Lucky Bastards: Howard Govt Legacy Shines Like a Beacon

The question here is how the Howard Govt will be remembered as economic managers in years to come? My guess is that they will be seen as a shining example of how an economy should be managed (wink)

I’ve also got to say that John Howard and Peter Costello are probably very relieved that they lost the last election, for  reasons that are now becoming very obvious in hindsight.

Lets assume for a moment that the following ‘doom and gloom’ assessment  is true.   The impact on not only jobs but government coffers is likely to be very significant (well, of course it is).

THE AUSTRLIAN’s Michael Sainsbury has revealed the worst case scenaio for exports today, when he writes:

AUSTRALIA is staring down the barrel of its worst export slump in 50 years.

It poses a bigger shock to the nation’s terms of trade than at any time since the 1997-98 Asian crisis.

The nation’s top 10 trading partners are in the middle of, or entering, an economic meltdown, with Western and Asian economies entering a cycle of contraction that experts fear could mean up to five years of flat global growth.

The next shock to the Australian financial system is expected to come when contract prices for our exports, particularly iron ore and coal, are renegotiated. The nation’s terms of trade — the difference between export prices and import prices — hit record highs last year thanks to the seemingly endless commodities boom. But the news from Asia — the destination for more than half our exports — hasn’t been good this week.

UBS economist George Tharenou told The Weekend Australian: “The main near-term weakness is going to come through export terms of trade. There will be a considerable fall from the second quarter onwards when bulk commodity price are renegotiated downwards.”

Export figures for the last quarter of last year are also shaping up as the worst for 50 years. “Fourth-quarter 2008 and first-quarter 2009 exports volume will be weak. We are expecting exports in them to fall by 5 per cent for (the December quarter),” Mr Tharenou said.

If this is correct, it will be the worst for the past 50 years, beating the 4.8 per cent fall in the third quarter of 1997 as the Asian currency crisis hit Australia.

There’s no doubting that the Howard Government were riding a very favourable wind whilst in power  as Andrew  Charlton puts it:

The economy is much like a little boat on Sydney Harbour on Boxing Day. Whether the trip is calm or rocky depends much more on the weather and the wash from the bigger boats than anything that might be done internally. If the weather is bad, you cannot blame the skipper for the bumpy ride. In fact, unless you know a lot about sailing, it is hard to know whether the skipper is doing a good job in bad circumstances, or whether he’s making it worse.

The same is true of skippering the economy. If you ask Australians about the economy in the decade or so of John Howard’s prime ministership they will remember the low unemployment rates, the low inflation, low interest rates and the general mood of affluence which suffused the nation. Howard turned this prosperity into stunning electoral success.”

The truth behind their legacy, however, is likely to end up being buried beneath a pile of rubble, especially in voters minds.  Mark Davis describes the Howard Government’s laying of the groundwork for the current crisis beautifully:

“Australia’s ‘age of prosperity’, as Peter Costello calls it in his memoirs, has been underwritten by the mining boom (even as manufactured exports stagnated during his tenure) and massive increases in household debt (now more than $1 trillion – about the same as the annual national output), even as the government has wound down its own debt. The national debt has in effect been privatised while, at the same time, risk has been shifted away from government and business onto the shoulders of ordinary people, in the shape of long working hours, casualisation, and the sort of uncertainty that is written in the fact that Australians take the least holidays of any western nation.

Not exactly the perfect start the Rudd Government could have hoped for, but a perfect end for the Howard Government era.

Over to you

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97 Responses

  1. “The economy is much like a little boat on Sydney Harbour on Boxing Day. Whether the trip is calm or rocky depends much more on the weather and the wash from the bigger boats than anything that might be done internally”

    Global economic outlook worsens
    January 24, 2009 – 7:34AM
    http://news.smh.com.au/breaking-news-world/global-economic-outlook-worsens-20090124-7ow2.html
    The world economic crisis deepened on Friday as US President Barack Obama called for urgent action, Britain slumped into its first recession since 1991 and profits at US giant General Electric plunged.

    Obama, who came to power this week amid economic turmoil and has pushed for an $US825 billion ($A1.26 trillion) stimulus plan for the US economy, said the downturn was “unprecedented” and should be dealt with “rapidly.”

    “Frankly the news has not been good – each day brings I think a greater focus on the problems that we are having not only in terms of job loss but also in terms of some of the instabilities in the financial system,” he said.

    Wall Street joined in the jitters during morning trading, with the Dow Jones index down 1.41 per cent and the Nasdaq inching up just 0.34 per cent. The broad-market, Standard & Poor’s 500 index retreated 0.1 per cent.

    Obama’s comments came after Britain joined the United States, the eurozone and Japan in a recession at the start of what promises to be an extremely challenging year for top world economies reeling from a credit crunch.

    Government figures showed that Britain’s gross domestic product (GDP) shrank 1.5 per cent in the fourth quarter of 2008 compared with the previous quarter, when it contracted 0.6 per cent – signalling the start of a recession.

    Howard Archer, an analyst at IHS Global Insight, warned of worse to come.

    “Our current forecast is for UK GDP to contract by 2.9 per cent in 2009 … This would be the sharpest contraction since World War II,” he said.

  2. There is form here.

    Howard’s hero Menzies rode on the sheep’s back to the detriment of most other sectors of the economy, and Howard rode on the resources back, also to the detriment of most other sectors of the economy.

  3. Adrian

    It has become frighteningly obvious now, don’t you think.

  4. Isn’t is something that both our longest serving leaders did so riding on the backs of economic booms not of their making whilst doing little for the long term prosperity of the country. That was left to those who followed them (even other Liberal governments).

  5. Interesting development here


    Kevin Rudd confirms $4bn rescue for construction industry

    Some (well, one) economists are liking it. I notice churn-bull has another, differing view.

    Differing from the governments (which he has the balls to accuse of feeding the banks, perhaps he is actually right, although, I think it is all that can be done.) and also he has moved away from supporting tax cuts.

    Wonder what he will want next week?

  6. Malcolm believes that tax cuts are the way to go and espouses trickle down economics as the solution to Australia’s financial problems.

    Now who do tax cuts overwhelmingly favour?

    Has trickle down economics ever worked anywhere? (Trick question, both NZ and Bush believed in trickle down economics).

  7. Well, the only thing that has appeared to trickle down to my little area is paying for this whole bloody mess.

    Can’t see those who created this fiasco paying for it.

    Is the trickle down effect ANOTHER failed neo-con experiment?

    (There have been a few)

    Or was it all a con to start with?

  8. That’s right Adrian. Better to give it to those who will spend it most wisely:

    http://www.news.com.au/heraldsun/story/0,21985,24955521-24218,00.html

  9. Tony

    “LOSSES on the state’s poker machines indicate that millions of dollars from the Rudd Government’s financial stimulus package have gone into the already bulging pockets of gambling operators.

    A staggering $250 million was lost on the pokies in December, just when low-income families and pensioners were getting their $1000 Government handouts.”

    It’s interesting that many pubs and clubs are also starting to cry poor and are apparently looking for handouts as well.

