Let’s say it right at the beginning. It won’t matter how many times Kevin Rudd says he is an economic conservative. It won’t matter how many schools or homeless shelters he visits. Nothing will make a jot of difference if the United States goes into recession.
Overnight the chief economist at the International Monetary Fund, Simon Johnson, has warned that the world economy could be facing a “perfect storm”.
He has warned of the impact of the global credit crunch and high oil prices. He says current projections for the American economy are too optimistic and warns that the IMF expects to downgrade its growth forecast for both the United States and Europe.
There are Australians who have already experienced mortgage rate rises not from any local macroeconomic setting, but because the funds they borrowed were sourced from overseas. Still, try telling them the government isn’t to blame. A global slump will cripple the Rudd government. It will make it look incompetent.
Labor’s success could compound the problems. Yesterday, Crikey wrote:
There is also potential for corruption and conflicts of interest – or at the very least some messy perception issues – with Labor in power in all states and territories and Labor linked lobbying firms knocking on doors all over the nation.
This very issue is all over the Daily Telegraph today:
Labor Leader Kevin Rudd’s chief of staff lobbied the State Government on behalf of the Packer-owned Betfair betting agency as part of a string of secret meetings stretching back to 2003…
Explosive documents obtained by The Daily Telegraph show David Epstein was in a lobbying team that asked the Iemma Government to let the PBL-backed company operate in NSW…
The revelations cast a shadow on Premier Morris Iemma’s version of how PBL-Betfair lobbyists dealt with the Government.
Crikey is aware of further allegations surrounding this matter and Epstein’s role in negotiating other contracts during his time in government affairs. Perceptions of incompetence are bad enough for governments. Perceptions of incompetence and sleaze are guaranteed to kill a government stone dead.
There have been comparisons between Kevin Rudd and Tony Blair. Will we be making them between Rudd and Norman Lamont?