Episodes Economics Politics

#58: When The Sky Fell In – Kevin Rudd

2 min read
#58: When The Sky Fell In – Kevin Rudd

Joe speaks with the 26th Prime Minister of Australia, Kevin Rudd. Kevin led Australia from December 2007 to June 2010 and again in 2013. His government’s fiscal stimulus package enabled Australia to avoid technical recession during the 2007-09 Global Recession. Only three other advanced economies achieved this feat (Poland, Slovakia and South Korea). Kevin also played a key role in forming the G20 and coordinating its global response to the financial crisis. Kevin is fluent in Mandarin and is internationally regarded as a China expert. He is currently the inaugural President of the Asia Society Policy Institute in New York.

Joe caught up with Kevin to learn about the edge-of-your-seat discussions in the Australian government about whether to guarantee domestic banks on the weekend of 11-12 October 2008, worth a cool $2.5 Trillion, while the sky was falling in around the rest of the world. He also presses Kevin on the decision to introduce a temporary First Home Buyers’ Boost, which resuscitated a flagging housing market, potentially leaving a time-bomb for a future government.

Show notes

Selected links

Topics discussed

  • What is Kevin’s theory on speechwriting? [3:05]
  • Kevin’s story about writing the ‘Sorry speech’. [8:15]
  • Why Kevin needed to guarantee Australia’s banks during the global financial crisis. [9:48]
  • How the Australian government had begun preparing contingency plans for the GFC in February 2008 – months ahead of the 15 September collapse of Lehman Brothers. [13:56]
  • What was the atmosphere in the decision-making room on the weekend of 11-12 October when the Australian government was contemplating a run on the banks the following Monday? [17:35]
  • Kevin’s 10,000-word Monthly essay on the GFC and its central thesis. [19:51]
  • Are markets efficient and can we predict bubbles? [25:12]
  • Does Australia have a housing bubble? [30:12]
  • Did Kevin re-inflate the Australian housing bubble? [38:44]
  • Is Kevin worried about Australia’s economy at this moment? [42:50]
  • Has Kevin forgiven Julia Gillard for ousting him as Prime Minister? [45:22]
  • What is ‘forgiveness’? [45:59]
  • Why do great powers go to war and can China and the US avoid the same trap? [48:12]