Voting is futile but that doesn't mean elections are

The most interesting thing about Jeremy Paxman's interview with Russell Brand isn't what the comedian says.

No, it's Paxman's horrified reaction.  Just watch it.  Brand is a twit.  But Paxman is glorious.  He's just so ... shocked.  Uncomfortable.  Confused.

Paxman is supposed to be one of Britain's leading political interviewers.  He's questioned top politicians and royalty.

Yet he is apparently flummoxed by this simple idea:  voting and political engagement are not the same thing.  The first does not equal the second.  The second is not dependent on the first.

Fluffy movie-star Marxism aside, Russell Brand is right.  Voting is one of the most futile ways to engage in politics.

Your vote — my vote, Brand's vote, Paxman's vote — doesn't count.  Not individually.  Not to an election.

This is intuitively true, easy to demonstrate, but strangely controversial.

The New Zealand economist Eric Crampton offers a survey of the academic evidence about the notion that an individual vote can change an election here.

The best data is from the United States.  A massive survey of 56,613 Congressional and state legislature elections could find only 10 elections where the result had come down to one vote — that is, where the result was a tie or the count revealed just one vote between the candidates.

Even that depressing result overstates the likelihood of a single vote deciding an outcome.  Counting is not an exact science.  Mistakes can be made (just ask the AEC).  Five of those 10 elections were either recounted to reveal much larger margins, or just re-run.

The chance your vote will make a difference is infinitesimally small.  So small, in fact, it's not worth voting.

Not worth it, that is, if the reason you want to vote is to make a difference.  There are other reasons one might vote apart from affecting an election outcome.

Many people follow politics like they follow sports teams.  If they draw joy from voting, who are we to judge?  Others vote because it is part of a ritual that underpins community and nation.  That's nothing to be scoffed at.  Purely instrumental claims that voting is "irrational" simply because an individual cannot change the outcome miss the point.  There's nothing irrational about doing something you enjoy.

For some, voting is expressive.  How they vote is part of who they are.  A "Labor man" is a man who votes Labor.  Humans build their identities out of their opinions and values — voting can help reinforce those identities.

And if voting is, legitimately and profoundly, a vehicle for personal expression, then so, surely, is the decision not to vote.

Brand explained his views in the New Statesman the next day:  "I don't vote because to me it seems like a tacit act of compliance."

Many people claim that treating the decision to vote as a personal choice is somehow undemocratic, or a rejection of hard-won liberties.

These arguments should be seen for the nonsense that they are.

There's a big difference between a right to vote and a positive duty — whether enforced by legal requirement or moral obligation — to do so.

The great battles for freedom and democracy of the past were not fought so that the state could coerce people into political participation.  In Australia, we have turned democratic rights into legal requirements.  (Yes, voting is compulsory.)  Breaches of the law are punishable by the courts.  This is a sickly ironic revision of the liberal cause so many died for.

Choosing not to exercise the right to vote is a very democratic choice.

There are far more effective ways to engage with the political system than voting.  After all, politics is an ephemeral business.

Paul Samuelson, who wrote the textbook Economics that monopolised post-war university education in the United States, once said "let those who will write the nation's laws if I can write its textbooks".

It's easy to overstate the differences between major parties, when, in fact, partisan differences don't account very well for changes in public policy over time.

In the 1930s and 40s governments around the world, of left and right persuasion, increased control over their economies.  In the 50s and 60s they built welfare states.  In the 80s and 90s they privatised and deregulated.

Elections didn't drive these epoch-defining changes.  Voting certainly didn't.  Ideas did.  The sort of ideas developed in textbooks and magazines.

But that's where Russell Brand goes off the rails.

There's a lot not to like about government of the twenty-first century — the institutionalised rent seeking, the expanding web of regulatory control, the lack of accountability, the national security excesses.

Yet it remains the case that elections are the most equitable, peaceful and legitimate mechanism to fix those problems.

Calling for "revolution", as Brand does, is childish and naïve.  At best such calls result in the kind of nihilistic destruction we saw in the London riots.  At worst, well, I'm sure you know your history.

Democratic institutions ensure that if you want to alter policy, you have to convince your fellow citizens that change is desirable.

And, because any single vote will not change an election outcome, you have to convince a very large number that your cause is so important they should make an expressive, personal, "irrational" stand at the ballot box.

The futility of voting means that democracy resists sudden radical change.  This is a good thing.

So many people who complain that the "system" is rigged are in truth complaining that most other citizens don't agree with them.

But Russell Brand's instincts on voting are correct.  There is no civic duty to vote.  His personal vote will not make a difference.

Abstaining is as powerful a democratic statement as any vote could be.

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Let MPs claim expenses as we do

You don't have to be a crook to be a rorter.  The current parliamentary expenses scandal isn't a story about bad people and corruption;  it's a story about poor incentives and bad rules.

The source of the expenses scandal is the vague governance system that rules expenditure.  When rules are vague, people interpret them to maximise the advantage to themselves.  This isn't surprising — that's just human nature;  that is also why rules should be clear and explicit.

Being an MP is a tough job.  MPs are on call 24/7 and must be on their best behaviour at all times.  They also have poor working conditions, with long hours and being away from home for long periods of time.

But here is the thing:  they get paid.  It is a well-paid job and people compete vigorously to get the job.  The base salary for an MP is $195,130, plus an electorate allowance of at least $32,000, and a payout if they lose their seat.

Then there are the entitlements well beyond the standard items such as salary and various forms of leave.  It is these that, even if not actually rorted, raise the ire of taxpayers.

We should have the best democracy we can afford.  So let nobody begrudge politicians their pay.  But let's also have transparency and consistency in their pay and conditions.

Most proposed solutions to entitlement abuse involve more disclosure and additional bureaucracy.  There is a simpler solution.  No entitlements.  Pay politicians entirely in salary (and leave).  Make it all taxable income, like most other employees.

Managing a constituency is the business of an elected representative.  That is what politicians get paid to do — any expenditure incurred in electorate business should then be treated as a work-related deduction on their income tax.  The Australian Taxation Office could work out what should be deducted, and what shouldn't, under the existing standard rules.

To be clear, this proposal relates to the remuneration of being an elected representative, and not to the business of government.  Expenditure necessary for the function of government should be paid by the government.  No doubt politicians will claim no clear distinction can be drawn between the business of politics and the business of government, but that is just cant.

Every other organisation in the country manages to resolve the difference between legitimate business expenditure and employee remuneration.

The downside of this proposal is that we may have to pay our politicians even more than at present.  That is the price of transparency.  Good government is not cheap.  But it may encourage our politicians to be more frugal with their own money as opposed to being spendthrift with our money.  Our politicians have exempted themselves from the accountability that every other organisation in Australia bears in this regard.  That has to change.