  10. Tony

    But isn’t giving handouts one of howards strongest financial legacies

    They argued for years that individuals should determine how they spent their money?

    Now they shouldn’t?

  11. OK,

    Adrian doesn’t like tax cuts because they favour the wealthy (read: tax-payers), and you, Tom, don’t like handouts because they are a Howard legacy.

    What’s your solution?

  12. I didn’t say I didn’t like them, you were the one who appeared to have an issue

    I actually support the recent handout, and, given the billions sent, a few millions on pokies is not big bickies

    And, unpalatable as it is, money in pokies is still money back into the economy

  13. Actually Tom,

    On re-reading your comment, I may have misinterpreted what you meant. Do you favour handouts, or tax cuts, or neither, or both?

  14. OK, thanks.

  15. Tom

    “Well, the only thing that has appeared to trickle down to my little area is paying for this whole bloody mess.

    Can’t see those who created this fiasco paying for it.”

    Banks and various big businesses in essential industries can hold the government to ransom (which really means us). Lent too much, borrowed too much, no problem, we’ll bail you out.

    Even those who’ve been sensible (business and individuals) are paying the price for all the excesses. TB mentioned the pain many self-funded retirees are suffering just recently.

  16. money in pokies is still money back into the economy

    Technically, maybe, but not in the way it would be if spent on other goods and services. (Poker machine licences here in Victoria are held by Tattersalls and Tabcorp, and most of the pubs are owned by a few large syndicates, so the money isn’t exactly shared widely.)

  17. True Tony, although, these large syndicates DO spend money on their plush new casinoes er pubs 🙂

    And, $30 million (which I think you will find jumped last year around the same time, although not as much) from the amount handed out, is not a large amount.

    And John McPhilbin

    Unpalatable as it is (my saying for the day it seems) but propping up the robber barons really seems to be the only way to prevent major catastrophe.

    I hope that lasting change does come from this.

  18. Keynes said “When the capital development of an economy is the by-product of a casino, the job likely to be ill done”

    Gambling revenues, housing and stock market speculation, and consumer debt supported and fueled by easy money and credit creation have never been and never will be the best roads to take when trying to build a sound and stable economic system capable of weathering downturns.

    The Howard Government never believed in the ‘downturn’ part of the equation. Who needed to save when these guys were in control?

  19. Tom

    “Unpalatable as it is (my saying for the day it seems) but propping up the robber barons really seems to be the only way to prevent major catastrophe.”

    Spot on, that’s the sad reality – We’re hostages to their demands whether we like it or not. And even then we’re not assured of avoiding a major catastrophe.

  20. John,

    Gambling revenues to which the Victorian state government, at least, is addicted. They would be f#*ked without it.

  21. RBA directors are usually cautiously upbeat. This is really saying something about where we are.

    Reserve Bank director says world economy is sick
    http://www.theaustralian.news.com.au/business/story/0,28124,24954264-643,00.html
    THE severity of the global economic downturn has exceeded all expectations.

    The crisis is expected to persist until battered confidence is replaced by renewed faith in economic policymakers.

    Warwick McKibbin, leading academic and member of the Reserve Bank of Australia board, said yesterday he had been surprised by the weakness in economic data across the major economies.

    “It definitely has” exceeded expectations in terms of severity. “I have been surprised by just how bad the negative numbers have been,” he said.

    The extent of the crisis was unusual in terms of modern experience “and it could really end up anywhere. But if people are reassured that policymakers know what they are doing, then things could turn pretty quickly”.

    However, “the world is looking rather sick at the moment”, he said.

  22. “Tony of South Yarra, on January 24th, 2009 at 9:36 am Said:

    John,

    Gambling revenues to which the Victorian state government, at least, is addicted. They would be f#*ked without it.”

    NSW is in the same boat Tony.

  23. SA aint far off either 😦

  24. Is there any state government that doesn’t depend heavily on gambling revenues?

  25. Adrian of Nowra, on January 24th, 2009 at 8:48 am Said:

    “Malcolm believes that tax cuts are the way to go and espouses trickle down economics as the solution to Australia’s financial problems.

    Now who do tax cuts overwhelmingly favour?

    Has trickle down economics ever worked anywhere? (Trick question, both NZ and Bush believed in trickle down economics).”

    Malcolm still thinks our economic woes are basic and a tax cut here and there will do it. Frankly, I’ve stopped listening to his BS.

  26. Nice post John. I see you remain eternally the optimist.

    re; gambling and the state’s reliance on it, I think it’s a bloody disgrace. The pokies especially. I don’t have a problem if people want to throw their hard earned cash away, but howabout restricting them to dedicated gambling venues like casino’s rather than having them in just about every pub.

    They’ve destroyed the heart and soul of “the traditional pub” social environment and not to mention the “live band” scene..

  27. At least now we will get a glimpse of the ideological positions of both parties – sounds simple, but it trumps Turnbull’s denial that the free – market needs a major overhaul.

    Wayne Swan calls for new controls on free market
    http://www.theaustralian.news.com.au/story/0,25197,24955346-5013871,00.html
    WAYNE Swan has attacked opponents of state intervention in the free market as “false prophets”, arguing that the global financial crisis justifies the need for government regulation to protect the public good.

    The Treasurer has urged policy-makers around the world to seize the opportunity presented by the crisis to craft a new “global economic order” by implementing a wave of reforms that will lay the foundations for renewed economic prosperity.

    Mr Swan made the comments early today in a speech to business people in New York. He said the collapse of global credit and stock markets had been caused by “spectacular regulatory failure” that had exposed the folly of the view among some policy-makers and commentators in recent decades that the state had no role in the free market.

    “Recent events have exposed such thinkers as false prophets,” Mr Swan said. “Our best approach is not to dismiss government, but to develop a coherent and modern view of the role of the state in an open economy.

    “In this regard, most nations now agree the modern state has an important role to play in helping people to face up to the consequences of globalisation.”

  28. I go along with some who say that Howard hitched the economic wagon to the resources boom and just sat back and enjoyed the ride. People should keep one thing in mind when judging our politicians: they don’t have to pass an IQ test. Having a look around the country in our various parliaments it’s quite obvious that our politicians would be hard pressed to pass an IQ test.

  29. Reb

    “Nice post John. I see you remain eternally the optimist.”

    I actually think that once we face some harsh realities a turnaround will come much easier, it will be hard going either way, but denying the system has some major flaws is not helping solve the problems we all face. So, my tearing away at what I see as BS is driven by my enthusiasm for positive change (wink lol). I should become a policitian.

  30. John

    I know its hard, but you need to try and keep up with churnbulls position

    Today, he is no longer supporting tax cuts (from my previous link)

    He is certainly a hard act to follow

    And I see he is following in howies footsteps of announcing major policies without any figures to back it up

    Bold ideas not a plan yet

  31. Stephan

    At least all sides of politics have one thing in common 🙂

  32. “People should keep one thing in mind when judging our politicians: they don’t have to pass an IQ test. Having a look around the country in our various parliaments it’s quite obvious that our politicians would be hard pressed to pass an IQ test.”

