Andrew Bolt vs Kevin Rudd: A Total Refusal To Answer Anything

PRIME MINISTER Kevin Rudd appeared today on Andrew Bolt’s Sunday talk programme, The Bolt Report; it may be surprising that Bolt was fairly easy on Rudd, but what will surprise nobody is the fact the Prime Minister steadfastly refused to meaningfully answer any question of substance Bolt put to him.

I have to say I was disappointed by this effort; the Bolt/Rudd interview has been given a lot of hype on News Limited websites in the past few days, even to the point of being described as “confrontational at times.”

Based on the version broadcast, it was nothing of the sort.

It goes without saying that this pre-taped interview needed to be edited to fit the available airtime allocated to it on Bolt’s show, and I accept that.

But even so, there are things to be taken from Rudd’s performance.

The unruly mess (and significant loss of life) emanating from Labor’s various regimes on asylum seekers since 2008 was the result of Labor honouring a 2007 election commitment to abolish the Howard government’s Pacific Solution.

This is the facile defence Rudd used to deflect any responsibility on the ALP’s part.

He is sticking, obliquely, to his contention that Coalition policy on asylum seekers and “turning back the boats” could start a war with Indonesia.

On climate change, Rudd refuses to give any specific answer to any question mandating a response to scientific propositions Bolt put to him, or — significantly — to explain his own position on climate change when he disagreed outright with the material Bolt presented.

The Global Financial Crisis is repeatedly trotted out to hide behind whenever Bolt attempts to pin Rudd down on the ALP’s shocking record on debts.

Readers can access the full 19-minute interview here.

I really didn’t think I would find myself saying this, but Rudd clearly bested Bolt today.

Perhaps Bolt was trying too hard to keep the tone of the discussion light, or perhaps it was simply the case that there was too much ground to be covered in a relatively short time.

Either way, I expected Bolt to rip Rudd to shreds, and I suspect so too did most viewers.

He didn’t.

But it provides a very stark illustration of the type of election campaign we seem destined to endure from the ALP; lots of open and empty statements and generalisations, no detail, no admissions of error, and absolutely no accountability whatsoever.

And that’s the point.

Rudd, however much he seeks to run from it, is not only responsible for the entire six-year record of Labor in government, but must be held accountable for it.

Many of the problems caused by this government, that are now clear, originated on Rudd’s watch as Prime Minister the first time.

And rolled by Gillard he may have been, the simple truth is that Rudd voted for every decision taken and every measure implemented by Gillard — good, bad or shocking — during her Prime Ministership.

The fact the ALP is still in office at all, given the finely balanced parliamentary numbers, is sufficient to puncture any denials on Rudd’s part, direct or implied, of his explicit support for Gillard, her government, and the decisions it undertook.

Even if stories of subterranean white-anting activities, undertaken concurrently, are right.

I wasn’t looking for Bolt to tear Rudd to shreds just for the look of it; such a notion is grotesque, and doesn’t serve any purpose in terms of meaningful journalistic scrutiny.

That said, however, I expected better.

Labor generally and Rudd specifically have an awful lot to answer for, and if this is the best effort a ferociously anti-ALP identity can mount, then the coming election campaign may very well be the updated version of “Kevin ’07” most of us on the conservative side expect.

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?

Gathering Storm Clouds…

There’s a word Western governments dare not utter; it’s a phenomenon some thought had been eliminated; and the GFC of three years ago — mild, in the rear-view mirror — lulled many into a false sense of security.

There’s a hard — and unpalatable — economic reality brewing; and this time, the storm is almost perfect.

Recessions aren’t sexy events, and nobody really wants them.

Governments hate talking about the prospect of them, or even acknowledging they exist, and will say and do almost anything these days to will them out of existence.

A recession is as good as a series of interest rate rises in a democratic country these days as a perceived recipe for certain electoral defeat.

But the grand-daddy of world recessions is on its way, and it is largely the fault of elected governments.

I’m going to put a whole stack of indicators down here tonight and I wonder — I just wonder — if anyone can argue the other side; that is, that a world recession is not imminent.

I’m no pessimist, mind; but the perfect storm is brewing, and the storm clouds are gathering.

Innocuously enough, the price of crude oil is falling, and that of gold rocketing; gold is a perceived investor safe haven in troubled times, and the price of oil declines on the back of lack of demand and, in this case, world markets spooked by lack of confidence.

