Barnacle Bill

Tony Abbott has asked nervous government MPs to maintain internal discipline in the face of the ABC funding controversy and bad polling, reassuring them he will knock “one or two barnacles off the ship” before Christmas.

Other than with the title, I’m not sure there is much of a lesson for us moderns other than that sensibilities do indeed change. This is from 1935. Anything similar is unimaginable today although I was shocked to see Olive Oyl playing the field as she does. But for all that, thinking of our leader of the opposition as Barnacle Bill does have an appeal specially when presented as a menace as he is here.

Should also mention how well the PM’s speech was yesterday. In fact, I was sitting next to a minister assisting the minister and was saying just that to him when he said why don’t you say it to Tony. And there he was passing by as he was leaving, so I said it again to him. The speech was reported in this morning’s AFR with the headline, “Abbott puts the onus on business”.

Tony Abbott on Wednesday night appealed to the business community to help the government sell its economic agenda foll­owing a decision to dump or water down key budget measures and new evidence the budget is far more vulnerable than previously thought.

The Prime Minister told the Australian Chamber of Commerce and Industry’s Australian Business Leaders’ dinner last night that the success of his government depended partially on strong business backing.

“My hope is that you won’t just be interested but engaged in 2015. You matter and your voice is heard,” he said in a similar plea issued recently to the Business Council of Australia. “Reform or stagnation, budget repair or endless deficits. More tax or less. Your choices and your statements count.”

Prosperity travels through business; there is no other way. Crony capitalism is not the free market; it is a reversion to the mercantilism Adam Smith is supposed to have seen off the lot. Barnacle Bill is playing with fire. They created the mess that will sink our living standards while they pretend it has been those who are trying to repair the damage at fault.

UPDATE: The imagery is complete. Viva [many, many thanks] in the comments noted that Abbott is being portrayed as Popeye by Moir in his cartoons!

abbott as popeye

ACCI and deficit spending

I did manage to get through Q&A last night but what caught me right from the start was where Wayne Swan, former Treasurer, said to Kate Carnell, the newly installed CEO of the Australian Chamber of Commerce, that ACCI had NEVER sought balanced budgets. Never is a long time and having been the ACCI Chief Economist up until a decade ago, I can say with perfect assurance that at least in my time, ACCI, previously known as the CAI, had never sought anything other than balanced budgets.

Way back, as far back as the days of Bob Hawke as Prime Minister, I wrote an article for our newsletter titled, “An Australian Economic Miracle?” Not many things on the net from the late 1980s, but I did find this:

“An Australian economic miracle, a truly Lazarus-like recovery is now a clear possibility,” says the Confederation of Australian Industry (CAI) in a newsletter this month.

Following the 1987 share market collapse, everyone across the world got religion and more especially Paul Keating here in Australia who balanced the budget in 1988. This was then – and always was while I was there – CAI/ACCI policy. Balancing the budget by lowering expenditure was a near-on certain cure-all for me and so it proved. What then wrecked it all was the almost immediate concern that the economy was overheating that then required the administration of a ridiculously high interest rate regime which brought on the “recession we had to have”. I had to spend the next five years shouting at the government for ruining it all with its monetary policies but it was by then too late.

But in that brave moment in 1988, Australia was set for the most remarkable recovery you ever saw. The flack I took for saying what I said, along with the organisation, was prodigious. But the then Labor Government, having balanced the budget, was indeed overseeing an economic resurrection that at the time no one had noticed was in place. So I wrote the article, signed off by my CEO, and once the recovery became common knowledge, had to endure the idiocies involved in cooling down what had only just picked up.

Balanced budgets work, and deficits do only harm. The evidence that the policies of the classical economists were overwhelmingly better than the policies of every mainstream text of the time, and of today as well, was demonstrated to me, just as it would be demonstrated again when Peter Costello balanced the budgets in the period after 1996. I am therefore pleased to see that Kate Carnell has reiterated the long-term policy of the Chamber.

And if you would like to have a better understanding of the underlying theory, you could not do any better than have a look at my Free Market Economics. Strange to relate, it is to my knowledge the only book of its kind.