    Lol, maybe I’ll leave politics to those most qualified. Damn it, I knew I should have thrown my IQ exam.

  33. It also appears that GroceryChoice (you know, that do nothing policy) is starting to reveal some uneasy truths

  34. Tom R, funny that… it seems that Grocery Watch will be of benefit to the consumers after all.

  35. Tom

    I suspect that Turnbull realises the economy is beyond his capability to successfully debate so why not go with another grand vision (no plan yet, of course – bit like Work Choices) while Kev’s hands are full.

  36. It’s common knowledge that supermarket chains price their goods according to individual store location. For example, one Melbourne Metro survey I read said Safeway Toorak was the most expensive, whereas the Deer Park (outer West) store was the cheapest. That figures.

    But in Sydney, according to this article, it is the other way round. How come?

  37. Yes joni

    I wonder if this will be acknowledged by those who came out cerying it as a cheap political stunt.

    Similar to those who attacked Rudd when he said “We will take a blowtorch to petrol producers”.

    And now, that pertol has fallen, it has nothing to do with him

    (I am not saying it is because of him, but language like that does affect decisions)

  38. Given that the PM has begged off attending the World Economic Forum next week, I thought I’d drop a link to the WEF for anyone interested. I can recommend a read of their ‘The Future Of The Global Financial System’ Report, at least for their canvassing of some interesting ideas and futures-casting of possible pathways (I think we’re attempting to head down the ‘Re-engineered Western-centrism’ pathway for Bretton Woods 2.0b; I’m not sure that will go unchallenged).

    How does any of this relate to the present thread? Well, the gamble which the Howard Government took on Australia’s behalf was that the mining boom would go on forever; much of that boom in Australian exports was predicated on China, India, Japan, South Korea and other near-Asian neighbours continuing their export-led existences; and Bretton Woods 2.0b, the Western-centric version, will attempt to have our near-Asian neighbours become more consumer-led and less export-led economies, in once case by having China, an engine of regional and global growth, appreciate its currency; all of which will only add to the remnants of the minerals export boom ‘falling away’.

  39. This might be harsh in peoples eyes but I hope the whole system crashes and the world goes into depression!

    I’m astounded that the government is propping up big business in the name of jobs…they all seem to have their hand out expecting our money but the culture that got us into this mess remains.

    This is like renovating a house that is termite ridden in my opinion…just throwing good money at a project rather than letting it fall down and rebuild from a much stronger foundation.

    I would rather see us take the hit and do the hard yards rather than sustaining this course of band aid solutions that the next generation having to suffer when the floorboards of their future disappears under their feet!

    There are big challenges on the horizon…food and water being the principals amongst others and I fear that our society will not cope if there is no sacrifice by ourselves!

    The last government let this nation down badly and I wonder how this government will be judged in the future?

    Summits and cliches are not good enough and we should demand better but that won’t happen as both governments have ensured that they have got a greater proportion of the populous in their pockets via the various handouts that have become too vast to mention.

    WAKE UP AUSTRALIA!

  40. Legion

    Very interesting. There has to be a better balance between production and consumption among the major and developing economies otherwise you get major imbalances like we’re seeing now. It will also expand investment options rather then concentrating large portions of the world’s savings and investment dollars in already overburdened markets.

    Here’s something that may also be of interest Legion

    The false belief at the heart of the financial turmoil
    http://www.ft.com/cms/s/0/ca1fac78-0116-11dd-a0c5-000077b07658.html?nclick_check=1
    By George Soros

    Published: April 3 2008 03:00 | Last updated: April 3 2008 03:00

    T he proposal from Hank Paulson, US Treasury secretary, for reorganising government regulation of financial institutions misses the point. We need new thinking, not a reshuffling of regulatory agencies. The Federal Reserve has long had authority to issue rules for the mortgage industry but failed to exercise it. For the past 25 years or so the financial authorities and institutions they regulate have been guided by market fundamentalism: the belief that markets tend towards equilibrium and that deviations from it occur in a random manner. All the innovations – risk management, trading techniques, the alphabet soup of derivatives and synthetic financial instruments – were based on that belief. The innovations remained unregulated because authorities believe markets are self-correcting.

    Regulators ought to have known better because it was their intervention that prevented the financial system from unravelling on several occasions. Their success has reinforced the misconception that markets are selfcorrecting. That in turn allowed a bubble of excessive credit to develop, which extended through the entire financial system. When the subprime mortgage crisis erupted it revealed all the weak points. Authorities, caught unawares, responded to each new disruption only after it occurred. They lacked the ability to foresee them because they were in the thrall of the market fundamentalist fallacy. They need a new paradigm. Market participants cannot base their decisions on knowledge, or what economists call rational expectations. There is a two-way, reflexive interaction between the participants’ biased views and misconceptions and the real state of affairs. Instead of random deviations, reflexivity may give rise to initially self-reinforcing but eventually self-defeating boom-bust sequences or bubbles.

    Instead of reshuffling regulatory agencies, the authorities ought to prepare for the next shoes to drop. I shall mention only two. There is an esoteric financial instrument called credit default swaps. The notional amount of CDS contracts outstanding is roughly $45,000bn (£23,000bn). To put it into perspective, that is about equal to half the total US household wealth and about five times the national debt. The market is totally unregulated and those who hold the contracts do not know whether their counterparties have adequately protected themselves. If and when defaults occur, some of the counterparties are likely to prove unable to fulfil their obligations. This prospect hangs over the financial markets like a sword of Damocles that is bound to fall, but only after some defaults have occurred. That must have played a role in the Fed’s decision not to allow Bear Stearns to fail. One possible solution is to establish a clearing house or exchange with a sound capital structure and strict margin requirements to which all existing and future contracts would have to be submitted. That would do more good in clearing the air than a grand regulatory reorganisation.

    The other issue is rising foreclosures. About 40 per cent of the 6m subprime loans outstanding will default in the next two years. The defaults of option-adjustable-rate mortgages and other mortgages subject to rate reset will be of the same order of magnitude but occur over a longer period. With single family home sales running at an annual rate of 600,000, foreclosures will overwhelm the market and cause prices to overshoot on the downside. This will swell the number of homeowners with negative equity who may be tempted to turn in their keys. The fall in house prices will become practically bottomless until the government intervenes. Cutting foreclosures should be a priority but the measures so far are public relations exercises.

    The Bush administration has resisted using taxpayers’ money because of its market fundamentalist ideology. Apart from a bipartisan fiscal stimulus, it has left the conduct of policy largely to the Fed. Yet taxpayers’ money will be needed to reduce foreclosures. Two proposals by Democrats in Congress strike a balance between the right to foreclosure and discouraging the exercise of that right. One would modify the bankruptcy laws allowing judges to modify the terms of mortgages on principal residences. Another would provide Federal Housing Administration guarantees that would enable mortgage holders to be paid off at 85 per cent of the current appraised value. These proposals will not solve the housing crisis, but go to the heart of the issue. They should be given serious consideration.

