federal politics
1 Dec 2008
A Man Of His Time
Former merchant banker Malcolm Turnbull now believes in taming the obscene excess of corporate executives, writes Andrew West
Somewhere I read that you know you've succeeded in politics, not when you've changed your own side but when you've changed your opponents.If the results of the US elections — both presidential and congressional — were not enough to convince you of the swing to the left across the Western economies, look no further than last week's speech to the National Press Club by the federal Opposition leader, Malcolm Turnbull.
Turnbull, a former merchant banker who pocketed around $50 million in a golden handshake from Goldman Sachs, now believes in taming the obscene excess of corporate executives, by giving shareholders a binding veto over their pay packages. The Prime Minister, Kevin Rudd, had earlier blasted corporate bosses for their excess.
The real test of Turnbull's commitment to reining in the free-for-all on mahogany row is, of course, whether he is willing to support what all sensible governments did during the most sustained economic boom in modern history — from the post-war years to the oil shock of the early 1970s — and tax the mega-rich more effectively. But in the meantime, his willingness to countenance some fetters on corporate greed shows just how far the centre of politics has shifted to the left. The public has long been repulsed by the self-serving nature of corporate chieftains, but popular revulsion has reached new heights, with 92 per cent demanding government controls on CEO pay.
And yet to suggest, as I did precisely a year ago that we needed to empower shareholders against CEO greed, and that the economic rationalist experiment had faltered, was to engage in heresy.
The realists on the right hate but concede this sea change. Oliver Marc Hartwich, of the Centre for Independent Studies, shudders at the political shift and fears its consequences for his side, writing in the Sydney Morning Herald recently: "Big government is back on the political stage with a vengeance ... Nowadays, one can argue for a cap on executive pay, for a ban on short-selling, and for nationalising banks and insurance companies, and still feel part of the political mainstream. Two or three years ago, such proposals would have only been heard on the fringes of the political spectrum."
The Wall Street Journal's editorial board, the incubator and marketeer of free market fundamentalism, acknowledged before the election what an Obama/Democratic sweep would mean for the political landscape. The Journal trembled in anticipation of "one of the most profound political and ideological shifts in US history. Liberals [the US term for the centre-left] would dominate the entire government in a way they haven't since 1965, or 1933. In other words, the election would mark the restoration of the activist government that fell out of public favour in the 1970s."
But others on the right are in denial, with one columnist citing a throwaway line from the authoritative US researcher Andrew Kohut that there was no evidence of a swing to the left in the US election results. The problem with relying on Kohut's analysis is that he was referring to the results of ballot initiatives in which the anti-gay marriage proponents won narrow victories. In the same breath Kohut says: "On the other hand, we see in the exit polls more people saying they want an activist government."
I had always been taught that an activist, interventionist government was a hallmark of the left. But if Kohut, and the conservatives who cling to his analysis, want to redefine progressive taxation, higher minimum wages, universal healthcare, the partial nationalisation of US banks, Keynesian deficit spending and caps on executive excess as "centrist", that's a healthy development in politics. As Hartwich has conceded — with a grimace, no doubt — scepticism of free markets is now a mainstream position.
I have always considered same-sex marriage, abortion-on-demand, drug law reform and liberal attitudes to crime, not left-wing but libertarian causes. Just as I have long predicted a swing away from libertarian economics, I have never posited a swing towards libertarian social policy. However desirable it may be for many progressives to permit same-sex marriage as a basic equity issue, it would not change the fundamental power relationship in the world today, which is, to put it bluntly, about guns and money. A socially libertarian society can be as unequal and unjust as a neoliberal, neo conservative world.
The results in the California ballot initiatives are instructive. A ban on same-sex marriage was carried narrowly, 52 to 48 per cent, but voters endorsed big-spending public works projects to build high-speed rail between Los Angeles and San Francisco and expand children's healthcare.
In California, where the car has long been king and where the citizens' tax revolt began in the 1970s, the public is endorsing "big guv'ment".
These developments suggest that traditional progressives who believe in the historic mission of challenging concentrations of economic and political power (I cannot emphasise that enough) are pushing against an open door. They not only have public opinion on their side, but, if Malcolm Turnbull's change of heart is any indication, they also have their opponents on their side.
