June 24th, 2010
01:16 AM GMT
(CNN) – Kevin Rudd’s sudden loss of his own party’s backing as Prime Minister of Australia seems to fly in the face of conventional wisdom that has ruled politics since Bill Clinton successfully stumped for U.S. president in 1992 on the back of this slogan: It’s the economy, stupid.
In the midst of the storm clouds that have surrounded the global economy during the “Great Recession,” the Australian economy has been a ray of light.
Australia never fell into recession. Rudd was widely credited for successfully steering the nation through the credit crisis, thanks in no small part to its commodities-rich trade with China and other emerging economies.
As recently as six months ago, CNN’s Stan Grant reports, Rudd enjoyed record approval ratings for a sitting prime minister.
Two major culprits, both of which have a deep impact on business in Australia: The failure of his emissions trading proposal – which would have introduced tougher cap and trade policies for industrial polluters – and a 40 percent “supertax” planned on mining companies.
A once passionate advocate of reducing global emissions, his softening on the issue upset his environmental base. His support of mining taxes, naturally, upset the nation’s powerful mining interests (at the close of trading in New York, shares of both Rio Tinto and BHP Billiton were up more than 2 percent on the news of a possible leadership shakeup).
Rudd’s inability to steer these two measures created doubt within his own Labor Party that he could successfully lead them to victory in upcoming elections.
Moreover, it appears Rudd alienated the supporters closest too him, who saw him as controlling and mercurial in his leadership style.
Which goes to show that its not always “the economy, stupid,” when it comes to politics. Instead it appears Rudd forgot that other maxim of politics, coined by former U.S. Speaker of the House Thomas “Tip” O’Neill: All politics is local.
It’s a lesson for executives, too: If you don’t have the support of those around you, you don’t have any support at all.
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