If you thought the concept of “faith-based reality” perished in the sands of Iraq, think again. The Government’s election advisers of choice, Crosby-Textor, have long aped the most iniquitous political practices of the Republican Party.

Now the Bush Administration’s practice of ignoring what’s happening on Planet Earth in favour of a more convenient narrative is driving the Government’s handling of interest rate rises.

In the Government’s preferred reality, it is entirely responsible for any good economic news, but has nothing to do with anything bad, and most particularly interest rate rises. Worse, there is economic turmoil ahead, and, despite what may have happened on its watch, the Government is the only party capable of handling it.

Admittedly, there have been some mixed messages from the Government on what’s around the corner. The quaint “Go For Growth” slogan had a big role in the first couple of weeks of the campaign but is now apparently being retired. Peter Costello has been warning of tsunamis for a while now. On Tuesday, the Prime Minister declared that the US sub-prime debacle meant trouble ahead, although yesterday he retreated a bit to admit that “I’m not saying the sky will fall in.”

But, just like the interest rate rise, all these economic difficulties will be someone else’s fault. Blame the Chinese. Or the drought. Or Citigroup and Merrill Lynch. But only the Coalition can handle them.

If the Government – and its cheer squad at The Australian, George Megalogenis honourably excepted – can get enough voters in enough marginal seats to accept this version of reality, it will be back in with a chance on 24 November – although it’s hardly the guarantee of victory Dennis Shanahan would have us believe.

It’s a longshot, particularly when the Government has to live down WorkChoices, but you never know. No-one, with the possible exception of Bob Shanks, has ever lost money overestimating the stupidity of ordinary Australians.

Then again, the lesson of Iraq is that all the faith in the world won’t help when things really do go bad. You can win an election, but eventually other, far more unpleasant realities break through. Just ask the lame duck in the White House.

No-one appears to be asking what exactly the Government’s response would be if all these promised economic catastrophes actually occurred. Its economic record consists of a massive increase in the size of government, the systematic redirection of revenue from a resources boom to its political favourites and an attack on trade unions that ended up entangling employers in even more regulation than before.

So what would it do if things went bad? Build some more roads in the bush and bash unions again? That’s all it knows how to do.