Economic slowdown will be music to Turnbull’s ears
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Finally, the numbers go Malcolm Turnbull’s way. For months the Opposition has been attacking the Government’s first stimulus package, which it (in hindsight, foolishly) initially supported, on the basis that it had no effect. Without evidence, the argument could have gone either way. But bit by bit, the data dripped in, showing a surge in retail and construction generated by the December handouts and the First Home Owners’ Grant boost. The Opposition tried to spin and twist the figures but they were increasingly clear. As late as yesterday, Turnbull was still at it, saying “there is no evidence that the stimulus package, the cash splash from December, has had any positive effect beyond a slight increase in retail sales”. He was beginning to look silly. Now, though, he has a basis for his argument that the Government’s efforts to stimulate the economy aren’t working. He can point to the cold hard fact that the economy shrank by 0.5% in one quarter. It would have shrunk even more if not for a strong farm performance. The Government has a number of responses. For a start, the “cash splash” as the Opposition insists on terming it didn’t arrive until mid-December, near the end of the quarter. The validity of that argument will be tested three months from now when we get the March quarter figures. It can also argue that it would have been worse but for the stimulus package. It can point to the fact that the main reason for the decline is the fall in inventories. Moreover, unemployment is yet to really rise significantly; however bad the economy might be, most employers appear to be hanging on to their workers. And of course, an annualised contraction of 2% is the sort of number the Americans, the Japanese and the Europeans would kill for. All fair points. But none of that level of detail will cut through. Turnbull only has to say “-0.5%”. The Government has been adept at talking directly to voters, cutting through the political and media chatter. Rudd specialises in it. Malcolm Turnbull and the Coalition have focussed on political games and point-scoring that might work in Parliament but have no cut-through to voters. Worse, they have allowed Rudd to craft the public perception of them as irresponsible opportunists and right-wing radicals. -0.5% now gives Turnbull some cut-through of his own. The figure will resound with voters, and probably cause a further collapse in confidence. Those who criticised the fixation on whether the number was negative or positive as Micawberish — basically, Terry McCrann — miss the point utterly: we’re in a vicious circle where bad news will further undermine confidence, leading to further bad news. The plus or minus sign in front of the number is critical, whether that’s rational or not. Turnbull, as long as he isn’t seen to be exploiting the bad news, can now stick to his “I told you so” routine. The Government may now be ruing that it did not try to get even further ahead of the curve and get a stimulus package off the ground earlier than December. But if the next quarter returns to positive territory, it will look like the Government got its timing just about right. Meantime, it will face a reinvigorated Opposition, which isn’t a bad thing at all given their performance lately. One other thing: who predicted a contraction of this magnitude? Commentators, economists and analysts don’t seem to have any more of a clue than the rest of us about how bad things are. Something to bear in mind as we go further into the unknown. |
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22 Comments
“Finally, the numbers go Malcolm Turnbull’s way”.
Bernard complimenting Turnbull, no matter how begrudging and small-minded the homage, is a very very significant event.
Why?
In the first instance Keane is implicitly criticising his beloved Divine Leader: The Kruddmeister. Circle the date in your diaries.
Secondly, Keane is implicitly admitting that he may have got wrong when he informed us that Turnbull had just committed political suicide in choosing to vote against the second $42 billion “stimulus package”.
Mind you, Bernard has admitted that he had got it wrong before. So I must believe that he shall explicitly admit it at some point in the future; so keep your diaries open on that score.
Peter, those ‘smart arse financers’ living in wrongness all this time are still trying to tell everybody how to do it which is the psychological classic state of those whom don’t get it. When is a joke a joke to the death?
George is singing my song but I think ‘George’ is a pseudonym for the head of treasury.
Forgotten is that cute piece that used to continuously clog all the media and was delivered by that exciting and extraordinary thing/bloke whom/which was the closest that Australia ever came to producing as its own real live and oh so sensational war criminal (by attitude more than by deed unfortunately for him) yes that sexy bit that loved getting his jollies off behind his Bush, J How aah dam what’s his name – the piece …… “labour will always deliver higher interest rates than me” (@ 3 to 4 % - another joke) that’s why Australia continues to stay laughing, all these unreal jokes that walked around as the real thing.
