IPA Keeping In Touch – 1 April 2020

IPA Keeping In Touch – 1 April 2020

Dear IPA Members

I was in the office late this time last week, joining Paul Murray Live from our Bailleu Myer media studio due to ‘social distancing’ measures at Sky’s Melbourne bureau.

Our indefatigable Digital Media Production Manager Saul was still packing up as I left to make the short walk from the IPA’s office to my apartment in Spencer Street. I carried my computer’s hard drive under my arm, preparing to work from home for a few weeks, possibly months.

The IPA’s office straddles Collins Street and Bank Place, a typically Melburnian laneway through which I walk on my way home. Directly opposite the office is the Mitre Tavern, a glorious old pub with a sprawling outdoor area – a regular hangout for IPA staff and hundreds of other office workers around the city. It’s not unusual to walk past the Mitre late at night and see a small crowd of office workers, ties loosened, staggering off home after an extended after-work drinks.

But of course, on Wednesday last week the Mitre was closed. As was the Trattoria, the Indian restaurant, the hole-in-the-wall coffee joint, the hookah bar, and Dikstein’s – the cafe where John Roskam hired me. All good businesses, all closed. Some of them will never reopen.

Melburnians have a strong parochial streak. Much as we grumble about its lousy politics and woke sensibilities, this town becomes a part of you, it gets into your bones. Each shuttered business is like a scab on our city. Soon, ‘For Lease’ signs will sprout all over Melbourne like scars.

These days everything is ominous, foreboding, laced with fear. Madonna was pilloried widely for her bizarre video last week claiming that the coronavirus was a ‘great equaliser’ – and rightfully so – but she did make an important point in one respect: The most frightening thing about COVID-19 is that nobody knows who is next. Many of us will become infected. Some of us will be hospitalised. A few of us, tragically, will die.

And all of us – with the possible exception of a privileged few, safe in the warm embrace of the public sector – will be affected, one way or another, by the economic catastrophe that the coronavirus has unleashed.

There’s a meme floating around on the internet: Is everyone enjoying their 30-day free trial of socialism?

Well, many a true word said in jest. In fact, in many ways we are seeing the consequences of every naive leftist fantasy in recent memory brought to bear. Honest commerce has been all but rendered impossible. Industry has been halted. Supermarket shelves are empty as some retailers resort to what is effectively rationing. Air travel has been limited to a very select few. Bars, pubs, pokies joints, casinos and nightclubs – long in the crosshairs of big public health and sundry other busybodies – are all shut. Emergency government measures will plunge the country into a colossal debt that may never be paid off. And worst of all, thousands of Australians have been thrown out of work as Centrelink queues stretch around the block with no end in sight. It is something that many Australians – myself included – haven’t seen in our lifetimes, and something that I hope to never see again.

Greta Thunberg reckons she has it – or rather has had it. Remember her? Six months ago she admonished world leaders at the United Nations, snarling that ‘All you can talk about is money, and fairy tales of endless economic growth. How dare you!’ Many of us had a chuckle at Thunberg at the time. Few of us would have predicted that within a few months, we’d be plunged into a nightmare of no money and economic ruin.

Economics is now important again. Really important. And not whacky spin-offs like ‘behavioural economics’ or ‘progressive economics’ or some such. We need serious, ‘black letter’ economics. Living standards matter now. Employment really matters right now. Hell, even hitherto meaningless catch phrases like ‘Jobs and Growth’ matter right now.

From now on, every government, every policy, every platform of every political party at every election for the foreseeable future will be judged by a single metric – the number of Australians it will put back into work. Political indulgences like climate and identity politics and black armband history are now firmly behind us. Jobs are all that matters.

Unfortunately, politicians around Australia and indeed the world seem incapable of thinking outside the simplistic Keynesian box, the lazy and narrow brand of economic chicanery that has dominated public policy debate in Australia since John Howard was in the Lodge.

Every day, it seems, various governments announce yet another suite of grand ‘stimulus’ measures. At best, they will keep business chugging along on life support for a little while, further entrenching the ‘got-us-through-the-GFC’ mythology – the ugly precedent that the prudent response to any crisis, real or imagined, is to borrow a monstrously large amount of money, blow it all on God-knows-what, and leave the next generation of Australians carrying the can.

And yet the chattering classes have been screeching that the extraordinary suspension of economic activity we are seeing does not go far enough, invoking the tired mantra of ‘money versus human life’. Perhaps these loud Australians could go down to one of Australia’s rapidly growing dole queues and then talk about human life.

