Saturday, September 09, 2006

Those Boring Fundamentals

The trouble with politics, or at least the election component, is that the most influential factors on outcomes simply aren't sexy.

I've been in the middle of a few campaigns and in reality, although every single campaign is approached as the single most important thing on earth, you usually know deep down from the outset what the result will be.

Still, with a win or a loss looming, the battle is fought to the bitter end, ignoring the obvious facts. Yes, there are borderline cases which make the fight vital, but for the most part the result is virtually set.

Putting aside those few entrenched electorates, or districts, there is a growing trend to swing voting because the political establishment is losing touch with the people.

So enamoured are we of the PR, the pitch, we ignore the science which shows us the un-sexy reality. In my experience, the first task is always to manufacture a short list of 'selling' policies, and we are generally encouraged by people eager to engage in the debate.

In going down this 'flashy' track we fail to relate campaigns to the certainties esp[oused for example by powerful theories like Maslow's Hierarchy of Needs.

Here we find that universally, once basic physiologial needs are met as they are with most voters, the safety needs come into play: Security of employment, Security of revenues and resources, Physical security - safety from violence, delinquency, aggressions, Moral and physiological security, Familial security, Security of health.

In short social economics. Boring as bat shit, and nearly impossible to sell. In fact it is very much a case of show, not tell. Even our most successful leaders have been failing to keep track of those needs, in their haste to divert attention with international power games.

It is in this context I was interested to see an unholy battle develop between Australia's PM Howard and not his opposition but the country's foremost investment bank, Macquarie .

Caught on the hop over housing issues (boring fundamentals) Howard claimed that state government land release policies are the main cause of high property prices locking first-home buyers out of the market.

"Not credible!", says Mac Bank economist Rory Robertson.

He says: federal policies that fuel demand for housing, including capital gains tax discounts and high immigration, have had a greater impact on housing affordability than land release on urban fringes.

Howard said the "main cause" of the high cost of housing was a shortage of land caused by state government land release policies and state levies on building new houses.

The bank's interest rate strategist, Rory Robertson, says federal policies that fuel demand for housing, including capital gains tax discounts and high immigration, have had a greater impact on housing affordability than land release on urban fringes. Interest rates were "not the issue" driving up costs for first-home buyers.

But figures released yesterday suggest higher interest rates have driven many first-home buyers out of the market. First-time borrowers accounted for just 16.7 per cent of new home loans in July, the smallest proportion for more than a year.

Robertson estimated the average price of an Australian home had risen from about four times pre-tax annual wages to about seven times over the past two decades.

Robertson said the needs of first-home buyers were being ignored because most voters were home owners and therefore had an interest in higher, not lower, property prices.

Now I dare say Howard will keep on arguing and duck-shoving; but what is the point? The average voter has no idea what he or Robertson are talking about, but they know something is shaking their pyramid, their hierarchy of needs.

While Bush, Blair, Howard et al are telling the world that their economies are going 'gang busters', ordinary voters know something is wrong, at least for them as individuals.

"If it's so great, how come I'm going backwards?" The feeling won't manifest itself in a sense of personal failure, well not for long anyway. If we are told we are doing well, and we obviously are not doing well, the politicians will pay regardless of clever distractions.

I guess that's why I keep walking away from the political coal face. It is the realization that nothing I do, no matter how clever, is going to make a great deal of difference because I have no control over those fundamentals. Besides, they are boring as bat shit and I always did prefer the good old rough and tumble campaign.


romunov said...

I love the phrase "duck-shoving". Can you elaborate on it, as I've never seen it used.

Cartledge said...

Ahhh, duck-shoving.
Passaing the buck or the blame I guess. Generaaly pushing a problem to someone else.