Those naughty Congressmen. Kevin 747 told them what to do and what happens? Nothing. Those naughty American legislators ignored him. There’s still no agreement in the United States on what action to take to try and solve the world financial crisis. So Kevin Rudd had to take his message to the United Nations where, in his first address to the General Assembly, he gave the leaders of the whole world the benefit of his economic wisdom.

The problem as he outlined it is that banks and institutions needs to have better incentives to encourage responsible action as opposed to unrestrained greed. “There has been”, he said, “a failure of internal governance within financial institutions. There has been a failure of external oversight.” The Rudd solution is for stronger regulations and rules to be agreed to internationally and administered by the International Monetary Fund. The IMF should have the job of developing a system which could give warnings of any indications that a firm may be in trouble.

Just what kind of bureaucratic monster would be required to perform this task for institutions world wide when the US Federal Reserve was incapable of doing it within its own country was not explained. But never fear. Let the world know that Australia will do its bit by working with the G20 nations to agree on reforms which could be implemented as soon as possible. Our Australian Prime Ministerr wants the G20 nations to take a lead on showing better financial regulations:

The purpose of this reform agenda is to provide a real political mandate for out international regulatory institutions to do their job in defending the integrity of the international financial system. The global financial crisis of today presents us afresh with a critical opportunity to act comprehensively and collectively for the long term, rather than selectively and separately for the short.

A strange choice as saviour. The world financial crisis is the creation of merchant/investment bankers with their greed and avarice. Henry Paulson until a couple of years ago was the boss of the biggest such bank on Wall Street. Is it any wonder that there is scepticism about the plan he has devised as Secretary of the US Treasury to end the turmoil?

Presumably when he joined the Cabinet of George W. Bush Mr Paulson was aware of the troubles that were brewing because of the sub-prime loans. And if was unaware of the dangers then surely that ignorance alone would rule him incapable of carrying out his job.

Yet there was barely a whimper from the former king of Wall Street as things got worse and worse and conditions in the United States deteriorated to the point where the whole world is threatened with bring thrown into recession. When he finally chose to act it was in the half hearted and ineffective fashion of aiding and abetting the takeover of Bear Sterns and then using taxpayers’ money to prop up AGI insurance.

That was all to no avail and the failure of these attempts at intervention just made the crisis worse. So what did the Treasury Secretary come up with? Another large dollop of taxpayer money only to find that $700 billion impressed neither the politicians who have to authorise its expenditure nor the markets it was designed to placate.

Poor political reporting promotes poor politics and politicians. The new Japanese Prime Minister might well be a man that Australia’s pair of wealthy political leaders get on with splendidly. Consider this pearl of wisdom which Taro Aso, elected to the post on Wednesday, confided to a close friend: “I don’t think ordinary people understand the anguish of extremely rich people.” It certainly fits in with the description in The Australian this morning of the dilemma Malcolm Turnbull would face, if he ever became Prime Minister, in deciding whether to leave his Point Piper residence to live at Kirribilli. According to those in the know, The Australian recorded, Mr Turnbull’s Point Piper mansion is worth almost twice as much as Kirribilli on a square-metre basis. If Mr Turnbull decided to shift from the eastern suburbs to north of the harbour, it could reasonably be considered a downgrade.

The political writer for the Mainichi Shimbun, Tomonaga Ito, recounted the Taro Aso quote in his column this week along with some criticisms of the country’s leader of a kind rarely found in the normally polite style of Japanese political journalism.

“Even though Aso occasionally assumes a persona where he ‘pretends’ to be a bad guy,” the Mainichi Shimbun story said, “it appears that this is actually his true nature. The way he considers himself to be someone born to a special fate, and his confidence that he has experienced hardships that nobody else knows reveal a deep psychological condition. How he will control the government appears likely to depend on this warped self-confidence.”

The reason for this critical break with tradition was explained by Tomonaga Ito in this way:

I talk about such a thing because I wondered why Yasuo Fukuda, who resigned as prime minister on Wednesday, had decided to dump his government in an irresponsible manner and later acted selfishly. It all leads to the conclusion that he was not qualified to be prime minister. Many political reporters realized this fact, but did they clearly report it?

After Fukuda announced his decision to resign, the Mainichi Shimbun reported that as early as April he was tired of being prime minister. Nevertheless, the Mainichi Shimbun at the same time carried other articles saying that the prime minister was enthusiastic about his work.

Even though Fukuda displayed a mixture of aggressive and feeble attitudes, I cannot help but admit that these reports were incorrect. This is because the reporters failed to get to the bottom of Fukuda’s real intentions and simply believed what his aides said.

Since Junichiro Koizumi was in office, brief interviews with the prime ministers at their office, which were limited to twice a day, had continued for seven years. This set a bad precedent for political reporters who have now come to believe that such brief interviews are enough to write articles.

Reporters were criticized for failing to ask tough questions during the news conference at which Fukuda announced his decision to resign because they were asking questions as if the news conference was just another one of the brief interviews at the prime minister’s office.

People often talk about the political crisis, but it’s largely because of the crisis of political news coverage.

Peter Fray

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