy and its pro-market ideas.

http://www.theaustralian.news.com.au/st ... 50,00.html

[AiA in Atlanta]

Times are a-changin'. Something's blowin in the wind.

[Jovial Monk]

Great post, Mantra.

I had heard something about this on the radio as I was getting ready for work.

Yup, Rudd can outmanouvre the Lieberals in his sleep. Great politician, one of the best we have had since Curtin, but like Curtin, is a LOT more than just another politician, in this way far surpassing Menzies & the Rodent.

[boxy]

And the capitalist pigs have no one to blame but themselves. The total lack of any concept of decent behaviour is no better exemplified than by the embarrassingly huge executive bonus payments given in a year when they not only lost money, but had huge wads of it thrown at them by the taxpayers of the world.

[TomB]

Compulsory superannuation is equally contemptible. We are forced to have our wages put into mis-managed funds and be happy when they have "negative growth" as they seem to do every few years. I'm sure Rudd has no intention of doing anything about that.

[Jovial Monk]

Award super is on top of wages.

[TomB]

You are either very naive or a shifty employer.

[AiA in Atlanta]

An era has ended, no doubt, but there is no cause for glee either as it will be a long road for many who have been hurt by deregulation and greed. And there is no reason to point fingers as they are all guilty - its just that some are guiltier than others.

[Jovial Monk]

JW thinks I am naive but I am NOT a shifty employer.

Pay the wages, then pay the super each quarter.

[JW Frogen]

It is a politically astute move by Rudd to lay the blame of a global financial crises on the opposing party and attempt to make one immune from criticism by saying any policy is reform of a failed system, but it is rather dishonest.

Rudd's own party set Australia on a more Neo Liberal economic path, remember Keating? Keathing the man who was in many respects far more of a true Neo Liberal than Howard. Howard was more of a pragmatist nationalist often bucking Neo Liberal economic orthodoxy, such as his insistence on keeping the PBS out of the FTA with the US or his middleclass welfare initiatives, all of which any Neo Liberal economist would balk at and some of which Keating criticized.

It is relatively the same in the US (though their economy was far more Neo Liberal in reality), Obama is attempting to portray himself and his party has the reforming force for economic change, but it was his party that largely put America on a no holes barred Neo Liberal path under Bill Clinton. Clinton removed the restrictions against merging banking with investment banking and allowed that industry to create all sorts of ties and new products between the housing market and financial products, even linking to derivatives.

Clinton pushed NAFTA and a very aggressive Neo Liberal economic agenda in Latin America as well, much of the populist backlash, the Chavez Morales effect is to some degree in response to Clinton’s policies of deregulation advocacy and privatization.

And now most of those Clinton economic advisors are Obama's advisors, Summers, Rubin for instance.

The fact of the matter is most parties of center left and right have been advocating some form of Neo Liberal economics since the 90s.

The real question is what will the economic reforms look like? Will they be new, innovatory, addressing not only the need for regulation and short term stimulus but also the fact both Australia and America have little manufacturing capacity and poor trade balances, that both countries are almost totally consumption economies, (with the exception of the Australian resource sector).Will the reforms invest in future economic capacity and innovation, or will they just pass huge and conventional spending programs that simply redistribute wealth rather than create wealth as is typical with old Left economic philosophy?