The greener side of trueblue Heaven? Leftwing Aussie-Irish Catholic
It’s not absolutely necessary to be leftwing to support Rudd but it helps.
What is absolutely necessary is ignorance and/or sh1t-fer- brains.
How do you grovel?
“corpus delicti”?????????
You saw it with your own eyes! A PURPLE shirt!!!!!!!
…..besides do really want to catch Bernard and The Krudd: ‘flagrante delicto”?
“Negative growth”???? The opposite of growth in an economic sence would be contraction or recession. Call it what it is. If you die, is that negative life?
Why is it so bad to have a contraction in the economy? We need to wipe out the excess of which we have all been guilty.
The numbers have gone the way that was created by smart arse financers on the libs watch.
Where was Turnbull at the time (Nose in the trough)
JamesK: I wasn’t the person who brought up Keane’s religion. I thought it was you. I don’t mean today, I thought it was some time ago.
Last question: With ease. But if you are determined to be pedantic I’ll shout you a free meal at your nearest Maccas, but only with supporting evidence that Keane is everything you say he is! You will have to work out how to send the bill. Supporting evidence first!
Cheers
V
JamesK: If it’s the only game in town, why not?
As you know James, I was being aphorismatic, and indulging in metaphors.
I re-read the article which got you excited and fail to see how this could be perceived as being overtly left wing. He slams everyone. Calls Howard a nasty little opportunist and says we’re stuck with Rudd, Brendan Nelson is a poor bastard, Bracks made Kennett look like roadkill, Rudd has great political instincts etc. But most importantly, he says about your leader, Malcolm Turnbull, that he is brilliant and driven, albeit politically inexperienced.
What’s not to like? Each one of those statements is accurate. Truth frequently can be annoying. But to revolt about it is futile.
Sorry JamesK, you are gonna have to do a mile better than that.
Julie Bishop got very little publicity for who groundbreaking presentation at the Sydney institute the other evening and that is a pity. It is a pity that some of the other opposition members did not pick up on the power of Austrian Economics which eschews the Keynesian helicopters of Benanke and Krugman (he wants an even bigger helicopter) and the rest of the central bankers. She took the liberals back to their Menzian roots and away from the nasty trend towards socialisation of the economy which appears to be happening here and to an even greater extent elswhere except perhaps for New Zealand which appears to be attempting to support productive businesses rather than throwing as much good money after bad as can be done.
Bishop warned:
Speaking of the economy going backwards, Julie Bishop got very little publicity for her groundbreaking presentation at the Sydney Institute the other day and that is a pity. It is also a pity that some of her Opposition colleagues are yet to recognise the power and sanity of Austrian Economics in the present economic situation. The Austrian approach eschews the Keynesian helicopters of Bernanke and Paul Krugman (he wants an even bigger helicopter) and the rest of the central bankers for the rationality of free markets. For the Austrian economist, it is critical that the market finds its true level as soon as possible in order that business has the confidence to start reinvesting knowing the bottom has been reached. The free market is not one in which the government decides who are the winners and losers; who should get the handouts and who should pay for them and who gets the monopoly; which is the case at the present time? The market does not want the government interfering by propping up poorly run businesses in order to make short term labour rescues at the expense of the jobs of others in more efficiently run businesses. Continued….
Turnbull is plain wrong with his opposition to the stimulus package, no matter how badly the latest figures depict the economy, because with no stimulus package it would be worse. If you are so plainly wrong, you look wrong. You just don’t look good.
