The challenge of government intervention when you oppose government

One of the key differences between the current crisis and a decade ago is the very different nature of the leaders in charge of major Anglophone economies — and it’s not a difference that instils confidence in our ability to respond effectively.

Today brings another day with no sign of the promised stimulus package — tomorrow, we’re told, all will be revealed, when the government finally takes a break from backgrounding journalists about its contents to let the public in on it.

What it has finally gotten around to is a coronavirus information campaign — though it hasn’t explained why a government that is normally not shy to advertise its own alleged virtues has taken over a month to get a basic social marketing campaign together.

Maybe the penny dropped after fights and taserings in supermarket aisles and a stockmarket plunge of historic magnitude.

But the Morrison government has been a model of competence compared to the Trump administration, which hasn’t got enough working testing kits and which actually has no handle on the basic statistics of how many Americans have been tested or found to be infected.

Trump himself — inevitably — claimed the virus was a hoax, then claimed journalists were going to try to deliberately infect him, while trying to downplay it as less of a threat than seasonal flu.

Yesterday he pitched a stimulus package to congressional Republicans, although in typical fashion his own senior staff were downplaying his ideas.

In the UK, newly-minted chancellor Rishi Sunak will present his first budget today, London time, with a package of measures reportedly designed to provide support to business rather than stimulate demand, although the Johnson government was already planning a stimulatory budget to meet its election commitments.

Meanwhile here in Australia, while the government has abandoned its obsession with returning to surplus, the focus is still on fiscal discipline and ensuring there’s no more than a minimal and temporary dip into the red.

Yesterday in his address to The Australian Financial Review’s ridiculous “Business Summit” (where big business used death and illness to demand company tax cuts), Morrison referred to the budget more than a dozen times, insisting “when the economy bounces back, our plan is that the budget bounces back as well”.

While there are plenty of comparison to be made between Morrison, Trump and Johnson — and we’ll get to them — it’s important to note that neither of the latter have any interest in fiscal discipline.

Courtesy of Trump’s company tax cuts, the US budget deficit is headed to $1 trillion this year at a time of full employment, and public debt is forecast to reach nearly 100% of GDP in 2030.

The restraint of the Obama years, when the deficit fell to 2.4% of GDP, is now a distant memory.

In the UK, successive Tory governments have run large budget deficits, even in periods associated with austerity; the deficit only recently fell below 2% despite very low unemployment.

To combat the inevitable slowdown associated with Brexit, Johnson sacked fiscal disciplinarian Sajid Javid as chancellor and was planning a fiscal boost of 0.5-1% of GDP even before the current crisis broke out.

In short, there are no “Back In Black” mugs on sale at Tory HQ or the Republican National Committee in DC — and they don’t appear to care.

This lack of interest in fiscal discipline suggests that Trump and Johnson should be predisposed to follow in the footsteps of a previous generation of leaders in responding to the crisis.

While it was Barack Obama who pushed a large fiscal stimulus package through Congress in 2009, it was the Bush administration that initially appropriated US$700 billion to bail out the US financial system in 2008 and an initial stimulus package.

In the UK, Gordon Brown and Alistair Darling presided over a £500 billion bank rescue and a £25 billion stimulus.

There are two key differences, though. One is that the 2008-09 response was characterised by strong international cooperation, primarily via the G20, as well as existing bodies like the European Union. China, which launched its own massive stimulus package, was a key participant.

Both Trump and Johnson are defined by their hostility to international cooperation; indeed Trump sees any cooperation as weakening the United States — especially with China.

The other is that both leaders occupy their position by virtue of their hostility to existing governmental institutions, regarding them as impediments to be torn down. Johnson led a campaign to reverse a fundamental aspect of the UK’s economic and governmental system.

Trump goes much further than traditional GOP approaches to government of cutting taxation, defunding income support and services to groups that don’t donate to them and shifting public assets to the private sector (remember Dubya’s spectacular failure responding to Hurricane Katrina).

Trump’s entire goal is to inflict chaos at the highest levels, to render what’s left of government incapable of operating at even the most basic level. Little wonder it doesn’t even know how many Americans have been infected.

While sharing Johnson and Trump’s deep-seated reluctance to tell the truth, having posited his own conspiracy theories about “unaccountable international bureaucracies” and, like them, having achieved political success by campaigning primarily on fear, Scott Morrison is different in his agenda.

Now that his budget surplus has likely vanished, Morrison literally has no agenda of any kind, beyond prosecuting favoured culture wars and sending security agencies after those who embarrass him.

Malcolm Turnbull’s prime ministership was at least characterised by an embrace of a more active role in education and health funding and an attempt to establish an energy and climate policy that would enable greater investment. Morrison has smashed renewables investment and done nothing even in the face of persistent and deepening economic stagnation that left the economy vulnerable to an external shock.

Climate and biology promptly did that in a one-two blow starting last November.

Three leaders defined by their lack of interest in international cooperation and effective leadership face a challenge of leading at a time of international crisis.

It’s very different to a decade ago.