Friday, 30 March 2012

Obama's Mandate

President Barack Obama has two major domestic policy initiatives to his name after his first three years in office:  the American Recovery and Reinvestment Act of 2009 (the stimulus), and the Patient Protection and Affordable Care Act (Obamacare).

Neither of these policies are particularly popular, and this presents a significant obstacle to Mr. Obama's re-election.  Polls have consistently shown lukewarm support at best for the stimulus package, with a clear minority of Americans believing that Mr. Obama's policies have actually helped the job situation.

Similarly, Americans have consistently favoured the repeal of Obamacare by a significant majority. The individual mandate in particular is dangerously unpopular from a political perspective:

Americans overwhelmingly believe the "individual mandate", as it is often called, is unconstitutional, by a margin of 72% to 20%.
Even a majority of Democrats, and a majority of those who think the healthcare law is a good thing, believe that provision is unconstitutional.

The Supreme Court this week heard oral arguments over the constitutionality of the health care law, with a decision to be handed down by the nine justices prior to the presidential election in November.

Day two of arguments was concerned solely with the individual mandate, and by all accounts proceedings went horribly wrong for the law's defenders.  Solicitor General Donald Verrilli was peppered with questions by the justices, and he often lacked satisfactory answers.

Importantly, Justice Anthony Kennedy, the so called 'swing voter' of the court, seemed to be disposed against the government's arguments.

It is almost certain that Justices Ruth Bader Ginsberg, Stephen G. Breyer, Sonia Sotomayor and Elena Kagan will rule that the mandate is constitutional.

Meanwhile, Justices Samuel Alito, Clarence Thomas, Antonin Scalia and John Roberts are equally likely to side with the challengers.  This leaves Justice Kennedy with the deciding vote.

Thus there does seem to be a tangible risk that the individual mandate, if not the entire law, will be deemed unconstitutional by the Supreme Court.  What would this mean for the President and his chances of re-election?

Wall Street Journal columnist Peggy Noonan captures what the sentiments of the American people would likely be, given a hostile decision by the court:

The constitutional law professor from the University of Chicago didn't notice the centrepiece of his agenda was not constitutional?  How did that happen?
Maybe a stinging decision is coming, maybe not, but in a purely political sense this is how it looks:  We were in crisis in 2009 - we still are - and instead of doing something strong and pertinent about our economic woes, the president wasted history's time.

With Americans largely believing that his stimulus package was ineffective, President Obama needs his healthcare law to be upheld, even if it remains unpopular.  Otherwise he will be left broken, embarrassed, and without any record of significance after a full term in office.

Swan's Surplus

Wayne Swan has been more prominent in the media lately, as he has begun to lay the rhetorical groundwork for his fifth budget, to be delivered on May 8.  The Treasurer is talking a tough game:

Yesterday, Treasurer Wayne Swan told a Sydney business breakfast that Australia should expect a tough budget in the face of lower-than-expected tax revenues and the need to reach a surplus.
"We will need to cut and cancel existing programs if we are to meet our targets and we'll need to redirect some spending to where it is needed most," he said.

This all seems a little too familiar to me.  Every year, Mr. Swan spends the month in the lead-up to his budget emphasising the need to engage in fiscal restraint.  In the past he has inevitably failed to cut spending in any truly significant way - and any cuts at all in recent years have been entirely neutralised by new expenditures.

The 'lower-than-expected tax revenues' to which Mr. Swan referred yesterday are also a recurring theme, and there is a very simple explanation as to why.  The government has staked so much of its economic credibility on a 2012-13 budget surplus that it has been forced, each year, to manipulate Treasury's forecasts in order to make the promise seem attainable.

Thus we saw some ridiculous assumptions in last year's budget.  Mr. Swan then promised that 500,000 new jobs would be created by mid-2013, yet in the last twelve months we have witnessed the Australian economy add just 10,000 net jobs.

