If Ontario (Canada) and Australia are any indication, voters are no longer willing to throw good money after bad just for “saving jobs.”
First, Australia, where the formerly-government-owned Qantas asked for a massive taxpayer-backed loan to stay afloat. Prime Minister Tony Abbott (whose Liberal party is right-of-center, despite the name) is recommending allowing foreigners to invest in Qantas instead. The opposition Labor Party seized on the idea and went off to the races on “economic nationalism.” This comes on the heels of Holden (an Australian auto maker) closing its doors after Abbott refused to bail them out.
Labor leaders (including Bill Shorten – the opposition leader) were convinced that Australians would rise up in patriotic pride and fear to skewer the Abbott government. It hasn’t quite worked out that way (Canberra Times, via Andrew Bolt):
Here, too, Shorten’s assertion is that voters are uneasy at a pattern of indifference by the Abbott government as a succession of major companies either leave our shores or go under, slashing thousands of jobs in the process – GM Holden, Toyota and Forge spring to mind.
Labor’s charge is that Abbott is pursuing a scorched earth policy of market purism. Some of the ”drier” market-oriented Liberals find this depiction amusing, given Abbott’s past positions. But it is certainly true that since taking office, Abbott has hammered the theme that governments should not be the ”ATM of last resort” for failing businesses.
In any event, Liberals across the board now caution against an assumption that the ideology of small government and zero-corporate welfare is inherently odious and therefore at odds with voter sentiment.
They argue, in fact, that what have been regarded as givens such as the assumed ”backstop” role of governments, the permanence of ”iconic” Australian brands, and even the attachment of people to the status quo, are open to argument.
Informing this view is the surprising equanimity with which voters absorbed the Holden withdrawal in particular – perhaps the only badge to rival Qantas as the quintessential Aussie brand.
Liberals braced for a backlash. What they got instead was a level of sophistication from voters who understood the arguments about the unsustainability of an automotive sector with its hand permanently extended. And this in turn has emboldened a new attitude in the Abbott cabinet on Qantas.
In other words, the voters aren’t reacting to populist fear-mongering, but rather keeping their heads, or as the Australian puts it (via Bolt):
Labor has used this hard-line approach to describe Abbott as doctrinaire, hating workers, exporting jobs and being uncaring. Yet on the Holden decision not to offer further assistance using “borrowed money” for the automotive industry Abbott’s apparently doctrinaire philosophy is overwhelmingly endorsed by the public.
It may well be that with an increasingly economically literate electorate there is not just the impression of a doctrinaire economic directive coming from Abbott but also an appeal to a commonsense attitude where his apparent “simplicity” is actually a plus and Labor’s push for spending more of taxpayer funds for corporate bailouts is not resonating.
That said, the effect of an argument over Chrysler asking for $700 million in taxpayer money to help them refurbish two Canadian plants might even be more telling. Both the national and Ontario governments were more than willing to hand over the cash. It was Ontario Opposition Leader Tim Hudak who managed to stop it, simply by complaining.
The result? Chrysler admitted it really didn’t need the money. They just figured they’d ask because they could (Kelly McParland, National Post):
Maybe Chrysler didn’t really need the money, but why not ask for it anyway? The auto companies have a long record of demanding government “investment” in return for job promises, and just as lengthy a record of not following through on their pledges. No matter: the market has been groomed, the politicians have come to accept the legitimacy of auto subsidies, and voters have become inured to some industries getting special treatment over others. The money was there for the asking.
Then Hudak opened his mouth, and was accused of making it a “political football” – leading to this priceless response from McParland: “Canada is $700 million to the good as a result. That’s a pretty valuable touchdown.”
When corporate bailouts become so unpopular that a fellow known for losing a can’t-miss election three years ago can still stop one dead in its tracks, we should take notice. On a broader scale, it says that limited government – the serious kind, the kind that goes after favor-seeking as much as it does food-stamp spending – is more popular and better understood than some of us realize.
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