Thursday, 9 August 2007
There was something surreal about the reaction to the interest rate hike yesterday with the media, the government and Labor all talking about the same thing with three totally different agendas.
It is not surprising that the interest rate issue is so politically flexible, as in itself, there has been little politics in it ever since the government handed monetary control over to the world’s financial markets and the RBA. For commentators blinded by their prejudice that the electorate can’t think beyond its hip pocket, it gave the opportunity to try and explain something they have been struggling with all year, why the Howard government is on the nose despite an economic boom and tax cuts. Michael Brissenden on The 7.30 Report, who has at last given up calling the end of the Rudd honeymoon, gave the impression that the electoral benefits of Howard’s interest rate promise in 2004 fifth have been undermined by the five subsequent interest rate rises.
This is all nonsense. What the ‘hip-pocket’ view of history can never explain is why the Liberals could use Labor’s interest rate record against them in 2004, when it couldn’t in the Labor victories in 1990 and 1993, after Labor’s rates had already hit their peak. It would help if next time they played Howard’s 2004 ‘trust’ promises, as they did last night, they did not cut out the third most important one – on national security and the war on terror. It was Howard’s ability to beat Latham on that critical issue that allowed him to broaden it out to other more mundane issues such as the cost of borrowing.
That was definitely then, because now, not only is Iraq not the winner it was, but Howard is now incapable of even enforcing the type of anti-terrorist powers that his US and UK partners use practically every day. After the blow to the credibility of the executive in the Haneef affair, this government is struggling to control events, prompting Howard to get involved in the most mundane local matters to try and look as though he can make something happen.
Unfortunately, this ‘failed state’ strategy is not only incoherent (claiming the states are spending too much while stopping them closing hospitals, standing up for small Queensland councils then saying that people don’t care who provides services) but in stepping off the national stage, Howard has reinforced his loss of influence over the national agenda. Putting responsibility for interest rates on state spending was especially dumb for a government hoping to get re-elected on its economic record. It was attempting to look in control again of issues more appropriate for a national government, that led to Howard down-playing the role of the states and coming out with the strange line that the rise was positive because it “placed economic management front and centre of political and social debate”, something that must have only made sense to him and his advisors.
Such a response only helps Rudd with his anti-politics agenda that politicians are detached from the lives of ordinary people, a view reinforced by the politically astute Treasurer when he claimed that the rate rise was a sign of economic health. Of course, Costello was right, the economy is strong and the rate increases are not biting that broadly across the electorate (otherwise the RBA would not keep making them). But the view that the government is losing its grip on what the electorate is thinking is certainly real enough. While the political class grapples with some of the most fundamental issues of how it exercises power, the media still seems to think this election is about little more than the monthly credit card statement.
Posted by The Piping Shrike on Thursday, 9 August 2007.Filed under Tactics