Home > Economics - General, Media > Meltdown continues at the Oz

Meltdown continues at the Oz

October 22nd, 2008

The Australian has long since ceased to be a serious newspaper. Its opinion pages are devoted to recycling talking points from the US-centred rightwing parallel universe (some more serious conservatives have described it as the “conservative cocoon”, a term coined by conservative blogger Ross Douthat, recently elaborated here). Its political writers, who straddle the gap between news and commentary have long been in the tank for the conservative parties or for particular conservative politicians. Its war on science (Tim Lambert is now up to instalment XXII and he’s not comprehensive) has long passed beyond the point of absurdity.

Even so, I don’t think I’ve seen a front page headline as brazenly defiant of the facts as today’s. Having claimed, falsely, that the Reserve Bank opposed the government’s deposit guarantee, and been put down, mildly but firmly, by RBA Governor Glenn Stevens, the Oz doubles down and announces a “backflip” on the basis of the marginal adjustments discussed here yesterday.

For the correct story, you have to go the Fin (paywalled unfortunately). While the Fin is just as rightwing as the Oz on most issues, its readership consists primarily of businesspeople who need accurate information, not delusional rightwingers who need their prejudices confirmed. From the Fin it is clear that the Bank pushed for an unlimited guarantee (for much the same reasons as given here) and that it was Treasury that initially wanted the silly $20 000 limit.

The Oz is now essentially worthless as a source of information. Some individual journalists are still pretty good, and articles with their bylines are worth reading. But if their weather report predicted sunshine, I’d pack an umbrella, just in case.

Update The Oz goes for the trifecta, despite their claim that the RBA opposed an unlimited guarantee now being denied outright by both Glenn Stevens and Ken Henry. They have a document showing that the RBA wants to charge wholesale depositors directly for the guarantee and using the term “cap” to describe the amount that would be used to distinguish between wholesale and retail. This kind of ex post tweak is unsurprising, but still news and if the Oz had stuck to that a couple of days ago, they (and the Opposition) would be in less trouble now. Instead they have beaten it up into a full-scale war with the Government, Treasury and RBA which is going to cost them a lot in the long run.

To restate the point, the original announcement said nothing (at least nothing I saw) to indicate that the government guarantee would be free, and deposit insurance schemes normally involve a premium. In due course, I expect that the government will charge the protected institutions for the guarantee. It’s turned out to be necessary to move more quickly at the wholesale level, but this is a step in the right direction. The silly pointscoring of the Opposition (and its representatives in the press) is grossly irresponsible.

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  1. October 22nd, 2008 at 10:17 | #1

    News Limited could probably save themselves a lot of money by closing down The Australian and selling The Daily Telegraph as a one-size-fits-all newspaper.

    They’re essentially saying the same thing, except writers for The Australian use bigger words occasionally.

  2. smiths
    October 22nd, 2008 at 10:19 | #2

    i get it on the weekend just to get a quick overview of what those crackpots are saying and thinking, know thine enemy so to speak

    have been contemplating setting up an organisation that spreads flags and tshirts with celebratory slogans in advance of the day murdoch dies so the whole world can celebrate together when the time comes

    i hold him personally responsible for the enabling of some of the greatest crimes of our age

    war criminal is just too kind

  3. October 22nd, 2008 at 11:03 | #3

    The problem John is that ‘The Australian’ spreads its ideology around.

    The prime case is the ABC. Frank Kelly took up ‘The Australian’ article you have mentioned with gusto all throughout the program mentioning it with other political commentators and pollies all throughout the morning.

    ABC news both TV and Radio also took up this story.

    Frank Kelly had done this for years taking up stories from The Oz as holy script.

    If this newspaper was only catering for ‘delusional rightwingers’ as you rightly put it would be all well and good. But it is how it manages to pollute the rest of the Australian political journalistic sphere, that should know better, that worries me.

  4. John Foster
    October 22nd, 2008 at 11:31 | #4

    We have known about the true colour of ‘The Australian’ for a long time but what I find most appalling in this sorry episode is the behaviour of the Opposition. In order to gain short term political advantage its members have been willing to publicly humiliate a senior public servant with an outstanding reputation in order to try to make the case that the Government and its Treasury officials are poor economic managers. To run such an unjustified beat up in a serious national crisis is entirely unacceptable because it encourages a loss of confidence in the Government at the worst possible time. With what I thought was a much better leader in Malcolm Turnbull, I did not expect the Coalition to stoop so low in their desparation to score political points. Some upbeat self congratulation concerning the fact that the welcome surpluses were accumulated by a far seeing Coalition Government would have been a much better political strategy. I guess this is what happens when a hard-nosed lawyer is in charge. But the reality is that the Parliament is not a Court where the case is won and lost on legal technicalities. The Opposition have much greater national responsibiities to meet at time like this. So it is deeply disappointing that its members are paying no more than lipservice to bipartisanship in such difficult times for the Government.

