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Wednesday, June 23, 2010

Kevin Rudd did a facepalm... (again)


Kevin Rudd (the current PM of Australia) has always  been a terrible speech giver. Here's a hint: George Bush sucked and he would pause randomly (i.e. in the middle of sentences or words). Don't do what he does. Also stop hopping form foot to foot, it's like watching a pendulum. Stop with the crappy jokes, too. If you're funny, you're funny. Kevin Rudd is not. And when you're reading a practiced speech, we aren't children to be preached to which is what you sound like, a principal berating children for playing tackle footy at lunchtime instead of touch. Yet you know nothing about the world economy or even the Australian economy highlighted by this quote...

"...having navigated the worst economical crisis seen by the world..."

Wasn't the Great Depression in the 1930's? Pretty sure the oil hikes in the 70's and recession during the 80's was worse than what the world is experiencing, especially in Australia. Home loan rates are no where near the 20% they used to be nor is unemployment in the low-teens. They may be higher than 5 years ago but compared to other countries...phaw they'd love it. Furthermore, Australia's GDP barely dipped, if at all. These are generally indicators of ecomoic well-being Kevin so you and Wayne Swan should get together sometime on your failtastic quotes (for those of you who don't know, Wayne Swan is the treasurer and after the governments 1st cash hand out he was asked if it was a success and he replied something along the lines of: "Yes and you know why? I walked into the department stores and they told me socks and jocks are selling. Socks. And Jocks." Bonds the only Australian manufacturer left a week or so after this. Fail). Whilst it's pretty bad in the US and some European countries, other countries like Norway and Australia have been like what recession? Downturn maybe... oh and what did the Rudd government do? Throw away all liquidity....

Then you point out the government is elected by the people. Well done. Have you done anything the people elected you for? Education: no. How screwed up are the "contracters" for building whatever you decide at schools you choose who often need something completely different. Health: no. How are those hopsitals running? You might have started something but this could of happened 2 years ago if you hadn't of thrown all your money away. Enviornment: no. Hey why not make a tax that has no fixed rate and the government can change at any time. You wonder why Australia and the most of the world gave the idea the proverbial finger to it? I don't. Helping the environment is something I support, do it right. Saved jobs? No. On the whole it wasn't as bad as it could of been because of your cash throwing about but what a shame the RBA has to raise interest rates to control inflation which is a double whammy. Keeping our economy significantly stronger than the world's (specifically the US) caused the AUD to go up and there was no government expenditure to actually inject into the economy through infrastructure. Economics 101. Hey wait, aren't you screwing over our major exports though, aka mining? With a massive tax? If you hadn't of thrown away the surplus in your first year in office maybe you wouldn't need more taxes... How'd that insulation plan go btw? Don't even get me started on the censorship. Too late, you did [children don't read this next bit]. Way to make pornography a declared item at customs. If you're trying to find child pornography, make it specific. Asking individuals to reveal their private photos or movies of themselves (this is classified as pornography) is an invasion of privacy and I hope everyone comes back with really embarassing movies which customs are bound by law to watch "just in case." [kids you can read again]. Oh ya how about censoring the internet? Didn't realise I had moved to China! You also shouldn't say the major internet providers are on-board the censorship when they aren't. ii-net quite forcefully pointed that out when you said they were.

/nerdrage

Seriously, whilst Tony Abbot has shown himself to make some odd choices (i.e. the pill, refugees/aslyum seekers, etc.) he was at least part of a government who knew how to run an economy and Kevin Rudd has made some terrible mistakes whilst not really understanding how or why I think. Is it a fact of life that everytime Labor comes in we go into defecit or something? *shrug*

So...how was everyone else's day =D?

19 pinkments:

Messanger of Death said...

Krudd has once again fucked up. Can't even keep his own party happy. Fucks around with schools, hospitals and then mining industry. And now we have political instability (which does not look good to outside investors).

"Is it a fact of life that everytime Labor comes in we go into defecit or something? *shrug*"
I bloody hope that the trend that they only last a term or two continues. Gough Whitlam was a joke and so is Krudd.