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The 3am curfew plan simply won't work

The proposed state-wide 3am curfew on Queensland's licensed venues won't prevent alcohol-fuelled violence.  In fact it will probably increase it, at the expense of our choice to go out when, and where, we want.

Queensland — take heed from Melbourne's own unmitigated failure.  The 2am lockout Premier John Brumby experimented with in 2008 was a disaster, with mayhem throughout the CBD's popular nightspots.

Queensland's 3am curfew is more extreme than Melbourne's own failed scheme.

Attorney-General Jarrod Bleijie commissioned a panel in September 2012 to look into the regulation of liquor licensing across the state.  These so-called experts are now calling for the state-wide closure of clubs and pubs at 3am in order to try and prevent the drunken violence.  This plan simply won't work.

Queensland already has a Drinksafe program that imposes a liquor venue lockout at 3am and a curfew at 5am.  Lockouts ban pass outs and you cannot enter a new club or pub after the set time.  But you are free to stay on in the same venue.

The next restrictive step is a curfew which forces closure of all venues.

Queensland's Auditor-General produced a scathing report of Drinksafe, stating that it had been a costly failure, with a bill of $10 million.

Any small headway made by the program was from the presence of extra police officers on the street, not the actual lockout and curfew.  Dr Anthony Lyneham, a maxillo-facial surgeon who sees firsthand the bloody mess created by street violence, argued that what made the Drinksafe precincts work "was the men and women in blue."  Dr Lyneham believes that "the number of assaults that police actually prevent is incredible."

Despite the failure of the pilot program, Queensland seems determined to introduce a new, earlier curfew.  This new plan is more extreme than what Drinksafe imposed and will be even more ineffectual and restrictive.

The curfew only applies to smaller venues.  Casinos with their 24-hour licences are exempt, so patrons can simply kick on from the compulsorily closed club to The Treasury.  Protectionism creates a privileged, state-backed entity to the detriment of other businesses.  Government shouldn't be artificially altering the market to favour any one business.

As the casinos will still be allowed to trade, it will simply transfer the problem to a different location.  You will simply see a mass exodus of drunken patrons having to cross town to the new venue.  Instead of being dispersed across many different venues and locations, people will be funnelled into the one casino in town.  This simply concentrates the revellers and will increase the likelihood of brawls breaking out during their journey or at the casino itself.

Why would you want to kick out all patrons state-wide at exactly the same time?  Without a curfew, partygoers will naturally leave or change venues at their own pace.  An arbitrary closing time of 3am will likely see a huge spike of orders at 2.45am, with patrons quickly sculling drinks before they have to leave.  The six o'clock swill didn't work the first time and I have a feeling the negative effects will only be compounded if it is reinstated at 3am.

There are logistics to consider too.  Transport is already limited after midnight and an artificial 3am rush will compound the problem.  Instead of people leaving in small groups, hundreds of people will need a taxi at the same time.  Taxis and public transport will be unable to cope with such a spike in demand.  And there are only so many police officers who will be able to patrol.  Not all will be available at 3am.  The same goes for ambulances and emergency rooms — resources are already stretched to breaking point.  This curfew is likely to prove to be the proverbial straw.

The proposed curfew will result in thousands of people on a Saturday night being forced from venues by bouncers fearing that they will be slugged with a fine if the doors are still open at 3.01am.  The buses will have stopped and there is likely to be too few taxis.  Bored patrons who have just downed their drinks will be left milling around trying to figure out how to get home.  The revellers who have spilled on to the street are likely to pick a fight.  This is the perfect recipe for mayhem and exactly what the designers of the curfew want to prevent.

Increased police presence is the only way we can hope to reduce fighting on our streets.  The proposed curfew is just a nanny-state, knee-jerk response that has no hope of stemming the violence.

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It's high time to abolish the ACCC

In the Federal Court last Friday Justice John Middleton ruled AGL and its agent had broken the law against unsolicited selling when one of their door-to-door salespeople in South Australia ignored a "Do Not Knock" sign on the front door of a house.

The case is ridiculous.  And it demonstrates all that's wrong with how business is regulated in this country and all that's wrong with the Australian Competition and Consumer Commission.

AGL can be fined up to $50,000.  If the company had asked the salesperson to spray graffiti on the home rather than sell electricity, its fine would have been smaller.

The fact it required a Federal Court judge to decide the meaning of a sign saying "Do Not Knock, Unsolicited door-to-door selling not welcome here" demonstrates the capacity of lawyers to argue over something that to any normal person is perfectly obvious.

But the piece de resistance of the case is the attitude of the ACCC.  Rather than simply getting AGL to apologise, the Commission promised to pursue penalties against them as part of its campaign against illegal door-to-door marketing.  (The ACCC spends part of its $150 million budget producing "Do Not Knock" stickers.  The stickers feature the Australian coat of arms and the ACCC logo.)

Tony Abbott has proclaimed Australia is now "open for business".  He can prove it by abolishing the ACCC.  In fact I recommended exactly such action last year in my 75 radical ideas to transform Australia.  Getting rid of the ACCC came in at No 9, between abolishing the Commonwealth Grants Commission at eight, and Australia withdrawing from the Kyoto Protocol at 10.  (No 1 was repealing carbon tax.)

There's two main duties the ACCC undertakes:  things the government has no role in whatsoever and things that can be left to state governments.  On the very rare occasions when there is a genuine issue of competition policy, the matter can be decided by the Treasury department or directly by parliament.

Revealing snapshot

A quick look at the 10 most recent press releases from the ACCC is a revealing snapshot of how it's turned into a make-work organisation for bureaucrats, which is hardly surprising.  Its chairman, two deputy chairs and three commissioners all have backgrounds as public servants, lawyers, and academics.

Between them they have as much experience in the private sector as the Labor Party's frontbench.

One of the 10 press releases was about the AGL case and another covered a speech given by the chairman.  Other press releases dealt with credit card companies coordinating new authentication procedures;  with music licensing;  and with regulating the prices charged by the national broadband network.

The ACCC should have nothing to do with the national broadband network.  As soon as the monopoly regime of the national broadband network was revealed, the entire senior staff of the ACCC — if they'd really had any commitment to competition — should have all resigned.

The ACCC also announced it had allowed the Queensland government to control the sale alcohol as part of a liquor control program, and it had permitted councils in New South Wales to coordinate rubbish collection.  A further press release disclosed the ACCC had approved the Homeworkers Code of Practice.  In simple terms the Code regulates the use of outworkers in the textile, clothing, and footwear industry.  The Code entrenches the right of the relevant trade union to interfere in every stage of the manufacturing and management process in the industry.  The Code mandates exactly the sort of behaviour the ACCC should be eliminating.  Instead the Commission gives the code its blessing.  Finally there's press releases about the dangers of trampolines, and warning parents not to allow babies to swallow small objects.  Helpfully the Commission advises parents to supervise children on trampolines at all times.  Exactly why the ACCC is telling parents how to raise their children is unclear.  At least the Commission hasn't — yet — gone as far as Scottish government which recently proposed every child in the country have their own government official to oversee the child's upbringing.