Stock exchanges in the Western world have been on a rollercoaster these past couple of weeks, and whilst there has not as yet been an overall, sustained crash, the stock markets also reflect, as a crude measure, the general sentiment of the wider world economy and reflect broader trends as an element of that.

Governments around the world, for too long, have lived through a vicarious lack of restraint, or appalling fiscal and monetary policies, or a combination of the two.

Market economies are just that: market economies. And they work, and work well, too — when not distorted, interfered with or intervened in by governments obsessed with the political cycle.

And nobody thinks a recession is rollickin’ good fun, either. But there’s a reason recessions appear roughly every seven years in the cycle: it’s to impose a market-driven correction on the system.

In Australia, from approximately 1995 until 2008, we didn’t see a recession. Partly through good economic management and partly by virtue of luck, we missed a turn in the cycle whilst other countries foundered in the late 1990s and early 2000s.

We kidded ourselves that it was a golden Australian age: we were enjoying the greatest prosperity in Australian history.

In reality, it was nothing of the sort. It was simply a repeat of our country missing a turn in the cycle as it did in the 1950s under Menzies. In those days, we “rode to prosperity on the sheep’s back” with a little help from our wheat farmers.

Then, as now, the idea of Australia’s “miracle economy” was a myth.

This brings us to the so-called Global Financial Crisis — or GFC — of 2008.

In the USA, decades of so-called sub-prime mortgage lending had caught up with Uncle Sam. Roughly the equivalent of “no-doc” lending in Australia, mortgage originators (primarily Fannie Mae and Freddie Mac) lent money hand over fist to homebuyers of questionable repayment quality and capacity.

When that bubble burst — and hundreds of thousands of foreclosed mortgages flooded the US property market — it was the US government who bailed out the biggest financial institutions, with others left to wither and die.

Unlike Australia, if one buys a house in the USA, if one is unable to continue to pay a mortgage, there exists the opportunity to simply walk away.

Yes, you lose whatever equity you may have built up; but you also lose all liability in relation to the mortgage when you pull up the stumps and move on.

In Britain, many of its major banks carried large exposure to the US sub-prime market, with the result that again, many collapsed — only to be bailed out by the British government.

This cause and effect pattern was replicated elsewhere.

And as market systems are wont to do, the reverberations from the crisis manifested themselves around the world in plunging share markets, plunging oil prices, plunging consumer confidence, soaring gold prices, and knee-jerk reactions from governments desperate to either avert recession at any cost or to minimise and mitigate the scope and duration of recession should it occur.

The money being thrown around at that time — in the name of governments bailing things out or shoring up their economic interests — originated primarily from Chinese economic growth and Russian petrochemical dollars.

And all the while, a host of unresolved issues rested on a steady simmer on the world economic hotplate.

Certainly, here in Australia, we had “stimulus” which basically amounted to the Rudd government throwing $130 billion of borrowed money at anything and everything that moved — and at some things that didn’t.

Certainly, millions of taxpayers got a $900 cheque just for the sake of sending them one.

But the distorted, inflated property bubble was given another pump from the oxygen bottle, and billions of dollars were thrown at ridiculous programs such as “Building the Education Revolution” and the “Pink Batts” fiasco in the name of staving off a recession.

And so now, well, here we are…

One of the greatest acts of economic lunacy in the late 20th century was the Euro: a currency founded on the noble but idiotic belief that it is possible to federate a couple of dozen disparate countries into an economic and political union and — among other things — give them the same single currency to spend.

Many of these countries, whose currencies were rapidly appreciated to qualify for entry into the ERM and then the Euro, were left with nowhere else to go except the path of high sovereign debt to compensate for the fact there was less money in real terms to run their economies as a consequence.

Britain — which (wisely) stayed away from the ERM under Margaret Thatcher, later joined and then left again under John Major, and never took the Euro as its currency (despite an unprecented push under Tony Blair, which even saw the emergence of Euro trading zones in Britain) nonetheless went on a gargantuan debt and spending binge under the Chancellorship, and later the Prime Ministership, of Gordon Brown; events which also covered the period of the bailout of the British banks during the so-called GFC.

And the USA has been borrowing trillions of dollars for decades to fuel its economy; in the long-term, a completely unstable model.