And Gillard is a liar. First she says she supports him and now she is after his job. Plus she always has ugly hair styles.

And I'm unhappy that the Witch Hunter PDF doesn't have the Allies rule in it.

But other then that I'm all good.

Messanger

Anonymous said...

Abbot wasn't part of a government that knew how to run the economy well; Howard simply inherited the well-tuned economy Keating helped set up.

I'm just saying...

Anonymous said...

Furthermore, there's nothing wrong with Keynesian economics. The fact that interest rates are going up is a GOOD sign at a macro level, as I'm sure you're aware. Surpluses are a country's rainy day fund, and shouldn't be hoarded indefinitely.

Sure, you can argue that the average Jane or Joe with a home loan will feel the pinch. However, they're consenting adults, so they should have understood the risks in taking out loans.

Anonymous said...

I'll concede that Rudd made some poor decisions during his term to date. The internet censorship fiasco was particularly embarrassing, but you'll have to admit it was made with the best intentions.

He's not the best orator, and the fact that he comes over as smug to most people certainly didn't help. It's a shame that Australian politics has turned into a popularity contest.

Now I'm going to go out on a limb here and accuse you of failing "Economics 101", as you would put it. On one hand, we have Glenn Stevens, notable Australian economists AND the IMF backing the proposed mining tax. In addition, we have China, Australia's largest export destination for resources, signing $10 bn worth of deals a few days ago. On the other hand, we have the Liberals (who couldn't even reach an agreement with the government on climate change) and mining executives crying foul.

Are you honestly telling me you believe what these fallacious pricks are cramming down the public's mouth? Perhaps if the mining executives each took modest pay cuts...

Anonymous said...

@Messanger of Death: Are you telling me the criterion for distinguishing between good prime ministers is appearance?

This is why I weep for democracy: you ill-informed pricks have the collective power to be herded by plutocrats without the need for sheep dogs. You do not deserve to vote...

Brother Loring said...

*Kirby gets shot*

Sad day for 40k interweberz!

Raptors8th said...

Lovely. Nice to know that the place I'm moving to has an idiot/ass in charge.

Eltnot said...

I'm in agreeance with you Kirby, there are a lot stupid choices that have been made and are being made by our current government.

Kirby said...

@Anon; because the Howard government did nothing and managed to run an economy for 11 years into surplus because of what Keating did more than a decade before their term ended? Keating was a good PM but the world and local economic environments (hell everything really) is far too unstable to say that the Howard government did nothing and only did well due to Keating. Having a flexible interest rate is good, look at America stuck at 1% but it went up to high and too quickly because the government had no liquidity so the RBA is forced to act. And when you have no liquidity, you start to raise taxes. I don't really care how much execs get paid, nothing to do with the government unless we want to start living in a totaltarian state. Raising mining taxes limits investment in mining in Australia which limits mining productivity which limits Australian exports and money influctuation which negatively impacts upon the Australian economy. Plus the fact superfunds which you don't have control over often invest in mining (cash FTW). It's not going to screw over the Australian economy but it's not going to limit new investments and if Rudd hadn't of thrown away our "rainy day" cash, well he wouldn't need to be doing this.

Did you ignore what I said on the environment (aka climate change)? The majority of the world couldn't agree on the ETS because it was so backwards.

@Loring; I know :P.

Anyway, Rudd's out now. Kirby's prediction of one term was correct but stupid leadership spills. I wish Australian political parties would just stand by their leaders rather than whilst in opposition changing every 6 months.

Anonymous said...

@Kirby: So you admit that Keating set up the automatic stabilisers which everyone here seems to take for granted, no? Effectively most of the economy's on autopilot; all the government has to do is collect taxes and allocate spending (the fiscal side) as their party saw fit. And no, Australia was directly exposed to neither the dot com crash nor the Asian financial crisis (ironic as it may seem).

