Poisonous Ideas (reposted from JR Nyquist): Not Such A Poisonous Argument

Sometimes — when looking to encapsulate a foundation from which to mount an argument — it is necessary to look afield, and to share common thoughts; tonight’s post does precisely that, and Jeff Nyquist’s excellent article is one we will return to and discuss.

In ensuring I keep abreast with everything in the world I want to, I find that I read copious volumes of other people’s opinion pieces, essays and dissertations, in addition to following the raw flow of news, tonight I refer to a piece a read a couple of years ago by American author, columnist and scholar Jeff Nyquist.

To be clear, I certainly do not believe everything I read, and I disagree with Nyquist as often as I concur with him; even so, when he nails an issue he tends not to miss, and so it is with the piece I have linked to this evening.

Over the coming weeks, I intend to intersperse the comment pieces I have been publishing with other articles written from a more purely conservative philosophical bent; I do believe that all is not well in Western societies — Australia included — and whilst shrill generalisation is not the intention, it does seem that many of these problems emanate from the Left of the political spectrum and, indeed, could be characterised as the flows at the end of the tributaries of the “River Communism.”

With the strong caveat that I don’t agree with everything in this article (and to the extent that I do agree with some elements of it, that agreement is qualified), I would urge all of my readers to click the link and read the article I have reposted here.

And to think about it; to discuss it with family, friends and colleagues; indeed, share it: even if you disagree in the strongest terms with the substance of the Nyquist argument, forward the link to those around you with whom you discuss issues of substance, and see what they think.

And send me comments: there will be articles arising from the general ideas that are covered by Nyquist and — as always — all views, assenting, dissenting or otherwise — are encouraged and welcomed.

Please click the link below and read the attached article. I think the issues covered are important, and that it is high time to nudge social debate back onto a more meaningful footing. I look forward to hearing what people think.

And with that, over to J.R. Nyquist…

Poisonous Ideas | JR Nyquist | FINANCIAL SENSE.


We Save And We Stimulate: Economics, Wayne Swan Style

Treasurer Wayne Swan put in a truly cringeworthy performance yesterday; I think the Treasurer was trying to make the case for his government’s economical credentials but, unfortunately, he shot himself in the foot.

And underlined why Labor governments cannot be trusted with money.

According to Wayne Swan, the government is “ready” to introduce a further stimulus package if the economy crashes.

According to Swan, “This government has a track record of delivering stimulus to the Australian economy in times of economic difficulty.”

“This government has a proven capacity to respond to global financial instability,” Mr Swan said. “We’ve done it in the past and we can do it again, if it should be necessary.”

Well, quite.

A track record of throwing money at everything that moves, with little regard for value for money or for propriety.

How many tens of billions of dollars did the federal government borrow to deliver that stimulus?

In the next breath — with an eye on Labor’s promise to run a budget surplus next year — Swan says that “You can be…making savings and implementing our fiscal discipline, while at the same time have a growth outlook that is consistent with our view that we need to see growth at trend or above.”

Excuse me? Fiscal discipline?

Fiscal discipline from a government that has borrowed $200 billion in four years?

Spare me.

More to the point, on the one hand Swan talks about “making savings” (read, budget spending cuts) and then on the other, talks about borrowing more foreign money to pump it through the economy if the effects of his “savings” induces a recession.

Can anyone spot the problem with this picture?

Ever the pious type, Swan continues to utter mealy-mouthed slogans about the need to run a tight ship in light of the problems in foreign countries.

But what about the problems in Australia?

Our own economy isn’t exactly in stellar shape; consumer confidence is at an all-time low; businesses are both shedding and refusing to hire staff; tourism and other industries exposed to the high Australian dollar are being ravaged, unemployment is beginning to rise, productivity is stalled, and if the “mining boom” is excluded, Australia is already in heavy recession.

Of course, the Gillard government — in which Swan is a senior minister — wants to tax hell out of the mining sector, for good measure; and it wants to impose its blasted carbon tax at a time every other substantial country in the world is either abandoning their own “emissions trading” measures or rethinking their inclination to even go down that track.