  5. wilful
    October 22nd, 2008 at 12:10 | #5

    So who are the good writers?

    George Megalogenis gets a tick from me. Anyone else?

  6. 2 tanners
    October 22nd, 2008 at 12:33 | #6

    Wilful @ 5

    Also Jack the Insider.

    And that’s about it as far as I’m concerned.

  7. 2 tanners
    October 22nd, 2008 at 12:37 | #7

    Anyone read redstate.com recently, somewhat apropos of the above? The denialism, concetration on talking points and above all, refusal to acknowledge what is happening around them, electorally and in terms of public affairs, is eerily familiar.

    Cast your mind back…back…12 months into the past. That should about do it. :D

  8. David Irving (no relation)
    October 22nd, 2008 at 12:51 | #8

    The only things I bother to look at are Bleak and Doonesbury, and now that Bleak’s in a coma …

  9. October 22nd, 2008 at 12:58 | #9

    We’ve long lamented the pollution of the ABC by News Ltd. – especially manifest in Brisbane.

    It’s part of Murdoch’s tactic of owning the debate.

    Always fun to mock, but actually really insidious and dangerious for democracy.

  10. cows say moo!
    October 22nd, 2008 at 13:43 | #10

    Yes George Megalogenis is a good writer, readable and intelligent as for many of the others they are parodies of a conservative position. Here we are crying out for some reasonable commentary and we get the bitter Christopher Pearson’s (googled the night before) effort and the appalling Albrechston. If it needed to make a profit to survive then maybe things would change ?

  11. Nick K
    October 22nd, 2008 at 13:59 | #11

    Personally, I think The Australian is probably better than most newspapers in Australia (although I tend to agree it is not as good as the Fin Review). I spend a lot of time reading the Weekend Australian. But often I find that the weekday editions are not worth bothering with.

    I don’t really think the Oz is as dominated by right-wing commentators as is claimed. There are several people who write for the Australian who are generally left-of-centre (George Megalogenis, Mike Steketee, Elizabeth Wynhausen, Phillip Adams, Susan Maushart). Then there are those like Paul Kelly, Caroline Overington and the late Matt Price whose politics appear to be more Labor Right.

    Overall, I would say the Aus actually has a more even balance of commentators compared with, say, the Age, which appears to have long since given up any pretense of even-handedness or being anything other than a far-left journal.

  12. jquiggin
    October 22nd, 2008 at 14:04 | #12

    Nick, the point isn’t bias, it’s total disconnection from reality and aggressive reaction to anyone who points this out. The climate science delusionism is the most obvious, but there was also the big brawl with the psephbloggers last year and now this episode.

  13. Father Mercy
    October 22nd, 2008 at 14:15 | #13

    Team Left and Team Right are well represented at the Oz. Let’s not forget the admirable medical role of Oz journos Uncle Phil and Ms Albrechston whose standard boilerplate has acted as an aperient for those suffering the debilitating condition of constipation. Countless thousands of people owe their relief to the Oz and its stable of fabulists.

  14. derrida derider
    October 22nd, 2008 at 14:24 | #14

    I’d add that its not those opinion pages that worries me so much – sometimes its a good thing to encounter the insane so you can better recognise the sane.

    I worry much more about the way you can no longer trust the Oz’ news proper. The example John has based his post on is a case in point.

    The Age’s veering left in its opinion pages is, IMO, just calculated commercial practice (though it’d be more readable if their writers were a bit less predictable). But its front page is reality based.

  15. Superannuated Lord Sir Alexander “Dolly” Downer
    October 22nd, 2008 at 14:32 | #15

    Mike Steketee is a the best of the bunch. Phil Adams ain’t no journalist; as the good Father suggests above, Philip is the is ying to Janet Albrechtson’s yang. Both substance-free, fighting the good culture wars, enthusing fans and enraging enemies.

    But it all really comes down to one person: the editor in chief. He’s the one who says ‘mate, we’ll take this page 4 story and put it on the front, give it this headline – here, let me write the intro ..’ etc.

    Actually, the Weekend Australian editorials, written under a separate editor (but still under the same editor in chief) are the really mad ones. Undergraduate rants.

  16. Thertises
    October 22nd, 2008 at 15:00 | #16

    Any comment on this one John?

    Govt vows to keep budget surplus in hard times
    By Rob Taylor of Reuters

    CANBERRA — The federal government has promised to keep its budget in surplus through economic hard times ahead, despite spending half of this year’s projected surplus on a stimulus package and calls for more.

