Trump’s shadow on our election
Trump could be saving us from a Coalition government
If Australia is to be spared the economic damage and social division that would be yielded by a Dutton government, we will have to acknowledge the part Trump has played in undermining the Coalition’s campaign. He will have helped Australia in two ways.
The first is a demonstration of the consequences of electing a right-wing populist government, whose leader peddles simple solutions to difficult problems. In cases Dutton’s solutions are the same as Trump’s – root out imagined “woke” influences, cut immigration, deport nasty people, slash the number of public servants, and halt action on climate change. Through different means the two big ones – tariffs in the USA and nuclear power in Australia – share the feature of inflicting massive economic damage.
Jason Koutsoukis, writing in the Saturday Paper – “This is going to stick”’: Inside Dutton’s Trump thump -- describes how Dutton and his acolytes confidently believed they could ride electoral victory on the same wave that took Trump to the White House. It was to save them doing anything difficult like developing a coherent set of policies, and would build on the already prevailing idea that Coalition governments are better at economic management than Labor governments.
The trouble with right-wing populism is that while it works in building constituencies, it delivers a dismal failure when it has to form an administration. We now have that demonstration effect from the USA. Like a dog that catches a car, Trump seems to have no idea what to do when he gets into the driver’s seat.
The second is a demonstration that there are forces well beyond the control of our government in Australia. The Reagan-Trump-Dutton question “are you as well off now as you were when this government was elected?” suddenly sounds rather stupid, and is easily replaced with the government’s question “who do you trust to do the best for Australia in tough economic times”.
It didn’t have to be this way. Dutton and his supporters could have spent the last three years developing a platform in line with the traditional values of centre-right parties – a preference for markets and price signals to allocate resources, and a commitment to the federal principle that the Commonwealth should not do things that the states can do better.
But a preference for market forces would force the Liberal Party to embrace carbon pricing as a means to combat climate change – not easy when the party has defined attention to climate change as some “left” or “woke” concern. It would lead to policies such as road user charging, which would cut out the possibility of cutting fuel excise as an election bribe.
On federalism Crispin Hull has a challenging post An education for us all, which opens with the paragraphs:
Opposition Leader Peter Dutton is right: there should be some serious rethinking about the role of the federal Department of Education, which he says does not run one school.
There is a very good case to be made for the Federal Government to totally withdraw from the funding and administration of Australia’s primary and secondary schools and leave it so the states.
This doesn’t mean Hull has had a right-wing conversion on the road to Canberra. In the same article he goes on to describe what those public servants in the Education Department do. Bypassing the states, they dish out funding to private schools, to fund “chapels, swimming pools, and sportsfields which contribute next to nothing towards Australia’s educational standards”. (He forgot to mention indoor equestrian centres.)
Hull is putting forward basic principle of federalism as spelled out in Section 51 of the Constitution and in our early federal settlement. The states should be adequately funded so as to be able to provide public goods and services to the same standard. That doesn’t mean the Commonwealth should have a “hands off” relationship with the states for matters that fall outside Section 51, such as education. There are many important functions to do with standards and coordination in education with which the Commonwealth should be involved, as Hull explains. But a football oval in Hobart, commuter car parks in Melbourne, security cameras for a mosque in Sydney, roads serving purely local needs – where do these fit with our principles of federation?
Dutton’s ideas of cutting public service positions and abolishing functions in the Education Department, however, were not in any coherent policy framework, such as the principles of federalism. They were simply a Muskian move, aligning with the Liberal Party’s “small government” ideology and its stated belief that nothing of value is ever done in the public sector.
No wonder Dutton’s ideas on the public service had such a short half-life.
How America works
Understandably most discussion about Trump’s tariffs has been about their immediate effects on particular countries, and whether they are part of a long-term plan to re-establish manufacturing in the USA or are simply threats to negotiate trade deals. (By Thursday they were looking like the latter but that could all change.)
A reader has drawn attention to a discussion Trump’s Trade Policies: A Fast Track to Economic Ruin featuring economist Michael Hudson and political scientist Richard Wolff, who see Trump’s policies in a much wider context.
