Kevin Rudd came to power for the first time on December 3rd 2007, just a few months after the global financial crisis commenced, and some time before its severity was truly appreciated by the political classes of any nation. On September 7, he lost office for the last time.
The first election he won was a bad one to win, not because he was blamed for the calamity of the GFC itself of course, but because his entire term was dominated by reacting to it.
That reaction had parts that could be rubbished (everything from the Liberal Party’s favourite farce of the Pink Batts program to my pet hate, the First Home Vendors Boost) but a simple comparison of Australia’s economic performance to that of the rest of the OECD over the last six years shows that his reaction worked – see Figure 1, which shows unemployment in Australia, the US and Ireland. Unemployment never exceeded six per cent here, and growth turned negative for only one quarter. The US, on the other hand, had its longest post-war recession ever, and Europe’s obsession with austerity turned its downturn into a genuine second Great Depression....
So could this election be a good one to lose? Not for Rudd, of course. Surely there’s no way he will emulate “Lazarus with a triple by-pass” and make a comeback from this electoral defeat. But the ALP will hand over the reins of government to the Liberals at much the time that luck is no longer playing on the Australian side....
Abbott could well find himself experiencing a similar double-edged sword of fate. He will take over when the deleveraging that caused the GFC has come to a temporary halt, and demand will be rising in the US (and maybe even in Europe, from the depths of its self-imposed Depression) thanks to rising private debt (see figure 7). But this rise could peter out even more quickly than it did for Fraser, leading to anaemic economic performance that will be blamed on the politician rather than the times....
Australia also faces the headwinds of a possible bursting debt bubble in China, something that is also beyond Abbott’s control. Our new prime minister may find that he lives in interesting times, rather than favourable ones.
http://www.businessspectator.com.au/art ... n-election
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