The world is facing some serious problems, and in particular the short-term financial problems we are experiencing seem to be difficult to solve.
The key issues are:
- In Europe, lack of leadership and a more global vision
- In America, dysfunctional politics
The reasons for the current problems are similar worldwide. Basically most western countries have been living beyond their means and when the time comes to put their financial position back in order those in charge are, for various reasons, unable to do so.
Key here are the sometimes half-hearted compromises that stop short of implementing essential structural changes – for example, those needed to establish full financial and fiscal integration. As well as this, a persistent silo mentality hampers the development of structural reforms within most of the national governments. It is this silo thinking that makes it impossible to more successfully address today’s challenges.
Each country keeps on putting itself first, ahead of the European community as a whole. The problem is that if the European Union collapses each individual country in Europe will be much worse off. A financial collapse of Europe could see a contraction of the national economies, possibly by as much as 25%. This would drag the entire world into a very serious economic recession. This can also, as we are already seeing in some of the south European countries, develop into civil unrest, which will only exacerbate the situation.
It is hard to imagine what the consequences of this will be, but we have plenty of historical examples of such situations, from the Middle Ages onward and none of them look attractive.
From our first-hand experience working on telecommunications policies with the Obama Administration in 2008 and 2009, the problems they are facing are very similar. There, however, it is a dysfunctional political system, ruled by very influential lobby groups of vested interests, that is stopping any structural reform. Over the years – under the banner of rather extreme right-wing free-market policies – this has led to a polyarchy.
No decision is made without the agreement of the ruling patriciate.
This polyarchy has been further fuelled by a rapidly dumbed-down media. That sector had also grown into an untouchable and unwieldy structure and, given that sensation sells, the lobbyists and their politicians use selective propaganda tools to create sensation that the media then use to sell their newspapers and broadcasts. They are using the age-old elements of fear, uncertainty and doubt.
Australia is catching the American disease
The stakes are simply too high to play the kind of political games that we see in the USA – and also, increasingly, in Australia. Of course Australia’s role in all of this is a minor one, and its political and very narrow point scoring will not cause a global downturn. But it amazes us that Australian politicians do not seem to be able to put their politics into the broader context of global problems.
To single out just a few:
- Financial management – Australia is applauded for this all over the world, but the political opposition is talking down Australia’s strong financial position.
- Border protection – Australia is confronted with a few thousand refugees. Other countries have to let in millions. Yet here the view is that those few thousand refugees (supposedly all at least potential terrorists) are going to ruin the country.
- Climate change – Europe introduced the carbon tax almost a decade ago, yet policies aimed at getting something similar underway in Australia are again presented as being something that will be the end of the world.
- The national broadband network – this is identifying Australia as an international leader, recognised all the way up to the UN, but again it is being undermined by policies from the Opposition – ‘kill at all cost’. This could end up wasting a once-in-a-lifetime economic opportunity that would both give Australians first-class services at home and allow for significant business innovation and export.
And discussions are taking place in the parochial way that is unique to Australia – this seems to be a consequence of its geographical distance from other countries.
Leadership is essential in challenging times, and there is a clear lack of this in the western world. The leaders either are simply not there, or, in the case of Obama, are completely undermined by dysfunctional politics.
Opposition is a critical element of democracy, but once criticism becomes nothing but ridiculing and demonising others – at the same time undermining every political decision that needs to be made in what are very challenging times – then countries are clearly on the wrong track. The national interest is no longer centre-stage in governing the country and we believe that, regardless of political persuasion, it is in the interest of every single citizen for politicians to place the national interest above their personal political ambitions and persuasions – and above their allegiance to vested interests.
Can it be that all the ideas and suggestions made by the government – whether in the USA or Australia – are completely wrong? Would it not make more sense to believe that the truth might be somewhere in the middle? Rather than follow a ‘kill at all cost’ policy would it not be better to sit around the table, find some common ground and work out plans that are in the national interest of the country, rather than in the interest of a political party or individual politician?
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