Right. ‘Voters don’t like being told, "You’ve never had it so good".’ Why? Because they have to face up to the fact that they cannot control their own spending, and they like to be able to blame the government of the day for their own, individual incompetence in economic management.

No matter what ones thinks of John Howard, Peter Costello et al, there is absolutely no logical reason to change government this month and condemn ourselves to three or four years of totally hopeless Labor money-managers. However, the very people who cannot manage their domestic budgets seem to think Labor will somehow get them out of the bind that they have got themselves into through rabid consumerism and greed.

I hope they get their way, and really suffer. The sitting Liberal candidate in my electorate is real dill, and I am seriously thinking of withholding my vote from all of the candidates standing in my electorate. I don’t want any of them on my conscious; they all seem to be trying to curry favour with no-hopers.

Australians need a real jolt to make them see how easy they’ve had it up until now. And the Australian Labor Party is just the mob to provide that jolt.

If the predictions of a share market crash are correct and it happens sometime in the next 3 years, the sensible political party will the one who looses this election and pick up the pieces after the next federal election.

One thing is certain is that there will be a share market crash, it is a matter of when?

james, i suspect a quality of politicians is a belief that a world wherein they are on top cannot have any serious flaws. this creates a vision defect that no optician can help.

Leigh, absolutely no-one I know that is planning to vote against the Coalition government is doing so because of their own personal financial situation. It absolutely *does* matter what we think of Howard and Costello. Even if Rudd & Swan are likely to suffer some teething problems managing the economy, it's well worth this risk if it means a chance to redress some of the actions (and inactions) of the Howard government over the last 11 years.
The idea that we should never change governments if the economy is doing well is bunkum. We change governments when voters want a change - that's how democracy works.

The once noble science of economics has become so indelbly polluted by ideology that it has become difficult to distinguish between the two.

Sinclair Davidson's analysis represents yet another attempt at justifying the Coalition (indeed economic rationalism's) fatal flaw - the uncontrolled accumulation of foreign, business and household debt through leveraged speculative investment.

Anyone that tells you that "the current account is of no economic import" or quite simply "private debt is good public debt is not" will probably tell you anything that would suit their own ideological leanings. And if the simple voting masses that the author refers to in condescending terms find it difficult to believe that ‘debt is good’ then that is entirely to their credit.

Davidson’s take on foreign debt is consistent with what Peter Costello told The Age’s Tim Colebatch during questions after Treasurer’s debate - that ‘private banks’ needed foreign borrowings to fund productive investment.

What Mr Costello didn’t tell us was that in recent years, a huge proportion of that investment has been poured into a (non-productive) speculative boom in housing that has contributed little to construction, inflated the price of established homes and undermined the prospects of younger generations.

Recent Reserve Bank figures have revealed that Australia’s household debt has risen exponentially from the equivalent of 30 per cent of GDP in 1990 to around 100 per cent now. And that older homebuyers and property investors accounted for most it. Business debt by comparison was 60 per cent*

Moreover the RBA noted that households that were borrowing to invest in property and shares left themselves vulnerable to rising interest rates or shocks such as a fall in asset values. Those shocks are already occurring in Sydney’s west where the US pattern of mortgage stress, negative equity and foreclosures has set in.

Over the last ten years our productive capacity has stalled as growth has been driven by asset-price inflation and household debt. If the voters have concerns, they are justified.

*See ‘Some Observations on Financial Trends’ (25/9/07) by RBA Dep. Gov. Ric Battellino under ‘Speeches’ on the RBA website

Professor Davidson pens a serious and imaginative argument on the axis of Schumpeter’s notion of “job ownership” as an answer to the puzzling question that a government that has engendered a crop of prosperity to Australia faces electoral defeat.

But there is a fundamental contradiction in his argument that torpedoes his thesis. For if “WorkChoices legislation” and the processes of the free-market—which were in existence under Kim Beazley and had hardly impacted favorably to his electoral prospects as they presumably do now with Kevin Rudd—are psychologically threatening the “job ownership” of Australians, an untested Rudd as economic manager who can still cannot outpace Howard as a better economic manager--as he has done on other issues-- that is deeply engrained in the electorate’s perception and which all polls clearly show, can hardly make workers feel more secure about their job ownership under a Rudd government. Moreover a government that is perceived to be dominated by the unions which scarcely have the reputation of saving or creating jobs. In such a situation, it’s more likely than not that people will vote for the devil they know.

I believe that there is another subjective element that tentatively answers the puzzle. It’s the PROLONGED honeymoon, for not yet known reasons, of Rudd with the electorate that drives his favorable polls. They have created a momentum of success and the people who are answering the questions of the pollsters get a great frisson, a great thrill, by riding this winning horse. But their thrill will cease before the end of the race. At the approach of the real poll on November 24, when the prospects of the two parties will be very close, “subjective reality” will be given its knockout punch by objective reality, and the electorate will chose the current economic security against uncertainty.

See:How Long Kevin Rudd's Polls Defy the Law Of Gravity?
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