  17. Socrates
    October 22nd, 2008 at 15:12 | #17

    I agree. Not being able to admit you are wrong is the first step towards living in a delusional state, and they seem well down that track. Their idea of balance is to provide two extreme viewpoints on a topic, with little middle ground. I don’t find either extreme appealing. I haven’t bothered to read it for some time unless I am looking for specific articles.

  18. Will
    October 22nd, 2008 at 15:58 | #18

    Phillip Adams is an gasbag, name-dropping, former communist; like Alan Colmes, on Hannity and Colmes, he’s there as a token prop for showing “balance”. I think you can probably count on one hand the number of columns he’s ever written that are half decent.

    Adams doesn’t balance the incredible editorial/op-ed slant of paper post-Kelly simply because he is not right winger. In order to do that, you’d actually need a strident and credible voices of the liberal-left. Michael Costello occupies this role somewhat, but he’s hardly all that.

    Also, Megalogenis is excellent journalist, but he is hardly left liberal. He takes a Centrist neo-liberal take on most things – which is very even handed. To interpret that as partisanship, simply because it doesn’t embrace the wing-bat echo-chamber nonsense found in the rest of the News stable, just shows exactly how far the goal posts have moved.

  19. Superannuated Lord Sir Alexander “Dolly” Downer
    October 22nd, 2008 at 16:00 | #19

    Michael Costello is no longer at the paper.

    Apologies for changing the topic, but I must say I found myself in agreement with Gerard Henderson in the SMH yesterday. Dr Keen does come across as an attention-seeking, over-dramatising, somewhat empty vessel. And if everyone took his advice and tried to sell their house, well …

    But I am no economist.

  20. October 22nd, 2008 at 16:20 | #20

    If the Australian isn’t a “serious newspaper” it can at least console itself with the knowledge that it was beaten in the race to the bottom by both the Sydney Morning Herald & The Age

  21. gandhi
    October 22nd, 2008 at 16:40 | #21

    Phillipe Sands had an interesting article recently about the only journalist to be put to death at Nuremberg, and the legal discussions about propaganda as a weapon of war at the time. It’s unfortunate that those legal initiatives were not pursued more vigorously over the years.

    Murdoch’s New York Post was today forced to back down after publishing a totally fictitious story about Michelle Obama dining on lobster and caviar in her room at the Waldorf-Astoria (she never even stayed there).

    It’s not just The Australian which has jumped the shark, the entire News Corporation media empire has fallen into line behind their CEO’s insane vision of Zionist Global Corporate Fascism (for want of a better term).

    Journos at Teh Oz (as I call it) have done some good work over the years, particularly on Haneef and AWB. But personally I don’t think any self-respecting journalist should be taking money from Murdoch’s blood-soaked hands.

    There are other opportunities for generating income online, and it would be good to see more wealthy Australians poaching journalists for online ventures. Crikey’s business model is fatally flawed, IMHO, but surely there are others willing to challenge the Murdoch-Fairfax duopoly on news in Australia?

    What about a journo’s co-op online? What about an Aussie version of HuffPo, or at least TPM?

    As for Rupert, what about a jail cell? There is no smoking gun linking him to a million dead Iraqis – there are hundred of thousands of smoking guns. The truth is there in plain sight for anyone willing to look. You don’t need a front page to tell you about it.

  22. gandhi
    October 22nd, 2008 at 16:51 | #22

    People might also be interested in pondering the career of a certain Mr Tom Switzer, a brash American who joined the Oz as Opinion editor a month after 9-11 and only quit after Howard was unceremoniously dumped. Janet Albrechtsen was heart-broken at the time.

    Where did Switzer go? He joined Brendan Nelson’s office in Feb 2008, and is now being retained by Turnbull.

    Between 1995 and 1998, Switzer was assistant editor at the American Enterprise Institute (spiritual home of the US neo-conservatives) in Washington. Nuff said?

  23. Spiros
    October 22nd, 2008 at 17:30 | #23

    “While the Fin is just as rightwing as the Oz on most issues”

    I don’t think that is true. The Oz is in a league of its own in the editorial pages, and in the Der Stürmer league in propaganda masked as news.

  24. Donald Oats
    October 22nd, 2008 at 18:21 | #24

    Bill Leak is *the* best writer at “The Moz” (as in mozzies aka mosquitos, the irritating little sh!ts that buzz around, sucking the life blood and annoying the hell out of everyone at an evening barbie, but I digress…). His powers ebb and flow, but at his peak Bill is unequalled. The “Sprung Chickens” cartoon, for instance. Just magic.

    I sincerely hope Bill Leak can recover from the accident on the weekend. It would be a double tragedy if he doesn’t.

