Someone Forgot To Tell Australia About Regulatory Uncertainty

Australia, as you may have heard, is an English-speaking settler state where a new center-left government took office in early 2008 with an ambitious agenda of progressive reform. But both under Kevin Rudd and under Julia Gillard, the governments in question have had trouble in practice getting a legislative agenda through the veto points and hurdles of the system. How it’s played out in detail is quite different, but in an abstract sense, Australia is not on some wildly different social or public policy trajectory in the United States. And yet as Karl Smith points out, the Australians keep seeming to be forgetting that regulatory uncertainty and/or bad luck from Europe make it impossible for a high productivity society with a growing population to continue to increase its output:

A closely-watched measure of Australian consumer confidence rebounded strongly in September as lessening fears of a hike in interest rates and better news on the economy helped offset turmoil on global markets. […]

“This is a surprisingly strong result,” said Westpac chief economist Bill Evans.

He thought it likely that diminished fears of a rise in rates from the Reserve Bank of Australia (RBA) may have helped sentiment. The central bank made it clear last week that it was best for policy to stay on hold while markets were so volatile.

What? What? It reminds me of, I dunno, 1997 and 1998 when “bad stuff” would happen in the world (Russian default, hedge fund wackiness, blah blah) and policymakers in the United States of America had a firm conviction that “lets have several million additional people sitting on the couch, unemployed and depressed” wasn’t going to make things any better. They of course could have chosen to let the economy fall into a deep depression and then said, “look we didn’t make this depression, it’s the banking crisis in Asia and market turmoil prompted by Russian default. Also Chiapas. Go blame Subcommandante Marcos.”


Is there some conservative explanation of why there’s less regulatory uncertainty in Australia than in the United States?