Chapter 18, Hobart January 2018
In which our hero takes an easy scalp
Global warming had reached even Hobart, Australia’s most southern city, where vast icebergs often troubled the weekend sailors.
Professor Ronald Whitrod was sweating and puffing. He was winding up with his views on Australia's recent economic problems. He was an old-fashioned bloke who had learnt his economics in Cambridge many decades ago. He had served John Howard’s supposedly Neo-Con government at the start of the twenty-first century, and in fact he was the genius who invented the new industrial relations policy that was known as Work Choices. This had hastened Mr. Howard’s retirement, and Whitrod had been forced to return to his native Taswegia where he was hanging on to an honorary professorship by his fingertips.
He was proud to be known as the last of the Keynesians, having read Keynes and briefly tried the higher sodomy during his student days. He was deeply suspicious of economists from “the mainland” as he called the rest of Australia. Australians who had succeeded in the United States he regarded as spawn of the devil.
Australia’s problems were due - he had argued - to the collapse of society in the mid sixties, the breakdown of the nuclear family, long hair, increased sexual and social permissiveness, and the consequent loss of vital bodily fluids which accompanied all these disgusting practices.
Whitrod had inserted (tricky word this) into John Howard’s first speech as Prime Minister a reference to the good old days when men were men, women were safely behind the white picket fences of their modest but affordable houses, barefoot and pregnant, and children were seen and not heard.
With his (accidental) appointment to the newly-created National Council of Economists, his opinions on these and other matters had suddenly become much sought after. He was from one of the redbrick universities south of the intellectual Mason Dixon line which ran through Canberra, and he believed that Doctors Norbitt and Watson had traveled south to sink in the hatchet. Norbitt was wearing his famous smirk, and Watson scribbled furiously. No doubt the older of the two technocrats would be the first hit man. Still, they were a minority of two at this meeting so should not be too difficult to handle.
"In conclusion, I will give my policy prescription. I would cut taxes, increase the budget deficit, and hence expand economic activity and reduce inflation. I would not cut the goods and services tax because that would encourage smoking, drinking, fornication and other evils."
Bill Dodge lit his thirtieth cigarette and muttered to his old mate Jack “Jacko” Hoode. "Silly old bastard. He's gone against the party line. He'll be chopped up."
Bill Dodge had himself migrated south some years before, changing his views on economic policy in the progress. A colleague had remarked, "I expected him to change his views when he went to Hobart - but did he have to do it at the airport?” But despite his famous flexibility, Dodge sat uneasily in what passed for the Establishment of Australia’s Deep South. He certainly had little sympathy for the Whitrods of this world.
Jacko Hoode was a representative of the Australian Council of Workers, the peak body for Australian unions, nowdays representing only 5 % of all workers. He moved into action immediately the meeting was thrown open for questions and comment. He pointed out that Whitrod's pious hopes that the workers would go easy on wage demands if their income taxes were cut was totally wrong, indeed irresponsible. “It might have worked for Paul Keating in the eighties” he conceded, “but get real mate. This is the twenty-teens”.
He pondered a moment. "And besides, us workers likes our beer”. "And our cigarettes," added Dodge, lighting up his thirty-second. In case readers are wondering, Australia’s sheltered workplace for boffins, known for reasons lost in the mists of time as CSIRO (pronounced CY-ro) had discovered vaccination against lung cancer several years earlier. Many older Aussie blokes had reverted to the Marlboro-man image so popular in their youth or, in the case of Dodge and Hoode, their fathers’ youth.
The argument ran to and fro until Norbitt finally injected the U.C. line - that money mattered and Whitrod had totally ignored it in his analysis. Whitrod was so exhausted by the struggle with his fellow southerners that he could only mop his forehead and gesture at the figures which he had put on the blackboard to prove that money had nothing to do with inflation. Norbitt's attack was relatively mild, and Whitrod began to feel quite smug. But Hoode and Dodge had given him a hard time. "Cheeky young buggers. Need a touch of the lash!" he mused.
Watson's attack on Whitrod was more telling. "You may imagine that individual countries operate independent economic policies," he argued. "But the fact is that international economic linkages now exercise an overwhelming influence. Like many other countries Australia's excessive overseas borrowings in from the 1980s and again by the Rudd-Gillard-Crean government in the early twenty-teens means that there are now severe limitations on what can be done. If the international financial community does not like a given policy change in a particular country, they can immediately mark down the value of its currency. That makes the country effectively poorer and so the policy will have to be reversed, as we saw when the Eurozone collapsed."
"Of course some countries try to buck the system. Repudiating debt has been tried by some. But that means no new borrowing can be undertaken. Living on current income alone is not an attractive option. Some small people's republics struggle on with a philosophy of self-sufficiency, but an increasing proportion of their better people find ways to leave. Now that Australia has got its act together, we are the beneficiaries under our climate change refugee program”.
"Countries which pay their bills have tough times too," Watson pontificated, “as we did during the economic disturbances of the past decade. But those who keep their credit ratings high have the better time of it. Increasing numbers of people from the more successful countries now have investments in a range of countries and currencies”. Watson paused for another sip of the amber fluid so generously provided by Fosters Inc., the conference sponsor.
“When pension funds for workers have widely diversified international portfolios, the old left-wing paranoia about international capitalist conspiracies is hard to sustain”. This time Watson took a long swallow. “Professor Whitrod's policies would raise further our international debt. They are therefore not viable," Watson concluded. Dodge and Hood nodded in agreement. Whitrod reached for his angina pills. This argument had severely aggravated his condition. "I'll not dignify this rubbish with a reply," he gasped. "My policies will survive intellectual scrutiny."
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