Hayek was of course right to point to the impossible complexity of human affairs for those who demand definite and precise answers. But Keynes knew that and was much better equipped than Hayek with worldly experience, public and private, to attempt to deal with the complexity. Of course the cod-Keynesians of the post-War world, vote buying politicians and their less brilliant advisers, led their economies to the point where only harsh correctives would work. Hence Paul Volcker’s high interest rates and Thatcherism with its connection to Hayek’s anti-socialist arguments.

So where do our inevitably oversimplifying and underqualified politicians stand? Too many Coalition MPs were simple-minded anti-deficit propagandists at the wrong time, though it is a pity that Swan and Gillard didn’t take on some of the spirit of their objections and try to make sure the debt they were accumulating was justified by investments with a big positive return. Still, those Coalition MPs will probably be the ones who help Hockey restrain Abbott’s populist instincts, including those which old ALP supporters of Catholic social teachings would have approved. Abbott won’t have the prestige of John Howard after his second or third election victory so will probably be restrainable.

As for promises, well, they won’t really need to make any and all apparent promises to this date will be declared out of time before the election campaign proper.

I fear mightily for the good they may be able to undo, and for the genuine damage they could cause by their populism.

Remember that TA models himself on John Howard. JH had a lot of steel in opposition, but basically became a populist leader avoiding the hard decisions after the GST, and handing out lollies for the rest of his term.

That is the problem. I’d kill for another hung parliament next time, whoever leads, so that the carbon tax won’t be destroyed, the NBN can go ahead, and even god willing the mining tax actually makes some money.

If only ……………

Pretty much covers it. The dollar has been that high for that long that manufacturing and other sectors are either learning to live with it, and driving the innovation that will get them through it, or they are going to go out backwards.

Like an epidemic, the high dollar may just force the ‘lazy managers’ to look at their own business rather than wait for the government to perform some miracle that makes their business more productive. Those that are left will almost certainly be stronger for it. The weak may well be weeded out.

And as for productivity having anything but the slightest nano-connection to workchoices, that just shows the extremely limited educations of the masses of corporate rent-seekers.

We may do very well out of this, in the long run.

Australia like many non-core countries is caught in this web and it is difficult to see an equitable way out of it.

If we start slashing interest rates and creating more and more money, I believe we will join the downward spiral being experienced by others. China can’t prop us up forever. Don’t forget that cutting interest rates has two sides to it represented by the savers and the borrowers (who may or may not invest their borrowings in productive activities). There is also a redistributional effect in cutting interest rates and the added high risk of causing asset bubbles (again with a redistributional effects).

Unfortunately Australia has embraced this free market/free trade + privatization policy unquestioningly and has, as a result, created an economy that is extremely fragile being, as it is, so reliant on mining, including of its native forests. Our manufacturing industry is gone, agriculture is suffering, notwithstanding high world prices for grains, and now the high dollar is even hurting the not-so-profitable-85% foreign owned mining industry. The high dollar as I noted earlier is partly a result of the currency wars but also, especially early on, tied to the resource boom.

Every time mention is made of imposing import duties there is an outcry… we’ll start a trade war. Really! And similarly if mention is made of imposing some sort of capital controls all hell breaks loose. Why? Surely we should try something different for a change if the system we have been working under for so long is breaking up and has left us so vulnerable.

Even Malcolm is a concern as he has failed to show much backbone.

That or a Tobin tax, so we can at least derive some small benefit from our currency being treated like the town bicycle.

The G20 declared in its communique that it “will refrain from competitive devaluation … [and] will not target our exchange rates for competitive purposes, will resist all forms of protectionism and keep our markets open”.

(G20): The ministers also pledged to crack down on tax avoidance by multinational companies.

These statements raised an involuntary and weary snicker. The world’s top three economies (USA, China, Japan) are engaged in overt or covert currency manipulation, and two of them are Australia’s top two trading partners (and some of our key export commodities are priced in US dollars). We can only lie back and dream of … Hayek?

BTW don’t Hockey’s appearances on TV now give you some comfort and reassurance compared with what you might have thought a couple of years ago? He seems to be well briefed and realistic about the economy. What you cite in your article is just Hockey playing standard politics I guess and, all things considered right now I don’t see much down side for him in playing it like that.

I thought higher productivity was what everyone says they want? But is that only if it’s by screwing wages?

thats a disgrace and imbiciles like hockey get quoted every day in and out bagging our economy,as a consequence of this misinformation and probably brain washing , most of the public beleive that our economy is in dire straits

its unbeleivable that this can happen in a so called democratic society but thats what has happened

simply the australian public is not being told the truth

the main stream mediac, murdoch dominated aided and abetted by the right wing rednecks has taken over the information stream in our country