Cometh the moment, cometh the man. Malcolm Turnbull is the right man to lead Australia, right now. Why? Because he is committed to the right values of economic liberalism to repair the economy and second, as well as more importantly, is capable of persuading people of what it will take to do it.
On the first point many readers will be dismayed that a Goldman Sachs alumnus has risen to the office of Prime Minister. This will feed fears that he is a member of that global school of vampire squids that seeks only to benefit a financialised economy. It may be so, only time will tell, but I council you to be patient. Our own partner in this great struggle, Leith van Onselen, is also a Goldman alumnus. It does not brand you one way or another.
Liberalism is so much larger than that and will still be vital in preventing the worst case outcomes approaching Australia. As our good fortune founders on the coming emerging market and commodities rout, Australia will face a history making choice. The event will destroy the current basis of the economy: exporting dirt and using the income to borrow offshore in order to inflate house prices. This is the dumb way to grow. The way that relies upon luck only to prosper. It can be bailed out and decline be baked in or a new direction embraced. That way is simple enough, we’ve done it before: innovation, productivity, reform, competitiveness and earning our way in the world.
Yet the bubble in dumb is vast. It is central to an entire institutional edifice so large and complete that smarter alternatives have all but been erased. Dumb is backed by the Reserve Bank of Australia and the Treasury which are staffed by dills that pushed the model so fully in the past seven years that they’ve hollowed out the productive economy to disastrous lows. It is embedded in political cultures that hang success on dumb surpluses without a thought to what that means for private debt. Dumb is built into household balance sheets in the form of global leading debt loads. Dumb is the foundation stone of our largest and most influential corporations. Dumb is the lifeblood of our real estate addicted media.
One cannot overstate the challenge confronting a smart liberal leadership. Already calls are rife for Turnbull to repair the dumb. We need more confidence the dumb are saying. That’s the last thing we need. We need smarter confidence not more dumb compulsion to gamble on houses and holes.
That’s why Malcolm Turnbull’s communication skills are so vital. Tony Abbott was the dumbest prime minister of my lifetime. The epitome of dumb. Dumb on policy and and dumb on expressing it. Fully committed to the dumb economy in scrapping mining taxes, promoting dying commodities, holding back productivity reform, cheering on another salivating house price bubble and its rent seeking banks and doing nothing to prepare the nation for the mutual sacrifices needed to return dynamism to our productive sectors. Turnbull must turn his formidable rhetorical skills to undoing this legacy of dumb.
Oh yes, the challenge facing Malcolm Turnbull is gigantic. The story he must tell will shock everyone. But it must be told. The alternative is one of the dumbest declines of a blessed economy in the history of such.