Last year's rosy prediction of GDP growth reaching 4% over 2011-12 has been replaced by actual growth of just 2.5%.

The forecast 2011-12 budget deficit of $22.6 billion has already ballooned out to nearly $40 billion.

Mr. Swan last year predicted that the unemployment rate would drop to under 5% during 2012, and fall further in the following year, but it remains above 5% and is assuming an upward trajectory.

And of course, last year's budget predicted that tax revenue would shoot through the roof just in time to deliver a 2012-13 surplus.

The Treasurer can use 'lower-than-expected tax revenues' as an excuse if he likes, but he and his department must have known, even at the time, that last year's assumptions were wholly unrealistic.

Mr. Swan now finds himself facing a monumental task - a required turnaround of roughly $40 billion in the nation's fiscal condition within a twelve month period.

This is a problem of the Treasurer's own creation - he has consistently put off the tough decisions, choosing instead to manipulate the figures and hope for an unrealistically optimistic scenario.

When he hands down his fifth budget, Mr. Swan will undoubtedly again find a way to predict a razor-thin surplus for the coming financial year.  New taxes, with surprisingly high revenue streams, will be implemented to boost the bottom line.  Revenues will be moved into 2012-13, and expenditures shifted into the forward estimates.  Certain spending will remain off the books - the NBN being the most prominent example - and some programs will need to be cut, if belatedly.

Of course, we can also expect to see one or two overly optimistic assumptions.  The final fiscal outcome for 2012-13 may not be revealed until after the next election - so Mr. Swan's true day of reckoning may never come.

Thursday, 29 March 2012

The Queensland Conundrum

Labor's recent annihilation in Queensland has led to much back-and-forth over any potential implications for the federal government.

It would be fair to say that federal issues played a backseat role in the state campaign.  Opposition Leader Campbell Newman did talk about the carbon tax, but it was a peripheral point, lagging behind traditional state problems such as service delivery and general competency in importance.

The wider issue associated with the carbon tax, namely the cost of living, was of course much more prevalent.  But it is worth noting that Queensland Labor was on the path to political annihilation even before Prime Minister Gillard announced that there would be a carbon tax.

We can thus discount the tax as a central source of Queensland Labor's electoral woes.  But this should be of little comfort to the federal party.  The straw that broke Premier Bligh's back is a familiar one in Canberra - the question of trust.

Anna Bligh made no mention of asset sales prior to the 2009 state election, but within months of her success at the polls she had sprung the surprise on her constituents.  She promised that fuel subsidies would remain untouched during the campaign, and then abolished them after the election. These twin betrayals of the voters' trust set her on the path to electoral oblivion long before Campbell Newman came along.

Clearly, Queensland voters do not take kindly to such surprises from their political leaders.  When it comes to her broken pledge on the carbon tax, they will have about as much sympathy for the Prime Minister as they had for Premier Bligh.

Strategically, this is an urgent problem for the federal government.  Labor currently holds eight Queensland seats in the parliament, and seven of them are marginal.  If the state election's vote were to be replicated federally next year, only Kevin Rudd would stand a better-than-even chance of survival.

Remember, in order to reattain majority government, Julia Gillard will be required to gain seats at the next election.  Losing two or three seats in Queensland alone would all but guarantee a Liberal victory.

Labor, if it is to retain power, must resurrect its vote in the sunshine state.  There is no alternative. But Queensland voters have just shown us all how they react to a political leader breaking their trust.  Having witnessed Premier Bligh's demise, how does Julia Gillard now escape Queensland's wrath?

The Shackles of Re-election

The President of the United States participates in many international meetings, and chances are that throughout a term in office he will be caught out by an open mic at least once or twice.  President Obama was in open mic strife once again several days ago, during a meeting with Russian President Dmitry Medvedev:

In comments that were not intended to be broadcast publicly, Mr. Obama candidly assures the Russian President (and by proxy his successor, Vladimir Putin) that he will be able to negotiate over the issue of missile defense with more flexibility following his 'last election' in November.