Those proposed taxes — despite their framing — aren’t aimed at the national good; they’re aimed at manufacturing a budget surplus.

The Labor Party has committed itself to producing a budget surplus by the 2012-13 financial year; it did this in the middle of last year’s election campaign.

It was a silly promise on one level; here in Australia we have absolutely no control over what happens in Europe, the US, or China, which is showing signs of entering an economic slowdown itself.

Yet on another level, it was a promise that had to be made — by borrowing so much foreign money during the so-called GFC and flinging it around like confetti, with little apparent regard for any standards of probity or accountability insofar as how that money was handed out, the government had left itself wide open to charges of mismanagement, incompetence and fiscal ineptitude.

And Labor generally, and historically, isn’t exactly regarded as the party of economic prudence, the early Keating years notwithstanding.

Now Swan says he can slash government spending and promote economic growth; is financially responsible whilst presiding over record government deficits; and will “devise” another stimulus package if the economy deteriorates or enters recession (which is likely) whilst government debt is at a record $210 billion, and rising.

Sound like good, old-fashioned wishful thinking to me.

Still, Swan is the world’s best Finance Minister…

What do you think?

World’s Best Finance Minister? Wayne Swan, What A Joke!

European finance magazine Euromoney has today done something truly cringeworthy and totally lacking in credibility: it has named Australian Treasurer Wayne Swan as its Finance Minister of the Year.

Excuse me whilst I locate, and use, the sick bag.

Before we get onto the merits or otherwise of Wayne Swan, let’s have a look at this award.

The magazine is reputable enough, although its list of winners in the last 30 years is difficult to digest.

In seven of those years it didn’t even award a winner, and the years it did feature luminaries from such noted economic powerhouses as Serbia, Nigeria, the Philipines, and Pakistan.

And of course, “our” Paul Keating in 1984.

It’s very interesting that a European money magazine is making pronouncements about who might be (in our jargon) the best Treasurer in the world.

After all, half of Europe is bankrupt, and the other half is being pulled into the abyss along with the basket cases.

And once the German public becomes resolute in its desire to reinstate its Deutschemark and send the Euro into history, rather than bailing the rest of the continent out, the whole disastrous European monetary, social and federal project will also take its place in the dustbin of history.

I note Euromoney has never named a German as “World’s Best Finance Minister.”

Even so…Wayne Swan. How does he stack up?

The unfair comment first is that the guy is as boring as hell; he gives no hint that he believes anything he has to say; he inspires economic pessimism so well that he ought to start an industry to manufacture it; and speaking politically, he has no credibility in the eyes of the voting public whatsoever.

And that’s just presentation.

As Treasurer, he has presided over the greatest deterioration in the financial position of this country in its history.

And to quote shadow Treasurer Joe Hockey today — who said the award was hard to take seriously: “Mr Swan has racked up $154 billion of deficits, he’s yet to deliver a budget surplus and has turned $45 billion in the bank into a $110-billion-dollar credit card bill.”

Well, quite.

Never mind the so-called Global Financial Crisis.

This is a man who presided over fiascos such as the “Building the Education Revolution” program; Pink Batts; Green Loans; the Solar Rebate Scheme; and the hare-brained, ham-fisted, half-baked scheme to buy everyone off with a cheque for $900 under the auspices of looking after them in a crisis.

So much of the money under those programs was wasted, misappropriated or otherwise rorted owing to loose guidelines around its expenditure that it’s difficult to see how the responsible Minister could ever be commended.

And given virtually all of the money thrown around under those schemes was borrowed abroad, it’s impossible to say they were remotely responsible economically.

I say “virtually all” of the money, because the first $45 billion of it came either from the budget surplus the Howard government had built over long years, or from cash reserves Howard and his Treasurer, Peter Costello, had secured in sovereign investments to hold in trust and allocate interest from as a residual extra source of recurrent funding.

No, this Treasurer is the agent of bankruptcy, not the instrument of responsibility.

