Brendan Nelson and the prisoners’ dilemma

I have not had the opportunity as yet to completely digest the draft Garnaut Report [PDF from SMH], although I have had time to be annoyed that the government feels comfortable basing decisions on predictions of the distant future when it seemingly does not have the ability to predict the demand for downloading a report from its website now. As I type the Garnaut Review website is completely out of commission and seemingly accepting no traffic. One wonders if the entire domain is being relocated to a different network or provider. Whatever is going on, it is a hardly acceptable level of service. People should not be prevented from viewing information disseminated by the government because it did not adequately predict demand for that information.

But on to more material matters. What I have read of the report so far certainly provides food for thought, and by the looks of things, there are quite insightful nuggets of wisdom embedded throughout. What I appreciate about Garnaut’s analysis is his intellectual pragmatism. I have little doubt that his blue-blooded contrarian streak questions whether the devastating potential consequences of climate change will come to fruition. I have little doubt that the imposition of government controls that could serve to damage the economy in the short-term run counter to his natural intuition. Despite all of this, like most of the rest of us who do not immerse themselves in the climate change science literature full-time, Garnaut knows that he has little recourse given the available evidence but to presume that the scientific mainstream is right, or in the very least, not far from. He therefore respects the need for potential short-term pain in order to reduce the likelihood of severe long-term pain. This is an entirely rational approach under the circumstances.This characterisation of the political problem facing the nations of the world from the draft report sums things up fairly well (pp. 12-13):

Effective international action is necessary if the risks of dangerous climate change are to be held to acceptable levels, but deeply problematic. International cooperation is essential for a solution to a global problem. However, such a solution requires the resolution of a genuine prisoners’ dilemma. Each country benefits from a national point of view if it does less of the mitigation itself, and others do more. If all countries act on this basis, without forethought and cooperation, there will be no resolution of the dilemma. We will all judge the outcome, in the fullness of time, to be insufficient and unsatisfactory.

Resolution of the international prisoner’s dilemma takes time—possibly more time than we have. The world has squandered the time that it did have in the 1990s to experiment with various approaches to mitigation.

Climate change is a diabolical policy problem. It is harder than any other issue of high importance that has come before our polity in living memory.

The prisoners’ dilemma, of course, is a well known logical problem that has important applications in mathematics, economics, computing and psychology. In raw economic terms, Australia would be best served in the short-term if all other nations on the planet cut emissions multilaterally, and we were allowed to continue emitting as much carbon as we pleased. Of course, this is not a tack that every nation can afford to take with respect to climate change. If all other nations decide to cut emissions only when the largest polluters except them cut emissions, the world will remain in a state of emission cut deadlock perpetually. This is a scenario that calls out for leaders; for a few select nations to put their hands up and show the rest of the world how it is done.

Brendan Nelson’s populist response to the draft report indicates that he either does not understand this point, does not really accept mainstream scientific opinion, or otherwise (most probably) has decided that there is more to gain politically from opposing any climate change policy that might involve short-term economic pain:

“It will be an act of environmental suicide, an act of economic suicide, if Australia were to be so far in front of the world implementing an ill-considered, not yet properly developed and tested emissions trading scheme if we haven’t got a genuinely global response,” he [Nelson] told journalists.

It would seem that the leader of the Opposition, cast as prisoner in the apocryphal dilemma, would rat on his fellow prisoner in an instant in a ruthless and foolish attempt to try and stay ahead of the pack. Given what we know about the mainstream climate science, Nelson seems to be risking a lot more than five years imprisonment by refusing to give an inch until some of the other nations of the world give a mile. This approach is a continuation of the willingly ignorant purposelessness that characterised the Howard Government’s approach to environmental issues, and I think that most people who give a fig about what is going to happen on this planet over the next few decades will see that.

