Australian Prime Minister Rudd reaches back to the 1920s for economic inspiration

I tell you who is sleeping more soundly tonight and that's former Prime Minister Gough Whitlam.

Why?

Well, Whitlam's government was a shambles that wrought chaos upon Australia's economy that took many years to overcome.

Whitlam himself has long been viewed as the worst PM we've ever had (for the Seppos - think of him as an Aussie Jimmy Carter) and for good reason.

But with the current Labor PM Kevin Rudd's 8,000+ word socialist screed published in the leftist The Monthly this week Whitlam can let out as big a sigh of relief as his 92 year old body will allow now that the mantle of Australia's worst ever PM has been lifted from him by Rudd's unbelievable incompetence.

Andrew Bolt pointed out that when Kevin Rudd was wooing the Australian public in the run up to the federal election of 2007 he described himself as an 'economic conservative'.

So how's this for economic conservatism?

KEVIN RUDD has denounced the unfettered capitalism of the past three decades and called for a new era of "social capitalism" in which government intervention and regulation feature heavily.

In an essay to be published next week, the Prime Minister is scathing of the neo-liberals who began refashioning the market system in the 1970s, and ultimately brought about the global financial crisis.

"The time has come, off the back of the current crisis, to proclaim that the great neo-liberal experiment of the past 30 years has failed, that the emperor has no clothes," he writes of those who placed their faith in the corrective powers of the market.

"Neo-liberalism and the free-market fundamentalism it has produced has been revealed as little more than personal greed dressed up as an economic philosophy. And, ironically, it now falls to social democracy to prevent liberal capitalism from cannibalising itself."

Mr Rudd writes in The Monthly that just as Franklin Roosevelt rebuilt US capitalism after the Great Depression, modern-day "social democrats" such as himself and the US President, Barack Obama, must do the same again. But he argues that "minor tweakings of long-established orthodoxies will not do" and advocates a new system that reaches beyond the 70-year-old interventionist principles of John Maynard Keynes.

"A system of open markets, unambiguously regulated by an activist state, and one in which the state intervenes to reduce the greater inequalities that competitive markets will inevitably generate," he writes.

"Social Capitalism in which government intervention and regulation feature heavily"... well that's something to look forward to. Imagine being so clueless as to refer to FDR as the man who rebuilt capitalism after the Great Depression? That beggars belief.

Rudd has hardly covered himself in glory by sacrificing $10 billion of taxpayers' money on the altar of Keynsian economics less than a couple of months ago in order to ensure the Australian economy didn't follow the rest of the world into recession.

The result?

Australia is headed for an unavoidable recession and Rudd's $10 billion giveaway has been destroyed. That's what consumption does to money.

Good work, Kev.

If Kevin Rudd wants to go back just a few years before Keynes then there was a fellow who was lionized around the world for his success in balancing the public and government need, for intervening in the economy in just the right way so as to create national prosperity that hadn't been seen before and for creating a 'model society'.

Who was this man, this giant who Churchill dubbed 'the world's greatest living lawgiver', who was lauded by Freud and Einstein, and who earned the praise of leading Fabian Socialists of the time such as H.G. Wells?

In 1927 the Literary Digest conducted an editorial survey posing the question: "Is there a dearth of great men?"

The person who topped the list, ahead of Lenin, Edison, Marconi, Orville Wright, Henry Ford and George Bernard Shaw was...

...Benito Mussolini.

I wonder whether Kevin Rudd would appreciate, intellectually, the comparison?

The way that he struts the world stage like a peacock on heat would suggest that rising to the level of 'great man' is one of his aspirations.

It was only after Italy's invasion of Ethiopia in 1935 and alliance with Hitler that Mussolini's name lost its lustre.

Is Kevin Rudd a fascist?

Obviously not...or not yet.

However, fascism can only ever be implemented by the left and for two major reasons.

Firstly, fascism is simply another form of socialism.

Secondly, only the left believes that more government is the answer to society's problems.

Every time a new law is enacted citizens lose a little bit of liberty. The left has government expansion and enacting of laws built into its DNA, which it justifies on the grounds of fairness and equality of outcome. On the other hand the right values small government, individual liberty and equality of opportunity. It's a bit hard to end up with a fascist state if those are one's principles.

It's easy to see why Keynesian economics has not withered on the vine of historical failure. Keynes' remedy to a slowing economy is government spending and if there's one thing that left wing governments don't need any encouragement to do it's increasing spending.

When the real remedy is to give tax cuts, reduce government and then wait for the market to correct itself it's easy to see why populist leaders reach for the Gospel According to Keynes when the economy slows.

With the world heading into deeply troubled waters that most of the population have never experienced, the call for governments to 'do something' is going to become a deafening roar as unemployment and inflation head towards, or above, 10%.

Who among Barack Obama, Gordon Brown and Kevin Rudd has the backbone to do what is right rather than what is popular?

None of them, as far as I can see.

(Nothing Follows)