Meanwhile, state premiers seem to be trying to outdo each other in terms of who can tank their state’s economy the fastest, all in the name of being seen to be ‘doing something’. It’s like an exercise in perverse societal backburning. Burning down their state in order to save it.

Scott Morrison has wisely recognised this, in what could be the definitive statement of his prime ministership, saying:

I’m not going to be cavalier about people’s jobs and businesses. I don’t think we should rush to cause great and unnecessary harm. We are dealing with two crises – medical and economic. Lives are on the line in both cases.

Quite.–

Like many others, I was sceptical about the coronavirus when it first crept into the news cycle. At worst, I thought, it was a nasty strain of the flu, another transient illness that would sweep through parts of Asia before petering out.

Of course, I was wrong. This is a serious problem. It requires a serious public policy response. It is legitimate for the state to take unusual and drastic action for the protection of its citizens. And to mitigate the costs of that drastic action, the government should provide financial compensation to businesses and families whose livelihoods have been rendered temporarily unlawful by government edict.

But the way this is playing out is exposing deep flaws in our country, in our society – economically, politically, culturally – almost an echo of what then-President Jimmy Carter called (disastrously as it turned out) a ‘crisis of confidence’. We have lost faith in ourselves, and our faith in the state has proven to be utterly misplaced. No wonder everyone’s losing their damned minds.

And really, what are we supposed to think when our governments are apparently all over the place, when our leaders cry wolf at a press conference and then fail to back it up? What are we supposed to think when the NSW government tells us to #JustStayHome in one breath, then in the next admits to letting a cruise ship dock and letting swathes of infected passengers flood into the country? When Daniel Andrews scares the bejesus out of Victorians by threatening ‘Stage 3’ restrictions, and then waiting over a week before giving us the faintest idea of what that involves?

The problem is that in a public policy sense, hysteria has become the default option. Quite frankly, we have become too risk averse. We’ve created a perverse culture in which policymakers are too easily swayed by a vocal minority of rent-seekers and taxpayer-subsidised do-gooders, falling over themselves to inflict economic hardship on the rest of us. We’ve become used to the idea that the state can keep us one hundred per cent safe, one hundred per cent of the time, in one hundred per cent of situations, and then wonder why the slightest suggestion that it might not sends us into the kind of frenzied panic that results in the bizarre spectacle of supermarket shoppers engaging in fist fights over toilet paper.

We’ve become a nation of enfeebled hypochondriacs, an understandable response to government advertisements and self-interested quangos constantly telling us that everything from solar radiation to refined sugar is sending us to an early grave. And we’ve made empty panic into a virtue, having spent decades distracted by the idiotic pageantry of climate hysteria.

All of this points to a culture in retreat, stifled for decades by a permanent political class hell-bent on remaking society in its own smug, self-satisfied image. We can begrudgingly accept that at least some of the damage done by policymakers in response to the coronavirus is necessary, but these temporary measures cannot be seen in isolation. With COVID-19 the dam has broken, unleashing economic and societal ruin that has been brewing long before patient zero sat down to hoe into that fateful bowl of bat soup.

None of this is intended to be a slight on Australia or, more importantly, Australians. On the contrary, it is a wonder that the country has been in such good shape for as long as it has, given how badly it has been weighed down by a perennially-empowered aristocracy that thinks it knows better than we do. If and when we recover from this crisis, it will be because of the hard work, sacrifice and common sense of mainstream Australians. The only question now is how much control the political class can be persuaded to relinquish – whether the state will get its foot off the throat of private enterprise.

My good friend and predecessor Simon Breheny said to me recently that the IPA may be more important now than at any other time in its 76-year history, and he’s probably right. This is like 1943, the year that the IPA was founded, only this time it is not a world war but a nasty strain of viral pneumonia that is being used as a pretext for greater state control over our lives and our livelihoods.

And who knows? As bad as this crisis is, it may be – like the stagflation of the 70s and the recession of the 90s before it – the catalyst for reform that would reinvigorate the economy, turbocharge living standards, and unlock much of Australia’s latent and unrealised potential.

Maybe this crisis will be the trigger for dismantling the regulatory state that is robbing us of $176 billion a year in lost prosperity, the IR regime that keeps thousands out of work and the punitive taxes that rob Australians of reward for effort.

I’m proud of the work that we do at the IPA, and the work we’ve been doing, despite having to clear out our office and disperse under the threat of house arrest. I’m excited to keep fighting the battle of ideas, to help fix not just this mess but decades of economic complacency.

But above all, I’m grateful to be in good health, to have a roof over my head, and most importantly of all have a job. For now, that is enough.

As always – and indeed now more than ever – thank you for your support.

Kind regards Gideon

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