Boilover for the Federal Opposition

Brendan Nelson obviously put a lot into his budget reply speech and from all reports it was delivered quite well. One of the headline proposals from the reply speech, the Opposition’s plan to cut fuel excise by 5c per litre, was and is on the daft side of sensible economic policy, but there was still quite a danger there for the Rudd Government that it would serve as a populist means for the Opposition to claw back some support. Unfortunately for Brendan Nelson in particular, it appears that any chance of that happening has now been firmly and suitably buried by his Shadow Treasurer, courtesy of a fairly grubby email scandal.

Malcolm Turnbull evidently does not personally support the proposed cuts to fuel excise, and a leaked email sent from the Member for Wentworth to Nelson’s office makes this clear in no uncertain terms. Nelson’s leadership has quite frankly now been critically undermined by his second in command on the frontline; I honestly think that he has no credible course of action besides sacking Turnbull from the front bench or in the very least issuing a very strong public reprimand. For Turnbull’s part, I think that this was a particularly ill-judged intervention that seems to be more about his own intellectual pride than anything else. He is of course correct about the excise cuts – the opportunity cost of embarking on the exercise is realistically quite high – but this is about the least appropriate means imaginable to make a point to his party and the media. I don’t think the time is yet ripe for a leadership spill, and neither do I think that Turnbull’s colleagues will judge him kindly after this latest unseemly boilover. Childish and clumsy incidents like these make one wonder whether politics is really the right game for the Shadow Treasurer to be playing.

Wayne Swan and Kevin Rudd must be blessing his cotton socks.

Quitters can be writers

The news that former Treasurer Peter Costello is set to publish his memoirs in early October this year is not particularly good news for the Liberal Party. Apart from the fact that it represents a certain negative publicity time bomb waiting to go off in a few months, it also seems certain to provide ongoing grist to the rumour mill regarding the the leadership. Costello has already asserted through the media that his memoirs would not be a Latham Diaries style book of bile, but rather would seek to provide direction for the Liberal Party moving forwards. It is unclear whether the underlying motivating factor for publishing his memoirs so soon is to repay a debt he feels he owes to the party, or perhaps to provide a foundation for some resurgent leadership ambitions:

Peter Costello has vowed to identify the way forward for the Liberal Party in soon-to-be-published memoirs, igniting speculation that he will use the book to relaunch his political career and seek the Opposition leadership.

Mr Costello hinted that his memoirs would not focus exclusively on the past and would represent “a very positive contribution of where we are now, how far we’ve come, where we ought to go in the future”.

When it comes to the question of the leadership, I am in agreement with the senior members of the Liberal Party who believe that Costello should have taken the reins when they were handed to him if he really did want it. No doubt there are some conservative supporters who see a return of Costello to the leadership as a possible path for returning to the success of the Howard years. Those supporters need only consider the sorts of compelling and utterly effective attacks that the Rudd Government could make on Costello if he did try to return after throwing it all away last November. Now, folks like Kim Beazley will no doubt be thinking, who is the one who didn’t have the ticker?

By taking a leaf out of Iron Mark’s book without declaring his hand openly, Costello seems to be betraying that he is is still a little undecided about his future. At least Mark Latham had the good sense to exit politics before plunging a dagger into his own party. Costello would do well to do the same before his book is released, and to put an end to speculation about his future as soon as possible.

How to state the obvious

Greg Sheridan certainly has a breakthrough piece of commentary in The Australian today:

Key Liberal powerbrokers who backed Brendan Nelson as Opposition Leader have switched their allegiance to Malcolm Turnbull.

The shift, combined with a general sense of despair at Dr Nelson’s recent performance, means a leadership spill is likely within months.

Actually, I think that probably happened in the first day or two after Nelson won the leadership. In other breaking news, I’ve just heard on the grapevine that the Howard Government lost the federal election.

Picking fights with Glenn Stevens

The Coalition are still in search for a strong position to take to the media and the electorate when it comes to matters of inflation and interest rates. To be honest they have it bloody difficult; the Rudd Government has all the running on this issue, given that the Howard Government can in some respects be judged politically culpable for the current situation. We have not quite reached the point from which the Coalition can implicate the government in the blame for future potential interest rate rises, and any attempts to do so would no doubt draw an immediate and likely quite convincing rebuttal from Messrs Rudd and Swan.

