Browsing articles in "Media"
Wednesday 13th June 2012
Comments Off

End This Depression Now: Krugman

by Alan Thornhill

Europe’s debt issues have already touched Australia in a very sensitive spot – its confidence.

This is shown in the latest issue of the Westpac Melbourne Institute Index of consumer confidence, which rose by a “disappointing” 0.3 per cent in June, despite two successive monthly cuts in interest rates.

“Westpac’s Chief Economist, Bill Evans, said: “clearly other factors are dominating the minds of consumers.

“Those factors are concerns about the domestic economy and international conditions.”

The two are linked.

If people in Europe and the United States are spending less, because their economies are depressed, China, the new workshop of the world, will, consequently, be exporting less.

And, as China is Australia’s best customer,  we don’t have to be told what that means for us.

So what is to be done?

The Nobel prize winning economist, Paul Krugman, makes a bold attempt to answer that question, in his latest book End This Depression Now.

Your correspondent has just read this book, and was mightily impressed.

Krugman says today’s leaders have both the knowledge and the tools to end this suffering.

How?

His theme is simple.

The time to spend is when the economy is low.

Booms are the times to stop spending.

That, essentially, reflects the mantra of the great Depression era economist, John Maynard Keynes.

As you will have guessed, from all this,  Krugman, himself,  is an unreconstructed, unapologetic and proud Keynsian.

But he notes: ““From the beginning….political conservatives – especially those most concerned with defending the position of the wealthy – fiercely opposed Keynsian ideas.

Krugman says this is still happening, with a vengeance.

He sees those, advocating severe austerity measures, now,  as abandoning economics, and turning instead to “morality plays.”

Austerity programs, championed, conspicuously by the German Chancellor, Angela Merkel, effectively protect the bankers and shadow bankers, whose excesses contributed so much to the present crisis, Krugman argues.

And they leave the unemployed to suffer, needlessly.

Krugman notes that immediately after the collapse of Lehman Brothers, in 2008, just about all major governments applied the lessons learnt from the Great Depression of the 1930s.

“But a funny thing happened in 2010,” he adds.

“Much of the world’s policy elite – the bankers and the financial officials who define conventional wisdom – decided to throw out the textbooks and the lessons of history, and declare that down is up.”

They decided, instead, to go for spending cuts, tax hikes and even higher interest rates, even in the face of mass unemployment.

Expansion was out.

Austerity was in.

That’s the wrong remedy entirely, Krugman argues, in his very timely, lucidly argued book.

 

It can be ordered from http://books.wwnorton.com/books/978-0-393-08877-9/.

The price is $US24.95.

Your correspondent, though, was mightily impressed, at being told this book was waiting for him at the
Dickson branch of the ACT library service, just a few days after he had asked for it.

 

 

 

 

 

 

 

 

 

 

 

 

Please visit our sponsor
Monday 21st May 2012
Comments Off

Thomson explains

by Alan Thornhill

The embattled former Labor MP, Craig Thomson, declared today that the Opposition Leader, Tony Abbott, is not fit to be a member of parliament – let alone Prime Minister – because he ignores the democratic principle that an accused man is presumed innocent, until found guilty by a court.

“Are we going to have parliament ruled by the mob?” Mr Thomson asked rhetorically, as he concluded an hour long statement to Parliament, declaring himself innocent of allegations made against him.

These included assertions that he had misused union funds and paid for the service of prostitutes, with a union credit card.

“I have repeatedly made it clear that I have done nothing wrong,” Mr Thomson declared.

He attacked three officials of his old union, who he said had made false allegations against him, the watchdog,  Fair Work Australia, which made adverse findings against him, after a four year investigation and opposition members, who he said had ignored basic principles of law, to advance their political cause.

The Prime Minister, Julia Gillard, was not in parliament as Mr Thomson spoke.

She is in Chicago for talks with other world leaders, on the future of Afghanistan.

Mr Thomson also had tough words for journalists and commentators whom he said had reported that he was guilty, without checking with him.

He reserved some of his strongest words, though, for Terry Nassios, the author of the 1,100 page report, that Fair Work Australia made about him.

He said Mr Nassios had simply accepted assertions that union rivals Kathy Jackson and Michael Williamson had made against him, without supporting evidence.

Mr Thomson noted, too, that Jeff Jackson, Kathy Jackson’s former husband, was second in  charge of Fair Work Australia.

He said, too, that a  threat made by Marco Bolano, another HSU official, had originated from Ms Jackson’s office.

The threat was that he would be associated with prostitutes and his career in politics ruined if he persisted with reforms to the union.

“Michael Williamson said this is the way we deal with matters that we view as problems,” Mr Thomson said.

He said, too, that the credibility of the Fair Work Australia report had been “destroyed” by another, produced by the Australian Electoral Commission, which showed that FWA had not properly investigated the matters on which it had reported.

Mr Thomson said, too, that while there are many good people in the media,  some journalists and commentators did not check the facts on which they wrote.

He said there had been other abuses, too.

“What I did not expect to see was Channel Seven reporters hovering under my bathroom window, while my pregnant wife was taking a shower,” Mr Thomson said.

