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The irrational slide to Rudd

By Jonathan J. Ariel - posted Wednesday, 12 September 2007


Now many fear that John Winston Howard will suffer the same fate. That his economic success is being sold as a mere commodity, capable of being cloned by anyone, and not unique to the managerial skills of Howard and Costello.

John Howard inherited an awful economic mess from the French clock collecting and Armani clothes horse, Mr Paul Keating. There were skyrocketing interest rates; stratospheric national debt; high unemployment; “the recession we had to have” and Australia’s non existent standing in Asia, thanks to Keating’s inability to hold his venom in check.

Howard’s energy and wisdom coupled with his innate belief in Australia’s Protestant work ethic turned convention upside down and showed that he in fact could make a silk purse from a sow’s ear. And what a grand purse he made!

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Low inflation, high wages and a 33-year low rate of unemployment. And that’s before we look at our very high simultaneous standing with Washington, Beijing, New Delhi, Tokyo and Moscow.

To understand what’s going on, let's look back to 1945.

Britain’s general election of July 1945, held just two months after VE Day, resulted in the shock election defeat of the Conservatives led by Winston Churchill and the landslide victory of the socialists under Labour’s Clement Attlee.

The result of the election was baffling, given the heroic status of Winston Churchill. Voters swallowed Labour’s lies foolishly believing that the Labour Party was better able to rebuild the country following the war than the Conservatives could. Churchill and the Conservatives were also considered to have run a poor campaign in comparison to Labour. Negative advertising by Churchill, it is claimed, also hurt the Conservative cause. In one instance Churchill accused Labour of seeking to use Gestapo tactics in order to impose socialism on Britain. This quip backfired very badly.

Like snake oil salesman, Clement Atlee’s Labour Party offered blue sky. The Party promised the world: full employment, universal health service (the NHS), and a womb-to-grave welfare state. British Labour marketed its reforms under the utopian slogan “let us face the future”.

Interestingly, Labour focused on what the polls told the party was its greatest asset: the policy of social reform. Whereas the polls showed only one in 20 Britons considered the policy of international security to be important: the Conservatives were araldited to that policy above all else.

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With the war drawing to an end by 1945 and Churchill's personal popularity staying, Conservatives sat listless, confident of victory by just turning up on the day. Labour, aware of Churchill’s popularity, especially within his own party, urged the public to distinguish between Churchill and his party. Labour painted the Conservatives as no more than appeasers, based on their behaviour in the 1930s. This scurrilous tactic worked and we’ll no doubt see Rudd ape this strategy of dividing the Liberals from its leader, John Howard, when the polls start to move against the ALP.

In February 1945, four months from the election, British Labour was 18 per cent ahead of the Tories. Many felt that these were early days and that the war hero was unbeatable, as David Lloyd George had been in 1918.

The Conservatives built their campaign around Churchill’s personality, marketing him as the prime minister who was not only a warlord, but also a constructive peacetime statesman.

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About the Author

Jonathan J. Ariel is an economist and financial analyst. He holds a MBA from the Australian Graduate School of Management. He can be contacted at jonathan@chinamail.com.

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