    The writer’s book, The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means,

  41. Scaper

    “WAKE UP AUSTRALIA!” it’s hard to debate this.

  42. Scaper, summits are ok as Rudd promised inclusion rather than the previous government who made ‘executive decisions’. But I agree, enough summits.

    But back to joni’s topic. I see the Howard years as the wasted years. A pet peeve is not training our own children, the disinvestment in education from the youngest child through to universities. For example, enter a uni class and a majority of the students are from overseas while our own kids cannot obtain a placement. Tradies without jobs while the Howard government thought that exploitation of workers from other countries was ok.

  43. Min…inclusion…of whom?

    Twenty nine year old advisers, corporate pals, movie stars that are based OS, mates… or should I say boot licks???

    I know a little bit of the going ons in the viper pit than I let on and my point is it is one thing to criticise the last government but I see there is more than good intentions needed to steady the ship that is being kept afloat by an array of loose fitting corks.

    Still meandering on the road to nowhere in my opinion.

  44. No John McP. It’s not hard to debate ‘this (wake up Australia)’ at all.
    I partially agree with what Scaper had to say. The boom of the 2000s was an opportune time for businesses, large and small to consolidate their financial positions and client base, by paying off debt.
    In a race to capture greater market share, larger corporations borrowed well above their fighting weight, given that the Rio takeover by BHP was ‘unattractive’ due to the enormous debts Rio had accumulated. All pie in the sky stuff.
    The local small to medium size private business/industry has, more often than not, the family home in hock, all working frantically to once again hold the title deeds to that family home, unlike the larger corporations. Small to medium business as usual will get no financial assistance.
    Rudd may wish to assist large industries by subsidising redundancy payment to those unfortunate individuals who lose jobs. But that’s it. No more. No point in throwing good money after bad in assisting large corporations which have ‘no markets’ for their product. It’s over, for now.
    As Scaper says, time for a cleanout. I expect our trade deficit will blow out negatively to astounding proportions.
    Time for trade tariffs to be re-introduced, particularly in the motor building industry. To each nation, her own. Time for Toyota, GM, Ford, to build vehicles ‘for Australia’.
    All the financial theory on earth will not help the good people of Ravensthorpe, which seems to be merely the tip of the iceberg. Time to bring forward the building of national infrastructure. Time for a public housing policy ‘forced’ upon the states, to alleviate the housing crisis where those who can least afford private rental are paying exorbitant rents now; public housing which will in turn force house prices and rents downward by increasing supply, create employment and allocate contracts to ‘private’ builders, NOW.
    Rudd has stalled on this issue, missing the whole egalitarian point. Helping the homeless find shelter is not rectifying why the homeless are homeless. Mere bandaid.
    The homeless are homeless because there are not sufficient ‘built homes’.
    Tax cuts will not help, entirely. As Scaper says, we’ll have to ride this one out. Time to raise corporate tax on diminishing corporate profits.

  45. Oftenbark

    I think you may have misinterpreted my meaning of ‘hard to debate’. I simply couldn’t find an argument that says ‘scaper’ is wrong. ‘WAKE UP AUSTRALIA’ is also well-pointed out in your comments.

    Perhaps, a major clean out is the only way and if that means increased hardship for everybody, that’s what it takes. What peezs me is how we were allowed to get into this position in the first place, all the while being told we’ve never had it better, hence the reason for posting this thread.

  46. Reb

    And you call me a pessimist (lol) I think we’ve hit an ‘inflection point’ in this crisis, where panic is now the order of the day. Shit! F%$k! Bust as they say. I’m actually at the point now where I’m now calmly thinking ‘hey, so what?’

    Heat’s on for all in global financial crisis
    http://www.theaustralian.news.com.au/story/0,25197,24954526-28737,00.html
    ENJOY the Australia Day weekend.

    The rest of the year is not going to be much fun. Think jobs evaporating, businesses closing, share dividends disappearing, superannuation shrinking, housing prices falling, the market plumbing the depths again. China, so recently our reliable economic driver, is now reversing us back down the hill at full tilt.”

  47. Tony of South Yarra, on January 24th, 2009 at 8:52 am

    I’m chasing up the figures now but the increase in gambling I believe represented less than 1% of the handout, around 0.15% from memory, and taking into account that gambling (as does alcohol consumption) increases during times of financial hardship, this is nothing more than a beatup.

    This is an increase for all gamblers, so the high rollers may have also increased their stakes which would have significantly lifted the figures. Also this figure is the total spent, not total lost.

    ————————–
    A bum begging money for a meal approached a well dressed businessman.

    “Have a cigarette”, said the businessman to the bum.
    “No I don’t smoke.”

    “Then let me buy you a drink in that bar.”
    “No I don’t drink.”

    “Well how about I give you this lottery ticket.”
    “I don’t gamble either, all I want is money for a meal.”

    “I’ve got a better idea,” said the businessman “come home with me and I’ll get the wife to prepare the best meal you’ve ever had.”

    ‘Wouldn’t it be easier to just give me some money?”

    “Yes, but I want my wife to see what happens to a man who doesn’t smoke, drink or gamble.”

  48. <b>Tony of South Yarra, on January 24th, 2009 at 9:36 am Said:

    Gambling revenues to which the Victorian state government, at least, is addicted. They would be f#*ked without it.

    I’m trying to put this as politely as possible but the best I can say is, what a stupid statement.

    For a starters it was Kennett that introduced this gambling regime into Victoria and swung a good chunk of the State revenue onto it.

    Somehow you have equated that a reduction in gambling means the money that was spent on it magically disappears never to be seen in any other area of the economy. Do the people who no longer have the scope of and easy access to outlets to gamble on just take the money they would have gambled away and burn it as they would have burnt it in the machines, tables or tracks anyway, or do they use it to spend on other things?

  49. PETER COSTELLO: Let me make this point to anyone who’s listening: if you’re thinking of saving, put some money in superannuation. When this plan goes through it will be the best way of saving.

    The above from: http://www.abc.net.au/worldtoday/content/2006/s1635287.htm

  50. Min

    Is this the same tugboat who came out ridiculing Keating for hos compulsory super.

    A plan which has (had) added 1 trillion to the economy?

    Fair weather sailing at its best lol

  51. Yes John, I may have somewhat misread your meaning, and thank you for your usual measured response.

    I’m still amazed that politicians generally do not ‘get’ the picture of how small to medium size businesses work. Most operate on the ’30 to 90 days sales in/production out, perhaps forward order’ cycle, which is to say, most are only as good as the past months’ result. Most will not survive in the same form on negative 3 months’ results. Those that survive will be the ones with the least ‘debt’.
    Now that commodity and luxury goods markets are diminishing at an alarming rate, production for domestic consumption must be our main focus, in all facets. Export goods are now a bonus, if one should be so lucky to have access and sales to foreign markets in these times.
    A financial summit is only as good as the agenda put forward and the people who attend, in that a true agenda of local and regional financial issues and the consequence of same should be put forward.
    Big business and big employers are not necessarily one and the same. Collective small to medium size businesses, suburban and regional, are far more important issues.
    I’ve gotta grin wryly at Rudd’s luck, or lack thereof. You would not hand the current economic climate to Saddam Hussein, well, almost.
    I would go as far as to ‘educate’ Australian consumers on ‘credit’, ‘ownership’, ‘debt’, ‘interest on consumer purchases’, ‘necessities’, ‘savings’, and a whole lot more; education under the guise of a ‘Federal Consumer Advice’ programme, ‘surviving the financial crunch’.
    Harvey Norman can go jump, as can corporate executives.
    Time to buy back Telstra. The Rodent had no moral right to sell. Just another idiot in a long range of idiots who have no idea of assets and profit-making assets, vital national infrastructure, and on and on and on.