Sunday 13th May 2012
Comments Off

Battling for “the battlers”

by Alan Thornhill

Although freshFederal elections aren’t due  in Australia until next year, the grounds on which they are likely to be fought are already becoming clear.

Middle class welfare.

The latest poll indicates that the Gillard government hasn’t yet got the bounce it expected from its fifth Federal budget.

Indeed its position in that Herald Nieslen poll, published in Fairfax newspapers, actually weakened.

That poll pointed, instead, to a Coalition rout.

Just as significantly, perhaps, it also showed that most Australians expect their  economic circumstances to get worse over the coming year.

There can be no doubt, at this stage, that Tony Abbott’s relentless attacks on the government’s credibility have had devastating effects.

Helped, certainly, by Labor’s woes with Craig Thomson.

It is also possible, though, that the full significance of Wayne Swan’s fifth budget hasn’t yet hit the public.

The message sent and the message received often differ.

Labor, certainly, has found it difficult to sell its message, on at least two major counts.

The national economy, on any reasonable measure, is the envy of the Western world.

Multi-speed certainly.

But there are very few advanced countries in the world that can boast of a 4.9 per cent unemployment rate,  such as the one Australia has just recorded.

Inflation, too, is low and likely to remain that way.

But Europe’s troubles, especially those in France and Greece, are still worrying.

So it is, perhaps, not too surprising that consumer confidence in Australia is still weak.

Or that Australian families are looking closely, at their own finances.

At  this stage, Tony Abbott is relying heavily on his “fair dinkum” paid parental leave scheme, which offers new mothers six months full pay, to win the hearts, minds and votes in the still uncommitted middle class families.

His reply, to the government’s budget, late last week, was stronger on rhetoric than fresh policy.

The government has tried to build confidence  with a “spread the wealth” budget that includes a substantial “schoolkids’ bonus.”

That’s because “babies grow into kids” and “the expenses don’t stop” Julia Gillard says.

There are also new tax breaks for small business and provision for better superannuation.

But who is listening to Labor?

And what is Tony Abbott offering?

They are the two big unanswered questions, hanging over Australia’s Federal politics, right now.

 

 

Thursday 10th May 2012
Comments Off

Are we worrying too much?

by Alan Thornhill

Confidence is scarce right now.

That’s due, mainly, to fresh uncertainties in Europe, particularly France and Greece.

And some slowing in the US economic recovery.

The doubts are not confined to share markets, which have fallen sharply over the past few days.

Consumer confidence, too, has fallen again, on the latest measure.

And if a 0.5 per cent rate cut won’t fix that, what will?

Is there a bright side, somewhere?

That question is worth asking, even if you aren’t exactly into counter-investing.

The French and Greek election results are, at least, a challenge to the austere policies of the Merkel-Sarkozy era.

Although that certainly raises fresh worries, it might well, eventually, turn out to be a good thing.

Austere policies, harshly applied, can lead to a downward spiral, rather than the confidence they are said to inspire.

The Nobel Prize winning economist, Paul Krugman, has been warning of that, for some time now.

The “confidence fairy,” he declares, is a myth.

Will this week’s Federal budget help?

The Treasurer, Wayne Swan, believes that its $1.5 billion surplus is a real confidence booster.

And the large cash transfers, to the poor and middle class mums and dads, that it contains, should help, too.

Australia’s shopkeepers, after all, have been complaining of weak sales, for more than a year now.

Perhaps they ought to stock up now, on school clothes and shoes, before school-kids’ bonus cheques start hitting family mail boxes, throughout  Australia.

Independent economists, who have studied the budget forecasts, that point to a gradual strengthening in Australian economy, over the years ahead, believe they are broadly correct.

So perhaps present fears may be overstated.

 

Tuesday 8th May 2012
Comments Off

Julia Gillard’s horror:a tied vote

by Alan Thornhill

The Gillard government was embarrassed by a tied vote today, after the opposition sought to have Peter Slipper replaced as Speaker, by his predecessor, Harry Jenkins.

As question time was due to begin, in the House of Representatives today, the Manager of Opposition Business, Christopher Pyne, moved suspension of standing orders, so that the proposed replacement could be debated.

Mr Pyne said the Parliament had been “seriously compromised” by the government’s decision to allow Mr Slipper to simply stand aside from the post, while allegations against him are unresolved.

Speaking earlier, Mr Slipper had strenuously denied the allegations made  by a former staffer, James Ashby.

These included claims of sexual harassment and misuse of Cabcharge documents.

Mr Slipper insisted that  he is entitled to a presumption of innocence, until these matters are dealt with properly.

And he said: “It is unfortunate that trial by media seems to have become the order of the day in this country.”

The Coalition rejected that.

“The standing of the Parliament has never been lower in the minds of the public,” Mr Pyne declared.

He moved suspension of standing orders, so that the House could debate replacing Mr Slipper with the former Labor speaker, Harry Jenkins.

Mr Pyne said the Prime Minister had arranged for Mr Slipper – a Liberal – to replace Mr Jenkins last November,  to strengthen Labor’s vote in the House.