The President's assurances are certainly correct.  But they are also problematic from a political perspective, because the implications set forth in that statement are unlikely to be well received back in the United States.

Mr. Obama is essentially saying this:  'After the November elections, I will never have to face the American people again.  It will no longer matter whether or not my decisions have popular support. So I will be able to make a deal with you then.'

These implications are clear because the President explicitly mentions that November is his last election.  George W. Bush was phenomenally unpopular throughout much of his second term - but it mattered very little, because he was not anchored by the political accountability that comes with the spectre of re-election.

Republicans will argue that the same applies for President Obama.  They will assert that unfettered by any accountability to the American public, Mr. Obama will be free to do as he likes, no matter how radical or unpopular his policies may be.

You can expect this argument to be completely overblown by Mr. Obama's political opposition, but there is an incontrovertible truth at its heart.

Of course, this would be the case for any two term President - one could argue that it is a glaring flaw in the case for term limits.  But Mr. Obama needs to be more discreet in front of microphones from now on - because that 'flexibility' of which he spoke will apply to much more than missile defence, and Republicans will make sure that every single voter knows it.

Wednesday, 28 March 2012

Rick's Rage

Rick Santorum's early forays in the Republican primary season went largely unnoticed, save for several somewhat petulant moments during the debates.  Mr. Santorum was displeased with a perceived lack of attention - he did not receive as much time to answer questions as the frontrunners.

Now, one could argue that Mr. Santorum had every right to feel aggrieved during the debates, as he really was treated quite peripherally at times.  But his campaign has since been characterised by an almost permanent sense of aggrievement - particularly towards the media.

Here is the latest example:

There are several points to make here.  Firstly, someone like Mr. Santorum, who spends much of his political life talking about family values, should not be caught on camera swearing at reporters.

Secondly, Mr. Santorum has a habit of attacking the media for asking perfectly valid questions.  He makes social issues a central theme of his campaign, and then complains when interviewers focus on social issues.  In this instance, he attacks a NY Times reporter merely for asking him about a comment that he had made earlier.

In a wider sense, the above altercation calls Mr. Santorum's temperament into question.  Can you imagine President Obama reacting to a question in this manner?  How about Mitt Romney?  

A presidential figure maintains his calm, no matter how unreasonable any given line of questioning may be.

Many Republicans appreciate attacks on the 'mainstream' media, and would interpret Mr. Santorum's performance as a display of passion and conviction.  It is, in actual fact, a display of petulance and resentment.  It is unbecoming, and it is certainly not presidential.

Monday, 26 March 2012

Lobbying the Tories

"It's an issue that crosses party lines and has tainted our politics for too long... an issue that exposes the far-too-cosy relationship between politics, government, business and money.  I'm talking about lobbying - and we all know how it works.  The lunches, the hospitality, the quiet word in your ear, the ex-ministers and ex-advisors for hire, helping big business find the right way to get its way.  In this party, we believe in competition, not cronyism.  We believe in market economics, not crony capitalism.  So we must be the party that sorts all this out."

These words were spoken by British Prime Minister David Cameron two years ago.  Let's compare them with the words of (now former) Tory party co-treasurer Peter Cruddas, speaking to undercover journalists who were posing as potential donors:

"Two hundred grand to two hundred and fifty is Premier League... what you would get is, when we talk about your donations the first thing we want to do is get you at the Cameron/Osborne dinners."
"You really do pick up a lot of information and when you see the Prime Minister, you're seeing David Cameron, not the Prime Minister.  But within that room everything is confidential - you can ask him practically any question you want."
"If you're unhappy about something, we will listen to you and put it into the policy committee at No 10 - we feed all feedback to the policy committee."

Aside from the passing football reference, there is not very much to like about Mr. Cruddas' assurances.  Nor, for the Tories, is there much to like about this exchange being aired in the public arena.  If there is one thing that any democratic electorate cannot abide, it is that politically deadly combination of dishonesty and hypocrisy.

