He spoiled my nice new rattle!

Which one do you like best?

The Debate was a worthwhile exercise. The format worked pretty well, and ninety minutes was a reasonable time to cover most of the issues. I wonder why the ABC bothered to telecast it, given that Chanel Nine had both the worm and Annabel Crabbe.

Howard had obviously decided that the thrust of Rudd’s macroeconomic critique would be that our current prosperity is all due to the resources boom, and that he would get on the front foot and block it comprehensively. But you’re not supposed to select your shot before the ball leaves the bowler’s hand, so when he launched into a tirade against the resources boom thesis despite Rudd’s not having a uttered a word about the resources boom in his opening speech, Howard looked at best inflexible and at worst a bit mad. Even if Rudd had delivered the expected ball, the PM would have sounded bad-tempered and petulant. He was trying to sound indignant on Austalians’ behalf that their hard work and entrepreneurship was not being recognised. But the emotion was too genuine to have been moved by anything so noble: he was transparently outraged that anyone would deny him credit for ourprosperity — or rather, that such claims could gain any traction.

Both candidates were asked to justify promising big tax cuts in an economy at full capacity. Each responded with a flourish of superficially plausible macroeconomic analysis, although Annabel felt this was a bit too esoteric for the worm. Howard tried to argue (1) that tax cuts would be less inflationary under his industrial relations system than under centralised wage-fixing; and (2) that tax cuts are not inflationary as long as you still have a surplus. Rudd for his part claimed that Labor’s investments in education will, by raising the nation’s productive capacity, reduce inflationary pressure.

As far as Howard’s first point is concerned, while it might be generally correct, the experiment of the Accord showed that centralised wage fixing can in fact be a useful tool of macroeconomic management. But a new Accord is not an option open to Rudd, so he couldn’t very well argue this. He could have pointed out that the enterprise bargaining system that Howard is dismantling is not centralised in any case. But he didn’t do that either. Even though, interestingly, Rudd feels confident enough to keep up Beasely’s strong language about ‘tearing up’ WorkChoices, he is unable and unwilling (as I’ve complained before) to outline the basic philosophy guiding his own industrial relations blueprint.

Howard’s point about surpluses is completely wrong, as anyone with a cursory knowledge of macroeconomics should know. As far as the effect of the budget on inflation is concerned, what matters is not the balance, but whether new measures are adding to or subtracting from total demand. Unfortunately it will be a long time before any party dares to explain this to the public, thanks to the unhelpful work of the mainstream media, who are collectively convinced that surplusses are necessary and sufficient conditions for good macro management. Even someone like Tony Jones, who surely must know better, has taken to using the term ‘fiscal conservative’ (meaning someone committed to budget surpluses) as a synonym for competent.

Rudd’s argument about investing in education — as a means to prosper beyond the resources boom — is a good one. Indeed it would be a good justification for a budget deficit in different circumstances. But it is not a justification for tax cuts that will increase consumer spending in a fully-stretched economy. I daresay the ALP has done its research on tax cuts and voting intentions; but I must say that my own anecdotal evidence is that Rudd’s credibility in advocating public investment in knowledge has been undermined by his willingness to join in a tax-cutting frenzy at a moment’s notice.

Speaking of surpluses, Laurie Oakes’ question to Rudd about the over-abundance of trade union officials was a reasonable one. The Coalition’s demonisation of unions is appalling, but on the other hand the predominance of apparachiks — be they unionists or ‘staffers’ — at the expense of public-minded citizens from ‘the real world’ is a real problem for the ALP. So part of me was cheering Howard when he raised the disendorsement of Bryce Gaudry. Given that Rudd is stuck with this liability, his best tactic would have been a broader, spirited defense of trade unions and their achievements. For a moment it seemed he would give this, but again he fell back on the single example of Bernie Banton and James Hardy — one that’s going to wear a bit thin after a while. The failure to mount a broad defense of unions is linked to the failure to outline a vision for industrial relations, betraying that the Howard-Hockey union bashing experiment, however crude and preposterous, has them spooked. Rudd even missed the opportunity to attack Howard for wasting public money on its adverstising, though this would have been very safe ground for him.

In the greenhouse policy section, Rudd’s position was at least clear. Labor will ratify the Kyoto protocol, even if it’s rather late in the day. They will not announce an intermediate carbon target until Garnaut reports, and voters can judge that by their own lights whether that’s good enough for now. Howard, on the other hand, came across as a complete parody on this isssue, especially when he tried to portray himself as the guy who will bring Bush to sense.

As for the Iraq War, it’s interesting how things have changed. It’s conventional wisdom that Latham’s promise to bring home the troops by Christmas was a big mistake, and that Howard’s ‘cut and run’ mantra was effective in contrast. Rudd is now effectively proposing the same plan in the same time frame. He seems very confident in doing so, despite lacking anything resembling an analysis to back it up. Whatever the merits of the original invasion, they are irrelevant now. And even if it’s true that the war has increased the threat of terrorisms, Howard is right that we shouldn’t be influenced by terrorist threats. The only valid argument for leaving Iraq is that nothing can be achieved by staying there, so we might as well not risk any more deaths or injuries. No one has yet explained why a ‘staged withdrawal’ is better than a quick and complete one. But most likely both parties realise that the majority of Australians have made up their minds that they want a withdrawal, but they want one that’s dressed up to look like the end of a successful campaign.

Howard can’t see a way to do this yet without loosing face, so he’ll just ignore the issue as much as possible, except to mumble platitudes when it’s absolutely necessary to say something. Where possible, he’ll use the topic of Iraq and terrorism to rail passionately about the cruelty of terrorism, the Bali bombing and so on, as he did tonight. This serves the combined purpose of diffusing the specifics of the Iraq debate, and creating the general sense of chaos and fear that he believes has drawn voters in his direction in the past. A contrastingly constructive approach to terrorism could serve Rudd well. His proposal to invest in South East Asian development, to give young Muslim men an alternative outlet to terrorism, is actually just the right approach. But by squeezing it in at the last moment, when there was no time for any detail, he made it seem more like a glib afterthought.