There can be no denying that Prime Minister Kevin Rudd and Treasurer Wayne Swan, in particular, have brought a concerted air of solemnity to their communications regarding the global financial crisis. It has become almost cliched for our leaders and media commentators to assert that these are “tough times that we are living in”, or to compare the recent machinations in our financial markets to Black Monday, the oil shocks of the 1970’s, or even the mother of them all, the Great Depression. The national mood is a heady brew of overstated pessimism and introspection, and few have the confidence to predict exactly how events will unfold in the future.
The importance of confidence for consumers and the world’s remarkably flaky financial markets can’t really be overestimated at this stage. This creates a bit of a conundrum for government; on the one hand, the situation should probably be talked up, in order to send positive signals out there to those willing to listen. On the other hand, the government needs to keep its mood in touch with that of the Australian people. The last thing the Rudd Government wants to do is engage in rank triumphalism over Australia’s position in relation to the financial crisis when a lot of people out there are hurting as a result of it.
It would seem that the Liberal Party is happy to send positive signals with respect to the financial crisis, and to wear on its sleeve any criticisms arising from it being out of touch (some would suggest this is its natural disposition). Shadow Treasurer Julie Bishop appeared on Channel Nine this morning suggesting that Rudd needs to be more positive in relation to the crisis, offering this hyperbolic vignette to support her case:
Ms Bishop said shopkeepers in an Adelaide shopping centre had sent her a clear message.
“A number of shopkeepers … said to me that every time the Prime Minister goes on the nightly news and says ‘it’s going to be tough and ugly and hard’, they know that sales will be flat the next day.”
Former Prime Minister John Howard sent the Rudd Government a similar message on Fox News yesterday, urging the government to steer clear of comparisons of today’s crisis with the Great Depression. He is not without a point, but clearly the line upon which the government needs to walk here is fraught. Federal Labor is getting hit by the Opposition and some punters for talking the crisis up. If it talks the crisis down while the problems related with the crisis remain, it will also get hit by Opposition and the punters.
Rudd and Swan, knowing that this truly is a global financial crisis and that for the most part it is beyond Australia’s control, are erring to the negative side at the moment. Although we could perhaps do without some of the “Great Depression” hyperbole, I am not sure this is necessarily a bad thing given the reality of the situation that Australia faces. When the United States sneezes, we need to do what we can and hope for the best, because we simply don’t have the economic equivalent of an influenza vaccine on hand.