  25. observa
    October 22nd, 2008 at 18:46 | #25

    “the Oz doubles down and announces a “backflipâ€? on the basis of the marginal adjustments discussed here yesterday.”

    From the ABC Sun Oct 12 we have-

    ‘Prime Minister Kevin Rudd has announced that the Government will guarantee all deposits in Australian banks, building societies and credit unions for the next three years.

    Mr Rudd has announced the measures in response to the global financial crisis, making the Federal Government liable for up to $700 billion in bank deposits.

    He says the Government will guarantee all money that Australian banks borrow internationally and it will stand by all deposits in Australian institutions with no cap on the maximum amount.

    “The Australian Government will guarantee all deposits whatever their size in all Australian financial institutions for three years,” he said.’

    ALL DEPOSITS WHATEVER THEIR SIZE is very straightforward in the Queen’s English and any retreat from that is dissembling, backflipping or just plain prevarication John, so your critique of the Oz on that score is just plain WRONG or W.R.O.N.G to steal a line.

  26. Superannuated Lord Sir Alexander “Dolly” Downer
    October 22nd, 2008 at 19:01 | #26

    Ghandi @22.

    Switzer is Australian; spent time in the US. Was actually on Q&A recently.

  27. JB
    October 22nd, 2008 at 19:25 | #27

    I always think of the op-ed page of the Australian as the “Winchester Club” from that classic 80s BBC show Minder. I remember the sobriet was earnt due to an episode of Minder where the two police inspectors always chasinf ‘Arfur Daley’s dodgy business deals had to petition the local magistrate to keep the Winchester club – that den of nefarious characters – open so that they’d know where all the important crims (criminals) did business!

    The question is, who should earn the ‘Arfur Daley’ title for the Oz’s op-ed pages???

  28. melanie
    October 22nd, 2008 at 19:40 | #28

    I’d be curious to know if anyone knows the circulation of the Oz?

    Gerard Henderson (mentioned @ 19) is a curiosum in my opinion. My VC recently cited GH on his blog as having said that Australian school children need to know nothing more than some ‘facts’ about history. I’m so pleased for Gerard that he can not only identify a ‘fact’ when he sees one, but he also knows which ones are important for Australian children to know. There is such a big difference between, for example, “invasion” and “settlement” (of Australia) that you’d think even Gerard could get it.

  29. observa
    October 22nd, 2008 at 19:45 | #29

    Never let it be said that a critique of where the Oz was really coming from (and we aren’t always privy to their political sources)should be devoid of ‘context’ here. Let’s all look at the delicious irony of that particular ‘context’ shall we contextual folks?

    Labor had a long history of bank bashing along with oilcos and big supermarts we’ll all recall. Even in Govt it was quick to use its ‘moral suasion’ to get banks to pass on in full the first interest rate cut after around 11 consecutive rises. That quickly changed with impending meltdown as they flipped to soothing us all how well run and finacially stable Oz bastions of banking really were all along. No worries mates, everything’s apples, but then Swan trots out that in any case the Govt is going ahead with legislation to formally guarantee deposits up to $20k. Blind Freddy including moi and JQ could see instantly what stupidity that was in the context of increasingly nervous times. Basically forget any implicit guarantee folks and start worrying about setting up lots of $20k deposit accounts all over the place. When the financial manure really hit the propellor, our brilliant Treasurer was between a $20k rock and an infinitely hard place of his own making.

    King Canute to the rescue with- “The Australian Government will guarantee all deposits whatever their size in all Australian financial institutions for three years,” as well as guaranteeing all Oz bank borrowings from OS. This, after previously announcing the $10.4 bill giveaways to soothe the savage minions, a regal gesture to be sure, because we now know from none other than the Head of Treasury that they had nothing to do with the design of such divine right of elected kings. A convenient bunch of well paid, Sergeant Schultzes, The OZ might argue under the circumstances.

    Guaranteeing ALL DEPOSITS WHATEVER THEIR SIZE, in deposit institutions from our new King Canute would instantly breathe new life into an old fable, as the obvious ensued. Basically all fiat money is guaranteed by the King as long as you place it in the King’s preferred accounts. All hail the wise King Canute now! The shorter OZ- We’re being ruled over by financial and economic illiterates, making it up as they go along folks!

  30. observa
    October 22nd, 2008 at 20:04 | #30

    As for this report-

    ‘TREASURY boss Ken Henry has said he and the head of the Reserve Bank were of one mind over the advice given to the Government about guaranteeing bank deposits.
    Dr Henry was appearing this morning before a budget estimates hearing of the Senate economics committee where he faced a grilling from Opposition members.