His opposition to the stimulus package is not based on political opportunism - that is endangering the Australian economy by undermining consensus on the package so he will somehow “look good” when all crumbles. Rather it’s based on economic illiteracy which he shares with his main rival, the ex Treasurer in the peanut gallery, the man most responsible with Howard and Keating for our country’s massive foreign debt. You can forget the budget surplus as ever being a relevant measure of economic rectitude for the Coalition’s dynamic unfriendly duo. The minerals boom, the massive GST tax grab and flogging off assets gave us the surplus. But they helped give us our foreign debt
Every time Costello opens his mouth without a Treasury briefing it looks more and more like he was carried along for the ride on the Treasury benches, a lucky passenger along with Howard in our economic boom. (Ask John Hewson). We are all so lucky that neither is in power because both argue that we should maintain a surplus now which effectively means no stimulus package at all.
If the logic of the strategy of opposing the stimulus package and ” looking good” when all fails held any water then you would have to say Costello had edged ahead of Turnbull and would be looking “gooder” because Turnbull at least thought we should have some stimulus package and presumably a budget deficit.
Howard, Costello and to a large extent Turnbull are out of step with the Treasury, the RBA and just about every government in the world.. Thankfully they are in the right place and will be for a long time.
Are you kidding Venise? Approximately one in two of Bernard Keane’s articles see his pucker’d chops betwixt Rudd’s hindmost keister.
Here is but one: http://www.crikey.com.au/Politics/20081219-Rudds-year.html#comments
I only go to Macdonald’s for the Heart Tick Healthy Choice menu….. similar to the line of reasoning that says I love Rudd now because I used to hate Howard.
Recommended reading for Malcolm Turnbull: “The economic history of the 1930’s” and for Peter and his mate John:” Enjoying a peaceful and silent retirement”..
JamesK: Contrary to your opinion, I’ve never thought of Bernard Keane as being a rampant leftie. If you’re into subtext at all-no criticism implied, but some people never look for the sub-text-I think he comes across as a frustrated , lower case Liberal who was sickened by John Howard’s deplorable government; but fully aware that Kevin Rudd could have the potential to crucify this country. A journo who appreciates Malcolm Turnbull’s clever financial creds but feels let down on that front as well, because however much Turnbull waffles on he doesn’t come across as having any philosophy about Australia. But heaps of it when it comes to his personal ambition.
I think you said he was a Catholic which was an un-necessary comment, because he doesn’t let that come into his writing at all.
If you can quote evidence to support your view that Keane is a Labor supporter I will, of course, grovel.
Cheers
V.
I have a plan. (that will blow you all out of the water)
Based on “…ask not what can your country do for you but what can I do for my country”.
A $40 billion infrastructure spend on the greatest necessities with not a cent (or even a dollar) of it from the Australian tax payer. And no attached loan account with any one or thing.
So, we had $10.4 billion of taxpayers’ funds given away helter skelter in December and there is more to be given away next month, not on the basis of need, not that the recipients deserve it, but almost randomly. That was $10.4 billion which could have fixed the Pacific Highway or the Spit Bridge, both of which are infrastructure projects which would have lifted productivity by having faster and safer travel for workers and businesses. Instead, some of the money has been drunk, smoked, gambled or spent on trinkets. The rest has been used to pay down debt by people who weren’t prudent up until last year. This was a massive swindle on taxpayers, but it still didn’t prevent a recession.
A lot of unsubstantiated nonsense is being spouted forth about the ABS growth estimates by a lot of people who should know better. First, the Government’s December stimulatory spending package was way too late to have any significant effect on the numbers. Second, the ABS estimates are being treated like holy gospel. They are only preliminary numbers based on preliminary data. Well, I remember John Kerin’s brief stint as Bob Hawke’s treasurer in 1991. He was totally humilated at a press conference with the release of ABS last quarter growth estimates that turned out to be negative. It was small comfort to him a year later, when ABS revised the growth estimate for that quarter, and it had a plus sign in front of it.
Cont…
Julie Bishop argues that Liberal philosophy needs to revert to its Menzien roots away from the trend towards big government in bed with powerful friends leading to ever increasing socialisation of the economy. It is only the government that can create monopolies and those who benefit from such government generosity stand to gain much but the rest of business and its labour suffers as a consequence. Whatever the government gives to one sector it must take from another and that invariably has economic and social consequences. This is the crux of the Austrian argument against the profligacy of the Keynesians. There is no free money in the long run which we are now finding out to our collective chagrin.
