Topic: aust govt
There was a big explosion at the Hells Angels clubhouse last night in the next suburb which we understand to be in Crystal St Petersham. Just around the corner eastward is a tattoo parlour Platinum Ink which has been shot up a bit too. Further east other side of the road is House of Pain tattoo parlour not involved. In the other direction a few blocks south along Crystal St is the Oxford Tavern on the corner with Stanmore Rd, a late night strip joint.
So much for pleasure and pain. So much for Gimme Shelter about the Hells Angels stalking The Stones in the 1970ies. The explosion somehow echoes the drama of a $42 billion economic package in all the reportage this morning. In a way PM Rudd is blowing up orthodox politics as we know it with all the risk and uncertainty and opportunity that involves.
Here are our main points of meta analysis working off the Big Media as a non economist but also as an acute (we hope) observer (eg a business law degree etc):
1. We can't really get a full sense without viewing former PM Keating on Lateline last Monday and Costello as ex Treasurer last night same show. But with the caveat of reading both down for their intense political self interest, not least over ownership of economic history;
2. Like Mickey Mouse and his 3 helpers pictured above we are in a bit of ALP media choreography today. Tanner is everywhere as Finance Minister, even Parliamentary & News Network live at 7.30 am. Rudd's statement to the nation at 6.55 pm last night on national radio, reprinted in The Oz today, long interview 7.30 Report with nasal cold last night. Swan as Treasurer less prominent here but busy on AM (transcript in due course 4 Feb 09), Chris Bowen Assistant Treasurer taking callers after 8.30 am on local abc;
3. Costello is referring to ex PM Whitlam-esque deficits as reckless, similar to the oil shocks chapter of political history early 70ies. There is partial resonance to the claim but maybe more to do with Gough's famous and brave 'crash or crash through' seizing of the leadership and election victory, rather than the deficits as such. A bravery that perhaps Costello never had;
4. Yesterday Stephen Mayne made a flippant claim via Crikey.com.au ezine that Rudd was making a diversion on the scandal of Stanley Ho Chinese gambling mogul of Macau funnelling half a million dollars into the NSW ALP and trying it on at federal level too.
However we think there is partial truth in Mayne's gripe - Rudd is at risk like the literary character Gulliver of being staked down by many little issues in the land of Lilliput;
- Ho's donations
- a vibe that Rudd was never elected on a platform of economic crisis management more as conservative rich man success in boom times
- unconditional backing in January byPM Rudd of a demonstrably racist murderous element in the Israeli Defence Force (eg page 1 expose' by John Lyons in the last The Weekend Australian)
- often argued NSW union puppeteering of Rudd's ascension with the in turn ascension of union leader John Robertson to NSW Parliament preventing the huge energy privatisation agenda of big business
- recent data of collapsing trading destinations with 4 year profile of increasing deficits perhaps the thickest cord on him of all by late Monday 2nd Feb 2009;
- Harvey Norman sledging stimulus mark I as failing to prevent big retail closures;
- probably other issues of individual nuisance value 'in due season' (!) but all taken together quite threatening to Rudd's status and leadership
Gulliver has broken the threads and strode forward with this giant stimulus mark II package. But will it work?
5. Rudd seems to be wise to the very real one term wonder risk - he's been doing gym work apparently. We suspect his wifey too has been trying to shed a fair degree of the pear. He's been re-writing the philosophical thrust of the government in his Monthly piece to accommodate the global market failure aka GFC. That probably does reveal leadership and a grip on reality. Will it work? We suspect it's building a bridge to an economic growth paradigm that no longer works and where modern western politics is broken.
6. Earlier this week we commented on the Bernard Keane Crikey ezine string about lack of govt economic plans to 'de-leverage debt' and need for 'green infrastructure' and 'quiet peaceful multi occupancy residential':
Where is the plan for staggered de-leveraging from high debt, programmes for low cost self reliance including:
- home food production,
- transport self help with free bicycle repair warehouses,
- models for quiet peaceful multi occupancy residential,
- national roll out of green collar jobs in the energy sector,
- personnel diplomacy in foreign lands via teachers, doctors, tradespeople.Looks like our instinct was good in parts. Here is some reportage today:
But the insulation in every home policy, as welcome as it is, could well play like the cynical NSW ALP free green light globes programme in 2006-2007 in Sydney in marginal seats, unless it is administered with integrity. More expensive vote buying to be sure at $1,500 a house. Or is it?
7. As we write Opposition Leader Turnbull is speaking in parliament, contradicting Michelle Grattan's view earlier on ABC RN about their silence being "very very odd indeed". Wrong in part because Joe Hockey was on 7 Sunrise contemporaneously rebuffing the Rudd railroad. Senator Brown too literally 10 minutes later to same Fran Kelly show saying taking more time is valid.