Opposition Leader Brendan Nelson’s latest approach seems to be to beat up on the RBA. He does not seem to be ready to question the economics of the bank’s recent decisions to raise interest rates, but rather to question whether the RBA is taking into consideration the stress being placed on those with home loans:

In an unprecedented swipe at the bank chief, Dr Nelson said he supported the independence of the Reserve, but added: “I don’t believe that independence should be incompatible with sensitivity to and caring for the people that are affected by (monetary) policies.”

I am not particularly convinced this is a wise line of argument to run with, although one can see it starting to resonate with the electorate should the interest rate hikes continue to come thick and fast over the next year or two. If it does resonate, of course, it will only be for somewhat dubious reasons. The reality of course is that the Reserve Bank board does not invite mortgagees with their tales of woe into meetings, and base their decisions on their lamentations. The board bases its decisions in relation to interest rates on what it thinks is most suitable for the national economy, given the prevailing conditions. The measures at the board’s disposal are simplistic and really quite blunt; it does not really have the instruments at hand to treat any wounds it may be inflicting on the faceless thousands with mortgages across the country. If such “treatment” is indeed deemed necessary, it can only be realistically be meted out by the elected government of the nation, not the unelected board of the national bank.

In short, if Nelson wants to speak out on behalf of those Australians who are suffering financial stress as a result of the state of the national economy, he should be encouraging the Rudd Government to do something about it, and not pestering Glenn Stevens.

The truth about Doctor Nelson and the polls

There was of course another interest rate rise today, which is bad news for a lot of ordinary, hard-working Australians. The rate increase also curiously, as a product of our current position in the electoral cycle, helps the Rudd Government in political terms and inflicts just that little bit more pain upon the Coalition. The Opposition, of course, has been collectively left smarting in the knowledge that this latest rate rise represents just another refutation of their economic credentials and legacy. I am sure that senior members of the Coalition sleep well knowing that just as the Coalition terrorised Federal Labor for a decade in relation to their economic legacy during the Keating era, it appears that the Rudd Labor Government will have the pleasure of returning the favour ad nauseum with respect to the Howard years.

It is quite clear from Opposition Leader Brendan Nelson’s comments that he does not know quite how to tackle the twin peril of his own poll ratings, already deep in relegation territory, and this latest rate rise:

The Coalition has also lost further ground on a two-party preferred basis, down 6 points to 37 per cent, while the Government has a 63 per cent share of the vote.

Dr Nelson downplayed the poll as he arrived to chair a shadow cabinet meeting in Sydney this morning.

“I’m firmly locked in the underdog status, but the most important thing today is that the Reserve Bank of Australia will be delivering the report card, for the next 30 days and beyond,” he said.

The underdog reference is of course an understatement, if the polls are anything to go by, and Nelson’s reference to the Reserve Bank delivering a “report card for the next 30 days” does not really make a great deal of sense. If the Reserve Bank really has delivered a “report card” on government policy, which I don’t think anybody sensible believes it has, the report card would certainly provide an F grade to the previous Howard Government, and at minimum, a C grade to the government for the minimal tangible impact it has had on the national economy since assuming office. After the seemingly unstoppable barrage of interest rises over the last six months, I think most Australians with an interest in the matter would recognise that the country has a systemic problem on its hands with regards to inflation; one that is going to take a sustained and concerted effort from the government over a reasonable duration, if any relief is to be provided at all.

But let’s consider Doctor Nelson’s position as Opposition Leader for just a moment. To be honest, he seriously does have a severe case of the “Simon Creans”; in fact even worse than the current Minister for Trade had it five years or so back. Although he is not doing a particularly good job, I don’t personally believe that the job he is doing warrants the abysmal poll ratings he is receiving. Nelson’s leadership ratings are no doubt being impacted by the policy inertia that the Coalition has exhibited of late, and also the extended honeymoon that the Rudd Government has enjoyed since the election. Let’s be frank; the Rudd Government has, in political terms, been kicking arse and chewing bubble-gum since November 2007. Not many beats have been skipped – at least not any of enough significance to slow the government’s momentum.