    As Alan Parsons once said, in relation to the likes of Howard/Costello:
    ‘I am the eye in the sky, looking at you, I can read your mind,
    I am the maker of rules, dealing with fools, I can cheat you blind’ . . .

  52. Adrian,

    It’s not a stupid statement, and It’s not something I just dreamed up to start an argument. Many groups are saying the same thing. From The Age:

    States ‘addicted to gambling revenue’

    http://www.theage.com.au/news/National/States-addicted-to-gambling-revenue/2007/11/28/1196036970425.html

    And this from a report by The Victorian Local Governance association:

    In Victoria it is clear that the State Government is heavily addicted, with around 14%of its revenue now emanating from the gambling industry. The addiction is shownby the government’s need to prop up the industry whenever it shows sign of flagging.It is also shown most disturbingly when the State Government enters into gamblingtax reduction wars with other states in a futile bid to secure the elusive high roller.Similarly, the State Government’s opposition to addiction prevention programs andto hard impact advertising campaigns warning people of the risks and consequencesof gambling must be seen in this context.

    The Victorian State Government has been criticised by the Auditor General forreturning less than 5% of the proceeds of gambling to research and ameliorationactivities. The VLGA is most concerned that in Victoria the decisions about use ofthe funds rest with the Premier. There is no community, no local government andcertainly no independent voice involved in decisions about distribution of gamblingproceeds through the Community Support Fund.

  53. Actually, “The Economist” (about as respected a weekly as you can get in economic circles) said a long while back that he and Costello relied on luck, and the Howard/Kearing reforms, not good policy. Unfortunately the article is not available anymore except to subscribers, but I deconstructed it and quoted the relevant bits in The Economist damns Howard with faint praise (2007-05-17).

  54. That is not the stupid part of your statement Tony, this is;

    They would be f#*ked without it

    ….and I gave the reason.

    Of course they are addicted, an addiction deliberately started by Kennett to advantage a small cadre of his mates, and of course 14% of State revenue from gambling is obscene and should be pared back to wean the State (all States) off what it believes is easy money. There has been cost benefit analyses done on gambling revenue and it isn’t as beneficial to the government as they like to believe.

  55. an addiction deliberately started by Kennett

    You keep saying that, but I think you’ll find poker machines were introduced under Joan Kirner’s Labor government.

  56. Poker machines introduced in 1992, Jeff Kennet Premier of Victoria 1992-1999.

    He was elected in October at the time of the poker machine roll out and then began the acceleration of the integration of gambling into the State. So he may not have introduced them as it was a Kirner policy to widen the tax base using gambling, and it would be sheer speculation on how far her government would have gone, but the fact is Kennett started a substantial increase in gambling in Victoria and increasing the taxes on it to tie more of the State revenue to the gambling base.

    All the horrible facts laid out in one neat PDF: Socioeconomic Banditry: Poker Machines and Income Redistribution

  57. Oftenbark

    “I’m still amazed that politicians generally do not ‘get’ the picture of how small to medium size businesses work. Most operate on the ‘30 to 90 days sales in/production out, perhaps forward order’ cycle, which is to say, most are only as good as the past months’ result. Most will not survive in the same form on negative 3 months’ results. Those that survive will be the ones with the least ‘debt’.
    Now that commodity and luxury goods markets are diminishing at an alarming rate, production for domestic consumption must be our main focus, in all facets. Export goods are now a bonus, if one should be so lucky to have access and sales to foreign markets in these times.”

    Solid observation Oftenbark. we just didn’t see this coming and our biggest failure was that we were lulled into a false sense of security. With our former PM and Treasurer being the biggest cheerleaders. And there’s no denying one major factor “Those that survive will be the ones with the least ‘debt’, but many will now fail.

  58. If every corporation went broke we would survive…if every business went broke we would not survive.

  59. Lenore Taylor, National correspondent for THE AUSTRALIAN seems to have captured current reactions to this crisis rather well.

    No magic formula to stimulus strategy
    http://www.theaustralian.news.com.au/story/0,25197,24953687-7583,00.html
    “…Rudd and his ministers returned to work this week from their first real break during 13 long months in office the bad news just kept getting worse. And after that it got worse still.

    Publicly they say they are in uncharted waters. Privately they are quite upfront about the fact that they are flying blind. Every time they think they understand where the global economic catastrophe is heading, it changes and so does its impact on Australia. None of the changes have been for the better. ”

    I’d much prefer honesty than uninformed and simplistic comments being put forward by an opposition hellbent on scoring political points. Convenient that Malcolm has now changed his focus to climate change.

  60. scaper…, on January 24th, 2009 at 5:56 pm Said:

    If every corporation went broke we would survive…if every business went broke we would not survive.”

    Interesting concept scaper, I never actually thought of it that way.

  61. One correction JMc, many did see this coming, most as short as six to seven years ago when the warning to the Howard government started growing apace, but some very astute observers well before that. I believe one economist or economic institution gave a two year old Howard government specific warnings of deep financial trouble in a decade if Howard didn’t start acting immediately. A warning which Beazley in opposition aped, probably more out of being negative than any real belief that a disaster was looming, but who knows. Like all astute and credible warnings given to Howard, he completely ignored it until it became such a disaster he could feign, “Who could have guessed, we could never have seen this coming,” then come riding in, a white knight saviour throwing tons of money around, the hero of the battlers.

  62. Adrian of Nowra,

    I’d have to say you’re probably right. No, let me correct that some more. Yes, you’re right. It’s funny though just how much power and influence JWH seemed to have over the press.

    In fact, he was so powerful that those who knew the true state of affairs didn’t, or couldn’t seem to get a word in.

  63. “One correction JMc, many did see this coming,
    Adrian of Nowra, on January 24th, 2009 at 6:03 pm Said:”

    Maybe you are correct. The Libs did something by repaying all the Federal govt debt created by the Keating/Hawke labor govt.

    The people who did not see this coming was the current ALP govt. If you people have not forgotten the current budget which was not that long ago was supposedly an inflation fighting budget designed to put back into the bottle the inflation genie supposedly created by the alleged reckless spending by howard.

    I do not recall any talk about the GFC during the last budget.

    After all the talk about alleged reckless spending we have now been told to spend, spend ,spend.

