How did a second-term government that delivered some of the best economic management in the world and established major reforms in education and health so popular its opponents were forced to agree to them, manage to lose an election?

The standard answer, not incorrect, is that Labor has struggled to communicate its message on the economy. It never owned its economic success; indeed, many voters didn’t even think the economy had been managed well, even as Europe plunged into depression and the International Monetary Fund routinely downgraded its global economic forecasts.

But Labor’s problems were deeper than its lack of effective communication skills, the sort of problem that could be addressed (indeed, partly was, with the arrival of John McTernan) by hiring the right talent.

Labor managed the economy well, but it could never manage itself. In particular, it couldn’t manage Kevin Rudd, first when he was prime minister, when it took an unprecedented removal of a first-term PM to deal with his managerial style, and then when he was on the backbench, plotting his return. As one state Labor figure put it, Labor never worked out that if you removed a sociopath from the prime ministership, what did they think he was going to do in return?

The leaks that derailed the Gillard campaign in 2010 and cost her majority government set the scene for the ensuing three years: hobbled by deals with the Greens and the independents, particularly over a carbon tax she’d said loud and clear before the 2010 election she’d never back, Gillard’s prime ministership became a war of attrition between her and Rudd. Even after Rudd had been comprehensively defeated and professed he would never return to the leadership, he remained a lurking threat, eroding Gillard’s support, depriving her of clear air.

On the other side of the chamber sat Tony Abbott, with his colleagues strongly united behind him, his frontbench (however wretched, with the likes of Kevin Andrews and Bronwyn Bishop on it) unchanging.

Where Labor was most successful with voters was in its big picture, Labor-style reforms. Voters backed the mining tax, however badly implemented. They backed the National Broadband Network. They backed the Gonski review education funding reforms, and they backed DisabilityCare. All but one of those reforms has been adopted, partially or fully, by the Coalition. And that became another problem for Labor: the Coalition in effect said to voters “you can have Labor’s reforms without Labor’s chaos”. It proved a compelling argument, especially when the Coalition was able to simply stonewall Labor’s effort to portray them as budget butchers poised to slash spending. The Coalition even ditched a commitment to think about (and only think about) reforming the GST.

Restricted by Coalition “unity tickets” on big reforms and with Rudd only in the job a matter of weeks, Labor visibly wondered what to talk about in its campaign. Rudd’s lone ranger instincts kicked in and he began free-forming, conjuring visions of northern development, relocating naval bases and restricting foreign investment. Eventually sanity was restored and by the time of the campaign “launch” Rudd was back on the theme of jobs, but Rudd’s, and Labor’s, numbers were in decline.

Still, Rudd has done the job that he told Labor MPs he could do — “save the furniture” — in contrast to the huge defeat it looked likely Gillard would lead them to. Courtesy of the return of Rudd, and the New South Wales Liberals’ ongoing problems in western Sydney, the promised slaughter in NSW hasn’t eventuated, and Queensland may yet prove safe for all Labor MPs — although the touted swing to Labor that Rudd was supposed to deliver never happened. There were few in the Labor caucus who thought Rudd could actually win, and he hasn’t. But many still have their jobs partly thanks to him.

Rudd has also done the right thing and said he is now leaving the leadership. There can be no more returns for Rudd, even given his colossal ego. He must leave politics during this term and draw to an end the extended period of high highs and low lows he has inflicted on his party.