“What the Parliament needs right now is a Speaker who has demonstrated that he is fair and honest,” Mr Pyne said.

Mr Jenkins, who was sitting on Labor’s back bench, smiled at this point.

However, a senior minister, Anthony Albanese, who responded for the government, said the opposition’s proposal would violate both House of Representatives practice and the Constitution.

A Speaker could not be appointed that way.

Mr Albanese said there are proper judicial procedures for dealing with allegations, like those made against Mr Slipper, and they must be followed.

The vote on Mr Pyne’s motion was tied, at 72 for and against.

To have succeeded, though, it would have required an absolute majority, of 76 votes.

That was not attainable, because of absences, form Parliament.

And the Acting Speaker, Anna Burke, declared that, because of that, she would not use her casting vote.

Tuesday 8th May 2012
Comments Off

Speaker attacks “trial by media”

by Alan Thornhill

The Speaker of the Federal Parliament, Peter Slipper,  attacked “trial by media” when the House of Representatives resumed today for its budget sittings.

In a brief speech before he vacated the Speaker’s chair, Mr Slipper noted that James Ashby had made allegations against him.

These included claims of sexual harassment and misuse of Cabcharge documents.

Mr Slipper said the new sitting had given him his first opportunity in Parliament  to strenuously deny the charges brought against him.

He said, too, he believes he is entitled to a presumption of innocence, in the circumstances.

But he added: “It is unfortunate that trial by media seems to have become the order of the day in this country.”

Mr Slipper then stood down, and allowed the Deputy Speaker to take the chair.

Thursday 3rd May 2012
Comments Off

High Court rattles boardrooms

by Alan Thornhill

The High Court  has just sent a shiver throughout Australia’s boardrooms.

It  ruled that seven former James Hardie directors had issued a misleading statement, in 2001, declaring that a compensation scheme, for asbestos victims, was fully funded.

Just two years later, the scheme found to have been underfunded by more than $1 billion.

Meredith Hellicar, a former chair of James Hardie Industries – and six colleagues –  now face penalties, to be decided by the NSW Court of Appeal.

That court will consider issues of liability, penalty and disqualification, at the direction of the High Court.

The corporate watchdog, the Australian Securities and Investments Commission took the latest case to the High Court, after a rash of  legal actions, lasting years.

ASIC Chairman Greg Medcraft welcomed the High Court’s decision, saying it reinforces the behaviour expected of company directors and other market gatekeepers.

‘We made it clear when launching these proceedings that the action was in the public interest,” he said.

‘The case brought into sharp focus the fundamental responsibilities of both executive officers and non-executive directors who are ultimately responsible for significant public company decisions, and the release of information concerning those decisions, to the share market, employees, creditors and the public, Mr Medcraft added.

Tuesday 1st May 2012
Comments Off

Tony Abbott “slippery” on Speaker affair:Swan

by Alan Thornhill

Wayne Swan says the Coalition has “questions to answer” about its role in the Slipper affair – and he has accused the Opposition Leader, Tony Abbott, of giving “slippery answers” on  the scandal.

The Treasurer’s attacks follow a report that Coalition frontbencher, Christopher Pyne, met James Ashby “for a drink” a month before the scandal broke.

The affair, which forced Peter Slipper to stand down as Speaker of Federal parliament, broke after Mr Ashby made two serious allegations against Mr Slipper.

The former staffer in Mr Slipper’s office, accused his his previous employer of misusing Cabcharge documents and sexual harassment.

A journalist asked Mr Swan today about the report of a meeting between Mr Ashby and Mr Pyne, who is also manager of opposition business.

Mr Swan said he believes both Mr Pyne and the Opposition Leader, Tony Abbott, still have questions to answer about their roles in the affair.

The Treasurer alleged that Mr Abbott, in particular, had given unsatisfactory replies to questions about his part in the matter.

“I think when you have listened to Mr Abbott’s slippery answers he has not fully answered that (question),” Mr Swan said, adding:”I think Mr Pyne has many questions to answer.”

Pages:«12345678...18»

Profile

Alan Thornhill

Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.

The Latest

Saturday November 1

Tony Abbott and Victorian Premier announce a joint Federal-State police task force to investigate illegal behaviour by union officials in that State

US economy grows at an annualised rate of 3.5 per cent

Military personnel serving in Afghanistan will have their daily pay bonus cut after Defence assessed that the operation in the strife-torn country has entered a less dangerous phase.

Please visit our sponsor

THE MARKETS

All Ordinaries5505.000  chart+47.900  chart +0.88%
S&P 5002012.57  chart+17.92  chart +0.90%
Aud To Usd0.8801  chartN/A  chartN/A

Bhp Blt Fpo33.960  chart+0.410  chart +1.22%
Csl Fpo80.190  chart+1.030  chart +1.30%
Westpac Fpo34.780  chart+0.320  chart +0.93%
0.000  chart0.000  chartN/A
Amp Fpo5.850  chart+0.110  chart +1.92%
Please visit our sponsor

Topics

News Archives