The ACCC has outlived any purpose it may once have had.  Someone else can make the "Do Not Knock" stickers.

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Roadblock on path to hard-won rights

According to those who argue for increasing anti-bikie laws, particularly police, eroding fundamental individual rights is fine if you've got nothing to hide.

The Queensland police and government have adopted exactly that argument in defending the harsh consequences of laws against unsuspecting motorbike enthusiasts who have never gone near a bikie.

Queensland's Police Commissioner, Ian Stewart, put it simply when he stated:  "We make no excuses and I'm sorry for any inconvenience to the general public but if they've done nothing wrong they've got nothing to fear from our people."

The raft of new laws targeting bikies across Australia represents an unacceptable assault on individual rights.  The big states have introduced laws that together represent a nationwide attack on the rights of law-abiding bikies.

Under existing state laws in Western Australia, Queensland, NSW and Victoria, bikies are the direct targets of government attacks on their fundamental rights to property, freedom of association, privacy and free speech.

Proposed amendments look set to further erode the rights of anyone associated with a bikie, let alone individuals who own a bike.

Queensland is set to make it illegal for bikies to ride in groups larger than three;  Victoria has banned fortified walls at club-houses;  WA allows for property seizure;  and NSW is soon to follow suit.

It is easy for politicians and police to target these individuals because of this perception of all bikies as automatically criminal, gang-affiliated or interested only in organised crime.

But what's absolutely crucial is the protection of these key rights for every member of society, no matter what group you associate with or the hobbies in which you choose to indulge.

Queensland Attorney-General Jarrod Bleijie admits "there will be some disruption to law-abiding motorbike riders".

But the Queensland laws will be more than a mere disruption.  Innocent bike riders will have their right to freedom of association eroded through penalties for simply riding next to two other bike enthusiasts.  The laws would also restrict freedom of speech and individual privacy, with police able to stop, search and photograph anyone in club colours.

It has never been acceptable to monitor and record someone because of what colour they are wearing.  Apparently it's now justifiable because it's targeted at those pesky bikers.  Don't worry about freedom of association, individual privacy or freedom of speech because individuals who like motorbikes don't deserve these rights.

In WA, the Supreme Court has the power to seize property, including cash from bank accounts, if the asset has had "criminal use".  These property confiscation laws were used in a 2011 case against biker Gary White, leading to WA's Director of Public Prosecutions seizing $135,000 from White's bank account.

Substitution laws allow authorities to seize any of an offender's property as substitution for other property used as part of the crime, but owned by someone other than the offender.

White's $135,000 was unrelated to the crime, but due to this substitution law its seizure was upheld by the High Court as valid.  The law provides for an extremely broad interpretation of criminal use of property subject to seizure, allowing the state to seize the private property of individuals who have been involved in the commission of an offence.

Such laws have no regard for the basic human right to own and use property without interference.

Victorian anti-fortification laws came into force last week, significantly eroding centuries-old property rights.  The laws ban any fortified walls or barricades, allowing police to obtain court orders to destroy any fences or walls at bikie club rooms.  These walls are often there to protect the hundreds of thousands of dollars worth of valuable bikes within the club.

The laws also undermine the rights of private property owners.  Victoria police state they will not publicly say when they make anti-fortification applications to the court, adding a veil of secrecy to the already authoritarian laws.

To escalate the attack even more, Queensland parliament will next week pass new laws granting its Crime and Misconduct Commission new powers compelling bikies to appear before its star chamber.

Under star chamber rules, individuals can be sentenced to mandatory jail terms for refusing to answer questions.

The forced appearances for bikies destroys these individuals' right to silence and provides a clear example of government use of all possible avenues of power to target individual rights.

This range of targeted laws throughout Australian states demonstrates a concerted effort to erode the fundamental rights of anyone who enjoys riding a motorbike.  If an individual breaks the law, they should be liable for it.

There is no suggestion bikies should be allowed to engage in criminal behaviour.  Equally, however, every individual must have their rights to property, of association, to silence and privacy upheld and not be subject to laws attacking these basic human rights.  The laws blatantly undermine the fundamental legal principle of "innocent before proven guilty" and represent an indiscriminate attack on law-abiding individuals purely due to association.

Given the current trend, the erosion of rights is on track to get even worse.

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It's about muckraking, not kingmaking

The Abbott Government's expenses scandal has been a wonderful natural experiment.

Most political scandals are three-pronged contests, pitting opposition against government against media.  Each vie against the others to pursue their goals:  winning office, keeping office, selling eyeballs to advertisers.

So usually it's hard to tell which faction is the driving force behind the controversy — political party dirt units, muck-raking journalists, or partisan commentators.

But not this time.  The Labor party has dealt itself out of the expenses debate.  (Fair enough, too.  They've been busy with a leadership ballot.  Nor has Labor wanted to expose itself to charges of hypocrisy.  See, as an amusing exception to this discretion, Mark Dreyfus.)

Labor's absence has left the whole expenses scandal as a simple, clean contest between media and the government.

That seems to have made it more frustrating for the Coalition, rather than less.  There has been no way to dismiss the allegations as the product of Labor dirt.  But more importantly, this natural experiment reveals just how indulgent the debate over the influence of the media was during the Rudd and Gillard years.

Left intellectuals have spent the past six years obsessing over the wickedness of Australia's press corps.  First we were told the press didn't care about policy, then that the press was speculating about leadership tensions that didn't exist, then how it was trying to secure government for Tony Abbott.

At its most lucid, the obsession with the media was displaced frustration with Labor's hapless performance turned into anger about Rupert Murdoch.  At its worst, it produced the sort of mad conspiracy of the #ashbygate crowd.

The expenses scandal demonstrates how off-target all that outrage about the media really was.  It turns out the press is more interested in muckraking than kingmaking.

Those Labor supporters who imagined Abbott to be the media's darling must be very confused.

Remember being told that Abbott was a former journo himself, he provided great copy, and therefore journalists in the press gallery had taken a personal liking to him?

Contrast that with the obvious frustration the new prime minister has had trying to deal with the expenses story in the middle of the APEC summit in Bali.

It's not like the expenses affair is a particularly scandalous scandal.  Parliamentary expenses are one of those stories that journalists can pull out of their pocket on a rainy day.