Now, China has decided it wishes to slow its rate of economic growth from 10% per annum to 7% to deal with domestic inflation in that country, and given a large slice of the West has become dependent on Chinese spending and lending in the last 20 years, the system has arrived at the point where something has to give.

Economies across Europe are collapsing — or at least buckling — under the strain. Ireland and Greece have already needed to be bailed out; Spain, Italy and Portugal are unsteady on their feet; and now we have France with a decided case of the wobbles.

There is only so much Germany can do, and there are even rumblings that Europe’s one enduring powerhouse over the last thirty years is also showing signs of trouble.

In Britain, a Conservative-led government is frantically — and ruthlessly — slashing government expenditure, and with it, the public sector borrowing requirement. The problem is that these painful reforms will take time to produce the desired effect: a lean economy trimmed of fat and primed for growth. In the short-term, the withdrawal of money from the real economy, as part of these measures, may induce another recession there; the difference being that such a recession may actually effect the structural correction required to ready Britain for sustainable economic growth.

China this week, following the first downgrade to the US government credit rating in 94 years, issued a strident rebuke to the Americans about living within their means and not borrowing endlessly from the rest of the world to maintain its culture, artificially inflate its economic position, and maintain its military might.

Ominous words indeed from a country not only a major creditor nation to the West, but a rising and potentially malevolent military superpower in its own right.

Talking of superpowers, and despite its domestic problems (something Russia has papered over for centuries anyway), three years ago — to resolve a dispute over payment terms, Russia shut off the main gas pipeline to most of Eastern Europe to make a point, and show Europe who was boss.

Russia, too, has spent a good portion of the past decade remilitarising and modernising its military hardware.

Most of Europe, as well as Britain, are almost solely reliant on Russian gas and largely dependent on its petroleum production. North Sea oil is a minnow compared to the Russian oil behemoths.

Russian companies — state-owned and private — now own vast business interests in Britain and the rest of Europe across a raft of industry and service sectors, including sizeable holdings in the media.

But returning to the US — its burgeoning debts appear to have caught up with it; indeed, the deal to lift the US debt ceiling struck this week also involved legislated commitments to begin to trim trillions of dollars out of recurrent government spending over the next four years to start to nudge the US toward a more sustainable financial footing.

And for the last three years, the US treasury has maintained a policy of simply printing more money: it devalues the US currency, and helps the US deflate its own economy, but harms every other country with dealings with the USA.

If you doubt this, look no further than Australian exporters struggling under the burden of an Australian dollar worth 35% more than it was five years ago.

And it is a poke in the eye to China, whose investments and debt holdings, in US dollars, become steadily more worthless as the process goes on.

In all of these cases, governments have been serial borrowers, and serial bailers-out of businesses that ought to have failed in the pre-eminent market conditions that existed three years ago.

And what of Australia?

Having come to power with a clean debt slate, the Rudd/Gillard government has already racked up $190 billion in government debt, with a bill before parliament to raise our own debt ceiling to $250 billion — all in the space of four years.

Along with throwing money at virtually everything and anything in 2008-09, the Labor government here achieved a special piece of economic insanity: through inflated subsidies to the property sector, it artificially maintained the ballooning boom bubble in the housing market.

In practical terms, this meant that most people who had borrowed 90, 95, 100 percent — or more — of the purchase price of their properties, and thus leveraged to the hilt, were shielded from the threat of foreclosure and the loss of their asset.

In other words, the financial imbecility of brainless idiots borrowing large amounts of money at the very peak of a property boom — taking maximum risk with little or no equity holding — were protected from the consequences of their own stupidity by taxpayer dollars sluiced around by a government that borrowed heavily on world capital markets in order to do so.

Clearly, this post is a first point in the discussion. At double the normal length of my articles, it’s time to down tools and let people think about these issues.

But the economic storm clouds are building.

This time, unlike 2008, there isn’t a government buyout, or bailout, or handout.

This time, the corrections are going to need to be made, the world over.

If they’re not made now, we will be back at this point in another couple of years.

And racking up more debt to Russia and China is no solution. After all, they’ve both made it known they’re…unhappy…with the West and the way it has handled these things.

We’ll talk more about all of this in the next few days, I’m sure.

In the meantime, what do you think?