The truth is Howard lowered individual taxes and raised corporate taxes. Cynically speaking, individuals can vote but corporations can't (unless you're as big as the mining industry). He recouped his losses by tapping into the "rivers of gold" that flowed in to Canberra through corporate taxes and in particular mining royalties. Any treasurer worth their salt would have realised that lowering taxes on individuals during a boom isn't a bright idea, and fortunately the RBA tightened monetary policy in response to Howard's recklessness.

With regards to the ETS, I'm personally in favour of a blanket carbon tax. Taxes are both brutal and simple. If the price of petrol increased by half a dollar, chances are you'll be looking at alternative forms of transport and fuel. It's the "invisible hand" that nearly always works. But no, raising taxes is political poison, and no party at this stage has the political willpower to announce such a vital piece of structural reform. Not even the Greens. Nonetheless, the ETS was a step forward; even Turnball the businessman was smart enough to see it made sense.

I'm not sure at this stage whether you understand the effects of taxation on investment or whether you're simply repeating the mining industry's mantra. The tax is progressive; if you earn more, we'll take more, but ultimately you can still make higher profits. These taxes will cost the mining industry, but it's a price the industry can afford to pay. The treasury team aren't idiots. They aren't "shooting the golden goose". Yes, projects are being delayed, but this is akin to a naughty child throwing a tantrum and refusing to cooperate. At this stage, the only thing that's holding back investment is uncertainty, which drives volatility. If the government had the guts to say, "Screw you; we're doing this our way," then there will be no uncertainty, no volatility and no reason not to invest. Australia will still have a comparative advantage in the resources industry, and its key client isn't shying away either.

In short, the mining tax is prudent. It makes logical sense. If you had researched this properly, instead of getting caught in all the hot air, you'd see it too.

Messanger of Death said...

@ Anon - I dislike all politicians. Doesn't matter what side of the river they are from. Not many of them are economists (neither Krudd or Gillard have degrees in business/economics rather in arts and/or law).

I do agree that our democracy is rather stupid. We force people to vote even though they have little or no understanding on economics/law/history/ science etc etc.

Luckily for me I do have a basic enough understanding in topics like that. Just gets to a point where I dislike both the Liberal and Labor party enough that it is hard to pick which party is the 'bad' and which party is the 'worse'.

But thankyou for determining I'm an uninformed prick based off one sentence I have said on the interwebz :) I hope your understanding of economics is not based off reading just one sentence published by Ross Gittins ;)

Messanger

Kirby said...

Lol MoD.

@Anon; Let's assume the Australian government only ever has to deal with the fiscal side of the economy. Goodjob on screwing it up Rudd yes? Lack of spending FTW.

Again, the ETS was rejected because it was a variable tax which the government could modify at any point. All you need is one moron to come in and screw around with it (and no, the current labor government has not proved they aren't economical idiots). As I said before, I'm agreeing something like this needs to be done. Something needed to be done a decade ago. Goodjob to Rudd for siging the Kyoto but that's about it.

In regards to the mining tax; ya I'm just listening to the hot air *eyeroll.* You seem to grasp individuals generally listen to things like this which influences their choices. If your standard run of the mill grunt abandons the mining industry through their super, where they live, etc., the economy suffers.

In regards to 'screw you; we're doing this our way', the Rudd government has been highlighted by a lack of compromise (looks @ ETS). Gillard has at least said they're going to negotiate which is what a democracy is based upon. You get a government which flexes its muscles all the times and lays down the law strictly, you're going to scare off individuals and organisations alike.

Anonymous said...

Your blaming rudd for a lack of spending?

Well, at least it's original

Brother Loring said...

Wow! 3++ has the influence to oust a PM! I'm glad I'm a friend and not an enemy!

The funniest thing is you're now being run by a Welshie! Let the sheep jokes begin!

Messanger of Death said...

But all the sheep jokes are to do with New Zealand.

Plus we gave you a red head politician in exchange for another.