Questionable expenses claims are regularly reported.  They will be with us forever.  And compared to the British expenses scandal a few years ago, it's all a bit pathetic.  No Australian politician has billed taxpayers for cleaning their moat.

If the Coalition thought the press was on their side before the election, they no longer do now.

Hopefully there's another lesson the Coalition will learn from this episode — there's no such thing as media management.

It seems like yesterday that commentators were telling us just how calmly and quietly the Abbott Government was going about its business.  This was apparently a revolutionary change from the media hungry style of Kevin Rudd.

One week after the election, Laurie Oakes wrote that Abbott had shunned the demands of the 24 hour news cycle and gotten on with "working rather than talking".

They say a week is a long time in politics, but, really, it's not that long.  When all this was being said, the government hadn't even properly formed.  Technically Kevin Rudd was still prime minister.

And, in retrospect, the argument that the Coalition had invented a brilliant new style of media management is pretty funny.  The government has wasted two entire weeks trying to bat away the expenses affair.

Politics cannot be willed off the front pages.  The media cannot be managed.  It can only be defended against.

Kevin Rudd's infamous one-announcement-per-day strategy was less about controlling the news cycle and more an attempt to out-run negative publicity.  But the negativity caught up.

And a good thing too.

Most people say the media should aim to rigorously scrutinise government actions.  But it should do more than that:  the media should be openly hostile to the government.  It ought to be fickle.  Sometimes even unfair.

After all, the government is the single most powerful institution in society.  Australian governments consume or redistribute over a third of the total resources of the nation.

With such power concentrated in one institution, the real risk to liberal democracy isn't that the press is unfair to the government, but that it is too indulgent.

During the Labor years, nobody could accuse the press of that sin.  And, if the last fortnight is any indication, this term of government will be the same.

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Challenge to ACT's laws on gay marriage will show state of play

A challenge to the ACT's proposed laws to introduce same-sex marriage on constitutional grounds provides the certainty needed on an emotive issue and the guidance required for potential state-based schemes.

On Thursday, newly commissioned Attorney-General George Brandis QC announced the federal government would challenge the ACT's Marriage Equality Bill 2013.  The challenge reportedly follows advice he received last week from the commonwealth Solicitor-General that the proposal was unconstitutional.

The bill's explanatory memorandum outlines that it is designed to "allow couples who cannot marry under the Commonwealth Marriage Act 1961 because of the way marriage is defined under the act to enter into a marriage regardless of sex".

In practice, the bill is a mix of show-ponying by sections of the Labor Party to try to claim ownership of this social change while knowing it likely exceeds their power, as well as putting pressure on the commonwealth to follow and allow same-sex couples to marry.

Opponents of the law argue the commonwealth should seek to overturn the soon-to-be law.

Any effort to overturn the law will quickly become a de facto debate on the present federal Marriage Act and it is doubtful such a law would be passed under present Senate arrangements.

There is a certain irony to any commonwealth challenge.

Under section 51 (xxi) of the Constitution, the federal government has the "power to make laws for the peace, order and good government of the commonwealth with respect to marriage".

The federal government has legislated that a marriage is a "union of a man and a woman to the exclusion of all others, voluntarily entered into for life".

The ACT will likely argue that the unions they are forming don't fit within this category, are therefore not marriages, and don't conflict with the federal power.

Therefore the federal government will have to argue that a union between two people of the same sex is equivalent to a marriage, even though it has explicitly legislated otherwise.

But so long as the ACT seeks to define these relationships as a marriage it seems unlikely the territory will win.

The ACT may be the first cab off the rank but it is not alone.  The Tasmanian parliament is set to re-debate an earlier failed move to introduce state-based marriage for same-sex couples.

The NSW parliament has also had an inquiry into whether it should legislate for a state-based scheme.  A bill will be introduced and debated soon.

The NSW inquiry concluded states had "the power to legislate on the topic of marriage, including same-sex marriage", before raising the caveat that the result of a High Court challenge was uncertain.

In any decision from the High Court, the government should also seek clarity about how the court may respond to the states taking equivalent action.

Some constitutional lawyers argue the states can establish marriages, but their interpretations appear to be based on the hope that the High Court will support the social change and ignore the jurisdictional nature of the dispute.

It is not an accident of history that Australia has uniform national marriage laws.  The drafters of our Constitution learned from the US experience of leaving the definition of marriages to the states.

Despite the merits of competitive federalism, Australia's founders made an informed decision that nationally consistent laws were desirable.

The Abbott government is seeking an expedited hearing from the court, which hopefully should avoid a repeat of the dilemma faced by California.

California issued marriages to same-sex couples following a state Supreme Court ruling in June 2008 that declared the existing ban on marriage for same-sex couples unconstitutional, and the subsequent November 2008 passage of a referendum, Proposition 8, that reinstituted the ban.  Since then, legal challenges have resulted in overturning of the Californian ban.  But in the six months to November 2008 more than 18,000 marriages for same-sex couples were registered.

Following the passage of Proposition 8 the legal status of those relationships sat in legal limbo.  It wasn't resolved until a 2009 California Supreme Court ruling upheld the legality of the unions of those already married.  But the same rule concurrently denied other same-sex couples access to marriage, effectively creating two classes of citizens.

If the ACT or NSW issues a single marriage certificate to a same-sex couple, and a subsequent constitutional challenge is successful, the cruel process of removing the legitimacy of a couple's relationship in the eyes of the law will be a reward for only the most heartless opponents of change.

These sentiments were echoed in the Attorney-General's statement:  "It would be very distressing to individuals who may enter into a ceremony of marriage under the new ACT law, and to their families, to find that their marriages were invalid."

A commonwealth challenge to the ACT plan won't satisfy those who want to use the debate solely for political grandstanding, but it will provide the clearest and fairest pathway for supporters and opponents alike.

Even if the commonwealth does not challenge the ACT's plans, opponents will.  A commonwealth challenge gives it the best chance to be debated on constitutional grounds, without prejudice on the preference for an outcome in favour or against, but merely in favour of clarity.

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It's not just about trade deals but also reforms at home

Tony Abbott is broadly on the right trade track, but may find more success in unilateral liberalisation than waiting for other countries to step up to the plate.

Abbott has already achieved a trade policy win by appointing highly competent Liberal MP Andrew Robb into the trade and investment portfolio.

Robb's record as a dogged free trade advocate during his 1980s' leadership role of the National Farmers' Federation puts him in good stead to manage domestic interests in sensitive sectors.

Robb's challenge is to drive Australia's free trade agenda, even while the same roadblocks that stopped the former minister, Craig Emerson, from achieving much, remain.

In addition to locking down trade deals, there are still reforms to be taken at home.

INCREASE FOREIGN INVESTMENT THRESHOLD LEVELS

On a practical level, the government could increase foreign investment threshold levels that prompt Foreign Investment Review Board reviews.

