2009

A year when we all needed hope | The Australian

Even after a very hard 2008, optimism must prevail

AND so the year ends with a whimper, as we endure the after-effects of the economic explosion that went close to destroying the world's financial system in October, and hope for a better 2009. It is a far more modest aspiration than almost all Australians held for the coming year a bare six months back. Until the markets crashed, 2008 looked like being a good year for humanity. Certainly too much of Africa was caught in chaos, unquestionably Islamic terror held far too many millions, especially the long- suffering innocents of the Middle East and Afghanistan, in fear. The obduracy of Iran in its determination to build a bomb and the madness of North Korea in refusing once and for all to end its nuclear weapons program placed the peace of the world at peril. And in Zimbabwe the worst dictator since Saddam Hussein continued to systematically vandalise his country in the interests of nothing more than his own ego. And yet there was hope. Hope that the year would leave the world peaceful and prosperous, with fewer children hungry and more in school than at any time in human history. Hope that the march of democracy was set fair to continue, with all the advantages for ordinary people that representative government, free enterprise and the rule of law always entails. Hope that this New Year's Eve would see the world a better place than it was 12 months before.

And then the world's financial markets collapsed, with a ferocity resembling the crash of 1929, with an impact that may yet drag the world -including Australia - into depression. Some say that for the vast majority of the world's people, subsistence farmers, day labourers and those who rely on their meagre incomes, the economic crisis is an irrelevance, a problem for people who remain relatively rich and consume far more than their fair share of the world's resources. Others argue that the collapse of banks around the world, especially in the US, demonstrates that capitalism has failed and that now is the time for the state to take control of national economies. Such arguments miss the core evidence of economics since the depression of the 1930s, a lesson proved since the collapse of communism demonstrated the folly of command economies. Free enterprise and the innovation that inevitably accompanies it is the only way to increase the world's wealth. Free trade in goods and services is the only way to ensure people all over the planet ever have a chance of improved prosperity. And free political debate is the only way to hold governments to account. Anybody who doubts this need only look at the way Australia, specifically Kevin Rudd and his ministers, have responded to the present crisis.

A year ago, the new Labor Government was full of promise. The obsessive ideologues who hated John Howard's government hoped that Mr Rudd would act on their three Rs agenda, by opening our borders to all who claim to be refugees, through pursuing symbolic reconciliation with indigenous Australians and in enacting a bill of rights. Everybody else who voted Labor in the November 2007 election expected the Government to abolish Mr Howard's Work Choices laws but otherwise leave most things much the same. Initially it seemed as if the Government was determined to accommodate the majority, doing little lest it offend anybody. The apology to the Stolen Generations was immensely important to indigenous Australians and, as such, almost universally applauded. But beyond that immensely powerful gesture, Mr Rudd moved slowly, waiting on the reports of the many reviews and inquiries he commissioned. By Easter, commentators were suggesting that if the Government had decided what it wanted to do and how to do it, Mr Rudd and his senior ministers had no idea how to explain their plans to the people. The sense that little had changed from the Howard years was confirmed by Treasurer Wayne Swan's first budget that spent to meet election promises but focused on defending the surplus and containing the risk of inflation in an economy that optimists assumed would keep growing on the back of the minerals and energy export boom.

The crisis changed everything, for the worse in the case of the economy, for the better in terms of the Government's standing. From the commencement of the crisis, Mr Rudd and his senior ministers rose to a challenge that nothing in their careers could have equipped them to confront. They made mistakes - the hasty decision to guarantee bank deposits was made before the way it would undermine people's investments in other financial institutions was understood. Whether spending $10 billion on payments to pensioners and other welfare recipients was the best use of a great deal of money that could have effectively ended the university system's capital works problem, to name but one of many responsible uses, will only become clear when the economy's performance over summer is known. And Mr Rudd was blessed by a financial system that was relatively well regulated and remains in good shape, making Australia's internal problems much more manageable. But there is no doubting that the Government kept its nerve and, while understanding that almost any action was better than doing nothing, has not panicked with the public purse. The result is that Mr Rudd's record over the past few months is impressive compared with President George W. Bush in the US and British Prime Minister Gordon Brown, among many other world leaders who, from Beijing to Brussels, have emptied their treasuries in the forlorn hope that propping up bankrupt companies will protect their citizens' savings and jobs. Australians understand this and approve of the job Mr Rudd and his senior ministers, Deputy Prime Minister Julia Gillard, Treasurer Wayne Swan and Finance Minister Lindsay Tanner, have done. Despite the competence of Opposition Leader Malcolm Turnbull, the Government now enjoys a two-party-preferred lead in the polls that exceeds the margin that put Labor into government. Whatever the new year brings, the voters have placed their hopes in Mr Rudd's hands.

Hope also explains the other epochal event of 2008, the election of Barack Obama as president of the United States. That Mr Obama accomplished something extraordinary in being the first individual who is not a caucasian male to be elected president is beyond doubt. Others were undoubtedly inspired by his dubious promises to spend the US out of trouble, although they were matched by his Republican opponent, John McCain. But most of the millions who voted for Mr Obama were motivated by the way his achievements enunciate the core American ideal - the right of every individual to make the most of their ability in life. It is an aspiration that resonated around the world and Mr Obama enters office, as Franklin Roosevelt did in the depths of the Depression, bearing the hope of the world that the US can show the way out of an economic slump that threatens the right of billions of people to expect a better future, if not for themselves but for their children.

Such an expectation is the birthright of all humanity and the fact that it is not assured this New Year's Eve demonstrates how profoundly the world changed in the past three months. But myriad reasons remain why Australians should look back in resignation, not anger, and forward, not in despair, but hope. For those of us who are not ill or impoverished, for those of us who love and are loved this holiday season, there remains a great deal to be thankful for. Despite the damage done to our savings and despite our fears for the future, the vast majority of us are secure in our jobs, safe in our homes and can be confident that while the new year may be difficult, life will go on. "We judge of a man's wisdom by his hope," Ralph Waldo Emerson wrote in 1841. For all the bad news of 2008, there remains much to be thankful for. And above all, we can - must - look forward to the year that begins in the morning, in hope.