The second lesson of Romney's defeat

The aftermath of the US election reveals the old left-right ideological battle is dead, and if Abbott doesn't seek a more pragmatic approach he'll fall on his sword.

The early signs are that the Republican Party is ripping itself to pieces following the US election. They're infuriated by the fact that women, young voters and major non-white ethnic groups got the guy they wanted – Barack Obama – rather than the guy they ought to have wanted, Mitt Romney.

How dare they. Democracy was never supposed to be like this.

The Grand Old Party is being rent asunder by far-right Tea Party ideologues pulling one direction, and pinko liberal types digging in the heels of their sandals and pulling in the other. (Romney has never really been sure which end of the rope to join.)

"America is not demanding a second liberal party," stormed Reagan era Republican big shot Gary L. Bauer in The New York Times.

But he's wrong. The exit polls clearly showed that the Obama presidency, warts and all, is exactly what young/female/minority groups wanted.

Last week I teased out one of the lessons for the coalition in Australia – the tendency among some conservatives to see any Labor win as a massive con on the people, hurts not Labor, but the Coalition itself.

It's an old tradition. As former Hawke minister, and member of the dismissed Whitlam government Barry Cohen wrote in The Australian yesterday, "Conventional wisdom had it [at the time of the dismissal] that conservative governments were the natural order of things and Labor was only elected when things got really bad. Then it was back to the conservatives."

That was in 1975, but all the signs in parliament are that the view persists. Take, for instance, shadow immigration minister Scott Morrison saying a few months back that even if Labor adopted all the coaltion's immigration policies, his side of politics wouldn't support Labor implementing them.

Then there's Tony Abbott's frequent assertion that Labor has "no legitimacy", augmented by the idea that the voters of Dobell, Craig Thomson's seat, don't have a democratic right to be represented by him and his "tainted vote" on the floor of the House of Reps.

One can only hope that Labor remembers all this and resolves, next time it's in opposition, not to so blatantly scoff at the rules of democracy so carefully refined since federation. We need one set of rules, applied consistently to all.

But enough on the 'Labor is a con' meme. There are other lessons flowing from the Republican punch-up.

The second big one is that the left-right battles of the mid-to-late 20th century are over – governance in liberal democracies has moved on. In the broad sweep of 20th century history, we went from a shocking new thesis (the gross failures of post-WWII socialism) to a heady explosion of the antithesis – now remembered as the era of Gordon Gekko's Wall Street and the unchecked 'financial capitalism' that brought on the GFC.

Voters do not need a PhD in economics to realise that neither of these ideological frameworks delivered what they promised. For my money, the Obama win was a historic referendum on a simple choice – ideology vs pragmatism.

Am I dumbing down political-economy? You bet. And a few policy wonks probably should too.

Big government doesn't work (The death knell of social democracy, August 9). Big capitalism, by itself doesn't, work. And ideologues who pore over economic studies to prove that one or other of these propositions is untrue, are leading their parties away from a pragmatic centre where if one mode of economic production/distribution fails, we try the other.

In typically inflammatory style, Malcolm Turnbull made the same point last week by arguing, of the Liberal Party, that "We are always a party that is focused on the centre, on the sensible centre".

Well he knows that's not true. In December 2009 that party hurriedly organised a coup to remove him as leader, and steer the party away from that centre – the issue was climate change policy, and we ended up in a bizarre world where a conservative party has spent two years arguing against using a market-based carbon pricing scheme to lower emissions.

As I have argued before (Pain will follow the carbon fantasy, July 3) if the coalition wanted to offer a less centrist approach, there was plenty of scope to push for a more 'pure' market based scheme, without all the distortions and subsidies that the Turnbull-Rudd ETS entailed, and the Gillard 'carbon tax' carries with it. That would be both pragmatic (differentiating themselves from Labor), and yet retain some of the flavour voters expect from Liberals.

Back in the US, the Obama win has re-opened the file on carbon pricing. The Obama-proposed cap-and-trade scheme chased out of the House of Representatives in 2010, might now be replaced by a carbon tax – a move that would have the added benefit of easing the shocking fiscal bind in which the US finds itself.

Yesterday's editorial in The Washington Post (yes, those old hippies) pleaded: " ... if there were just some policy that would reduce carbon emissions and raise federal revenue... A tax on carbon, of course, is that policy, and lawmakers and the president should be discussing it.

"This is the best plan lawmakers can take off the shelf to fight global warming. As an added benefit, it would reduce dependence on imported oil.

"The federal government needs new, economically efficient streams of revenue, to fund priorities such as scientific research and to narrow the deficit. A carbon tax should be atop the list."

Nobody wants to see our main parties go into the 2013 election with the same suite of policies – product differentiation is as important as ever. But if any local conservatives think Romney's mistake was not veering hard-right, they are hard-wrong.

The Abbott agenda, when fully revealed, must contain different policies, but not extreme policies, to avoid the Romney mistake.

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