Because of bilateral deals, New Zealand and American investors enjoy threshold levels up to five times higher than other investors.  The standard could easily be extended universally.

Robb should also scrap parallel import restrictions on books that protect the interests of multinational publishers, can increase prices by up to a third, and do nothing for our local writers.  Proposals to broaden and strengthen Australia's anti-dumping regime should also be scrapped.

There are also under-utilised provisions by professional bodies in existing FTAs to promote qualification recognition that could increase services trade.

Robb also needs to rebuild Australia's free trade consensus.  We no longer have a free trade consensus;  we have a no-tariff consensus.

Since 2007 all sides of politics have toyed with non-tariff barriers that would restrict trade under the disguise of environmental concerns.  Equally, all sides appear committed to extending the ongoing, outrageous taxpayer-funded subsidies to the car industry.

CUTTING REMAINING TARIFF RATES

Robb should focus his energy on ensuring the schedule for cutting remaining tariff rates is met without the reciprocal increase of subsidies, as the car industry has enjoyed.

Internationally the challenges are starker.  Negotiations for an FTA with China have dragged on since 2005 because of disappointing offers for market access for Australian agriculture exports.  Investment regulations are also hampering negotiations.  Unless the Chinese government puts better offers on the table it will be difficult for Australia to secure a comprehensive deal worth signing.

The temptation for the government will be to conclude negotiations even if it means securing a weaker deal.  But we shouldn't trade our national interest for a headline.

Similarly, we should not be starry-eyed about the progress of broader agreements, such as the Trans-Pacific Partnership.

The TPP started with Brunei, Chile, New Zealand and Singapore, but negotiations have expanded since 2010 to include eight other countries in the Pacific Rim, including Australia and the US.

A comprehensive deal was more likely to be struck amongst a smaller number of countries with few politically and economically sensitive industries.

Countries should then have been welcomed to join a comprehensive deal with phase-in timelines to allow domestic industry to structurally adjust.

A SMALLER NEGOTIATING WINDOW

Instead many countries joined negotiations early as the TPP appeared to be providing the framework for an Asia Pacific-wide regional FTA.  But with every additional country the negotiating window for a comprehensive deal becomes smaller.

With a Democratic President in the White House, the injection of environment and labour standards could sink any deal with poorer developing countries.

It will be difficult for the TPP to be concluded by the optimistic deadline of the end of this year.

Similar problems are dogging global trade talks due to ongoing disputes about developed-country agriculture subsidies and developing-country tariff protection of industrial products.

After so many years of failure, it is doubtful a global deal can be done.  The round started on the wrong foot by prioritising development as a central pillar of any deal, not just free trade.

Development follows from free trade through Adam Smith's invisible hand of greater efficiency, trade and growth in the global marketplace.

Promoting development as a priority assumes that the visible hands of governments actually know what trade and investment flows will lead to growth.

Injecting "development" compromises the unifying principle that trade deals should remove barriers.

The gap of expectations is a systemic problem in international forums.  Throughout the 20th century the rich world got to write the rules, on the proviso that there were expectations on developing countries.

Today, developing countries are asserting their negotiating muscle, but there's less unanimity about what the rules should say.

The WTO is not alone.  The UN's health, intellectual property and climate change bodies are all struggling to secure treaties, most notably failing to secure a post-Kyoto Protocol.

These challenges should not dissuade Abbott and Robb from being ambitious on trade, but equally they should not ignore securing vital, achievable liberalisation gains at home.

Lego PMs must be diligent in making choices

A perennial feature of Australian political affairs is the desire of prime ministers to be remembered for their ''nation-building'' legacies.

So it was true to form that, during the election campaign, Tony Abbott said he wished to be remembered as an ''infrastructure prime minister''.

However, the ability of Abbott's new government to substantially increase capital spending is thwarted, by no small degree, by the parlous budgetary conditions bequeathed to it.

The undesired budgetary starting point, in turn, was the product of past policy decisions to rapidly increase the Commonwealth's public debt, covering for less-than-expected general revenue growth, which primarily funds recurrent expenditures.

As the late Nobel-prize-winning economist James Buchanan noted, the application of borrowed funds for current consumption, as transpired under the Rudd-Gillard governments, erodes the productive capital stock required to grow an economy in the longer term.

Even in the perilous fiscal circumstances which Australia faces, it has been widely reported that the Abbott government is preparing to accommodate further increases in public debt.

On this occasion, however, the government hopes to dedicate the borrowed funds to infrastructure projects, which would supposedly offset any diminution of private sector investment growth in the mining sector.

There is speculation the government is considering the sale of dedicated ''infrastructure bonds'', a scheme previously abandoned by the Howard government on the basis of their financial misuse.

Prominent unionists, business representatives, and academic economists like to remind us that the case for debt financing of public sector infrastructure rests upon securing an intertemporal apportionment of benefits and costs, associated with such activities.

Specifically, it is deemed inappropriate that current generations defray the full cost of financing long-lived assets, primarily through taxation, since the assets would conceivably generate a stream of economic returns enjoyed by future, presumably wealthier, generations.

These widely accepted constructs seem reasonable in theory.  However, it is false to presume that highly imperfect political processes would necessarily deliver those infrastructure projects most needed to expand Australia's productive capacities.

As election campaigns readily demonstrate, political processes are predominated by an intense rivalry between parties to promise awe-inspiring, monumental infrastructure projects that will win sufficient votes, particularly in marginal seats.

That is, the spatial allocation of capital spending is greatly influenced by non-economic considerations, potentially compromising the economic effectiveness of ensuing infrastructure developments.

Assurances government infrastructure would deliver value for money to taxpayers can also be compromised by on-site labour arrangements, such as bans on non-union subcontracting work, which unduly inflate project costs.  Conflicting underlying objectives, concerning the purposes of spending, could further compromise the economic efficacy of government infrastructure programs.

As the recent expenditure during the 2008-09 global financial crisis had shown, a desire to lay down infrastructure to create jobs, rather than long-term economic value, can lead to a political laxity in economic and fiscal disciplines when selecting which kinds of projects to undertake.

Another complicating factor is the modern political tendency to confound recurrent and capital spending, with numerous recurrent forms of expenditure, such as disability services and industry corporate welfare payments, erroneously labelled as ''investment''.

The risk is that, in the absence of careful vetting disciplines by government, future generations would continue to be effectively forced to repay borrowings for consumption spending enjoyed by those living today.  It is the risks arising from the politicisation of infrastructure development which lumber taxpayers and market participants alike with typically gold-plated capital boondoggles.

Examples of these can be found across the landscape, and include overpriced school halls, desalination plants, regional rail projects, and sports stadiums, or an incomplete and under-subscribed National Broadband Network.

