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?
http://australiacalls.blogspot.com

Honey moon? it will go long after the wedding mid first term Rudd will be as well liked as he is now.
Can we take the blinkers off? Howard who had worse interest rates while Treasurer rides an international wave of prosperity.
Rudd will too , like him or not Keiting and Hawk set some of the conditions in place that sees Australia ride high in the water.
The idiot view Labor will waste this chance is not unlike the sign on the side of the road today, remember Witlams 17%interest rates, wrong and foolish.
We will see a share market crash, maybe soon, it is coming and nothing to do with Rudd or ;Labor.
Can the author or some who post here rather than credit Howard with the mining boom talk about the issues that have turned him into the under dog?
In one term from hero to zero all his own work.

I still say that Howard has moved too far to the right of where people want to be and that Rudd has skilfully positioned himself as the Nice John Howard.

"Aspirational nationalism" is biting Howard on the backside, if you tell people to want ever more they will expect it and you may doom yourself.

Having said that 16 seats is a big ask and people are inherently conservative..but Ilive in hope!

Kevin07!

I likes MrSmith point.

"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."

Add those renters who, YES, aspire to become home owners. Together with them a million families with more than 30% of income to pay on mortgage is what will sink the Coalition. About 3 million Aussies directly and a further 1-3 million indirectly (concerned extended family who now need to chip in above weight) affected. For them the "historically low" interest rates real value at the till is obscenely high compared to the real value of much higher interest rates under Keating for 2-3 times LESS house prices.

2 million aspirational voters were the winning base of the Coalition. THEY will be the ones who will sink them now.

The fact the Costello is not willing to disclose the figures on just how many used the so called "first home buyer" grant for investment property for needy family (some with the ripe old age of 1, obviously needing this generous support) seems to corroborate the point.

The Coalition knows this. There simply is no substance that can lift them from this. Fear tactics alone won't. Remember, antics like the Tampa were just a charade. 2 million WERE aspiring on their or their family's behalf. That's a staggering 20-30% of those who eligible to vote! No tricky partisan preference here.

It is simply beyond comprehension how could the Coalition neglect such a large aspirational base. If they fall, it will be their own doing.

Howard is a good politician. But the secrecy and suppression of information he built made him ultimately believe that only his version of the truth exists. He could walk out without pants on and we applauded him. Now, it will be a costly mistake.

What a wonderful economy we could have if only its potential glories could be embraced by these pesky clouds of humanity.

How can they not realise the sublime joy of being seduced into immersive in debt whilst being relieved of the burden of secure employment?

Idiots!

What's Howard doing about this one?

Iraq War turned Turtle?

A war now needing philosophers more than soldiers
We who have followed the war so close, now have visions of a Saddam sardonically smiling in his coffin, and of a fully alive bin-Laden joyously chuckling in his beard.

All because George Bush has now set his sights on Iran, believing those Shias whom he had shown sympathy to for so long, Bush now has his generals casting them aside.

Simply because those same Iraqi born Shias are related to Iran, now just so much more fodder for the shock and awe diplomatic missile massage White House offsider Cheney has had in his sights against Iran for making fools of the Americans every time they tried to put it over the Iranians.

Certainly many of us had clapped our hands when the Iranians had held the US Embassy captive for over a year, and again when after eight years on from 1981, the Iranians had defeated Saddam’s not so gallant Iraqis, even after Donald Rumsfeld had been advising them for years.

All America's own fault, are now the genral feelings, because the US could not make up its mind whether it was fighting a Cold War battle, or just the same old Anglophilic imperial one for contraband and hegemon - now so much about oil.

Fact is, that none of us liked Saddam and even far less like bin Laden, but the Americans had and have been so pompuous and sure of themselves since WW2, even though they were virtually forced into that war with the Japanese attack on Pearl Harbour, we might wonder whether a smidge of humility might make us like them a little better.

But now we are fed with a madcap report from the New York Times about American troops near Baghdad calling in helicopter gunships preventing Iraqi national Shiite soldiers from rounding up Sunni insurgents, formerly called terrorists.

Reckon might be a good time for Rudd to ask Howard what plans he has to help his great mate Bush with WW3?

The Australian Government is thinking about setting up a 'consultation blog' to give the public a chance to comment on policy and proposed legislation.

If you'd like to help shape this blog then take this quick survey at

www.openforum.com.au/Survey

It could lead to something really worthwhille,

Thanks.

Certainly recent first home buyers, or aspiring first home buyers, are far worse off than when the Howard Government was elected (though this is not necessarily due to the Howard Government). For example, in Melbourne in 1996, the average Melbourne household was earning $61,800 and the median price for a house was $132,500. Now, Housing Industry Association figures show average household earnings are up 50 per cent to $93,400 - but the median house price has more than tripled to $418,600.

As a result, younger Australians are required to pay a far higher proportion of their lifetime's earnings on basic housing than previous generations, which in effect means that they start their working lives hundreds of thousands of dollars financially worse-off than their parents were at the same stage of life (not to mention the high HECS debts they also now have to repay)

Leith,

Your observations are generally spot-on except that the Howard Govt. had a major role to play in driving the speculative boom in residential property prices.

The RBA believes that deregulated lending is a major factor. Internationally others thers have cited central banks for slashing interest rates in the early 2000’s and both of those suggestions are correct to a degree

However the 1999 capital gains tax changes triggered an exponential increase in borrowing for housing investment & property prices as our unique negative-gearing laws allowed certain investors to minimise their rental income losses while the 50 per cent capital gains tax discount increased net gains .

The combination of these two factors - timed to coincide with 'record low interest rates (as they were) has fuelled the phenomenal increase in house prices and household debt

- Mr Smith