The culprit did of course attempt to backtrack as he offered his inevitable resignation:

"Clearly there is no question of donors being able to influence policy or gain undue access to politicians."


Peter Cruddas was not simply making this stuff up on the spot, as many conservatives would apparently have us believe.  He was explicitly offering access to the Prime Minister and to the policy committee at No 10.  Nobody in their right mind would make such extensive promises to potential donors if they could not follow through.

Mr. Cameron had warned mere months before being sworn in that corporate lobbying was the "next big scandal waiting to happen" in Britain.  How very prescient of him.  He should have told his party.

Who do you trust?

Whoever advises our Prime Minister on her daily media lines needs to be fired.  Immediately.

Because today, in yet another display of amazingly weak political judgement, Ms. Gillard through her own rhetoric fed the Liberal Party exactly the lines it will need to manufacture the next election's most potent advertisements:

"Who do you trust to manage the economy in the interests of working people? Who do you trust to understand the needs of the future and the building of that future economy? Who do you trust to spread the benefits of the mining boom to make sure they are shared by all Australians?"

Rest assured, the Liberals will not be playing the entirety of that quote in their election ads.  Just four words will do.  They would even make a good bumper sticker.

"Who do you trust?"

The ad that could propel Tony Abbott's party onto the Treasury Benches will be beautifully simple.  It will open with the Prime Minister asking over and over:  "Who do you trust?"

It will then cut to the following:

The ad will then finish by silently asking the viewer:  "Who do you trust?"

Julia Gillard can hardly complain.  Her political death warrant will be served using her very own words.

Sunday, 25 March 2012

Abbott the Ravager

Prior to the Labor leadership ballot in February, Kevin Rudd said the following:

"And they are the millions of Australians who depend on us to form a Labor government and to prevent Mr. Abbott from inflicting on Australia the ravages of the most extreme right wing government that the country will have ever seen."

It is remarkable how often you hear this sort of thing from Labor frontbenchers - you would think that the government's foremost raison d'ĂȘtre is to prevent Tony Abbott from becoming Prime Minister.  Aside from say, actually governing.

But in any case, for a man who is so often accused of being a rabid right winger, and of secretly harbouring an intense desire to reinstate Work Choices, Tony Abbott really does seem to lack a deeply felt, instinctive sympathy for liberal economics.

Consider the Opposition Leader's pet paid parental leave scheme, which he resolutely clings to despite dissatisfied rumblings from within his party room.

The pure argument, from the perspective of classical liberals, would posit that parents should ensure they are able to support a child financially before deciding to have one.  It would argue that it is unfair on those who make a conscious decision to be childless that they are forced to fund the choices of others.

Is it a nice idea, that a new parent should be granted money without labour, simply by virtue of being a parent?  Certainly.

But is it fair?  Too often the word 'fair' is hijacked so that it may be attached to ideas that are simply 'nice'.

In any case, whether you believe a paid parental leave scheme is necessary or nice, Mr. Abbott has proposed a scheme which is far more generous than the government's.  Which, coming from a leader of the Liberal Party, can only mean one thing - Mr. Abbott is, in this instance, sacrificing liberal economics in order to play politics.

Combine this with the report today by Stephanie Peatling that the Opposition Leader is planning to extend the childcare rebate to cover nannies:

One of Mr. Abbott's first acts in a Coalition government would be to ask the Productivity Commission to examine how much it would cost to extend the childcare rebate for in-home-care, such as nannies, in recognition that existing arrangements do not meet the needs of many families.

The idea that it is the government's job to 'meet the needs' of families does not conform with the spirit of economic liberalism any more than Kevin Rudd's stimulus conformed with the spirit of fiscal conservatism.

Our tax system is already littered with measures which are designed to ease the burden on struggling families - many of which are not even means tested.