These cautionary words are not to suggest that infrastructure investments should not occur.

Rather, government infrastructure should be developed with the greatest of economic and fiscal care, paying genuine regard to project costs and benefits, and with consideration given to cost-effective and efficient private sector involvement in construction and maintenance.

Given the aggressiveness with which governments of recent past have borrowed, the question should also be asked:  which recurrent spending programs should be pared back to accommodate proposed new capital works in the budget?

The Australian problem is not our sensible aversion to public debt, but our irrational aversion towards eliminating non-essential, and low-value, recurrent public sector activities, that could otherwise make budgetary room for potentially productive infrastructures.

The desire of Abbott to build an infrastructure legacy is politically understandable but, to achieve this, he must avoid the ill-disciplines of borrowing and poor spending decisions which bedevilled the previous administration.

Accountability goes missing in Iraq bank note scandal

In February 1998, John Howard's cabinet agreed to support American military action against Saddam Hussein.  But three months later, in May, officials from Reserve Bank were secretly offering the Iraqi tyrant our unique plastic bank note technology.

This stupefying discovery was contained in the most recent Fairfax and Four Corners investigation, which aired last Monday night.  Yes, the Reserve Bank scandal is worse if you put it in context.

Allegations that Reserve Bank subsidiaries used bribery to secure banknote contracts in foreign countries have been around for years.  But bribery is one thing.  This is something else.  One arm of the Australian government — the central bank, no less — was trying to cut deals with a dictatorship that the rest of the Australian government was preparing to go to war with.

(At least the body at the centre of the last Iraq scandal, the Australian Wheat Board, was a private company.  It did not travel on official passports.  It did not represent the Australian government.)

Even more amazing — it was the Reserve Bank's responsibility to enforce financial sanctions against Iraq.

The Reserve Bank's actions in Iraq reveal a massive, endemic governance problem that goes beyond this scandal to the structure of the Australian regulatory state.

After the 1991 Gulf War and subsequent United Nations embargo, Iraq could no longer import its bank notes from printers in Britain and Russia.  So the Central Bank of Iraq cobbled together its own printing equipment to do the job.  The notes they produced were nicknamed "Saddam" bills — plastered with the tyrant's face, they were easily counterfeited, badly devalued, and so poorly made that the ink ran.

In the late 1990s, the Iraqi central bank started looking around for a supplier to replace its shabby currency outright.  Saddam Hussein was shown polymer notes.  He loved them.  So representatives of the Reserve Bank's printing division popped over to Baghdad to spruik our merchandise.

Its trip had to be secret because, while they were there, 190 Australian troops were on the other side of the Kuwait border waiting for orders to attack.

The United States eventually passed the Iraq Liberation Act, and Bill Clinton ordered a bombing campaign in December that year.

The Reserve Bank is not just one of the most important government agencies.  It is also the premier independent agency.  It has been deliberately separated from the traditional Westminster lines of ministerial control.  It does not take directions from elected representatives.

This governance structure is supposed to eliminate political interference in Reserve Bank decisions.  But it also reduces accountability.

The two Reserve Bank subsidiaries involved in the scandal are even further removed from parliamentary oversight.  Securency, which makes the high-quality plastic film, was a private firm founded in 1996 and 50 per cent owned by the Reserve Bank.  (In damage control, the bank bailed out of Securency earlier this year.)

Note Printing Australia takes Securency's film and produces banknotes and passports.  It was originally a division of the Reserve Bank itself but was corporatised — that is, spun off and converted into a commercial corporation, seeking a market rate of return, but still wholly owned by the central bank.

And when did this corporatisation happen?  July 1998.  That is, while the division secretly had outstanding business with the Ba'athist government of Iraq.

The scandal occurred at the very moment when all the responsible institutions were being granted further independence;  that is, being reformed to be less directly accountable to our elected representatives.

The Reserve Bank itself had just passed a major milestone.  In 1996, Peter Costello released a statement on the conduct of monetary policy which formally confirmed the central bank's independence from government.  This was a big deal.  It had been less than a decade since Paul Keating had bragged he had the Reserve Bank "in my pocket".

While most commentators have focused on the monetary implications of this institutional change, the Iraq scandal shows that the central bank believed it could act independently of Australia's foreign policy as well.

For the last few decades it has been fashionable to praise "independence" as a desirable attribute for regulators, bureaucracies and central banks.

The appeal is obvious.  Politicians are venal creatures.  The further we keep them away from government the better.  The result of bureaucratic independence is — at its best — a technocratic rejection of politics.

But at its worst, independence fosters unaccountable bureaucratic fiefdoms pursuing their own agendas, backed by the full force of government but unconstrained by democratic norms like ministerial responsibility and public accountability.

In other words, exactly what we can see in the Reserve Bank scandal.

In its memo reporting back from the May 1998 Iraq trip, the Reserve Bank officials acknowledged that no banknotes could be delivered to Iraq until the United Nations embargo was lifted.  But "nothing was stopping us to sign a contract and have products (banknotes, machines, etc) manufactured".

You can imagine them patting themselves on the back for such clever, disingenuous reasoning.  The Department of Foreign Affairs and Trade was not as impressed.

So why are we only hearing about all this now?

The investigations so far have made much of the failure of the Australian Securities and Investment Commission to chase down the bribery allegations.  Once again, context makes it worse.

ASIC is one of the big three mega-regulators, along with the ACCC and APRA.  All are blessed with formal independence from government.  And all were being reformed in the early Howard years.

ASIC only gained its current form in (you guessed it) 1998, when it was given a new suite of powers and responsibilities.  It has since gained a reputation for being capricious and draconian.  In its actions against AWB, the judge accused it of bringing justice into disrepute.

Yet it has let this scandal slide.  But don't worry.  According to ASIC, "the public can be completely and utterly confident in ASIC's actions."

We're supposed to take it on faith that one independent government agency has fully investigated possible wrongdoing by another independent government agency.

There is nothing in the Reserve Bank scandal that should make us comfortable with how Australian democracy functions.

Strong political will needed for cheaper housing

Over the past year Melbourne house prices have edged up by over 5 per cent.  This followed rapid price increases in the two decades to 2009 and stable prices over the following three years.

Recent lower interest rates have been a major cause of this year's house price increases by making housing more affordable.  There have been consequent warnings about a property price bubble and even suggestions that the government should lift interest rates to avoid this.

Commonwealth Finance Minister Mathias Cormann has argued against such a rise in interest rates and downplayed fears of a price bubble, arguing that higher prices are self-correcting because they lead to increased supply.

For most products higher prices do indeed bring an increase in supply but this does not hold for housing.  That's because the key price driver for housing is land availability.  And state governments strictly limit the amount of land that might be used for housing around all major Australian cities.  So, interest rate reductions improve housing affordability but the resulting higher prices bring a negligible effect on supply.