So while, just to re-iterate, I think a transition of the leadership to Malcolm Turnbull is inevitable and the right solution for the Coalition, the situation is a bit more complicated than that politically. If Doctor Nelson feels that he has not yet been given a fair roll of the dice in the leadership, I think he has every reason to feel vindicated on that point. Of course, Simon Crean had every right to feel the same way, and yet the right decision for his party was definitely for him to step aside in 2003, if not even earlier. Like Labor back then, it seems that the Coalition’s political fortunes may be forced into decline for an extended period, substantially but not entirely as a result of a poor collective choice made regarding the party leadership.

The Coalition in policy-free nudist colony conundrum?

Well apologies, but this uncharacteristically provocative opening salvo from Age press gallery stalwart Michelle Grattan has me puzzling about where her head is at in relation to Canberra’s parliamentary “hot property”:

Parties that have lost elections quickly find themselves shivering in the changeroom, policy clothes stripped off and wondering how much of their philosophical underwear has also become unwearable.

Ooh, er. Despite the quizzical opening, Grattan’s latest column is one of the best from her I have read in some time. The point that she makes is not a particularly profound one, but does a fine job of rounding up all the recent evidence we have to consider about the Federal Opposition, arguing in a compelling fashion that they have lost the plot policy-wise. At the moment, we have no idea what the Federal Coalition stands for. Having taken the opportunity to rubbish at virtually every juncture the policy position of the previous government (e.g. Kyoto, WorkChoices, “saying sorry”, tomorrow will no doubt bring more), one could be forgiven for thinking that Kevin Rudd might be the best person to ask what the Coalition stands for on any given issue. At the moment, the Coalition seems to stand for whatever Kevin Rudd stands for with a twist; a twist that they generally are not prepared to fight for with any great determination in parliament anyway. The government is bringing the liqueurs and fruit juices to this particular parliamentary cocktail party, and Nelson’s Opposition appears to have gallantly taken responsibility for supplying the matchstick parasols.

In short, the Opposition is floundering, in desperate need of some policy directions to galvanise them, and a strong leader to take them forwards. Mindlessly chipping away at the government in parliament won’t achieve very much if nobody really knows what they themselves stand for. Turnbull’s cute but somewhat petty NAIRU bombing of Treasurer Wayne Swan may have resulted in some embarrassment for the Queenslander, but if the Opposition’s most useful line of attack on the government relates to the definition of a slightly obscure economic term, it says a lot about their own situation. Apparently lacking any substantive lines of attack on economic policy, they appear to have settled for the time being on pursuing the trivial.

On that ultimately meaningless political front, I wish them the best of luck.

The alpha and the omega… but how long will it last?

Despite a pointless pursuit of Kevin Rudd by the media on his relationship with Brian Burke, the Prime Minister is currently riding high with the highest preferred Prime Minister ratings in Newspoll’s twenty year history of such polls. The Coalition has already sensed that Rudd is top dog, and are instead concentrating their attacks on Treasurer Wayne Swan. Swan clearly needs to pick up the confidence levels and assertiveness quick smart if he is going to retain his job in the long-term.

Personally it is greatly reassuring to me that so soon after the government’s supposedly contentious delivery of a formal apology to the stolen generations, Rudd’s political standing remains not only rock solid but at record-breaking levels. Arguably it reinforces the point that although there is still a bit of anti-apology (and we may as well say “anti-compassion”) sentiment out there in the electorate, this sentiment is decidedly in the minority. From a progressive, dare I say left-wing point of view, this provides a not insubstantial dose of hope that the country will now finally cease to stagnate on issues of great social import.