One of John Howard's greatest achievements — in the political, not public policy, sense — was realised not when he was in government but when he was in opposition. In the mid 1980s, as Bob Hawke and Paul Keating shed much traditional Labor policy on public ownership and redistributive tax, and careered toward the centre, Howard chose not meet them there, not to contest the same ground, but to drag the political debate to the right. He was remarkably successful. By the early 1990s, Labor was dancing to Howard's signature tune of liberalising industrial relations.
When Howard said, at his lowest ebb, "the times will suit me", he knew that when the free-market tide initiated by Ronald Reagan and Margaret Thatcher finally lapped at Australia's shores, he would be there to catch the wave.
This is the one lesson Kevin Rudd and federal Labor should learn from the man they vanquished.
Cometh the hour, cometh the man.
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Andrew: You don’t think it was the voters who vanquished JWH and his Ming Dynasty thugs?
Drat, I pressed the wrong button: Unless I have misunderstood you, you appear to be making the same error of description as so many other political commentators. To equate the Liberal Party with libertarianism is like equating the Pope with birth control.
In true Oz political style the late Robert Menzies decided to call his new political party by the name he so blatantly didn’t stand for-liberalism. The Liberal Party always was, is now, and ever will be a CONSERVATIVE party.
Please don’t be fooled by Malcolm Turnbull. He is your typical Liberal Party leader, Catholic and conservative. Certainly he puts on a good act, but this is the man who would change his condom in mid-flight if he thought there was money, or power to be gained.
No matter how much I agree with restricting upper echelon business payments, prohibiting short-selling and derivitives, I will never, ever trust Malcolm Turnbull. Turncoat may be a better name.
Harry Morton In my youth in far North Queensland we described males of the Turnbull type as ‘A barber’s cat all piddle and wind.’ In Turnbull’s case this defames the barber’s cat. As such Venise may have been too kind to Turnbull
Interesting how both the major parties say one thing in opposition but when in government do another. Like Peter Costello used to say "Look at what they do not what they say".
I think people better wake up and stop falling for this clap trap and Vote 1 Greens.
So what kind of hour can we expect for Turnbull to cometh?
Will Rudd and the policies of the Labor party drive the masses into an orgy of self-loathing?
Will Turnbull convince us that we can, all of us, get $50M handshakes?
Howard convinced many that being a shareholder, even in companies that you already own, and whose stock is on the way down,is the natural state of being.
The chances of any person in the Liberal party holding any policy ideas other than those that promote greed and narcissism, is remote.
Harry: I haven’t heard that expression before; it’s evocative. Good one!
Good night
V.
Daniel from Sydney: I do, I do! I most certainly do!
I think you are being unfair Venise. I know it looks in the accompanying photo that Malcolm is referring to penis size but in fact he is indicating the size of the ‘l’ in his liberalism.
If you want any more evidence of his freewheeling style and open thinking just look at the way he changes policies and ideas. The answer, for Malcolm, is truely blowing in the wind. The wind in this case being created by turning the editorial pages of Sydney and Melbourne’s broadsheets.
Turnball is the right man at the wrong time. No doubt he will be doing an about turn in all of his on the run policies, as they chop and change with the tide of public opinion.
But the tide is low and a recession looms, threatening to become a global depression, so the well-suited, well-endowed Turnball is unlikely to strike a chord of empatico with the Australian public for the time being.
However, if he is in a mood of confession and wants to prevent such a situation of guilt ever befalling another capitalist with a social conscience, then raising the taxes of these richly blessed individuals, companies and consortiums would be a good start. Perhaps a special ’ handshake tax’ would also help rein in the greed.
Venise… Loved your response! especially this line; He is your typical Liberal Party leader, Catholic and conservative.
I think also that people need to remember is that he is a business man and he is not going to go against the majority. It suits him to play the left field for a while but do not be fooled he is a true storm trooper in the evil empire.
"If the results of the US elections — both presidential and congressional — were not enough to convince you of the swing to the left across the Western economies"
In what way are the Democrats a "left" party? The espouse funding the wealthy at the expense of the poor every bit as much as the Republicans do.
How does Obama’s desire to expand an imperial army, use public funds to bail out the obscenely wealthy and refusal to establish a national health scheme because he doesn’t think "socialised medicine" is a good idea and that the insurance companies need "a seat at the table" - in any possible way demonstrate a commitment to leftist politics?
Left means something and it’s not "anyone slightly less fascist than Hitler"