America and Australia tell a tale of two pandemics, and their political outcomes

On Friday, one of the biggest stories in Australia was the possible cancellation of New Year’s Eve fireworks in Sydney, as the result of a stand-off between the rail union and the government.

Meanwhile, in America, the headlines were about an approaching government shutdown. Such shutdowns are not that rare, but the events that threatened to create one this time were. Essentially, there was a bipartisan deal to prevent a shutdown – until Elon Musk decided he wanted to kill it. By The New York Times’ count, the world’s richest man then proceeded to post over 150 times on his social media site, X. During all this, the Times reported, Musk met with President-elect Donald Trump and Amazon co-chair Jeff Bezos, the world’s second-richest man, for dinner. The next day, Republicans did what Musk, and then Trump, had asked them to do; then a bill Trump backed failed, too. Ultimately, a bill passed, and the shutdown was avoided.

Artwork: Joe BenkeCredit:

Australians, you sense, are paying far less attention to American politics than they were before November. Still, this was a hint of the large contrasts that might open up over coming months between the two political systems Australians watch most closely. And we may tune in again.

It was a reminder, too, of the dramatically different impacts the pandemic has had in different places. In the United States, it seems to have exacerbated consequential trends that were already under way. These trends, intersecting with the specific person of Trump, have birthed an extended political soap opera.

In Australia, meanwhile, the most visible lingering impact of the pandemic is inflation: significant – painful for many – but also drawn-out, bordering on tedious. Not so much an explosive existential political battle as an uneventful war of attrition.

Last week, the Productivity Commission pointed to another gap between America and Australia. In the US, since the pandemic, productivity has “surged ahead”; here, it has “stagnated”. About this, the commission had several interesting things to say – including the fact the gap is “not as big as it seems”.

Still, the gap exists, and this brings us to another interesting thing. It turns out one reason may be the lingering impact of the pandemic. Measures like JobKeeper, put in place by the Morrison government to support workers, at first increased productivity, the commission suggests, by keeping productive businesses alive in a difficult time.

But as time went on, less productive businesses also stayed open longer, allowing workers to remain in those businesses. In the US, meanwhile, more workers lost their jobs – which meant they had to look for jobs in the surviving, productive businesses.

But the Productivity Commission had things to say about more recent causes, too – Australia’s experience under the Albanese government. When it comes to jobs, Australia is doing better than the US. The short-term impact is that we have more “younger, less experienced and less educated” workers employed. Is that good or bad? It’s not great for short-term productivity because it takes time for those workers to develop skills. But “ultimately, more Australians in jobs is a good news story. And as these new workers gain experience, their effect on aggregate productivity should also improve”.

Turn right: Some are asking if Elon Musk (right) will be Donald Trump’s “co-president”.Credit: AP

This should remind us of three obvious but important facts. The first, which the commission explicitly points to, is that government policies often have both pros and cons: they involve trade-offs of some sort. Second, those trade-offs often become clear only over time, which means it can be very hard to judge a policy’s overall effectiveness in the short term. Third, we often ignore this, for the simple reason that the news media has an inherent interest in what is new. This means we are all more likely to learn about short-term effects (even if they’re small and trivial) than about long-term effects (even if they’re large and important).

And keeping all that in mind, it is hard not to wonder whether all the debates that have consumed so much time this term – over whether government spending has kept inflation a little higher for a little longer, say, or over the impact of rejigging income tax cuts – will add up to much by the time we are in a position to spot the larger patterns.

What larger patterns? Well, for example, in the lead-up to the US election, there was much debate over whether Americans, who felt they had become worse off, really were worse off; and if not, why they felt that way. But after Trump’s victory, I was struck by the analysis of the progressive, Ben Davis, who argued that at the height of the pandemic, “Americans briefly experienced the freedom of social democracy”, with an “expanded welfare state”. Despite Biden’s achievements, “the material reality is that when Trump left office, this safety net existed, and by the time of the 2024 election, it had evaporated”. In other words, a dramatic shift, experienced widely, overshadowed all the smaller shifts that had obsessed the political class.

And so while it remains possible that small domestic nuances will affect the federal election, it is just as likely that two dramatic contrasts will have a huge impact. The first is with whatever is happening in America, and how that makes us feel about our own politicians: whether, say, this stirs desire for a strongman who can go toe-to-toe with Trump, or reminds us of the simple pleasures of living in an ordinary country where cancelled fireworks count as a national disaster.

But then, this assumes the most important contrast is between Labor and the Coalition, when in fact it may be the contrast between major parties and the rest. And here we come to the question of how much pandemic times still linger, with all the things we learned not quite forgotten: the difference between owning and renting, large homes and small, good employers and bad, hope and its absence. Which politicians can show that they, too, remember the larger patterns we all saw then?

Sean Kelly is an author, a regular columnist and a former adviser to Julia Gillard and Kevin Rudd.

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