    The Opposition wanted to know what advice the Reserve Bank of Australia gave the Government before it announced the scheme on October 12.

    The Government has said it acted on the advice of financial regulators, including the Reserve Bank.

    “In respect of the advice that was tendered to the Government and supported the decision that it took on Sunday October 12 (Reserve Bank governor) Mr (Glenn) Stevens and I were of one mind,” Dr Henry told the hearing.’

    Somehow, sometime in a far off galaxy, I’m supposed to be totally comforted by the fact that the Reserve and Treasury were totally at one with King Canute on this. Arrrrgh! We’re all freaking doomed!

  31. observa
    October 22nd, 2008 at 21:26 | #31

    Actually, The Oz article (whether from informed sources or a bit of speculative journalism) has served a useful purpose in ultimately throwing light on the fact that the Reserve, Treasury, Govt and Opposition have basically all stuffed up as one on this. They’ve all gone down the wrong road more or less, whereas in hindsight I reckon the Phillipines road was the wisest path and we need to get on it fast.

    How so? Well $20k guarantees under the circumstances was always like piddling on a bushfire, so some real hosepower was/is needed and pronto. With that imperative in mind, the Govt via the Reserve should be the temporary, depositary insurer of last resort, rather than direct guarantor. The Reserve should offer to insure deposit bases by tender, rather than giving the annointed a free ride, with all those attendant, unwelcome disturbances elsewhere. Offer them insurance on tick for the 3 years, so as not to necessarily reduce their immediate liquid assets, but they are ultimately incurring a liability to the taxpayer, one that can be exercised as first call on all assets in the event of administration/failure. After all, the taxpayer will have to do that now anyway, but this gives some recourse to shareholder equity, whilst allowing and encouraging individual deposit institutions to pay off their premiums and any interest sooner. This is essentially the extra cost that is required to stop the deleterious one way flight to safety from other parts of the finance sector. Whaddya reckon? Needs work?

  32. October 22nd, 2008 at 21:33 | #32

    The post was about how the Murdoch press is beneath contempt when it comes to honesty.

    A good example from recent history is from Murdoch’s early days in the UK. Remember the ‘Hitler Diaries’, which were a scam for which the “Dirty Digger’s” staff fell? Just before they went to press they found out that they had been scammed and that the whole thing was a hoax. So they ran with it anyway, too good a story to be destroyed by the truth.

    Observa (and other apologists), why do you like being lied to? Is it because you can tell they are lying but you think their lies will advance a cause or position favourable to you?

  33. October 22nd, 2008 at 21:37 | #33

    What on earth is “speculative journalism”?

  34. rufus t firefly
    October 22nd, 2008 at 21:54 | #34

    Thanks again JQ – an interesting post. Going off topic a bit though I am particularly grateful to JB @ 27 for recalling the Winchester Club – Dave the Manager/Barman was one of my heroes – speaking of Poms – Jeremy Clarkson is not a bad writer in the Weekend Oz. I also admired Caroline Overington’s work on AWB and like many others I miss Matt Price. Jack the Insider reminds me of lots of old mates who know everything that ever happened and that is a useful attribute – where are the Snowdens of yesteryear?

  35. Thertises
    October 22nd, 2008 at 22:32 | #35

    Actually I think the Oz is now looking more credible after providing direct quotes in some articles today from Glenn Stevens and you John are looking like a bit of a dill.

    I note News Ltd commentator Terry McCrann has made some scathing comments without directly referring to the Oz story. Every man and their dog knows McCrann is a conduit by which the RBA airs its thinking.

    The verdict is in but this obviously wont stop the hand wringing among the SE Qld/Courier Mail literati in Brisbane with itrs deep links into the Rudd/Swan bog. Meanwhile out here in the regions we have our cricket bats out waiting for Anna Bligh.

  36. jquiggin
    October 22nd, 2008 at 22:52 | #36

    Happy to double down again, Thertises(sp?)? Given Ken Henry’s unequivocal statements in the Senate today, I think you’re backing a loser here.

    Observa, you obviously think you have a point, but as usual you haven’t managed to communicate it.

  37. observa
    October 22nd, 2008 at 23:27 | #37

    “Observa (and other apologists), why do you like being lied to? Is it because you can tell they are lying but you think their lies will advance a cause or position favourable to you?”

    Hang about a bit, where did I say I liked being lied to? Nor do I want journos putting words in people’s mouths. Henry has accused The Oz of doing that and I’ll accept that at face value, just like I’ll accept his word that he, Stevens and Rudd, etc were singing from the same song sheet on ALL DEPOSITS WHATEVER THEIR SIZE but now they’re having second thoughts about that, or it seeemed like a good idea at the time. Turnbull applauded ‘their’ statement at the time, albeit he had mooted a $1mill limit prior. $1mill or unlimited doesn’t seem much different to me as I reckon banks etc would be happy to open lots of $1mill accounts, not to mention taking over all other finance should the other players’ funds dry up as aresult.

