Paul Keating famously educated the media and himself about the art of “pulling the levers” of the national economy. For a few years, the J-Curve was the subject of water-cooler discussion, the “twin deficits” theory was widely bandied about, and everyone had an opinion on micro-economic policy. Debate for and against “economic rationalism” raged. Paul Kelly and other journalists applied the acid test of economic orthodoxy to politicians, and a Federal Treasurer fell because he couldn’t remember what an economic acronym stood for.
Yet the Howard Years have seen the disappearance of informed economic debate, and indeed arguably of a coherent macro-economic policy. Puzzlingly, because issues like the trade deficit and the current account have certainly not gone away. With a few honourable and excellent exceptions, like blogdom’s own John Quiggin, academic economists seem largely to have departed the public domain.
Chris Sheil is probably right that neo-liberalism has been effaced by neo-conservatism and “rational economics” has made way for a pervasive populism:
What neoliberals (and all their business, media and academic associates) need to face up to, I submit, is that they have been dancing with the devil. It was their tacit agreement to allow their liberal interests to play a bit part (while holding noses) to the neocons which has placed them in irreleventville. What this may foreshadow is the final demise of the neoliberal moment. Having triumphed in the ’80s, having allied with the centre-left in the ’90s, having stayed silent in the ’00s – assuming their interests were in hand, if no longer to the fore, under the conservative side of politics – they now find themselves without a relevent voice in a left versus right populist contest.
The neo-cons of course have a faith-based attitude to reality exemplified by Cheney’s alleged comment that deficits don’t matter. But as Nicholas Gruen argues at Online Opinion, the absence of a serious economic debate from either side of politics is a huge worry as we enter 2005