When one of Bill Clinton's advisors pointed out during the 1992 presidential race that what mattered to voters was "the economy, stupid", that maxim was pretty much interchangeable with "their jobs, stupid". When the economy grew, so did the number of jobs.
The danger facing the Abbott Government is that these two things are no longer interchangeable.
As explained previously (Hockey’s real economic plan is still secret, February 27), Treasurer Hockey is, almost by default, going to preside over a period of soaring productivity. That's because the least productive workers are being laid off. That's not to say that everyone losing their job at this time can be considered 'unproductive', but averaged across the economy, lower performers will go first.
Hockey will also be able to boast of positive GDP growth thanks to strong resource exports. And, if the latest Dun & Bradstreet business investment survey is correct, he'll be chuffed with rebounding business investment.
The survey's capital investment index has risen for the fourth quarter in a row, with 19 per cent of businesses saying they planned to lift their business spending, and just 9 per cent that expect to invest less. That's not a bad turn-around from the same survey last November, when only 1 per cent of firms said they were going to increase business spending.
At first glance, these figures seem to be at odds with the bearish position taken by my colleague Callam Pickering, who has argued that "business investment is set to decline at rates not seen since our last recession in the early 1990s" (Kicking the economy while Qantas is down, March 3).
In fact, Pickering's view is correct: the decline in mining investment is so enormous, that "19 per cent" of firms looking to increase business spending isn't enough to begin to offset the overall decline.
Moreover, as Alan Kohler has argued several times (Terminating jobs: the rise of the machines, December 4), investment in the 21st century is often a way of replacing human workers with machines. Capital intensiveness has underpinned Germany's rise to be a high-wage, high-skilled manufacturing powerhouse.
Where does this leave Treasurer Hockey? He'll have GDP growth thanks to continuing high-volumes of resource exports at good prices (but no jobs), productivity growth to shame the Rudd/Gillard governments (because of the loss of jobs), and 'rebounding' business investment (quite likely to replace jobs).
So what will those tens of thousands of people laid off do all day? While it's undoubtedly true that some will fall into long-term unemployment, most will eventually rejoin the workforce.
The political questions are 'when?' and 'doing what?'
The current waves of job losses fit with a staunchly economic rationalist view in which the 'dead wood' is removed and hungry workers sniff out new kinds of work with the equally-hungry entrepreneurs building new kinds of businesses. All pretty exciting stuff.
But it may not be exciting for voters. The net effect on wages will be downward, and some of the roles that Aussies have baulked at in the past will be the only jobs on offer.
Looking to the US as a role-model for this kind of economic thinking, how many gardeners, pool cleaners, shoe-polishers, waiters and snow-shovellers eke out an existence on the minimum wage of $US7.25 per hour? Lots. President Obama is trying to get the federal minimum wage up to $10.10, but is facing fierce opposition from Republicans.
It would be extreme to suggest Australians will be working for $7 or $8 per hour in the near future. But in the longer term, as tens of thousands of lost jobs put downward pressure on wages, Australians who do have what Julia Gillard often referred to as "high-skill, high-wage jobs" will find it much easier to toss a few gold coins to a fellow Aussie to clean their pool.
Debate the ethics of that, by all means, but that is part of the economic rationalist vision that is – with some glaring inconsistencies, such as GrainCorp and the PPL scheme – driving the economic dries within the Coalition.
In political terms, they will want the pool owners' votes. The guy cleaning the damn thing might not be so happy.
Footnote: before entering journalism the author worked as a trolley-boy, burger flipper, deli fridge-stocker, supermarket night-filler, factory sweeper, call-centre worker, farm-hand and security guard ... all low-paid.