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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

masters of the universe « Previous | |Next »
August 11, 2007

Well now, the economy has become the centre of public and political debate hasn't it. Isn't that where Howard wanted it? It's his territory and he easily repels all raids on the citadel.

Howard and Costello have spun their wares about them being the greatest economic managers in the history of the nation for a decade or more. Nay, in the history of the nation. They are the ones in charge and they take the hard economic decisions to ensure national prosperity, etc etc.

metooism.jpg
Bill Leak

Only trouble is Costello is on the defensive. The recent events of global negative economic flows spinning out from the sub-prime market in the US indicate that they don't have things under control. Not even the boys at Macquarie Bank have either. Global economic flows are highly volatile, and Howard and Costello just stand and watch them happen.

So they are ducking for cover, crossing their fingers that the mining boom does not go bust, and talking fast and often about the economic fundamentals being in place. Not that they would admit ducking for cover, of course. And you can understand why: it would mean that they are no the masters of the universe.

| Posted by Gary Sauer-Thompson at 10:03 AM | | Comments (10)
Comments

Comments

Gary,
one minute Howard and Costello say that they are the greatest economic managers ever; the next minute they are spending as if there is no tomorrow. Doesn't their spending the (pork barrel and tax cuts) increase our spending (consumption) and so increase inflationary pressure?

Doesn't that then increase the likelihood of the RBA increasing interest rates in November to clamp down on inflation? Shouldn't the economist's finger be pointed at the Coalition?

Nan,
They are spending the boom not putting it away for the time when the boom finishes. I reckon they think the boom will never finish.

Nan, such questioning is like asking if God exists.

John and Peter, like the disciples of old, should be revered not questioned!

The dog will be shaggin' Howards leg next round maybe

I think Hulk Howard needs to change the game to WWF to win this one. Great series of cartoons by Bill Leak.

That noise we're all hearing is the sound of another coalition myth exploding.

Keating spent years trying to explain this stuff to the public - we're going global guys, but you'll be ok as long as you don't accumulate too much personal debt, because that'll hurt if global stuff goes haywire. Your government is no longer master of the economic universe.

Too complex apparently. Relaxed and comfortable sounded much nicer.

Nan,
Didn't Costello say he was opposed to the way that Howard spend up big to get back into power?

Lyn,
take the myths away and we stand naked looking at the terror in the heart of things. That's a pretty fearful situation to be in.

So who or what is going to protect is. We need something to clothe the terror; to make it bearable. The terror at the centre of an unregulated global market is like a giant wrecking ball.

Roundabouts and roller coasters Gary. Some people enjoy the terror, others cover their eyes and pray for it all to stop.

Nan,
I see that the Reserve Bank in its Quarterly Statement warns of inflationary pressure in an economy running at full stretch points:

Weighing up all these considerations, the Board judged that a somewhat more restrictive monetary policy setting was required in order to contain inflation in the medium term. Given all the recent information, inflation appears likely to be somewhat higher than earlier expected. Taking into account the effects of the August policy decision, along with other factors including the dampening effect from the appreciation of the Australian dollar, underlying inflation is forecast to be around 3 per cent over the year to December 2007. Ongoing pressures are currently forecast to keep both underlying and CPI inflation near the top of the target range during 2008.

The RBA does not directly address the increased pressure on inflation from government electoral spending.

But it does point to the possiblity of a further increase in interest rates. Costello was on the defensive as he tried to hose down worries of another interest rate rise this year, saying inflation is already at the high point of the economic cycle.