    Basically I don’t mind backflips, about faces, change of directions or whatever you want to call them if the facts are staring them all in the face. Why be pig-headed idealogues with populist rubbish like Fuelwatch and Grocerywatch, when there’s so many more pressing demands on resources I say, but then don’t bash the banks in one breath and then in the next guarantee their profits and juicy shareholder returns either.

  38. Thertises
    October 22nd, 2008 at 23:37 | #38

    With regards to Ken Henry’s statements in the Senate I can only fall back on my personal experience of being forced to take assault charges against a former employer to protect myself before being withdrawn with a warning to my attacker after being told by the prosecuting detective: “people don’t tell the truth in court you know”?

  39. Thomas Paine
    October 23rd, 2008 at 00:09 | #39

    The Murdoch media wasn’t able to break its symbiotic link with the Liberal Party before it’s demise and consequently has been dragged down with it.

    Not a particularly honest bunch of publications when Howard their favourite uncle was around but they did possess some standards which they found hard to go past.

    But now they have become psychotic and seemed to have dropped all standards and consequently are beginning to trash their own brand and credibility.

    The Australian if it is concerned about such things needs to dump its uncritical support of the Liberal party if it wants to regain any form of respect before it sinks beneath the waves of self disgust.

  40. October 23rd, 2008 at 00:23 | #40

    Again, what on earth is “speculative journalism�?

  41. sean
    October 23rd, 2008 at 01:22 | #41

    Read all about it, newspapers pander to their respective readerships. SHOCK!

    Only idiots buy newspapers, they feed our western guru seeking mentality.

  42. Superannuated Lord Sir Alexander “Dolly” Downer
    October 23rd, 2008 at 07:11 | #42

    The Australian’s motto: when you’re in a hole, keep digging. Eventually you’ll bury yourself so deep everyone will forget.

  43. rog
    October 23rd, 2008 at 07:38 | #43

    A lot of/most journalism is speculative, consider the date of this pearler;

    “WITH the consensus of expert market watchers tipping that the worst of the stock market slump is behind us..”

  44. rog
    October 23rd, 2008 at 07:42 | #44

    Minneapolis Fed examines press speculation and finds it to be untrue;

    “The Â…financial press and policymakers have made four claims about the nature of the crisis…At least based on data up until October 8, 2008, we argue that all four claims are false1.”

  45. observa
    October 23rd, 2008 at 07:42 | #45

    “what on earth is “speculative journalismâ€??”

    One rung down from conspiracy theorising, around the level of wotif? It certainly needs an atmosphere of crisis with plenty of chooks running around with their heads cut off to really fly, so the times are appropriate.

    Meanwhile back on terra firma, it’s obvious our leadership (including Opposition) has got it badly wrong with this global guarantee thingy. Certainly drastic times call for drastic measures but they can’t be so distorting. That’s why I think temporary insurer of last resort flys much better and on further reflection it might be a good call to introduce it in conjunction with a 3yr freeze on depositary institution dividend payouts to shareholders. Buying temporary insurance on tick and freezing payouts should help all cope with a hump in bad debt. Add in the inevitable moral suasion on exec salaries too.

  46. observa
    October 23rd, 2008 at 07:56 | #46

    Interesting that analysis rog. I tend to agree that the market will work it out if the nanny staters would let the price of capital float instead of interfering. However once the ‘explicit guarantee’ bit was floated, it’s hard to go back there so my take is ‘insurance’ is the second best option now.

  47. October 23rd, 2008 at 08:45 | #47

    To put it bluntly: It is difficult to take at face value the word of a person who has adjusted (or not adjusted) interest rates, 1/. to create a political advantate for one party over another, and 2/. to save face after having gone too far in previous cuts.
    Comments confirming or denying conversations aren’t coming from an objective source.

  48. Superannuated Lord Sir Alexander “Dolly” Downer
    October 23rd, 2008 at 08:48 | #48

    I do wish Observa would get out the scalpel and shorten his posts. The only people interested in reading long rants are the already converted. If you want to change someone’s mind, make it short and snappy and easy to read.

    Economy mit the words. Achtung!

    Observa is almost as self-indulgent as Jack Strocchi. What is it with these John Howard acolytes?

  49. James Haughton
    October 23rd, 2008 at 08:57 | #49

    Dolly, Steve Keen has a long record of being a Cassandra, and being ignored. If the media has suddenly decided he’s right, good luck to him. It’s not like he can twist their arms into interviewing him. Henderson’s complete lack of analytical criticism as opposed to sniping about media coverage shows that his motive is probably jealousy.