  64. The people who did not see this coming was the current ALP govt. If you people have not forgotten the current budget which was not that long ago was supposedly an inflation fighting budget designed to put back into the bottle the inflation genie supposedly created by the alleged reckless spending by howard.

    I do not recall any talk about the GFC during the last budget.

    That’s true. If Adrian can criticise Howard for not heeding warnings from “six to seven years ago”, then it is only fair to criticise the Rudd government for not heeding the – one would presume – more recent warnings of the same economic perils.

  65. ‘If every corporation went broke, we would survive . . . if every private business went broke we would not survive’ – Scaper

    Almost totally correct Scaper. The Toyota City example where staff are being laid off in their hundreds is not good news, perhaps having an adverse flow-on affect here in Aus.
    One can only hope that BHP, corporations generally go through a rationalisation process in consultation with Government which will minimise the jobs bloodshed.
    BHP’s unilateral action in the laying off of staff in Ravensthorpe WA had been planned quite some months ago, without consultation with the human or government partners in that project.

    The Howard government paid back debt with GST funds which reaped federal revenue amounts exceeding all of Costello’s expectations: a taxation system which Keating should have initiated, but did not. Simple. No big deal in raising taxes, Neil. Twentyseven EU member nations have as a precondition of entry into the EU family that all members MUST have a VAT.
    As for being told by KRudd to spend: The sentiment of spending in support of local businesses may be well intentioned, although contrary to good economic advice in these hard financial times.

    On a lighter note, an observation on my part hearing words tonight on SBS news from the Liberal lightweight, M. Turnbull had me in stitches of laughter, to wit:
    (On the subject of the Federal Government allocating funds to Banks with the aim of those banks distributing financial assistance to struggling businesses)
    Paraphrased:
    ‘this is just another example of the government increasing profits for the banks’ – M Turnbull

    Where in the heck do these braindead Liberals crawl from to lead the Liberal Party? I say let Julie bishop into the Liberal leadership position now, forthwith (Tarvydas suit collection, of course).
    This country may need some comic relief soon. Julie and Mal will provide same, with another large pack of Liberal dickheads waiting in the wings to provide more humour. Dear oh dear. What a political mess this Liberal rabble is!

  66. “The Howard government paid back debt with GST funds which reaped federal revenue amounts exceeding all of Costello’s expectations:
    Oftenbark, on January 24th, 2009 at 9:58 pm Said:”

    My understanding is that the GST is a state tax but i could be wrong. How about this statement- perhaps the Howard/costello govt did a good job. The halving of the unemployment rate and the paying off all the Federal govt debt was due to good government. You know it is a possibility.

    Anyway Howards second budget was a surplus budget. This was before the GST was introduced and the mining boom did not start until at least 2001. Some say it started in 2003.

  67. John McPhilbin, on January 24th, 2009 at 1:42 pm

    I think you may have misinterpreted my meaning of ‘hard to debate’. I simply couldn’t find an argument that says ’scaper’ is wrong. ‘WAKE UP AUSTRALIA’ is also well-pointed out in your comments.

    Perhaps, a major clean out is the only way and if that means increased hardship for everybody, that’s what it takes.

    Scaper is wrong! A politic of greed can take the form of a Luddite’s nightmare which values a taste for sluicing blood-vengeance, wreaking wanton destruction, and an imagined return to a dreamy prior Golden Age of simplicity.

    What is needed is a ‘cleaning up’ not a ‘cleaning out’ in a COMMONwealth. Big businesses do things bigger and draw on economies of scale; things that no small business can; some of those things are good…if they provide a social dividend. The object is to harness corporations, knowing full well what they are and their abilities to churn people, not to destroy them, imho. I am unconvinced that society is best served by phasing out the big mining trucks and replacing them with Tonkas; nor am I convinced that globalism is dead in the rush to regional protectionism (another on the WEF’s list of possible futures).

  68. As usual just “accentuate the negative”.

  69. ‘If every corporation went broke, we would survive . . . if every private business went broke we would not survive’ – Scaper

    Oh by the way you are so much of an idiot scaper.. that you should be certified.

    You are a total joke/jerk !

    You are just thick.

  70. I thought you didnt attack ( oh john you said this and that and it was rude) , you are so predictable.

    It wasnt that long ago i was going to ask if you could have a chance, i would off regretted that for sure.

    (I forgot …scaper your on pills cause thats my way of abusing people)

  71. M1+M2+M3=M3 Squared

    Watch the name calling. Neil of Sydney is almost always at odds with some of the comments and topics pertaining to his beloved Howard era government, but to give him credit I’ve yet to come across him using names’ like ‘idiot’, jerk and ‘thick’. And let me tell you Neil can be very entertaining at times with his comments.

    Aquanut, who ranks as one of the most polite commentors I’ve come across, is telling you also like he sees it. It takes a bit to get Aqua’s back up.

    Legion

    I don’t know about you but I’m it’s becoming quite evident that there will be no easy answers in the clean-out/clean -up. You give some food for thought with your comments as usual. Cheers.

  72. Neil and Tony both correct. There was no excuse for Rudd not heeding the warnings either and being reactionary. But unlike Howard he is listening to the current warnings and is putting into place long term measures to deal with them. The one big exception is the stupidity of Internet Filtering, his government is ignoring every industry and expert warning out there on that.

    Big difference now is that a lot of what Rudd is doing is for long term strategic planning instead of short term political gain, which is why he is often (wrongly) criticised for not doing anything or not doing things immediately.

  73. Gee, someone that responds with an attack on myself but no argument to prove otherwise my observations of near twenty years in business.

    Such great debating skills…I am humbled!

    As far as I stand this person has lost any credibility if there was any in the first place and I will not respond in the future!

    But I’m sure the attacks will persist knowing this…it is the Nature of the person.

    Troll comes to mind.

  74. Nah scaper that isn’t trolling. Over at Blogocracy we had a few real trolls (and one or two that were extremely good at getting the reactions they wanted (and in baiting me)).

    This is just a very base personal attack.

  75. Adrian, thanks for the clarification.

  76. “But unlike Howard he is listening to the current warnings and is putting into place long term measures to deal with them.
    Adrian of Nowra, on January 25th, 2009 at 8:24 am Said:”

    Hay Adrian- its shut the gate the horse has bolted. Rudd had no idea about the GFC otherwise it would have been a central part of the not too long ago budget. We have already lost a large chuck of our super and some people cannot get access to their savings.

    Rudd and Swan have no idea of what to do. They are just hoping that their policies (if you could call them that) will work.

    As for the advice they are getting from economists- I hope they reject it. These people are all theory and have no practicle use. Give me someone with common sense any day.

    Howard/Costello had common sense – The ALP does not

  77. Neil, can you specifically tell us where Rudd and Swan have no idea what to do, especially since most of what they have done as been complimented by industry and financial institutions, including those who traditionally favour the right, yet conversely Turnbull’s offerings (as slim and muddled as they are) have been criticised, as have the previous government’s policies.

    Howard and Costello had no sense as history is proving, just short term opportunistic offerings for political gain with no plans for the strategic well being of the country. If they had the slightest bit of sense and foresight we would be nowhere near the mess we are in.

