The folly of hand-outs 

Australian Financial Review

11 December 2008

Mark Latham


Sometimes the world of sport provides a perfect metaphor for the world of politics.

One of the most absorbing set-piece sporting events is the penalty shoot-out in soccer. Studies have shown that the player taking the penalty is most likely to kick the ball straight ahead, towards the middle of the posts. Yet the goalkeeper, who is supposed to stop the ball, usually dives to the left or right, thereby conceding a goal.

So why this act of folly? Why doesn't the goalkeeper stand his ground and block the ball as it is kicked towards him in the centre of the posts?

The most likely reason is crowd expectations. If the goalkeeper simply stands still and the ball is kicked away from him into the net, he will look foolish. For the sake of his reputation, it is better to do something, to dive to one side, even if this is the most likely way of conceding a goal.

Politics is much the same. Under the weight of public expectations and the demands of the 24-hour media cycle, politicians cannot afford to stand still. They must do things, or more precisely, they must be seen to be doing things. This explains the silliness of the nanny state, as governments devise new and superficial ways of trying to control social behaviour.

Every time an issue pops up in the media - fat people, skinny models, souped-up teenagers or unconventional artworks - governments feel obliged to respond with new laws and advertising campaigns. Ultimately, however, these gimmicks are futile. Human nature is not easily moulded by dusty piles of public ordinances.

The real action is elsewhere. In the globalised economy, outcomes are determined by the power of financial markets and international corporations. Educational outcomes tend to be a function of the family circumstances of students. So, too, health and wellbeing are determined by lifestyle decisions and personal responsibility. The role of the state is essentially residual: providing support for people who drop out of the education and economic systems and funding health care for the aged and chronically ill.

Everything else is simply for show: the evolution of public office into just another form of entertainment, filling large slabs of air-time on commercial TV and radio. This blanket coverage of politics has been in inverse proportion to the effectiveness of its policies. In earlier times, the British scholar and Labour MP David Marquand described it as the "feverish inconsequence of parliamentary life".

The goalkeeping metaphor is a perfect fit for our Prime Minister. Some Australian men like to watch the footy or play with the kids in their recreation time. If he could arrange it, Kevin Rudd would spend every waking moment in crisis meetings. This is his idea of a blissful life, even if he has to generate the crises himself.

During this five years as Labor's shadow minister for foreign affairs he regularly established opposition "command posts", co-opting staff and resources from other MP's offices, to deal with various international incidents. The fact he was in opposition and had no practical power to do anything about any of them never deterred him. He loved the thrill of being in charge of something, even if it was only a room full of Australian Labor Party staffers. Rudd is the consummate goalkeeper, an Energizer Bunny who never stops staging or attending meetings.

In response to the global financial meltdown, his government has shown its true economic colours. It has been diving from side to side with interventionist policies: introducing bank guarantees, Howard-style financial hand-outs and yet another tranche of car industry welfare. In each case, it was motivated more by the "seen-syndrome", the appearance of doing something, than the quality of its policy measures.

There was no run on any part of the Australian financial sector until the government announced its deposit guarantee and decided to exclude mortgage trusts and investment funds. In fact, the banks were flush with new deposits seeking a safe haven from the stockmarket downturn. As ever, government intervention created more problems than it solved.

Incredibly, Keynesianism and industry welfare, doctrines thoroughly discredited in the 1970s and 1980s, now form the basis of fiscal policy in Australia. If hand-outs to businesses and consumers are the answer to the competitive challenges of an open economy, why haven't they worked at any time in the past 35 years?

Such is the folly of goalkeeper government.


 

 

 

       
   
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