Anonymous said...

to agree with the other, earlier anonymous poster

Kirby - you do great 40K articles/comments/blog, but you have failed Economics 101 and seem to be studying from the Daily Telegraph / Rupert Murdoch newspaper of economics.

Housing affordability in the early 90's, (when interest rates were 20%) was BETTER than it is now, after 11 years of Liberal + 2 years of Labour govt.
... so for individual consumers, we're worse off on that front

Australia's GDP barely dipped because of China, India and the rest of the BRIC countries continuing to buy australian coal/iron ore. The Government's massive spending (more on why this was a good thing below) made the dip smaller than it would have been.

Rudd, and every other western country btw did exactly what they were supposed to.
They spent government funds, in our case our surplus, to compensate for the decrease in private (commercial & citizen) spending. That's how it works - you accumulate surplus in the good times (to decrease inflationary pressures) and spend it during the bad times (to lessen the effects of a decline).
sure some of the projects were poorly thought out and executed, buts its not easy spending $20billion in a short period of time and spending it completely wisely. Think of brewsters millions, just a lot harder.
The objective was to spend a lot, and spend it quickly, so to inject massive amounts of money into our local economy... so that retail, building and small business jobs were saved, you know, where the vast majority of us work.

This is also why the PIGS in Europe are so screwed - at a macro level they racked up massive public debts during the good times and had nothing to spend in the bad. That and they racked up the debts cause their economies are massively inefficient (greece, portugal, spain) or were growing on the back of a massive property bubble like the US (Ireland)

During the crisis the RBA reduced interest rates to their lowest levels in 50 years.. ie just after the great depression (that other big crash that you've at least seem to have heard about). It was inevitable that interest rates rise - they had to, they were not sustainable. In fact they are still at the lower range of what the RBA considers long-term sustainable / neutral.
To blame this on anything other than a return to BAU levels is disingenuous.

The AUD rose because:
1 - our official interest rates were/are 3/4/5 %, whereas most of the western world is still 0/1/2 % = investors make more money parking their funds in AUD than they do elsehwere;
&
2 - because our GDP didn't drop, which was because of continued demand for primary resources. Our miners expect to get paid in AUD, not chinese or indian currency, therefore demand for the AUD was still high.

The government itself has no control over the exchange rate in the short-term (govt policies can obviously affect it long-term), only the RBA can affect currency in the short term, either by changing the interest rate or by directly buying/selling AUD on the global market.

Rudd did a lot of things wrong, both personally (in his leadership style) and as a government. You'll note that I haven't disagreed with your criticism of Education/Health/Environment or censorship (because I agree with you:).

criticism based on bad policy or poorly executed policy is fine.
but I hope I've educated you that you're actually criticising good economic policy based on a biased (pro-liberal, anti-labour murdoch owned) press or some other source of biased information.

/ economics nerd rage

Kirby said...

@BroLo; go me?

@2ndAnon; at least you explained it more fully ^^ and reading what you said I certainly agree with you. I guess where I'm differing is how Rudd played with the cash and the fact the Australian economy didn't really gain any long-term benefits from it (I believe). I stand by that Rudd shouldn't of down the cash handouts early in his term. I know GDP, etc. would of dipped more but as 2nd Anon pointed out, China hasn't slowed it's spending. It's my understanding/belief if he had done only one handout or none he might of been able to actually pull together an actual package re: health, education, etc. but as was pointed out, a lot of those fell through due to piss poor planning anyway.

For the record, I got a Band 5 (B for you Americans) in my Economics @ High school (w00t). Please commence with the flaming (goes off to find his accountant friend...).

Messanger of Death said...

High-Five for the Band 5 in Economics! And unlike HSC Physics which means nothing once you get into University the stuff you learn in HSC Economics has real world application*.

Messanger

*I miss HSC... so easy when you look back at it. Far better organised that stupid University. And the content wasn't really that hard**.
**Except maybe for Ext Maths. But I did learn the Ext material before the Advance material (I no longer love maths...true story)

Messanger of Death said...

@2nd Anon - You made me smile because everything you said reminded me of my economic classes :)

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