  78. “Howard and Costello had no sense as history is proving, just short term opportunistic offerings for political gain with no plans for the strategic well being of the country.
    Adrian of Nowra, on January 25th, 2009 at 7:13 pm Said:”

    Mate you have totally lost it. If you say paying off all the Federal govt debt is short term policy you are crazy.

    About 2 months ago we had an American come to visit us at work and he could not believe the headlines. They were something like our budget surplus is not going to be as large as we expected.

    Budget surplus??? The American found it amazing that we were arguing about how big the surplus was going to be.

    I unfortunately had to tell him that the people who produced the surpluses were voted out of office. Antd they were replaced by people who can only produce debt and unemployment.

  79. “About 2 months ago we had an American come to visit us at work and he could not believe the headlines. They were something like our budget surplus is not going to be as large as we expected”. (Neil).

    Neil, did you tell your visitor that the headline was most likely on a Murdoch paper whose sole aim is to discredit the Rudd Government? Did you also tell him that Murdoch is now an American?

  80. “Neil, did you tell your visitor that the headline was most likely on a Murdoch paper whose sole aim is to discredit the Rudd Government?
    Miglo, on January 25th, 2009 at 7:38 pm Said:”

    Whats your point. I am sure there were lots of people arguing about how big the surplus was going to be. It was not to be as big as expected because of world problems.

    My American friend was amazed that we were arguing about a budget surplus since this is not something they have experienced for many years. I am just telling you what he told me. So what if a murdoch paper said this. It is true.

    And I said I had to tell him that the people who had produced the surpluses were voted out of office to be replaced by people who had created the highest unemployment rate since the great depression last time they were in power. Furthermore the ALP created the highest Federal govt debt in Australian history.

    he could not believe what i told him

  81. Over and over the same old thing Neil, and it was the same thing Abbott went on about in QandA. A surplus that apparently is more important than anything else, more important than education, health, infrastructure, social services, skills and the long term strategic well being of the nation.

    My god 11½ years of neglect, raking in a windfall not of their making and now the only thing you can go on about is that surplus gained through neglect. What a woeful legacy to leave behind.

    Abbott had no answer to the question posed to him when he bragged about a 22 billion surplus and was asked, “What about health, health, education, skills, manufacturing, infrastructure and productivity?” All went backwards after 11½ years in time of great prosperity. How can this be? How at a time of the greatest prosperity this country has seen and a windfall to the government of such magnitude the treasurer could not estimate it one month to the next that all these things and more went backwards under the Howard government, and it is now left to a Labor government in a time of financial crisis not of their making to get all these things back on track or the strategic future of the country is one of second class world citizens with third rate educations and health care. That was the outcome of Howard’s large surpluses whilst wasting millions of tax payers money on party political advertising and bribing the electorate to win elections.

    History will record the Howard years as the greatest wasted opportunity ever.

  82. “My god 11½ years of neglect, raking in a windfall not of their making and now the only thing you can go on about is that surplus gained through neglect.
    Adrian of Nowra, on January 25th, 2009 at 8:05 pm Said:”

    Not of their making??? How do you know. You are assuming that if the ALP was in power from 1996-2007 this same mining boom would of happened. You do not know. Anyway I have been told that the ming boom did not start until 2003. Any maybe Howard got better prices for us. Everybody knows that Showpony, Daffy Duck and the communist are pushovers.

    My own belief is that unemployment fell because investors were comfortable with the Howard/Costello govt. People were willing to have a go. Some people were successful and some people went bankrupt. But small and medium business can create more jobs than any mining boom.

  83. Well Neil why didn’t education, health, skills, social services, infrastructure, productivity and manufacturing improve under the great Howard?

    That has always had me perplexed in that you say the prosperity was due to the Howard government yet all these areas went backwards under him during this time of great prosperity you attribute to him. Surely a great leader in power for more than a decade would have improved all these things in that amount of time, yet instead the retracted?

  84. Neil

    My own belief is that unemployment fell because investors were comfortable with the Howard/Costello govt. People were willing to have a go. Some people were successful and some people went bankrupt. But small and medium business can create more jobs than any mining boom.

    China’s demand and companies like BHP and RIO’s ability to accommodate as well our abundance of resources pretty much assured a mining boom.

    Strating with low interest rates (which were a global phenomenon largely because of China’s ability to produce cheaply many of the products we like to consume/buy as well as an abundance of foreign investment dollars coming from countries as China and oil rich countries into the US and Australia etc) and to progressively lax lending to accommodate the flow if investment dollars literally assured that bubbles in stocks, housing and consumer spending would result. Personal debt has been by far the major driver of our economy through the Howard years.

    And they didn’t suspect it would end badly? ‘Low interest rates means people can borrow more than they have ever been able to’ was Howard’s mantra.

  85. Neil

    How many jobs were created during the Howard era as the result of increased credit spending? Large chunks in the finance, building, retail, etc,etc. The economy expanded because of the excess use of credit and now it’s contracting, meaning the economy is going to be ‘right sized’ as a direct result of the hands-off policies of the Howard Government.

  86. “China’s demand and companies like BHP and RIO’s ability to accommodate as well our abundance of resources pretty much assured a mining boom.
    John McPhilbin, on January 25th, 2009 at 8:43 pm Said:”

    John we have had a mining boom for the last 200 years. We also used to ride on the sheeps back.

    I will agree that the mining boom gave Costello lots of money. However it is debatable when this boom started or if many jobs were created. Some say 2001, some say 2003. Anyway Costello had several surplus budgets before the mining boom, before the GST, before our low unemployment rate.

    Unemployment was at 8% in 1996 and at 6% in 2000. Mining boom may not have started until 2003.

    Also our Federal debt was $96B in 1996 with an interest cost of $8,500 MILLION DOLLARS/year. We now save this much every year because of decisions taken by Mr Howard.

    Thats a lot of savings.

    As for the advice they are getting from the expert economists- i would reject it.

    Give me the Cairns taxi driver any day.

  87. “he could not believe what i told him” (Neil).

    There’s nothing so unusual about Neil. I think most people would have trouble believing what you say.

    That’s probably why you say the same thing over and over and over again.

  88. “There’s nothing so unusual about Neil. I think most people would have trouble believing what you say.
    Miglo, on January 25th, 2009 at 9:31 pm Said:”

    Whats your point?? Are you calling me a liar. It did happen. We had an American visitor at the place I work who told me about a headline he read in an Australian newspaper when he arrived. I cannot remember the exact words but it was an article about how our budget surplus would not be as big as estimated in the last budget.

    He was amazed that we were arguing about how big the surplus was going to be since Americans only talk about how big the deficit is going to be.

    I then told him that the people who produced the surplus were voted out of office. Furthermore they were told to not come back until you have learnt your lesson.

    He was dumbfounded

  89. Neil, I’ve read my posts and I can’t find anywhere that I’ve called you a liar. The way I see it is that you present your point of view, as you are entitled to do, but as the blog responds reveal, nobody is buying it.