  50. derrida derider
    October 23rd, 2008 at 10:18 | #50

    “Steve Keen has a long record of being a Cassandra, and being ignored.”

    Keep predicting disaster long enough and eventually you’ll be right – as they say, economists have forecast seven out of the last three recessions. I’d be more impressed if Keen had predicted the boom and bust’s timing and sequence (eg will Oz’s housing bubble burst before the US’? And how will it affect China and Japan, on whom we rely?), not just that it was gonna happen. Plenty of others have been mumbling about that for years.

    But yes, good luck to him – he’s got a business to run and if some journo wants to puff it why should he argue?

  51. Michael of Summer Hill
    October 23rd, 2008 at 10:27 | #51

    John, I just would like to say Turnbull’s arguments as to whether the fee for service by regulatory agencies is a “tax” has merit for the set levies are there to cover supervisory costs and for this reason I am in favor of such a system.

  52. wilful
    October 23rd, 2008 at 10:41 | #52

    I can’t believe Turnbull is running a line about the injustice of taxing million dollar deposits. Hmm, that one will really resonate, wont it?

  53. observa
    October 23rd, 2008 at 11:04 | #53

    This economic crisis was the first big test of the Rudd Govt and when The Oz asked some serious questions it set the hares running and exposed some deep deficiencies in the Rudd style, not to mention exposing the whole public sector belief mantra.

    Everyone from Terry McCrann to Bob Randall is jumping all over this train wreck of incompetence/confidence now. It’s clear Rudd loves the grand gesture and big promises only to move on from the messy details in its wake. We now know he trotted out the $10.4 bill impetus plan without any advice or modelling. Fine, if that’s the way he wants to play, but then he can’t fall back on Treasury and the Reserve when his King Canute grand gesture on deposit guarantees washes all over him. It seemed like a good idea at the time doesn’t cut it with inspiring financial confidence at a time when it’s so desperately required. His ego is getting in the way of sound policy and confidence building now and worse than that, Labor has now descended into the politics of envy and class warfare with its hasty, pasting over the cracks, ‘tax’ on million dollar deposit guarantees. It hasn’t taken them long to fall into bad habits when they’re under the pump. The honeymoon is over, except for the usual acolytes.

  54. observa
    October 23rd, 2008 at 11:11 | #54

    Oh and there’s nothing surer than the hue and cry will start up over the inevitable anomolies in taxing $1mill deposits, instead of the level playing field.

  55. October 23rd, 2008 at 11:45 | #55

    Observa – spoken like a true “Australian” reporter.

  56. October 23rd, 2008 at 12:14 | #56

    so many words, about such a trivial subject.
    Taking your words to heart, I’ve deleted the rest of your comment, Al

  57. observa
    October 23rd, 2008 at 13:24 | #57

    The last bastion of the politically inept- Blame the meeja!

  58. October 23rd, 2008 at 13:39 | #58

    Interesting article about this issue on Crikey by Bernard Keane.

    None of that matters much at The Oz. This is about attacking the Government regardless of the facts – and regardless of how much it makes them look like C-L-O-W-N-S.

  59. gandhi
    October 23rd, 2008 at 14:09 | #59

    This is all about who controls the discussion.

    Let’s go way back to March, this year, when Glenn Milne was attacking Ken Henry in the Oz. There was only one reason – Henry had publicly contradicted Moneybags Turnbull the week before:

    “I refer to recent claims that the Treasury recommended to the Government that it nominate a specific dollar figure in the Government’s submission to the Australian Fair Pay Commission on minimum wages,” Henry said carefully, without referring directly to the shadow treasurer.

    “These claims are false.”

    Then two months later there was Ken Henry’s opposition to the selection of US neocon favourite Robert Zoellick as World Bank President. Peter Costello did a quick backflip on that one, but Turnbull knows who butters his rightwing bread.

    Uncle Rupert and friends.

  60. gandhi
    October 23rd, 2008 at 14:37 | #60

    Sorry, that last bit didn’t come out quite right:

    “Peter Costello did a quick backflip on that one, but EVEN Turnbull knows who butters his rightwing bread. Uncle Rupert and friends.”

    I think Turnbull is angrily trying to smear Henry’s reputation and force him out of a job. Not a very responsible thing to do under the present circumstances.

    Let’s face it – the rightwing today is just a political front for the global business community, including Murdoch.

    Perhaps once upon a time there were ordinary people who really believed in lies like “small government”, “family values”, the merits of “privatisation” and “trickle-down economics”. Not any more.