We see this in Victoria over the past year, when higher prices actually saw new housing starts down 10 per cent.

The Government induced scarcity of land explains this.  An average newly developed housing block around Melbourne (with roads, water, sewerage etc) costs $211,000, a ninefold increase since 1985.  Without government restrictions on city edge land use, that block would cost under $100,000.  Regulatory-driven scarcity adds $100,000 to $150,000 to costs which the new homeowner must bear.

There is an abundance of developable land on the edge of Melbourne, as with all Australian cities.  Freeing up the regulatory bans on development would see new house-land package costs fall by a quarter.

But the Minister, Matthew Guy, takes his advice from an unholy alliance.  One part comprises property speculators who have approval for their own lots to be developed and don't want to see competition undermining the prices they expect.  In support are greenish busybody "experts" and agitators who want to confine new home building to within existing built-up areas, seldom drawing attention to the fact that less than one per cent of Victoria is urbanised.

The outcome is a squeeze on land availability and an ugly impost on those younger and poorer Victorians who have not got a foot on the housing ladder.

Contrary to its policy promises to lower housing costs and wage a "war on red tape", the Coalition state Government is actually performing worse than its predecessor.  It is approving fewer lots for development and compared with the Bracks/Brumby average annual increase in the Urban Growth Boundary of around 10,000 hectares, the Government last year approved less than 6,000 hectares.

House price rises are welcomed by existing homeowners and by those developers with land approved for housing.  But one man's meat is another man's poison and the high prices hit renters, especially young people.  Unfortunately, these groups are unaware of the tyranny of regulation that is raising their housing costs.  For its part, government prefers to accommodate noisy interest groups than to reduce regulatory barriers that adversely impact on the poor.

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Politics needs more ideology, not less

It says a great deal about modern-day democracy in Australia and America that some politicians now think they can insult another politician by calling them "ideological".  Last week, when Education Minister Christopher Pyne said he would review university funding in Australia, Labor's spokesman, Kim Carr, claimed it was "an ideologically driven exercise in trying to reshape the university system to their [the Coalition's] liking".

On Tuesday in Washington, President Barack Obama accused the Republicans of wanting to shut down the US federal government as part of their "ideological crusade" against his health policies.

Media commentators are getting into the act too.  For example, the newly elected right-leaning members of the Australian Senate are being warned that their "one-eyed ideology" could wreck parliament.

There's nothing complicated or sinister about the definition of ideology.  According to the Oxford Dictionary, an ideology is simply the set of ideas which forms the basis of an economic or political theory.  Those ideas can be good or bad.

Even though Carr and Obama were speaking in very different contexts, they were both doing exactly the same thing — questioning both the content of their opponent's ideology, and also whether it was even legitimate for their opponent to approach the question with any sort of ideology whatsoever.  Taken to its logical conclusion, the consequence of what they were saying is that there's no scope for conservative and liberal politicians to apply their philosophical positions to either university policy in Australia or health policy in the United States.  But ultimately in a democracy, every policy question must be subject to political control from politicians holding an ideological position.

OUT OF TOUCH WITH EVERYDAY PEOPLE

To accuse someone of being ideological is to present them as out of touch from the day-to-day concerns of normal people.  An ideologue is also seen as being outside of the prevailing consensus.  The reason that politicians on the left are so fearful of ideologues on the right is precisely because policy orthodoxy both in Australia and the US is on the centre-left.  It's a strange situation indeed.  On the one hand we're told that our politicians lack ideas and vision, yet as soon as a politician does reveal a philosophical position they're attacked for being ideological.

The double-standard of those like Carr and Obama is obvious.  According to their reasoning, the left is not ideological when it implements its policies.  But the right, when it tries to reverse those policies, is being ideological.  In any case it's difficult to think of a more ideologically-laden statement than that made by Obama in October 2008 when he was a candidate:  "We are five days away from fundamentally transforming the United States of America."

THE OBJECTION IS NOT TO IDEOLOGY ITSELF

There's other things at play as well when politicians talk of their distrust for ideology.  It's not ideology as such that Carr and Obama don't like.  Rather, what they're objecting to is the ideology of a potentially resurgent centre-right political movement.  The reason the Obama administration is having so much trouble managing the Republicans is that for the first time in many years, growing numbers of Republicans in Congress genuinely believe that individuals should have more freedom and government should be smaller.  In the past, Democrats have happily negotiated with Republicans who were happy to merely slow the growth in the size of the welfare state.  Now some Republicans actually want cut the welfare state.

For this and other reasons those Republicans get to be labelled ‘Wacko Birds' by their own side.

Something just as interesting and potentially exciting is happening in Australia.  It's exciting that from July next year two free-market senators in Bob Day from Family First and David Leyonhjelm from the Liberal Democrats will hold part of the balance of power in the upper house.  Just as exciting is the beneficial influence they could have on the Coalition.  An Abbott government that is forced to cut taxes more than it would like in exchange for getting its legislation through the senate is exactly what the ALP, the Greens, and many in the media find so frightening.

What politics in Australia and America needs is more ideology — not less.  A true contest of ideas is preferable to any alternative.

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Who's on first, gay black man or disabled Muslim woman?

If Bill Shorten's pitch for the leadership is any guide, the Labor Party hasn't learned any lessons from the federal election.

Recently the "Bill for Labor" campaign released its "Party.  Policy.  People" manifesto outlining Shorten's case for the worst job in politics.

Mixed among endorsements for his candidacy, Shorten flagged consideration of "quotas for sections of our community that are under-represented in our parliaments, including indigenous Australians and the LGBTI (lesbian, gay, bisexual, transgender and intersex) community".

Progressive ideas may play well in far-left political circles, but they're completely disconnected from the attitudes of average Australians who identify as individuals, not with group identities.

Progressivism isn't about progress.  Progressivism is designed to completely reorient the structures of our society.

Liberal democracy is built on the principle of the dignity of the individual and that society is governed from the citizen up.

Progressivism seeks to achieve equitable outcomes imposed on individuals from the government down.

In that spirit, Shorten's proposal aims to extend to minority identities the 40 per cent quota to preselect women candidates in "winnable" seats.

It is reminiscent of a fad that used to be prevalent in early 2000s far-left university politics.

At events run by the kaleidoscope of left-wing student political factions, "progressive speaking lists" were adopted during discussions to decide the order that participants got to speak.

At any normal function, the speaking order is based on the order that a participant gets to the microphone or puts their hand up.  A progressive speaking list sought to correct any racist, sexist, hetero-normative or any other form of established "ists" and "isms" that ensured minority groups weren't being heard.

