In his rather eccentric Australia Day speech that extensively explained why the economy was like the Australian cricketing team, Lindsay Tanner noted that the national day marked a turning point, when the summer break ended, footy replaced the cricket, the kids returned to school and everyone went back to work.
Indeed. It’s a hateful time of year. It’s stinking hot, there’ll be no more public holidays for ages, and the whole country seems in motivational deficit. It’s not just in Australia. A couple of years ago the BBC reported that a Cardiff researcher — as if any day in Cardiff could be anything but wonderful — had found that January 24th was the worst day of the year.
Overlaid on all that this year is the dead certainty that ’09 is going to be dreadful for a lot of people. Slough of despond, here we come. Reduced petrol prices, heavy discounting by retailers and low interest rates, which should have most of us celebrating, don’t seem even worth mentioning compared with the imminent rise in unemployment. Mass psychology is a fascinating thing, isn’t it?
As is political psychology. Julia Gillard is meeting today with welfare organisations to discuss what is happening “on the front line”, although the agenda seems to have been carefully prepared to avoid much talk about such distracting matters as an increase in unemployment payments. With all appropriate respect to welfare organisations, who make far more of a contribution to good in the world than someone like me ever would, it’s unlikely that a convocation of such bodies would ever advise that things were at anything less than crisis point, particularly given they were saying that at the peak of the economic boom. Quite what Gillard hopes to obtain from such a meeting therefore isn’t clear, but it looks as though the Government is listening.
Speaking of useless convocations, Gillard will be off to Switzerland to represent the Prime Minister at the World Economic Forum, which Kevin Rudd ditched over the weekend. He had been scheduled to go to India — a worthwhile excursion, if only to see where all them outsourced jobs went — and then to Davos (who is this Davo and why does he always host it?), after attending the Pacific Forum in Port Moresby. The temporary suspension of the Forum meeting gave him the excuse to ditch what would have merely added to the Kevin 747 persona. Appropriately for a shambolic body like the Pacific Forum, the meeting was promptly back on again, requiring Rudd to make a day trip to PNG. At the last minute he decided to take Wayne Swan with him so they could discuss stimulus packages on the plane. Ever get the impression the Prime Minister must be a pain in the bum to work for?
There will be another stimulus package, this week or early next week, public service sources say. It will probably include some form of training payment, subsidy or program for the unemployed, as well as tax cuts. Julia Gillard was emphasising this morning on radio that there are still areas of skills shortages in the economy despite rising unemployment. Increasing training has a lot more political appeal than bumping up unemployment benefits, since even when we know all about rising job losses, there’s a lingering downward envy sense amongst voters that the long-term unemployed are bludgers. On the positive side, it would actually amount to the sort of investment in our human capital that generates real benefits both for the economy and our social fabric.
No matter what the package, however, it’s all a bit like wrestling with smoke. Nothing short of a battered suitcase full of $1m in unmarked notes being sent to every household in the country is going to restore confidence, particularly given the enthusiasm with which we are convincing ourselves that everything is going to Hell, albeit at a slower rate than overseas, which is going to someplace the denizens of Hell live in fear of being sent to.
We need some new thinking that understands the mysterious links between mass psychology and the economy, that could lift the national fit of misery we’re slumping into, or at least ratchet it up a couple of notches. There is an anything-goes tone to economic debate in the US at the moment, a recognition that they’re in uncharted policy waters — or, perhaps more correctly, they’ve sailed off the edge of the earth and are plunging with gathering speed into the darkness. Some economists are suggesting inflation be embraced as a means of strengthening the stimulatory effect of zero interest rates. There are no rules anymore, they say.
We’ve not yet reached such a fire-at-will policy making but it might be wise to start thinking outside the normal economic parameters to which we confine ourselves. Otherwise we might end up lurching from stimulus package to stimulus package, wondering why nothing seems to work. That’s what happened to the Japanese, and they lost an entire decade that way.