  90. “The way I see it is that you present your point of view, as you are entitled to do, but as the blog responds reveal, nobody is buying it.
    Miglo, on January 25th, 2009 at 9:47 pm Said:”

    Maybe so but how come we were running budget surpluses when the American govt was running humungious budget deficits??? In an era of global prosperity the US govt ( and i think lots of other govts) could not run a surplus. But Howard/costello could.

  91. Because the US got George W Bush (a conservative) who took a record US surplus and blew it in 18 months and then continued to bleed money at record rates from then on. Also the US doesn’t have the amount of raw resources we do and relies heavily on manufacturing, which was mostly moved offshore.

    Howard and Costelllo ran surpluses for firstly they inherited a quickly improving economy due to the reforms Hawke and Keating had introduced, something most economists acknowledged and Howard himself did in 1996.

    They then slashed and burnt taking great chunks of money from health, education, infrastructure, social services, R&D etc., money they never fully returned to the previous levels, even when they were raking in massive revenues.

    Then they increased taxes in real terms to become the highest taxing government in our history.

    Finally throughout they didn’t spend on the basics like education, health, social services, infrastructure, R&D etc. even when they could afford to spend on them.

    Take R&D for example. Even though it was adding to debt, Keating continued to fund it to the level of making Australia as one of the highest spending OECD nations on R&D. He and Hawke before him knew the high importance of R&D to a modern nation.

    One of Howard’s first expenditure cuts and one of the most savage (foreign aid was another) was to slash R&D from amongst the highest in the OECD to the rock bottom lowest. A level he was never to restore in 11½ years of government, and along with his education cuts he was leading us to become the dumb nation, meaning if it continued there would be a bleak future for the country and something future governments would have to spend billions to put to right. Of course that didn’t worry Howard for it would not be his problem by then even though he caused it.

    Sorry Neil, as much as you spruik high praise for the Howard government racking up huge surpluses, it really is a negative and something Costello began to become embarrassed over when he could no longer get close to predicting one month to the next.

    Of course your American friend would have only got your version of the surplus story and not all the background ,and I can just imagine how fair and balanced you would have been. Let me talk to the same American and I can guarantee you he would come away and say what a good thing it was that Australia voted Howard out.

  92. “Give me the Cairns taxi driver any day.”

    (ioi) I think you’ve got your blinkers on Neil, but hey, you’re entitled to your opinion. WHat’s really hurting us now is the level of private debt that was allowed to accumulate under the Howard Government’s watch. Spending is what keeps the heart of the economy flowing. The arteries of the economy are being blocked. Take the internal fragility caused by excess debt along with the external shocks around the globe and we’re simply not prepared for what’s happening.

    Unfortunately, you, myself and everyone else now have a front row seat to the calamity. You can’t argue that the Howard Government put us in a great position just because they paid down much of the public debt (with all the neglect that that also implies as Adrian points out) when they effectively allowed the burden to be passed on to individuals.

    Anyhow, watch with us as businesses shut down, credit dries up, unemployment balloons, and personal bankruptcies rise and ask yourself if the Howard government could have and should have done better than they did.

  93. In spite of the fact that commercial property values are in need of correcting regardless of what actions are taken, Rudd has tagged Turnbull for what he is ‘ a market fundamentalist..

    Turnbull says let market decide
    https://blogocrats.wordpress.com/2009/01/24/lucky-bastards-howard-govt-legacy-shines-like-a-beacon/#comment-17772

    MALCOLM Turnbull wants Kevin Rudd to allow the market to “run its course” on commercial property values despite government fears the global financial crisis could drive a collapse that would threaten 50,000 Australian jobs.

    And the Opposition Leader has accused the Prime Minister of padding bank profits instead of helping small and medium-sized employers struggling to keep afloat in the face of the worsening credit squeeze.

    As the global financial crisis continued to dominate politics yesterday, Mr Rudd savaged Mr Turnbull, saying he was “a market fundamentalist” unwilling to act to protect families.

    The debate on the proper role of government in the economic slowdown came just a day after Wayne Swan told a meeting of business people in New York the crisis had exposed opponents of government regulation of markets as “false prophets”.

    The US problem In a nutshell, and the same one that exists here:

    “The current crisis just as convincingly represents a failure of the Big Government/Neoconservative (or, outside the United States, what is called“neoliberal”) model that promotes deregulation, reduced supervision and oversight, privatization, and consolidation of market power in the hands of money manager capitalists.

    In the United States, there has been a long-run trend that favors relatively unregulated “markets” over regulated banks that has also played into the hands of neoconservatives. The current financial crisis is a prime example of the damage that can be done by what has been called the “post-regulatory environment” (Thomas 2008).

    “The swing toward markets and away from regulated banking greatly increased risk, while at the same time it necessarily extended government assurance to the unregulated institutions for the simple reason that the government cannot allow a financial crisis to threaten the economy.What Bernanke called “The Great Moderation” is also known as the “Greenspan put”—the belief that no activity is too risky because the Fed will intervene if things go bad. Unfortunately, it is Chairman Bernanke who is left to clean up the mess left by years of lax oversight and deregulation that operated to the advantage of Wall Street.”

  94. Squared

    I see many analysts are starting to view the market in the same way I have been for some time now. No, it’s not being pessimistic for the sake of being pessimistic, or contrary for the sake of being contrary, it’s cold hard reality.

    Reporting season bloodbath expected by analysts
    http://www.theaustralian.news.com.au/business/story/0,28124,24961866-643,00.html
    SHAREHOLDERS should expect the worst from the coming profit reporting season.

    Analysts are betting that the companies falling short of their earnings forecasts will exceed by eight to one those that meet their forecasts.

  95. Anyhow, watch with us as businesses shut down, credit dries up, unemployment balloons, and personal bankruptcies rise….

    You should have already worked out Neil’s response to that one Mac.

    That is all Rudd’s fault. Howard is gone, and even though he was in power for 11½ years and had plenty of time to do some long term strategic planning for the nation, what happens now is all because of the Australian people being stupid and having a brain fart in November and electing a Labor government, which was certain to destroy this country.

    If only Howard had been reelected we would still be prosperous and living high on the (personal debt) hog, jobs would be abundant and businesses would be making record profits, and government surpluses would be exponentially accumulating. How Howard would have achieved this is a complete mystery, unless he savagely cut back on everything, massively increased taxes (GST 22½%? anyone) and sold every piece of Australia to China. Of course all those measures are also a negative gain in a global financial downturn and a long term disaster for the nation. But trust us Neil would say, Howard and Costello would have done it and come out the other end with the sun shining out of their arses.

  96. It will be interesting to see just how the banks performed in the last quarter…I suspect write downs that will detract from the bottom line but still healthy profits.

    I also suspect a downward trend on other stocks due to profit downgrades of the bottom lines that would have been considered acceptable a dozen years ago!

    A trigger for some to cut staff to maintain the greed!!!

  97. Tee hee, Adrian. It would have to be a fire sale though. China’s starting to go a bit rough, now. Who knows, if it gets worse crayfish might be cheap enough for the domestic market! Lol.

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