In place of a first-come, first-served speaking order, progressive speaking lists applied equity rankings to speakers based on their group identity, so marginalised groups were prioritised depending on the extent of the victimisation.

Women got to speak before men;  gay men before straight men;  but because gay men still benefited from patriarchy, straight and lesbian women spoke before them.

It didn't end there.  Australians who identified as indigenous got to speak before any other ethnic identity and, with the September 11 terrorist attacks being a recent memory, Muslims followed as a recently marginalised group.

But if your ethnic background was Asian, you were essentially classified as white because you'd been sufficiently assimilated and no longer suffered sufficient victimisation.

Unless the progressive speaking list was exhausted, comments from non-marginalised participants were generally capped and always came after marginalised identities even if they'd already spoken.  Problems arose when the compiler of the progressive speaking list had to start weighting speakers.  Who was more important, an indigenous gay man or a heterosexual Muslim woman with a disability?

At the start of the event, attendees voted for an individual or small group to make decisions on the order of the speaking list.

Subsequent no-confidence motions were common as one group felt that they weren't getting an equitable hearing.

Anyone who stood up for a traditional speaking list was denounced for supporting "right-wing notions of free speech" over fair speech.

The spirit of these progressive ideals lives on in Shorten's nutty proposal.

Hopefully it is just a temporary olive branch to the far-left flank of the ALP that thinks the solution to every problem is more government intervention.

But if these are the sorts of ideas gestating within Labor's ranks, it shows the party hasn't learned Australians have rejected this progressive approach.

To win, Labor shouldn't become the progressive party that Paul Howes has been calling for this week.  It needs to reconnect with its labourist conservative cultural and institutional roots.

Shorten's progressive quota proposal for candidates corrodes a founding principle of our contemporary liberal democracy that every one individual is equal.

Instead it imposes a subjective identity ranking based on a movable feast of socially constructed collective rights based on progressive priorities.

It's also a self-reinforcing proposal to constantly seek out victimised groups.

Once gays and lesbians and indigenous Australians have secured their quotas, progressive ideals justify seeking out the next victimised group.

For now, the proposal is only to consider the extension of the ALP's private quota rules.

But it doesn't take long for these proposals to enter the public domain.

The government-funded Australian Human Rights Commission previously promoted the idea of introducing mandatory quotas for women on boards.

As Canadian columnist Mark Steyn argued in 2011, "the minute you have collective rights, you require dramatically enhanced state power to mediate the hierarchy of different victim groups".

As long as the ALP embraces silly progressive ideals, it is distancing itself from average Australians who do not want the government treating them as part of minority groups, unless it is part of the largest minority group of all, as individuals.

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More than just a financial crisis

Five years ago, the United States Congress was debating its $700 billion bank bailout bill.

Lehman Brothers had collapsed a fortnight earlier.  Global share markets were in free fall.  It was a time of panic.

But half a decade onwards it is clear the global financial crisis was a cultural crisis as much as an economic one.  That's only natural.  Assigning events with cosmic moral significance is part of the human condition.

In his famous crisis-era Monthly essay, Kevin Rudd said the economic downturn was so great that we were entering a new epoch in human history.  But Rudd was positively restrained compared to what you heard on talkback radio and newspaper letters pages.

Take this letter, in The Age at the time, in which a professor of medicine speculates that our brains may need rewiring after the crisis.  Meanwhile, this is a good example of the typical hand-wringing column warning of the danger of greed and avarice.

All pretty ridiculous in retrospect.  And all, of course, from the political left.  Perhaps understandably so.  The left's opponents had crowed for three decades that there was no alternative to deregulation and privatisation.  Now those certainties seemed dead.  The political high ground was up for grabs.

Well, for a bit.  The financial crisis quickly morphed into a sovereign debt crisis.  That development somewhat dirtied the otherwise clean political message.  Turns out the societies most damaged by the crisis were not those who had let their markets run rampant but rather those whose governments had been unregulated by the norms of prudence and responsibility.

So much for the revolution.

The crisis has prompted some modest changes in economic policy — the renewed interested in Keynesian demand management, for instance — and has entrenched government deficits into the foreseeable future.  None of these are welcome, but they are reversible.

But it seems likely that the most significant long-term consequence of the Global Financial Crisis is a deeper, more prejudicial popular cynicism about our economic and political institutions.

And rightly so.  The GFC involved multiple institutional failures.  All sides of political economy were found wanting.  Politicians, regulators, central bankers, and markets were all equally corrupt or incompetent.  They all failed in their own special, complex, and opaque ways.

In retrospect, the crises of the 1970s — symbolised by but not limited to Watergate and Vietnam — were less damaging to public confidence than the financial crisis of 2008.  As I pointed out in The Drum last year, polls record higher dissatisfaction with government now than they did then.

Here's some indicative American polling data from Gallup on confidence in institutions, from the presidency to organised labour to banks.  In almost all, there has been a clear long-term decline, a decline which was been exacerbated over the last five years.

Such cynicism inevitably manifests itself in popular culture.  Hollywood has made a business of selling our neuroses back to us.

Yet most movies that directly tackle the crisis have been either forgettable or too heavy handed to succeed — for instance, the completely unnecessary Wall Street sequel.  They tend to suggest that the crisis was caused by the Wall Street lifestyle;  that the long economic slump can be blamed on greed, carelessness, or criminality.

As an exercise in fictional villain creation, this approach is fine.  But it doesn't quite capture the all-encompassing nature of the crisis.

There are just so many villains to go around — not just Wall Street excess, but the politicians who forged the massive bailouts, the ratings agencies, the financial regulators, and the central banks.

(It is interesting that one of the only films ever made which shows financial trading in a positive light — The Pursuit of Happyness with Will Smith — was released at the end of 2006, just months before subprime started to hit.)

More evocative of the crisis was the 2009 George Clooney film Up in the Air.  This film said nothing about the causes of the crash, but instead focused on the economic despair it caused.

Australians tend to call the whole episode the Global Financial Crisis, but in the United States it goes by the prosaic "Subprime Crisis", followed by "the Great Recession".  That different emphasis — from the origins of the crisis to its consequences — explains some of the pessimistic ennui which has enveloped the Western world.

It would be one thing if the 2008 crash had been followed by a strong recovery.  But instead the world has experienced a long, uncertain slump.

Up in the Air depicts an economy battered by anonymous forces that the victims neither see or understand.  Clooney's job is to fire employees one by one.  The recession in Up in the Air could be any recession.  It doesn't matter how it started.  All the sacked workers know is that they have no control over their fate.  The existing institutions have let them down.

It captures, in other words, a sense of institutional estrangement.

Such estrangement, and the cynicism it breeds, will be the long-term legacy of the Global Financial Crisis.

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