Obama a Downer for Australia
Australia's longest serving minister for foreign affairs Alexander Downer tells Business Spectator's Isabelle Oderberg:
Isabelle Oderberg: Are you enjoying watching the US election unfold?
Alexander Downer: Yes. I think it’s a particularly gripping election, a very interesting election, because you have two really, I think, quite excellent candidates. Of course…Candidates never look quite so good as elections wear on and they are subjected to negative campaigns. I think in this case you’ve got two very capable candidates – one fairly conservative, but not very conservative, one fairly liberal in American terms liberal and young and attractive, old and experienced. It’s a very interesting race and of course there’s been the injection of the Sarah Palin factor to give it a touch of excitement… the campaign a touch of excitement. When all is said and done, this has been one of the more interesting presidential election campaigns and it will be well-remembered.
IO: Some are now saying that it’s just a one horse race and Palin and McCain are providing a bit of entertainment, but really the race is run. Would you agree with that?
AD: Well, I think in a circumstance where you’ve got the Republicans having been in office for the last eight years and you have an American economy seemingly plunging into recession in the worst financial crisis there’s been in a generation, it’s hard for the incumbent party to expect to do very well.
What I think is actually quite interesting is how the McCain campaign has held up for as long as it has in the face of these difficulties and that’s a tribute to McCain and I think, to some extent, the sort of Palin factor as well, which at least in the short term was quite effective and helped to energise the Republican base which was otherwise disillusioned and de-energised.
Look, I’ve said ever since Obama was clearly going to win the nomination that it’ll be Obama’s election to lose and it’s hard to see him losing now. Nevertheless, it’s quite interesting that McCain has been as competitive in this environment as he has been. That may of course partly be a function of race politics in America which in this particular election lurks beneath the surface. It’s not much spoken of, but there’s what’s called the Bradley Effect, going back to a governor's election in California many years ago with a guy called Bradley, who’s the Mayor of Los Angeles, who is an African-American was expected by all the pundits and the polls to win the seat easily and ended up by not winning. It was believed that people told the pollsters they’d vote for him, but in fact wouldn’t vote for him because of his race, and there is a question in this election about the Bradley Effect and it may partly explain why Senator McCain’s campaign has been as competitive as it has been in this environment.
IO: If you were going to have a flutter though, would your money still be on Obama to win? I mean that’s what the polls are indicating, but you’ve just sort of suggested that there is some risk to that from underlying factors.
AD: There is. Look, I think as I’ve said for months now this is an election which is Barack Obama and the Democrats to lose. They have everything going their way. It could not be a better environment for them. It’s impossible to imagine a better environment for them.
But if you look at the polls, say at the very latest polls, the range is enormous from I think the largest lead of 14 per cent for Obama to a poll which came out overnight which shows it’s a dead heat – 44 per cent, 43 per cent they define as a dead heat. So I think, look, yes, if you’re a betting person you’d clearly put your money on Obama...But you just don’t quite know what this race, this Bradley Effect, this race factor will do.
I was talking to Jimmy Carter about it a couple of weeks ago when he came and visited Cyprus and so I saw him there and he said he thought it could be worth 3 per cent or 4 per cent, so it’s quite a lot. A friend of mine who was part of the Clinton administration I saw about a month ago in Washington and she said a very similar thing. In fact, what she said was Obama will have to be ahead in the polls by at least 4 per cent on polling day to be sure of winning because of this so called 'Bradley Effect'. It’s not to say I think that McCain is more likely to win than Obama. I don’t. I think Obama will win, but there is this one sort of open question.
IO: If you were American who would you actually be voting for?
AD: Well, I’m not an American so I mean in a sense I can’t put myself in that position. I have a sister who’s American and I think she’s going to vote for Obama, but that’s just my sister. That’s nothing to do with me.
IO: But you almost said then that you would vote for McCain.
AD: I’m an Australian and I don’t have a vote. Now what I would say is this… Who do I personally think, so not whom would I vote for because I don’t have a vote and if I had a vote, my circumstances would be entirely different from what they are so it’s impossible to say, but I’ll say this… On the basis of policy positions, there’s no doubt in my mind that McCain is the better option for Australia.
The reason I think that is that he is more free trade and therefore that’s good for us because we want America to be a free trading country. I think in the early years of an Obama administration, he could be reasonably protectionist. I think that will be bad for the Doha Round in so far as if there’s any chance of revitalising it. I also think this is the last time in history you want to have a protectionist administration.
