Rudd needs to heed warning from Garnaut

Comments on Michael Stutchbury “Garnaut warns PM on stimulus”, 9/10/2009, http://blogs.theaustralian.news.com.au/currentaccount/index.php/theaustralian/comments/garnaut_warns_pm_on_stimulus/

Garnaut is a highly reputable and respected economist with experiences in advising the highest office in the land. His view on the government stimulus is pretty much spot on.

Having said that, I personally think that some of Garnaut’s view may be questionable, like those about structural deficit and adjustments in Australia in the near future. That argument is convenient to put, but ignores the nature of the fact that government and consumers have imperfect information.

Now let’s get back to the government and Rudd. The main problem with the Rudd government is that the Prime Minister has a narrow and distorted view of the economic history of the past 30 years, as reflected in his essay in the Monthly in February 2009.

While the great financial crisis and the great recession shows some problems with ineffective regulations or supervisions in the US, especially the mal-practice of sub-mortgage lending and excessive gearing, it is far fetch to say it is the consequence of neoliberal economics in everywhere.

It is unclear whether Rudd really interpreted the economic history incorrectly or merely uses the crisis as an excuse to implement big government and strong government interventions. Different causes may have different consequences.

If he wrongly interpreted the history, then there is a chance that he may realise it one day and correct it.

If strong government interventions are his belief, then there is little hope that he will get the government’s economic policies and some other public policies right. And that would be a pity.

Better doing what you are good at, Mr Rudd

Comments on Michael Stutchbury “No market reform on Rudd’s recovery road”, 27/07/2009, http://blogs.theaustralian.news.com.au/currentaccount/index.php/theaustralian/comments/no_market_reform_on_rudds_recovery_road/

With all respect for his prime ministership, Rudd seems, unfortunately, to be acting like a confused man at the best, or an extreme opportunist always seeking popularity at worse.

The question is why he has been so interested, eager and daring in venturing into an area he does not have the expertise to say or do anything in that field.

While he has used the excuse of the lack of the relevant language skill to veto the appointment of a senior diplomat as Australia’s ambassador to Germany, that itself was extraordinary, then why hasn’t he apply similar criterion on himself in terms of whether he understand economics and economic history?

Rudd would do credit to himself and good to the Australian public, if he can concentrate on managing his government better and on managing the country’s affairs based on sound advices from experts, as opposed to publish half-cooked economic essays.

That is what he was elected for. The voters voted for an alleged economic conservative, but did not vote him for doing an incompetent economic essay writer.

Self aware is important, not only for ordinary people, but more importantly so for politicians holding high offices.