As Bishop accurately points out, the heavily repressive and socialistic New Deal policies of Roosevelt were a disaster and ensured the Depression was both long and devastating rather than short and painful. Yet that is exactly the approach once again being adopted around the world with the exception perhaps of the New Zealanders.
Bishop warned:
“The case against socialism will be a deadly one”. She argues that Australians face a most important ideological choice - one between personal freedom and its accompanying responsibility and almost complete womb to tomb control of our lives by the State. Bishop surprises by invoking the names of great Libertarians like Murray Rothbard and Frederic Hayek and their battle against the tyranny of the State. Her largely unreported speech relaunches Liberalism in its original conceptualisation (almost Libertarianism but not quite). It is an idea which is anti big government and pro individual. An idea that does not favour the economically strong but the most meritorious, that delivers a sense of responsibility and empowerment rather than an expectation of entitlements.; that rewards a human being for initiative and resourcefulness rather than as a result of insider contacts.
I only hope that Malcolm Turnbull was listening
JamesK: Prima facie evidence please. If I, a humble commentator, can write left-leaning comments and right-leaning ones, it doesn’t mean a thing. Nor should it. I believe, passionately, about the things I write about. NorI am I a Marilyn who upon winning Tatts would snarl at the capitalist crap which delivered the million bucks.
Because I’m a leftie it doesn’t make me endorse Kevin Rudd’s petty tyrannies.
I had hoped Malcolm Turnbull would deliver the goods. Nothing that Rudd does to reduce this country to a garbage heap, would be remotely possible without the help of the disorganized riot which calls itself the Liberal Party. I am especially heated up about Turnbull. He brought great creds to the job, but, as it turns out, he has no political philosophy, unless it pertains to his greater glory. And he has an overweaning case of L’etat c’est moi!
If I can believe there’s a shade of grey, why cannot Bernard Keane be of the same thinking.
As you don’t like Maccas-no blame here, I wouldn’t go near the place-how about the local fish and chip shop?
A BYO fish and chip shop.
First I want substantiating proof, not by what he has written, but by corpus delicti.
Cheers
V
Numbers and statistics eh?
You can make ‘em add up to whatever you want to see!
Apologoes the first half of my rant got knotted up!
here we go again….
Speaking of the economy going backwards, Julie Bishop got very little publicity for her groundbreaking presentation at the Sydney Institute the other day and that is a pity. It is also a pity that some of her Opposition colleagues are yet to recognise the power and sanity of Austrian Economics in the present economic situation. The Austrian approach eschews the Keynesian helicopters of Bernanke and Paul Krugman (he wants an even bigger helicopter) and the rest of the central bankers for the rationality of free markets. For the Austrian economist, it is critical that the market finds its true level as soon as possible in order that business has the confidence to start reinvesting knowing the bottom has been reached. The free market is not one in which the government decides who are the winners and losers; who should get the handouts and who should pay for them and who gets the monopoly; which is the case at the present time? The market does not want the government interfering by propping up poorly run businesses in order to make short term labour rescues at the expense of the jobs of others in more efficiently run businesses.
Rather, it is the free market which decides who is good and who is bad, who is a crook and who is offering a genuine product or service. Things invariably go awry when governments get into the act and favour one group over another.
problem for malcom is he was saying govt didnt need to spend all that money. based on these accounts they certainly did and are vindicated completely in their reading of the economy.
JamesK: I wasn’t the person who originally brought up the subject of Keane’s religion; I thought it was you-about three or four months ago.
Last question: With ease, if I think someone has put up the evidence to contradict me. However, since you are being pedantic, and upon providing me with proof that he is everything you say-I mean substantiating evidence. I will shout you a meal at your nearest Maccas. We will have to work out a way to pay you. But cash on the barrel head JamesK. first produce your evidence, proof of his bona fide membership of the dreaded Labor Party will do to begin with. If your evidence is unassailable I might be able to give you a meal at a slightly more enticing eating house.