Saturday Paper shoots the political chaos messenger

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Via Mike Seccombe at The Saturday Paper who can be sensible:

The point is that polls only measure perceptions, and are only useful to the extent that they (a) fairly frame the issue, (b) reflect informed opinion, and (c) are accurately and soberly reported.

Much of the time, the published polls fail on one or more of these grounds. Often, it is all three.

At best, polling gives a useful insight into the broad orientation of the popular opinion, which is often uninformed, even prejudiced.

The test for the media, says Richard Di Natale, is whether they simply record that opinion or take the harder option of ferreting out the facts. For politicians, he says, the test is whether they seek “to lead and shape the national debate, or whether they sit back and be passive actors in agendas run by other people”.

“You can either test opinion and respond to it, or you can shape and lead it. That takes a bit of vision and courage, but that’s what leadership is.”

According to Wayne Swan, you cannot govern effectively by reference to opinion polls. “If you do that,” he says, “then you are proceeding by looking in the rear-vision mirror. Social progress is only ever achieved by persuading people to move their opinions over time. Opinion polls can be a guide for action but should not be the determining factor. If you relied just on opinion polls, none of the great reforms would ever have been made.”

Di Natale and Swan are both right. Poll-driven populism is undermining our trust in politics, even in democracy itself. Faith in government is at record lows. The irony is, we know this because all the polls measure it, even as they contribute to it.

Political polling can be biased. And yes, it is overplayed in the media. But it is the messenger of the problem for democracy not its driver. We’ve always had polls.

The underlying issue is the spread of falling living standards around the Western world and the response by our democratic institutions to it. It happened long ago in the US, UK and Europe. Today it has spread to Australia:

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There are lots of reasons for it:

  • de-industrialisation;
  • globalisation of capital and labour;
  • increasing wealth and income imbalances;
  • peak debt and deflation;
  • failed policy responses and monetisation.

As the above gutted other Western middle classes, we prospered for a while longer through the serendipity of China’s appetite for iron ore and coal. But that ended with the mining boom in 2011 and the great income recession has been running here ever since.

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Opinion polling has crashed for every incumbent government since Rudd for this reason above all others. The polls drive panicked policy responses and crazy internecine party politics but they are not the cause, they are the messenger. The driver is that polities are desperate for answers about why their living standards are marching lower and ruling elites are only responding by making it worse and lying about it.

Every government since 2011 has adopted the wrong rhetoric and policy prescription for this underlying malady. The one moment of sanity was Rudd 2.0 when he declared the mining boom was over and we needed productivity reform. That passed like rain on the mountainside.

Every attempt to lift broader incomes since has fallen prey to cyclical thinking over structural; glass half-full thinking over realism and exceptionalism over hard work. The key driver of these delusions are our major institutions – especially RBA and Treasury – which are loaded with people attached to dying ideologies or just those that don’t want things to crash on their watch. The former is now desperately wrestling a deflating housing bubble of its own making while the latter keeps the immigration pedal to the metal, pointlessly boosting GDP while sending living standards into a death spiral.

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MB has been right about this since 2011. We’ve advised all incoming governments the same thing. Hose off expectations and deliver tough reform. Occasionally we’ve gotten policy recommendations adopted. But mostly the ruling elite just kick the can and the polls keep on falling.

So, one more time for the idiots, here’s what is needed to lift incomes and return us to stable government:

  • a low dollar policy with interest rates at zero and macroprudential controlling credit;
  • lower land and house prices;
  • mass productivity, innovation and competition reform;
  • energy reform including breaking the east coast gas cartel, and
  • immigration cuts.
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Do that and Australia will deflate such that wages can grow again and living standards rise. It will take time and be quite a rough adjustment. Thus it will need to be explained by pollies in advance as mutual sacrifice in the national interest. Expectations must be lowered and hard work embraced.

Otherwise one lost decade will become two and five PMs in five years will become fifteen in fifteen, with polls simply measuring the oblivion.

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.