It would be easy to accuse Mr. Abbott of using these issues in an attempt to gain political advantage, and such a critique would be fair to a point.  Much has been written about the Liberal leader's supposed problem with female voters - is it any coincidence that his most significant breaks from liberal orthodoxy have been on policies which concern women?

On the other hand however, many of the rebates and credits which are designed to help families are actually relics of the last Coalition government.  Were they proposed largely for the purpose of buying votes?  Perhaps.  But there is more to it than that.

John Howard was a Prime Minister who combined liberal economic views with a broader sense of social conservatism.  His underlying worldview emphasised the family unit as an essential building block of society - everything, in Mr. Howard's view, was rooted in family.

Thus Mr. Howard believed in using the powers of the state to protect and encourage the family unit, and this was reflected in his social spending.  Money was spent not on welfare or social justice, but on childcare rebates and the baby bonus.

Tony Abbott is in the same political family as John Howard - economic liberalism tempered by social conservatism.  The former Prime Minister showed all of us that this can be an electorally potent combination.

But Australia is currently in desperate need of a government with genuine fiscal restraint.  Mr. Abbott, should he one day become Prime Minister himself, needs to assemble a team of economic advisors who will be unafraid to reign in their leader's tendency towards conservative social spending.

Friday, 23 March 2012

Santorum's Lack of Respect

Republican presidential candidate Rick Santorum has made two particularly eye-catching comments in recent days.  It is important not to blow them out of proportion, but they do reveal a little about the man, his focus and his strategy.

The first quote comes from an answer Mr. Santorum gave when challenged as to why he has consistently lost the Catholic vote to Mitt Romney (Mr. Santorum himself is a Catholic):

"The bottom line is that we do well among people who take their faith seriously, and as you know, just like some Protestants are not churchgoing, they are folks who identify with a particular religion but don't necessarily practice that from the standpoint of going to church and the like."

Then, while on the campaign trail yesterday, Mr. Santorum said the following:

"You win by giving people a choice.  You win by giving people the opportunity to see a different vision for our country, not someone who's just going to be a little different than the person in there.  If you're going to be a little different, we might as well stay with what we have instead of taking a risk with what may be the etch a sketch candidate of the future."

Both of these quotes say something about the way in which Mr. Santorum perceives his own candidacy - he is the man for people who 'take their faith seriously' and 'take their conservatism seriously'.  Fair enough.

But the above comments actively portray other candidates, and also the millions of (avidly Republican) individuals who have cast votes for them, as being unserious about both faith and conservatism.  If you vote for Mitt Romney, you must not be serious about your faith.  If you vote for Mitt Romney, you are not a proper conservative.

This is disrespectful.  If Mr. Santorum truly thinks that Mr. Romney is only 'a little different' than the current occupant of the White House, then he had better take a much closer look at the former Governor's policies.  As Republican blogger Jennifer Rubin points out here, Mr. Romney's proposals mirror quite closely those of Rep. Paul Ryan, that unquestionable bastion of fiscal conservatism.

As Politico correspondent Jonathan Martin reports, conservative darling Sen. Jim DeMint yesterday only just stopped short of endorsing the frontrunner, and widely respected former Florida Governor Jeb Bush threw his weight behind Mr. Romney the day before.  If Mr. Romney is truly just 'a little different' than President Obama, it is certainly curious that such a legion of solidly conservative figures is continuing to coalesce in his camp.

It has been said that Mr. Santorum's 'holier-than-thou' attitude would turn off a huge number of voters in the general election, were he to become the nominee.  We have seen several exhibitions of this attitude in recent days.  By even going so far as to suggest that voters would be better off 'staying with what we have' instead of voting for a Republican other than himself, Mr. Santorum has progressed a step too far in his argument.

This merely demonstrates the desperation which now pervades his campaign.

Picking Winners

When we talk about wasteful spending by government, the discussion often focuses on explicit discretionary measures - think school halls and pink batts.  We also talk about the growth of the public sector.  You may recall that even Kevin Rudd, back when he was pretending to be John Howard lite, promised to 'take a meat axe' to the public service:

Kevin Rudd will take "a meat axe" to the bloated public service and end what he calls the Government's culture of secrecy and ministerial unaccountability.