This is a time to get the Doha Round concluded to boost international economic and financial confidence, not start introducing protectionist measures. You know what happened during the Great Depression and the Americans introduced the Smoot-Hawley Legislation, so compounding what was already a very difficult international economic environment, well it was a disastrous international economic environment, but compounding it was the introduction of protectionism in the United States economy and but Obama’s not going to do that sort of thing. It’s not going to be as radical as that. You don’t have worry to that extent. His instincts are much more protectionist and it’s in the interests of Australia and it’s in the interests of the world for international trade liberalisation to try it and prosper it this time. It’s terribly important.
IO: How do you respond to allegations that the Republicans got the US, and to some extent the rest of the world, embroiled in this major financial crisis?
AD: Oh, I think it’s outrageous to blame – I think it’s appropriate to partially blame them – but I think it’s outrageous to just blame the Republicans. I think the Democrats should hang their heads in shame because this crisis was started by the collapse of the subprime market and the reason a subprime market developed as it did was because the Clinton Administration, well it actually started with the Carter administration, but in a very mild way. The Clinton Administration with the support of the Congress, so with the support of both parties by the way although not all people in both parties, but with the support of many people in both parties, required American banks to lend to low income Americans. Banks did not want to lend to these people, but the Clinton administration required them to do that, to lend money to people who clearly could not afford the loans according to the judgement of the banks. So having made people do it, made the banks rather lend to people who were a higher risk and that’s what the American government and the Congress did, then in comes the Bush administration and it did absolutely nothing about it at all for seven and a half years and that’s where the Bush Administration is culpable. But it’s the Democrats who introduced the legislation in the first place and…there’s no getting away from this. The Democrats have got as much to answer for as the Republicans have in this case.
IO: Given your own foreign policy experience, I’m just wondering whether you find Obama’s lack of experience in that sort of sector a little bit scary?
AD: No, I don’t actually. This argument that you should always have somebody with experience is an argument for never changing the government. [Laughs] I remember Gareth Evans when I was the shadow minister for foreign affairs making this argument that they shouldn’t vote for the Liberals because we didn’t have experience. Well, in other words, always vote for them. He could be the foreign minister for life. No, that isn’t a good argument. I actually think that the argument is an argument about policies, not about whether they have experience.
IO: I’m going to change tack slightly now and just come back to home soil. I’m just wondering if I could get your impressions of Malcolm Turnbull as party leader.
AD: Well let me declare a conflict of interest here. Malcolm Turnbull’s was an old friend of mine, but you know I got on very well with Brendan Nelson, worked with him for years and years and years and day by day, so I know all these people incredibly well. I think he’s started off brilliantly as the opposition leader.
This is an environment, the current financial environment, which in the medium term is going to cause the government an enormous amount of pain and political grief. But in the short term, should be a bit of a winner for them, there’s no doubt about that. The government seems to be responding decisively to a difficult environment and all that sort of blah.
As you can see with the British government, any government should be able to make itself look reasonably good in the short term. But actually Malcolm Turnbull has caused them absolute agony by his focus over the last couple on their making policy on the run without giving it due consideration, that is the deposit guarantee, the unlimited deposit guarantee and has put the government in actually a very difficult political situation.
The other thing is these are issues he knows about. He knows these issues backwards. So you have Kevin Rudd who’s a career diplomat, so he’s a foreign policy expert who knows very little about economics and money and finance and the same can be said for Wayne Swan. He doesn’t know much about it either and they look like it. Malcolm Turnbull’s made them look like it. So I think he’s got off to an extraordinarily strong start. I wouldn’t rule out, as most people would, the Liberals having just gone into Opposition less than a year ago, I wouldn’t rule out Malcolm Turnbull winning the next election.
IO: You think that’s a possibility?
AD: I do. I do think it’s a possibility. I would not rule it out. I think he is an extraordinarily strong candidate. I mean you know what people say about Malcolm Turnbull? 'Oh, he’s so ambitious'. Well, my own eye, fancy the Prime Minister or the leader of the opposition being ambitious?! [Laughter] Imagine if you had a Prime Minister who wasn’t ambitious! How bad would that be for our whole country? But yes, he is very ambitious. He is very ambitious and he is very, very determined. I tell you this guy is very determined.
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