There are no good guys in the fuss over "unofficial" rises in mortgage interest rates. Each of the players is on the make: the greedy banks, the self-pitying punters, the commercially driven media and the insincere pollies.
The banks have happily used the global financial crisis to gain advantage over their non-bank competitors and enhance their pricing power - though we've yet to discover the extent to which the big four exploit that power in this episode.
It is, of course, "rational" for the banks to want to stamp out competition and to exploit whatever special advantages they gain from the government's need to protect the public from instability in the banking system. But that doesn't mean we have to condone or put up with such behaviour.
The media, as usual, are bringing far more heat than light to the affair. They're playing it for all it's worth, fanning the punters' uncomprehending self-pity for commercial advantage without any real desire to help them understand the wider issues or even help them deal with their problem.
And it's hard to feel any sympathy for Wayne Swan and the Rudd/Gillard government. It's been facing the issue of unofficial rate rises virtually since its election in November 2007, but it still hasn't reached an effective strategy for dealing with it.
Throughout its life the government has exhibited three related deficiencies: a lack of values, a lack of courage and a lack of skill in managing its relations with the electorate.
Labor's approach to unofficial rate rises - like its approach to executive salaries and "the cost of living" - has been dominated by focus group-driven insincerity. There's been a lot of "I feel your pain" and "I share your outrage" rhetoric without any great intention to take effective action.
What Labor has yet to realise is that this is a good tactic for oppositions - just ask Joe Hockey - but a bad one for governments. Pretty soon the punters say the obvious: if you're so concerned, what are you doing about it? When you've been in power for three years, they say what have you done about it?
Answer: nothing that's made any difference. There are two reasons for the lack of effective action on unofficial rate rises (and executive pay and the cost of living): you don't want to do the obvious and intervene directly because you know the side-effects might be worse than the decease, and you lack the courage to do anything - sensible or otherwise - that might annoy powerful interests involved.
A big part of Labor amateurism in media management - spin, if you like - is the way so much of what it says in the media is directed at attacking the opposition. A more experienced leadership would understand that the best way to neutralise your opponents is to ignore them.
The government's unceasing response to whatever the opposition is saying gives those opinions legitimacy and more media attention than they'd otherwise get. When Swan and Julia Gillard falsely accuse the Libs of wanting to re-regulate interest rates and refix the exchange rate, they richly deserve what they've ended up with: Hockey looking like the only person with a sensible policy.
Arguing the toss with the opposition not only fails to convince the punters, it also crowds out what the government should be doing: educating the public on the complexities of the issue and on individuals' responsibility for fixing their own problems (as does all the fake I-feel-your-pain/outrage rhetoric).
All this reinforces the mistaken notion that every problem can be and should be solved by the government. At least Penny Wong has had the gumption to tell whingeing punters they should bargain with their bank manager.
One small problem with the I-share-your-outrage approach is that, thanks to the global financial crisis, at various points the banks have been justified in varying their mortgage rates differently from the official interest rate.
So the government's been right to focus its policy response on acting to enhance competition between the banks by reducing the barriers facing people wanting to move their deposit accounts or mortgages.
The problem has been the utter ineffectiveness of these efforts to date, which demonstrates the government's insincerity, its lack of genuine belief in market forces and its fear of offending the powerful banking interests.
If Labor was genuine in its economic rationalism - instead of just pretending because it's a politically convenient position for a supposedly left-of-centre government - it would have the courage to make pro-competitive interventions despite the banks' objections.
That's what we need: imposition of measures - maybe portable bank account numbers - to facilitate account-switching and legislative restrictions on unreasonable exit fees, an end to St George-like takeovers, proper pricing of government guarantees and probably restrictions on the banks' overseas adventurism (which has almost always ended in tears).
If Labor really understood and believed in market forces, it would understand that banking is (necessarily) far from a free market and that the government's extensive protection of the banks both justifies and necessitates carefully considered countervailing interventions to enhance competition and also limit the banks' moral-hazard temptation to have Australian taxpayers indirectly underwrite their foreign adventures.
After years of Labor faking it, the punters and the rabid end of the media have called its bluff: do something effective to curb the banks' market power or be judged a waste of space. We'll see if it can summon the courage.