As a result of today’s award, Swan will no doubt slither around the world and start lecturing other countries about his brilliance and worthiness, in much the same way Kevin Rudd racks up hundreds of thousands of travel dollars per year to lecture other countries and to make a fool of himself internationally — and of Australia — in the process.

There’s an unconfirmed report that Paul Keating — the winner of this award in 1984 — responded that he “didn’t give a f***!” when approached for comment about Swan’s award today.

Irrespective of whether Keating said that or not, however, the response is justified.

Australia is now sitting on $200 billion in debt, with negligible reserves and a sizeable structural budget deficit — all developments that occurred on Swan’s watch.

And again, don’t bore me with the GFC — if we were in real trouble, Wayne Swan is the last man I’d want in charge of the Treasury.

More on that in a bit.

This country’s current financial position is far better than that of most of the rest of the developed world, I’ll grant you.

But the massive increases in debt and deficit in the past four years are just the thin edge of the wedge: no Labor government since the second World War has ever proven adept at managing public finances, and the longer this regime remains in office, the more evident will be the painful reminder of that fact.

Yet for the Australian economy to even be in the shape it is — and to be able to withstand to some extent Labor’s best efforts to push it into the red zone — is a credit to Swan’s Liberal predecessors, and not to him in any way.

The Euromoney award may only be made to public officials who currently serve; and this rules out former Treasurer Peter Costello and the Finance ministers who served under him (John Fahey and Nick Minchin).

Those three gentlemen deserve the award Swan received today; Wayne Swan does not.

If, indeed, Euromoney‘s award is even worth having.

I’d like to nominate my own award for “Best Finance Minister” for 2011 — George Osborne, Chancellor of the Exchequer for the United Kingdom and Northern Ireland.

The Conservative government that came to office in Britain last year in coalition with the Liberal Democrats was faced with a public debt bill of £1,200 billion ($1,800 billion); the end result of 13 years of Labour mismanagement, waste, reckless borrowing and profligate spending.

Osborne is doing something about it: tax rises, spending cuts, rationalisations and efficiencies; slowly moving Britain back onto a more sustainable financial footing, and ensuring the country does not default on its debts and that it can pay its way in the world.

It’s not popular and I’m told it isn’t pleasant. But it will work.

And this brings me back to my earlier point: if this country really were in serious monetary trouble, with its back to the wall, at risk of going belly-up, and with the vultures from its creditor nations circling, would anyone have any faith whatsoever in the ability of Wayne Swan to manage Australia’s way out of it?

I didn’t think so.

The Euromoney award is an absolute joke.

And so is Wayne Swan, and any claim he might make to competence as Treasurer.

What a joke. What a fraud. And what a disgrace!


Storm Clouds Gathering: More Perspectives

Following on from last night’s article, it becomes clearer that yes — indeed — the clouds of trouble are gathering.

The head of the World Bank, Robert Zoellick, has now weighed in; according to him, the problems in Europe are far worse than those afflicting the USA.

That’s a big call, given the US is the largest economy in the world.

Mr Zoellick appears to endorse the course of action the British government has embarked on, but notes the riots could play havoc with that particular strategy.

Yet he also praises Australia’s multilateral approach to world affairs, but describes China as a “reluctant stakeholder.”

The comments of Mr Zoellick are surely just a taste of what will come from senior leadership figures on the international money circuit.

Boiled down, his remarks essentially acknowledge Australia has many fingers in many pies, but one or more of those fingers could be badly burnt at a second’s notice.

I’m sure that other major figures in international economic leadership will — at some point — weigh in here with a little more honesty than has been forthcoming thus far overall.

Last night we spoke about the portents (and they’re there — nobody who has responded as yet has denied that there’s a problem; indeed, the only real dissent is over whether Australia could survive a recession or not).

I’m actually not going to speak for so long tonight; my post is merely to highlight the comments of the head of the World Bank as a pre-eminent figure in international economics who, clearly, is uncomfortable with the direction in which things are headed.

We’ll continue to follow this issue as it develops, and I’m sure we’ll continue to talk about it as it does.