If I was leader, something I’m not and never will be, I’d be telling the Australian people that it will be necessary in future months to cut interest rates aggressively around the world. Of course, I’ve never done anything aggressively since that incident with Howard last year, but after the tech wreck in 2000-01 and the September 11 attacks, I showed an inner resolve to address our financial situation. Pity I had no outer resolve.
But in the aftermath of that period rates were left too low for too long. Obviously, that economic retard John Howard was to blame. Minchin too. Money was so cheap that loans were being given away to “ninja” borrowers — people with no income, no job, no assets and no chance of voting for Beazley or Latham. The Liberal government I almost led took measures. The liquidity that I pumped into my system to stimulate me from the last recession laid the seeds for this one.
We did better in Australia, because I was Treasurer. I was more careful in loosening monetary policy and then faster to tighten it — this dramatic action was deeply and personally satisfying, although the Australian economy didn’t feel the same sense of smugness.
With this current crisis, caused almost exclusively by Kevin Rudd’s taxation hike on alcopops and luxury cars, we should have an eye to the future. That eye to the future means getting rid of that turncoat Turnbull and installing someone with economic credentials, say for example, the longest serving treasurer in Australia’s history. Only someone who, for instance, delivered 12 stimulating budgets, can make sure we shape the international arrangements that can handle future challenges to the world economy.
Today’s global institutions grew out of World War II, a war I would have fought in had I been old enough and not afflicted with a life long case of “chicken”. New international bodies to deal with problems that contributed to the outbreak of that conflict were established, such as the International Monetary Fund, The World Bank and Ron Walker fundraisers.
In the mid-1970s big industrial nations formed the Group of Seven to discuss common approaches to economic policy. Here in Australia, I formed the Group of One to discuss common approaches to my leadership aspirations.
In the wake of the Asian financial crisis of 1997-98, when prices of spring rolls and braised beef in black bean sauce skyrocketed, a new group was formed of countries systemically important to the global financial system, the Group of 20. Which, incidentally, mirrored my support within the Liberal caucus.
Most Australians have probably heard little of the G20 except for the summit held in my home town of Melbourne in November 2006 when for some reason, crazy, fruit loop socialists, Greens and trendy inner city wankers decided to riot in the streets. These anti-globalisation protesters really gave me the sh-ts as they stupidly protested against a system that is as solid and stable as a bank. Obviously, we employed SWAT teams and paramilitary squads to suppress this unreasonable demonstration against a financial system that has stood the test of time, at least up until September 2008.
It is interesting that President George Bush convened a meeting of the G20 over the weekend to discuss the current crisis. For some reason, he didn’t invite me to provide my arousing input, a matter I have asked shadow foreign affairs wunderkind Helen Coonan to take up with the US government.
When a country gets into trouble it is on its own. Last weekend the Australian Government decided to guarantee all deposits in all banks. Obviously, Wayne Swan and Kevin Rudd know f-ck all about this crisis. They panicked. They were spooked. They hope, of course, that the guarantee will never be necessary, but then again, they hope no one notices there’s barely an economics degree in the entire Cabinet.
But if it is called on the Australian Government will have to stump up the cash from its taxpayers. Do not expect anyone to come to our assistance. And certainly do not expect that chump Turnbull to do anything more than roll over like one of his famed Labradors and lick his own testicles.
Australia has been left out of both of the international forums designed to solve this crisis. Having met with Wayne Swan, the world’s leading economists decided an empty chair at the table offered greater input.
If Australia is to sow the seeds of the next crisis, it needs to return to the stimulating policies of the Costello/(Howard) government.
Peter Costello is a columnist for Fairfax newspapers. Sort of a poor man’s Gerard Henderson.
Walter Slurry is the author of Not The Costello Memoirs, (HGB-Crikey. Buy it here.)