Perhaps a touch more conclusively, it also says something about the Coalition. On the other side of the fence, sadly a very fragile hope is all that Brendan Nelson has at the moment in his position as Opposition Leader. That Nelson is currently burdened with just a 9% rating as preferred Prime Minister tells one a certain something about the current state of play with the major parties in this country. Federal Labor have succeeded (perhaps beyond their wildest expectations) in replacing John Howard with a mainstream, quasi-conservative figure, whom the “Howard battlers” can see a respectable degree of good in. That 70% of people prefer Kevin Rudd as Prime Minister sends a strong message to the Coalition that Brendan Nelson is currently not providing the leadership they require in order to be competitive. That only 9% of respondents prefer Nelson as Prime Minister more or less confirms that only rusted on supporters and party zealots (and Nelson’s friends and family) have elected to board the Nelson “I’ve never voted Liberal in my life” Express Train towards a Turnbull Opposition.

The clock must surely already be ticking. Having won the leadership and then completed a horrendously messy about-face on the apology issue, Nelson needs to be competitive or make way. One wonders if the Coalition party room, having not had the guts to do the politically intelligent thing and endorse Turnbull initially, will now have the guts to realise their error fast enough.

Frustrations of an estimable deputy

I don’t think there is anybody out there at the moment who thinks Brendan Nelson is making a good fist of it as Opposition Leader. For some reason, he has found it difficult to command the authority that one expects from a party leader in parliament. On just about every issue worth debating, the Federal Coalition have been all over the shop. The Opposition does not seem to know quite where it stands on industrial relations, besides promising to wait for the government’s legislation and deciding accordingly. It does not know quite where it stands on an apology to the stolen generations, because Nelson seemingly lacks the political capacity to forge a consensus on his own steam. Only now, shamed by the interventions of party heavyweights like Shane Stone, will Nelson’s ragged bunch of independent entities likely fall grudgingly in line behind the position of the Rudd Government.

Malcolm Turnbull must be feeling fairly frustrated right now, as he watches his party and Nelson wobble around like drunken sailors. Unfortunately, when politicians get frustrated they usually end up making mistakes or saying some fairly silly things. In this AAP report (via SMH), Turnbull takes what might have been a decent point to make about the government’s approach to inflation issues and makes a bit of a mess of it. Take for example this “red hot” analogy:

“For a treasurer to complain about economic challenges is like a fireman complaining about fires.”

“That is the job of the treasurer – to manage the economy.”

Well, if the so-called fires were lit (or at least stoked) by the Howard Government after a number of snoozy years at the wheel of the national economy, I don’t think you can really blame the firemen for getting a bit stroppy about it. Turnbull goes on to elaborate on how what Rudd and Swan’s public statements are actually the cause of all the nation’s troubles in this area:

“The problem with Mr Rudd and Mr Swan at the moment is that the language that they are using is so immoderate, so un-measured, it is actually creating economic problems for us,” Mr Turnbull told ABC Radio.

“He (Mr Rudd) is actually creating or exacerbating an inflation problem.”

Err… of course! It’s not the economy, stupid, its Rudd’s big mouth, stupid. How silly of us. Sadly for Malcolm, I wouldn’t advise anyone to hold their breath waiting for Glenn Stevens from the RBA to describe Rudd and Swan’s use of language as a major factor driving up inflation. Now on the one hand, I do think there is a good argument to be made asserting that Rudd and Swan should moderate their language in relation to inflation issues. There is certainly no need to (further) frighten the horses, although to be honest I don’t think their use of language has really gotten out of control in the way that Turnbull seems to be suggesting. However, to assert as Turnbull does that the Rudd Government is actually creating an inflation problem by making a series of high-level, generally accurate observations about the situation, is an absurdity. In short, it is a sign that the Opposition is in a real spot of bother. Presently, if there is any blame to be worn locally for the domestic economic situation, it lies squarely with the Coalition. This will change over time, of course, as the Rudd Government’s history in office grows, but for the time being at least, the government is effectively untouchable on economic issues.

When on considers the situation, what with Nelson creating chaos in the leadership, and the mouths of the Opposition gaffer-taped shut on economic issues thanks to the wastefulness of the Howard team over the last couple of terms, I’m not surprised our old friend Malcolm seems to be losing the plot.