What will the Coalition’s populist loons do next?

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From John Hewson today, who is rapidly evolving into Do-nothing Malcolm’s version of Malcolm Fraser versus John Howard:

In today’s very uncertain and unpredictable world of politics, it is difficult to be very sure about much. Yet, as sure as I can be, the Turnbull government will not win the next election by moving further and further to the “right”.

…He has been consistent, to a fault. He has stuck with the plebiscite on same-sex marriage, eschewed a host of tax and other reform options, muddied the climate issue mixing some initiatives with an incessant attack on renewables, let key Nationals run amok in both argument and spending, and a host of others. In each case, it has been almost breathtaking to have to endure the lengths he has gone to defend the indefensible.

With no discernible, overarching, political or policy strategy, it seems everyday is just a new day for Malcolm, doing or saying what is required to survive to the next day, in response to issues and circumstances as they arise.

In these two weeks, the policy imperative is to clear the decks on the omnibus issues, to lay the basis for essential “repair” in the May budget. It is almost incomprehensible that he would so easily risk distracting from the magnitude and urgency of this task by now offering to amend section 18C of the Racial Discrimination Act, when he had been at pains to argue that it wasn’t a first order issue, an unnecessary distraction.

…While many would accept that the original wording could have been improved, most would also argue that this is not the time to seek to change it, given the division that it would create and sustain. In this time of terrorism when we are desperate for the assistance of say the Islamic community to root out potential terrorists and minimise the risk of radicalisation, it is just plain dumb to risk division.
The electorate is desperate for Turnbull to begin to lead and govern for the majority, to recapture the centre ground. To deliver good policy, and good government, on issues with which they struggle in their daily lives. If he does, they will cut him a lot of slack.

Too late for that now, Dr John. His hollowness has been repeatedly exposed thus his brand is trashed and he doesn’t have any ballast to turn anyway. With One Nation now out as a partner he’s finished.

My greatest fear is that when the Coalition finally gets around to knifing Do-nothing later this year that it will turn to this, from Sky:

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One Nation leader Pauline Hanson has gone from offering sympathies to the people of London after a deadly terror attack to slamming the city’s mayor and pushing her bid to ban Muslim immigration.

Four people, including a policeman, died in the lone-wolf attack near London’s Houses of Parliament on Wednesday.

London mayor Sadiq Khan paid tribute to PC Keith Palmer who he said ‘was killed doing his duty – protecting our city and the heart of our democracy from those who want to destroy our way of life’.

But Senator Hanson focused on Mr Khan’s comment in the Independent newspaper last September that terror attacks were ‘part and parcel of living in a big city’.

‘It’s amazing that the Muslim mayor over there has come out and said terrorists attacks are part and parcel of a big city,’ she said in a video posted to social media on Thursday.

‘Well, no, they’re not, they don’t have to be, they never have been in the past, and that’s something I never want to hear or see here in Australia from any mayor in any city.’

Senator Hanson said sending sympathies under the PrayForLondon hashtag was futile and offered up her own hashtag to solve the problem – Pray4MuslimBan.

‘That is how you solve the problem. Put a ban on it and then let’s deal with the issues here,’ she said.

Whether the Coalition’s Nazi streak is strong enough to go this way in an attempt to recapture the One Nation vote is a moot question. It could use it to pretend to housing affordability via a discriminatory immigration ban. And the Murdoch press will do whatever it has to to support its mates, setting up a nice echo chamber of horrors:

One host on the ABC spoke yesterday about the odds of dying in a car accident being greater than the odds of being murdered by a terrorist.

This isn’t a betting game. We’re fighting for our freedoms against Islamic terrorists who have one clear aim: the annihilation of democracy.

Will there be more incessant talk of lone wolf terrorists? More kneejerk claims of Islamophobia rather than a call for an Islamic reformation? More claims the terrorist was mad, not bad.

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As the Right falls apart, Do-nothing Malcolm may be the best of it.

Bridgewater has released a timely note on the history of populism to give us some context:

This report is an examination of populism, the phenomenon—how it typically germinates, grows, and runs its course. Populism is not well understood because, over the past several decades, it has been infrequent in emerging countries (e.g., Chávez’s Venezuela, Duterte’s Philippines, etc.) and virtually nonexistent in developed countries. It is one of those phenomena that comes along in a big way about once a lifetime—like pandemics, depressions, or wars. The last time that it existed as a major force in the world was in the 1930s, when most countries became populist. Over the last year, it has again emerged as a major force.

To help get a sense of how the level of populist support today compares to populism in the past, we created an index of the share of votes received by populist/anti-establishment parties or candidates in national elections, for all the major developed countries (covering the US, UK, Japan, Germany, France, Italy, and Spain) all the way back to 1900, weighting the countries by their population shares. We sought to identify parties/candidates who made attacking the political/corporate establishment their key political cause. Obviously, the exercise is inherently rough, so don’t squint too much at particular wiggles. But the broad trends are clear. Populism has surged in recent years and is currently at its highest level since the late 1930s (though the ideology of the populists today is much less extreme compared to the 1930s).

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Populism is a political and social phenomenon that arises from the common man, typically not well-educated, being fed up with 1) wealth and opportunity gaps, 2) perceived cultural threats from those with different values in the country and from outsiders, 3) the “establishment elites” in positions of power, and 4) government not working effectively for them. These sentiments lead that constituency to put strong leaders in power. Populist leaders are typically confrontational rather than collaborative and exclusive rather than inclusive. As a result, conflicts typically occur between opposing factions (usually the economic and socially left versus the right), both within the country and between countries. These conflicts typically become progressively more forceful in self reinforcing ways.

Within countries, conflicts often lead to disorder (e.g., strikes and protests) that prompt stronger reactions and the growing pressure to more forcefully regain order by suppressing the other side. Influencing and, in some cases, controlling the media typically becomes an important aspect of engaging in the conflicts. In some cases, these conflicts have led to civil wars. Such conflicts have led a number of democracies to become dictatorships to bring order to the disorder that results from these conflicts. Between countries, conflicts typically occur because populist leaders’ natures are more confrontational than cooperative and because conflicts with other countries help to unify support for the leadership within their countries.

In other words, populism is a rebellion of the common man against the elites and, to some extent, against the system. The rebellion and the conflict that comes with it occur in varying degrees. Sometimes the system bends with it and sometimes the system breaks. Whether it bends or breaks in response to this rebellion and conflict depends on how flexible and well established the system is. It also seems to depend on how reasonable and respectful of the system the populists who gain power are.

In monitoring the early-stage development of populist regimes, the most important thing to watch is how conflict is handled—whether the opposing forces can coexist to make progress or whether they increasingly “go to war” to block and hurt each other and cause gridlock.

Classic populist economic policies include protectionism, nationalism, increased infrastructure building, increased military spending, greater budget deficits, and, quite often, capital controls.

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Try not to barf the next time a Coalition supporter attacks “the populists”. Full report.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.