There is another category of wasteful spending, however, which often manages to pass under the radar.  The costs and benefits of government subsidies are difficult to catalogue effectively because, quite simply, there are so very many of them.  In general, each individual subsidy uses a relatively small amount of money, so in the wider scheme of the $350 billion plus federal budget these expenditures get lost.

Government subsidies distort the market, which in itself damages economic performance.  But from a purely fiscal perspective, it is important for governments to ensure that for any given subsidy, the benefits outweigh the costs.

Consider the recent news that Holden will receive $275 million in taxpayer subsidies (combining federal and state initiatives) to keep the company's operations here for another ten years.  The car industry has benefited from subsidies for many years, with the support of both political parties.

There are certainly sentimental arguments in favour of such policies:

Holden is an Australian icon.  It's Adelaide plant produces two of the four biggest-selling cars in the nation.  It would be a very brave Prime Minister who pulled the plug on Holden.

There are perfectly valid economic arguments as well - most of our first world competitors also subsidise their car industries, so withdrawing funds for a company such as Holden would place us at a competitive disadvantage.

Then there is the more classically liberal economic worldview:

They argue that if there is no prospect of Australia's car makers being able to survive without government subsidies, we should cut them off now.  In effect, the government will pay almost 20 percent of the cost of Holden's new models: what other industry receives such support?

Both sides, it must be said, have perfectly valid points to make, and thus this is an example of the sort of government subsidy that needs to be aired extensively in open debate.

But what should be made of this next example?

A year on, The Conversation is attracting 20,000 individual readers a day, reading on average 38,000 articles, putting it just in the top 100 most read websites and on par with Crikey.

Now, The Conversation is a website of reasonably high quality.  While it is notoriously slanted towards one end of the political spectrum, the articles are of a generally high standard and the site is well organised.

The site's founder Andrew Jaspan, who has also been chief editor of The Age, argues that there is clearly a market for The Conversation:

There is an appetite for the unexpurgated views of academia.  He argues that as the fortunes and reputations of the traditional media decline more readers will turn to academics for trusted information.

For the record, I think Mr. Jaspan is quite correct, at least up to a point.  There is an online market for the views of academia, and The Conversation does a good job of appealing to that market.

So do tell me - why is The Conversation, a site which employs 26 people, being funded by $6 million in mostly taxpayers' money?  If the market for this product does so clearly exist, why must the government effectively act as a venture capitalist and subsidise the site's early existence?

When Mr. Jaspan wanted to start up The Conversation a year ago, he had every right and every incentive to do so.  Nobody would have stood in his way.  He could have done exactly what other new businesses do - he could have procured capital, from either his own pocket or through private lending, and invested it in his idea.

But he instead held out his hand to government, and our esteemed public representatives happily obliged.  Why?  Because they liked his idea.  It really was that simple.  Some politicians thought that Mr. Jasper's idea of an academic-centric opinion website was just fantastic, so they decided to give him millions of hard earned tax dollars to give it a go.

This, in my view, is both wasteful and downright improper.  Government is not a venture capitalist firm.  Politicians have no right to invest dollars that they have procured from hard working citizens to fund their own pet projects.

I am not picking on The Conversation - you cannot blame Mr. Jaspan for seeking public funds if they were available.  Most of us would do exactly the same, given similar circumstances.  This is but one example within a widespread culture of subsidy which often goes completely unexamined.

Make no mistake.  There is an argument to be made for subsidies, but no such argument is convincing unless it carries economic (rather than purely sentimental) weight.  Too many governments, of all denominations, use subsidies to pick winners.

Taxes should be used to fund essential services, not to hold up irrationally favoured industries or provide money for politicians' pet projects.

