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Costello's spin « Previous | |Next »
December 2, 2004

Have you noticed the way Peter Costello, the Federal Treasurer, is media managing the Australian economy these days?

The economic horizon is darkening. Australia's growth rates are declining. The last quarter was the lowest rate of growth (0.3%) since the introduction of GST. That does question Treasury's prediction that the economy will expand by 3.5 per cent for the next four years.That forecast rests heavily on the assumption that exports will fill the void left by the end of the housing boom.

Is it likely that exports will take over as the economy's next growth engine as domestic demand growth slows?

Costello's response to the darkening horizon, as it was reported in the Australian Financial Review, is evasive:

"... the economy is cooling ...however, the economy's prospects were bright thanks to the government's pre-election stimulus....the slowdown is on track....the economy is growing in a consistent and sustainable way..."

And so on. Costello is talking things up. He is saying that he has things under control, despite the fall in exports and a growing current account deficit.

If exports are falling, then they will not fill the void left by the end of the housing boom will they? That means declining economic growth.

Though Costello is talking about the slowdown in domestic spending, he is saying little about the dangers to Australia flowing from America's twin deficits. What he did say about the international economy was that China needed to revalue its currency to help our exporters.

Why not the option of Australia becoming a more high value-adding knowledge economy? Is that not a better long-term option for Australia, than repeating the old Fraser trick of pulling another resource boom out of the hat to plug the gap opened up by the end of the housing boom and the failure of exports to take off?

Costello is all smoke and mirrors.

Where is the ALP? Did not the dazzling glimmer twins say that they would be working extra hard to establish the ALP's economic creditionals? So where is Wayne Swan, the new Treasury spokesperson? Do we bloggers have to do the critical job whilst the ALP continues to lick its wounds.

Those who are more critical are dismissed as mere economic Cassandra's, opines the Australian Financial Review. We cannot have any criticism of the economic managers or their economic governance can we? That is talking things down.

The editorial in the AFR then offers some advice to Costello:

"Despite talking matters mildly up yesterday, he can now tell cabinet that things are really crook, insist on spending cuts and accelerate reforms. In the long run that is the only guarantee of prosperity."

The 'only' guarantee? There is no other option?

Do you get the impression that a lot of neo-liberal economics is really politics and media spin? You pay $2.50 to the AFR for that advice. And it is saying very little about what is happening in the US economy. The AFR does across as the ascetic priests whose straightened conception of utilitarian morality is to make us suffer.

| Posted by Gary Sauer-Thompson at 8:47 PM | | Comments (9)


Yeah, but he still likes to dish out advice on managing our household budgets.


*Consumers* are spending big?

*rolls eyes*

Funny that, I thought that the highly leveraged households and good high spending consumers were keeping the economy afloat.

Did not their spending increase by 1.1 per cent to be up 5.4 per cent over the year?

Note the imagery of the economy as a ship that is 'afloat.' It is different to 'heating' and 'cooling.'

Or does the 'heating' and 'cooling' refer to the old fashioned engine room driving the economic ship?

We are now being told that (bad) consumers should spend less on home building and renovation. Families are now required to do some belt-tightening.

All that moral language buried in economics.

Nothing is being said about the financial institutions pushing the lending boundaries on housing lending as they participated in the competitive frenzy that fuelled the housing market.

Yet household indebtedness are at record levels -because average mortgage repayments have risen from 34 per cent to 56 per cent over the past decade due to rising house prices.

Now housing prices are on the slide. So many households will end up owing more to the bank than their house is worth.

Bad news keeps rolling in from the US that means declining growth and increased unemployment.

Pretty scary. No wonder the Canberra spin is on.

Do people notice the little things creeping into everyday living costs?

Just got my bank statement yesterday and the cost of using a Rediteller ATM for non-credit union customers has jumped from $2.50 to $6.00.

Weren't the banks and credit unions meant to be encouraging customers to use ATM instead of us fiollowing tradition and going inside the bank to do our banking?

Have you noticed the way the various charges for online banking are being sneaked in? A few dollars here and few dollars there.

I reckon that we do notice the little things. The bank charges make us angry. The screws are being tightened on us so that the banks can increase their profits.

It is at our expense.

Profit by stealth. Good to see that the provision of banking services is some huge part of our private sector economy.

Very productive sector of the economy.

Exports are in for a very hard time. If the dollar keeps heading up, our competitiveness will nosedive further.

As I have said before, we don't make hard decisions in Australia until we are faced with disaster.

That point can't be too far away.

Now now BigBob.

Remember what the Australian Financial Review said. You are just being an economic Cassandra.

Remember no one believed Cassandra when she warned her companions about impeding future disaster. And that dismissal is Cassandra's tragic fate.

If you continue preaching doom and gloom you will be misunderstood and misinterpreted by the AFR as a madman or crazy doomsday prophet.

If you persist in preaching disaster you will be seen as raving lunatic by the economic elite who manage, and comment on, the economy.

The AFR editorialists has laid a curse on you. You are doomed to have a miserable life.

We in Australia do not have many fearless, fair investigative reporters. We have a lot of hacks who toe the liberal party line and constantly bash Latham/Labour As well we have those who work for murdock and these fearless ??journalists?? are told what to think and write. As a matter of fact journalism in this country has never been so low, in my eyes. The Australian public is not being told the truth but are being manipulated and changed by the - so-called - press
Regards, 'numbat' Qld. 4272


Margo Kingston in her 'Not Happy, John!'book says that whatever its faults, Fairfax is an Australian media Company where journalsim still works. She says:

"I've only got away 2with my activism on media ownership issues becaue I'm employed there .The same applies to my Webdairy journalism.Fairfax journos cling to tenaciously to the remnants of a true journalistic culture, one backed by a charter of editorial independence and journalistic solidarity when journalistic principles are at stake." (p.103)

Personally I think that Margo is talking about the past. Fairfax under Fred Hilmer is more concerned with moving product and advertising.

Instead of being a watchdog of democracy and providing good content to enable citizens to make up their own minds on public issues, Fairfax is rapidly becoming a newspaper whose primary function is to make money by exploiting readers through advertising.

Under Hilmer's watch Fairfax is increasingly about consumers and advertisng dollars. Still Margo's Webdiary survives.

(a) People voted for a market economy so they can damn well learn to live in one. It's not hard, just ask a merchant banker.
(b) The strategy of forcing people (oops, sorry, consumers) to on-line banking and then charging for the convenience was always on. Isn't convenience a 'good' that should attract a premium?