For a long time the US has had a trade deficit with the rest of the world. Those other countries have invested their dollar surpluses in US bonds, supporting a strong dollar and allowing the US to run a high and accumulating fiscal deficit. That’s the established “twin deficit theory”, which Trump weirdly interprets as other countries exploiting the USA – “those foreigners oppressing us”.
Hudson and Wolff see this arrangement in distributional terms, particularly in the way it has allowed America’s owners of the means of production to accumulate financial wealth taking advantage of a permissive tax regime. That accumulating deficit has allowed the US to avoid taxing the rich.
Trump’s tariffs are designed to change those financial flows. Making America Great Again is not about re-industrializing America: it would take many years, or decades, for firms to re-establish manufacturing. Furthermore the turmoil and uncertainty around Trump’s policies do not make for a favourable climate for firms to invest in manufacturing plant. Rather these policies are about making other countries pay tariffs instead of investing in US bonds. (Trump sees tariffs as a tax on foreigners, rather than as a tax on domestic consumers.)
That could be seen simply as a retreat to mercantilism and a disengagement from the rest of the world. Hudson and Wolff don’t dispute the idea that Trump appeals to mercantilist sentiments, but they see his strategy as going beyond mercantilism. It’s an imperial arrangement, where, through a series of bilateral deals, the US is able to subjugate other countries and exploit their resources.
This deliberate re-shaping of the US economy should hold up for a little longer the fortunes of the rich – the three percent of Americans who own and control the means of production.
Their explanation is a fairly conventional Marxist analysis of the problems of late-stage capitalism. These problems are most strongly manifest in the US because the forces and institutions protecting capitalism from its own destructive forces – trade unions, minimum wage laws, progressive taxation, consumer protection, social-democrat parties – have been deliberately weakened by the country’s rich, ever since Reagan was in the White House. Trump’s assaults on the country’s already enfeebled institutions of redistribution are designed to extend the life of this system, allowing the oligarchy to wring what they can out of a once-strong country.
That link to Hudson’s and Wolff’s discussions was sent last weekend. Since then there have been extraordinary movements on US stock markets. After markets had slumped, Trump said it was a “great time to buy”, just a few hours before he announced a pause in imposing harsh tariffs on most other countries. That was followed by a huge rebound in share prices.
Have we just witnessed the world’s most extraordinary shorting of the stock market?
How did anti-Semitism become an issue in Australia?
Once that caravan bomb was found to be a criminal ploy to negotiate plea deals, leaving egg on everyone’s face, anti-Semitism seemed to go away as a big political issue. But how did it arise to such prominence up to that point, and how did the interests of Australia’s Jews come to be associated with the Coalition’s hard-right platform and its vile attack on our Jewish Attorney General?
There is a hint in Yair Rosenberg’s Atlantic article – Trump’s Jewish cover story – where he says that the Trump administration has been claiming to be protecting Jews “while advancing an agenda that most Jews oppose”.
He describes how Trump uses supposed Jewish concerns as cover for his aim to defund universities. He believes that “the administration’s deportation spree is clearly not about defending Jews, but rather part of a broader anti-foreigner agenda whose goal is to make America into a country for a narrowly defined set of citizens”.
Was this the inspiration for Dutton’s anti-Semitism obsession?
Dealing with Trump’s America after May 3
So far in our election campaign the story is that the American Alliance is as secure as it has ever been, that AUKUS is on track (we’ve paid $800 million to buy one of those subs off the plan), and that the Five Eyes Intelligence Alliance is working (Trump wouldn’t really share our intelligence with Putin, would he?)
Writing in The Conversation -- Donald Trump has gatecrashed the federal election – Rebecca Stirling of La Trobe University reminds those vying to sit in Parliament that come May 4 they have a load of difficult work to do in adjusting Australia to a world where the second-largest power is governed by an impulsive narcissist.
As John Quiggin writes, Breaking with the US will be painful for Australia in many ways – but it’s inevitable.