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Yes it's me again, your Australian friend. In the light of the latest financial turmoil over the past few weeks, perhaps it's now time to examine the issue that I believe will define the election.

In the 1992, the slogan "It's the Economy, Stupid" became a mantra in the Clinton campaign. In 2008, I think we need to make an adjustment to our mantra. Why? Because across the western world, we are feeling a sense of disconnect between what our government is telling us about the economy, and what we are feeling. Despite GDP growth, and only moderate rises in unemployment, people are hurting badly. And it can be summed up in a three word phrase.

What phrase am I talking about?

In 2007, we in Australia booted out our conservative Prime Minister, even though the "fundamentals of the economy" were still, at that stage, strong. Or at least, the government had thought they were. The Conservative government at the time had a very strong reputation for economic management, which lasted right until election day. And yet, they lost spectacularly. Why? Common political wisdom dictates that, if the economy is strong, the Government usually does not change. And yet, it did. After they lost, Conservative political commentators were stumped. But back in the suburbs, the electorate knew why the government changed. The signs were there much earlier.

I was watching Sky News one day in August 2007, a few months before the Australian election began. Sky News had flown in Frank Luntz, who is currently a Focus Group pollster on Fox News, and former adviser to Newt Gingrich. You may not like Frank Luntz, and I don't, but he is actually quite astute. He has done focus group polling around the world, and has written extensively about political language. And in the focus group poll he ran during the Australian election, something came up that at first seemed innocuous, but in reality proved to be the most decisive factor of all.

Frank Luntz asked the audience of about twenty-five people which party was better on the question of "economic management". A majority of the audience picked the incumbent Conservative party. No surprise. That answer remains the case even after the election. But then... Frank approached the question from a very different perspective:

Frank asked the audience who they believed would be better on the "Cost of Living". And this time, more people put their hands up for the opposition Labor Party! By accident, he had stumbled on the three word phrase that defined the election.


That's it! And really, it encapsulated everything that the Labor party was campaigning on, and what people were feeling. Why? Because that phrase more accurately describes people's experience of current economic circumstances. Although the economy still grows, the vast majority of people are finding their own personal economic circumstances more difficult. The phrase "strong economy" has become quite separated from people's experience of the economy - the "Cost of Living". That's why, when the question was framed differently, the reaction was so different. This is extremely important.

In March 2007, the Conservative Prime Minister, John Howard, made a statement to parliament that "Working Families in Australia had never been better off". (Sound familiar?) It was quite a bold statement to make, but one Howard felt confident making, since the economic performance of the nation as a a whole was strong. But quietly, people were hurting. Mortgage interest Rates had gone up. Gas Prices had gone up. Utility prices had gone up because of drought. New workplace laws had been passed in 2006 stripping away conditions at work like overtime pay, holiday pay, leave rights, penalty rates, and a number of other measures.  

All of these things had contributed to a sense of malaise within the populace that the incumbent government never detected until it was too late. The government was too busy looking at their huge Budget Surplus, at the then-strong jobs growth, and at the strong macroeconomic growth performance of the government. They were too star-struck by their broader performance to notice that people were slowly being strangled by the rising cost of... well, everything. The fact they didn't notice is not a mistake. Why? Because it forms part of their conservative ideology. Cold, calculating, out of touch, user-pays, corporate cronyism. There are very legitimate ideological reasons why John McCain says that "the fundamentals of the economy are now strong", or why John Howard said that "working families have never been better off". These motherfuckers ACTUALLY BELIEVE WHAT THEY ARE SAYING ABOUT HOW STRONG THE ECONOMY IS. They just don't get it!

I look at America today, and I see exactly the same set of economic circumstances. Add to that the rising cost of health care, and the fact that many people don't have it, as well as the rising cost of College. The Sub-prime mortgage crisis has led to incredible collapses on wall street, with home foreclosures up, taxpayers money being used to bail out all sorts of failed companies, and jobs moving overseas.

These are not accidents. These are deliberate consequences of current Republican Party ideology. Cut regulation, let Wall Street gorge itself until it "gets drunk", give tax cuts to massive corporations and wealthy income earners, and watch as the National growth rates soar. Meanwhile, in the real world, people struggle to pay higher costs for everything.  

Make no mistake. These issues will be front and centre at this election. Barack Obama needs to fine tune his campaign message. Kevin Rudd promised assistance to families on cost-of-living pressures, and he won. Obama needs to tell exactly what those cost of living pressures are and what he will do to fix them. And he needs to put dollar signs on them. Bill Clinton was an absolute master at this. It's not enough to say you're going to cut taxes for 95% of Americans... how much more money do those 95% of Americans get? 500 bucks? 1000 bucks a year?

How much is Obama's plan going to save you on health care? What will the price of gas be under his presidency? How much will groceries cost? These are often tricky to answer honestly, but he needs to start doing it. I think you will find that when he starts doing so, he will start to get lots of traction. Why? Because these are the cost of living pressures that have been effecting everyone. These are the real issues. People are looking for a break.

They also need to be more aggressive. The McCain campaign has said some absolute clangers over the past few months. Like the "nation of whiners" line. And McCain continuing to say that "The Fundamentals of the economy are strong". In 2007, The Labor Party picked up on Howard's stupid statement about people being "never better off", and they ran it in all their campaign ads on TV, radio and the Internet. They even put it on gigantic Freeway billboards in the swing voting areas with Howard's picture next to it, to make it look like a Conservative part advertisement. If the Obama campaign was smart, they would do the same thing.

COST OF LIVING. Remember those words. And somebody have a quick word to the Obama campaign about it.

Originally posted to MooingChoir on Fri Sep 19, 2008 at 12:21 AM PDT.

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