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

Canberra gaze « Previous | |Next »
October 31, 2008

Looking back we can see that Treasury and the Reserve Bank of Australia were very slow to pick the financial crisis and the global economic downturn. They downplayed it and its effects on Australia in favour of fighting inflation, and they continued to do so until they could not avoid maintaining their upbeat narrative in the face of what was happening in the global financial system and economy.

Leuniggraph.jpg Leunig

Despite these institutions getting their diagnosis wrong Wayne Swan, the Treasurer, and Kevin Rudd, the Prime Minister, insist that now is not the time to be questioning Treasury or the Reserve Bank. The job is to maintain public confidence, and criticism undermines that, apparently. So much for Rudd Labor's commitment to accountability and transparent public administration in liberal democracy.

It is not often that I agree with John Roskam from the Institute of Public Affairs. But I do in his response to Rudd's Essence of Confidence speech to the Australia Unlimited Roundtable. There Rudd said:

A fundamental role of leadership in the midst of a global crisis of the type we are experiencing is to underpin confidence. Confidence in our financial institutions.Confidence in our markets.Confidence in our economy. Because confidence in the current environment is a fragile commodity; whatever the strength of the fundamentals.We all saw the huge blow to confidence from the US Congress's initial failure to pass the recent bailout package. It is incumbent upon all of us in political leadership to be very careful about what we say. Now is not the time to be questioning the head of the Commonwealth Treasury. Now is not the time to be attacking the head of the Reserve Bank.

Roskam responds thus:
If Rudd is serious, and as yet there's no evidence he was joking, the consequences of his statement are breathtaking. The Prime Minister is in effect demanding a gag ob public debate of his government's economic policies. yes, the condition of the world economy is serous. But is it so serious to justify the suspension of the practices of liberal democracy?

As Roskam says it is fine for the Reserve Bank to be independent but to whom it is accountable? And when is it a good time to question the views and policies of Treasury and the Reserve Bank?

| Posted by Gary Sauer-Thompson at 7:56 AM | | Comments (1)


"Looking back we can see that ...... and the ...... were very slow to pick the financial crisis and the global economic downturn."

Interesting observation.
Couldn't we say the same of almost anyone, any organization or 'expert'?
Is there anyone who did pick the crisis? Anyone of note and credibility?
I'm not criticising the post, just curious if there was in fact anyone with the nous and knowledge who was able to predict at an earlyish stage.

And if the answer is 'no' then I would respond with "How come?"