Gun Laws in America

Gary Younge has an interesting article at the Guardian, following the gun-related death of an unarmed black teen named Trayvon Martin in Sanford, Florida.  The 17 year old boy was shot dead by a neighbourhood watch captain, George Zimmerman, allegedly in an act of self-defence.

Mr. Younge approaches the story from a racial perspective, identifying a number of factors that, in his view, contribute to the likelihood of this sort of event occurring:

Add to this lax gun laws, entrenched segregation, deep economic inequalities and a statute that endorses vigilantism, and a murder of this kind is inevitable.

All of these factors deserve to be considered in great depth, but one in particular has a simple solution:  gun control.

The much cited Second Amendment to the United States Constitution speaks of a citizen's right to bear arms.  To many americans, this is a sacred right.  The desire to own a gun is certainly understandable - what is more important to the average individual than the safety and protection of his or her family?

Yet we are inundated with countless examples of the negative consequences of lax gun laws, with Trayvon Martin's case being but one of many.  On a wider scale, it has been demonstrated that soft gun laws lead to much higher rates of gun violence - which disproportionately affect black people.

A 2007 analysis by the Washington-based Violence Policy Center found that states with 'weak' gun laws had the highest rates of gun ownership and the highest levels of gun deaths.  The converse was also true - strong gun laws were associated with low rates of both ownership and deaths.

These results are supported by a number of similar analyses, and it should be noted that the same conclusions apply even when the subject area is extended beyond the United States.  A 2000 study published in the Journal of Trauma found a direct correlation between gun availability and homicide rates among developed countries:

"Across 26 high-income nations, there is a strong and statistically significant association between gun availability and homicide rates."

Even here in Australia, it has become clear that gun laws have a tangible effect on the rate of gun-related deaths.  Gun laws introduced by the Howard Government in the aftermath of the Port Arthur massacre lead to an acceleration in the decline of Australian gun deaths.

The evidence is therefore quite clear.  In order to reduce the prevalence of gun-related deaths in the United States, there must be tougher gun laws.  That is certainly not the only solution, and it fails to address the core causes of entrenched violence in disadvantaged communities, but it is a simple first step.

Tragically however, it will take a number of brave politicians in a number of passionately pro-gun states to enact the sort of tough gun laws required - and even if legislation is successful, the Second Amendment will always enter the picture from a judicial perspective.

One has to ask how long the bloodshed must continue before enough is considered enough.

Bob Carr on Iran

In an appearance on Sky News yesterday, recently appointed Foreign Minister Bob Carr said that threats of military strikes against Iran should be taken off the table.  He was optimistic about the prospects of existing international sanctions, seemingly confident that they will force the regime to change course:

"They've had an effect on Iran's currency, they've hurt the living standards, they've hurt the economy," he said.
"And it's not an unreasonable assumption that they would push the leadership towards a negotiated outcome here."

The effectiveness or otherwise of sanctions is certainly a subject for debate, but in this respect Mr. Carr is not saying anything particularly controversial.  The official position, and indeed the hope of most interested parties is that sanctions could cause the Iranian leadership to reconsider its position.

The problem with Mr. Carr's position is enshrined in this statement, referring to the threat of military strikes:

"It should be off the table as we persist with sanctions, and persist with seeking a negotiated settlement," Senator Carr told Sky News on Thursday.

Now, nobody - not Israel, not the United States and certainly not Australia - actually wants to see a military intervention in Iran.  President Obama has made that absolutely clear in his public statements.  But to suggest that the military option should be taken off the table is another thing entirely.

The threat of military strikes is a powerful negotiating tool, if used properly.  To rule that option out entirely would simply signal to the Iranian leadership that it can continue to misbehave without fear of serious retribution.  Mr. Carr, as a supposedly deep thinker, must surely understand that by removing the spectre of military action we would be weakening our own position in negotiations with Iran.

There is also a connected lesson for the American President here:  threats do not work unless the recipients believe that you may actually follow through.  Iran cannot think that we are bluffing - even if we are.