ALP’s knight is a thief in rusty armour

Niall Ferguson wrote in The Australian:

 

In the US GFC brings to mind the recipe for deep-fried chicken devised by Colonel Sanders. KFC stands for Kentucky Fried Chicken. Here, GFC should stand for Gillard's Fraudulent Claim.

The claim in question is that it was the fiscal stimulus injected by the Labor government that saved Australia from much more serious recession. According to one recent election ad, "Labor did what it had to do to avoid recession and protect jobs." The ABC's Kerry O'Brien unthinkingly recycles this line when asking Tony Abbott how he would have saved the 200,000 jobs Labor "created". It must have been music to Julia Gillard's ears when Nobel Prize-winning economist Joseph Stiglitz gave her his seal of approval recently. He praised the government's debt splurge as "one of the best-designed Keynesian stimulus packages of any country".

 

He goes on to say:

 

There's no denying the magnitude of the Australian handouts. If you rank developed countries' fiscal packages for the period 2008-2010, Australia's ranks third as a percentage of GDP, behind only the US and South Korea. So why did Australia's stimulus work so much better than America's? Spare us the fable that it was better designed. After the home insulation fiasco and the now-proven waste on new school halls, that can't withstand serious scrutiny.

Which brings me to problem two with the argument Labor saved Oz. Strangely, the professor (Joseph Stiglitz) has overlooked the other, more plausible explanations for Australia's relative outperformance. Step forward five candidates with a better claim to the credit: 1. Lady Luck 2. The Howard government 3. The RBA 4. China 5. The mining industry.

 

And concludes that:

Labor has stimulated the Australian economy, in the same way that Ned Kelly used to stimulate the economy of Victoria.

It's a very interesting article and if you get a chance I'd suggest reading the whole thing at The Australian.

(Posted by Chris Browne)