Brissenden on local abc cross after 9 am echoed Grattan that no formal Opposition response was a weak position. This was a bit surreal. Why would they respond so quickly to a $42 billion package? We are in budget in reply type dynamic here which takes real time. And the Govt are impertinent to suggest otherwise.
Even so, Turnbull has told Parliament he is not supporting a rail road and thus demanding real time to analyse the Bills. Given he is seen as vindicated on the differential bank deposit argument we tend to agree Parliamentary democracy should play a serious role not ALP executive govt alone. Alan Ramsey made the same point late 2008 and we agree if parliamentary democracy means anything:
Extreme times coming to a TV near you - Alan Ramsey - Opinion ... Sydney Morning Herald. October 18, 2008 The Rudd Government this week 'dealt' with the gravest 'global financial crisis' since ... Depression of the 1930s by ignoring Parliament, writes Alan Ramsey.
8. What we are seeing surely is as much a thoughtful policy response as a Rudd leadership political survival emergency measure. As Kerry OBrien asked PM Rudd last night - why the tub thump urgency vibe, which just scares people? The vox pop interviews running earlier today have average Joe and Mary wavering in their choice to spend or save the new largesse. But in a real pump priming economic emergency there is no choice but to spend. Which all suggests there is no real emergency as such. Not yet at least.
9. Our view at 8 on relative urgency is reinforced by Turnbull, a patriotic Australian no doubt, on 7.30 last Monday night with a steely confidence the government was in real trouble with the data indicating major deficits of $115 billion over 4 years (due to trading partners exit from the market). Up from $50 billion deficit in a day. That's a siren song to a Coalition re-election after a one term Rudd Govt. But Turnbull's confidence still implies Australia will muddle through and be repairable and worth governing next election despite those deficits.
On the other hand Rudd's giant package is a political railroad fanning insecurity to leverage incumbency as the champions of economic security. Much like Howard leveraged incumbency on security from terrorism. Trouble is the current govt package by it's nature has arguable merit.
10. Indeed the tardiness of the Rudd Govt in being honest last year tells the story: Failure to admit deficit profile late November 08 (as per Kerry Ann Walsh on Insiders: 30/11/2008 Panel discuss Govt spending). Similarly the last show 08 of Alan Kohler Inside Business to 'don't believe the government, there will be a recession' : 2008 an extraodinary year in finance "Alan Kohler gives a final summary of what happened in finance in 2008". The Govt lacks integrity to some degree in leveling with the people in a timely way. Not that the Opposition can be trusted on face value either.
11. The 25 minutes phone call between Rudd and POTUS Obama a week back reinforces this huge package is intended by Rudd and ALP to be in synchrony with the new Obama regime where 'capitalism is broken'. Davies in the SMH today expands that US scheduling there: (I have three years to fix economy: Obama - World - smh.com.au). The Republican Opposition are decidedly cold on that giant US stimulus too.
12. Indeed Peter Hartcher today and economics editor Gittins both smart guys in the SMH, with Lenore Taylor in The Oz, are all today referring in effect to a kind of Back to the Future 3 movie script where the Rudd Govt build a bridge to somewhere that no-one even knows exists: For the choo choo train to miraculously traverse the economic canyon in the nick of time by the magical creation of railway tracks using a time machine. Too bad if there is no other side to the canyon, because it's a long way down in terms of debt. We just don't know where and when this 'private sector recovery' or 'capitalism recuperating' and 'generating economic growth' is likely to happen. Gittins indeed has the honesty to ask "how temporary" is this deficit model? Not very short would be our view. At least 4 years.
13. To answer the question in 12 means knowing and understanding what caused the Gobal Financial Crisis today. But who really does? There is alot of loose talk about "greed", or as Obama refers to "a deficit of trust". Again we refer to late 2008 Inside Business:
"HAMISH DOUGLASS: It actually was something else Alan. What happened three days later, there was a very large money market fund in the United States, the Primary Reserve Fund, it's actually the largest money market fund, it's the oldest money market fund in the US. And believe it or not they held $800 million worth of Lehman Brothers senior debt and commercial paper. And on that Wednesday this made an announcement they held this paper and they were going to write down the net asset value of their money market fund below one dollar.
ALAN KOHLER: And that was because of Lehman Brothers?
HAMISH DOUGLASS: That was because of Lehman Brothers. This was the unintended consequences of the collapse. What then happened, they made a secondary part of the announcement, they were going to freeze redemptions in that fund. Well this set off a whole set of dominos around the world." In Hamish Douglass and Alan Oster join Inside Business 7 Dec 2008But we suspect systemic causes underlie proximate ones, perhaps like advent of the internet, collapse of religious belief in economic growth, record immigration to prop up consumption models, unsustainable population growth globally, and ecological unravel in most metrics.
14. One thing is for sure the Opposition can't say the Govt are not making real decisions anymore. Also that the ALP are indeed the mummy party in orthodox analysis.