  61. kymbos
    October 23rd, 2008 at 16:31 | #61

    Trying to predict the date of a bursting property bubble is like trying to predict the day of someone’s heart attack – there are very few circumstances in which it is possible.

    Keen got a lot right about this collapse, and it’s fascinating to watch criticism of him for it, by both economists and the economically-illiterate.

  62. Ikonoclast
    October 23rd, 2008 at 20:36 | #62

    Where I work I note that among hundreds of workers there is never a newspaper in sight at any time. On the train people read books, listen to ipods, talk on mobile phones or to each other or look out the window. Again there is scarcely ever a newspaper in sight except sometimes that rubbishy free “Metro”. (This is Brisbane.)

    I’d say the newspaper is about to go extinct. Certainly the Australian was rubbish last time I bought it many, many months ago. It sounds like it is even worse now if that is possible.

  63. observa
    October 23rd, 2008 at 21:23 | #63

    More newsdumps deleted

  64. October 23rd, 2008 at 22:49 | #64

    Observa’s self-interest is showing. Defending “speculative journalism”, touting the high-roller’s room as needy of protection from the risk/return equation they not only created but have unevenly profited from (until now).

    Observa’s gold interests are suffering, Murdoch’s shills aren’t providing any traction and thus average citizens are supposed to rise up in anger to defend those million dollar deposits in speculative/overleveraged/greed driven/usurious betting accounts for tax-payer protection. Obviously such “investments” should be given a 150% tax deduction to stimulate the much neglected lardy side of the Australian economy.

    There must be a kind of Godwin’s Law (perhaps “Murdoch’s Law”?) that if you quote a Murdoch sourced article you automatically lose the debate?

  65. El Mono
    October 24th, 2008 at 01:07 | #65

    #62 I brisbanes defence the Free MX is aggresivly given out and the “Here’s looking at you” section where people sms love messages to other commuters would entertain anyoe from any city

  66. October 25th, 2008 at 00:43 | #66

    The Australian may not be a serious newspaper, but let’s acknowledge that it, nevertheless, remains a highly effective privatised propaganda arm for the Bush regime and his co-thinkers in this country.

    By misreporting the election outcome in Miami in 2000 it made possible the subsequent stealing of that election by George Bush.

    Since then it has got us into the Iraq War and prolonged the life of the abominable Howard Government.

    Happily, its propaganda campaign to back Iemma’s privatisation of NSW electricity failed. My article about the misreporting of that issue by the Australian and other newsmedia, “Media contempt for facts in NSW electricity privatisation debate” of 18 Sep 08 may be of interest.

    I am also concerned that so many on the News Limited payroll are given air time on the ABC these days to further propagate its misinformation. Amongst the latest was Dr David Burchill who appeared on ABC Radio National’s National Interest to give what sounded like the News Limited spin on NSW politics in recent months. Others include Greg Sheridan, Paul Kelly and Phillip Adams. I made a complaint about this on the National Interest guest book recently.

  67. Alanna
    October 26th, 2008 at 00:01 | #67

    Quiggan writes

    “The Australian has long since ceased to be a serious newspaper. Its opinion pages are devoted to recycling talking points from the US-centred rightwing parallel universe (some more serious conservatives have described it as the “conservative cocoonâ€?, a term coined by conservative blogger Ross Douthat, recently elaborated here).

    I quite agree. Its so obvious that Australia is absolutely devoid of any unbiased media coverage – its rather disturbing, particularly the Australian. You wonder who owns it and who calls the shots – its atrocious for its extremism. Its like being hit over the head with a sledgehammer.

  68. observa
    October 26th, 2008 at 12:07 | #68

    Megan, et al, if you don’t understand what it’s all about I’ll let this bloke explain it to you-

    No you won’t. Please take another 48 hours off, and don’t post any more links to blokes who explain it – JQ

  69. observa
    October 26th, 2008 at 12:30 | #69

    The hypocrisy of leftist bank bashers down the years, with their response to this massive, implicit handout to banks and their shareholders, beggars belief. If our leadership seriously believed there was a threat to the financial system and fiat money and we collectively as taxpayers might have to pick up some of the tab, then it makes little sense to anoint winners and losers, a priori.

    As I outlined before, it makes more sense to offer Govt deposit insurance rather than a Govt guarantee. That makes the depositary institutions pay for the privilege, thereby levelling the cost of raising capital and at the same time setting up the taxpayer to have first call on any equity up for grabs in the event of an institutional failure. We need to demand that our leadership ditches their egos and backtracks on this current stupidity and pronto.

  70. observa
    October 26th, 2008 at 12:33 | #70

    Alright John I should have quoted the bloke, but thought it was relevant to the point about the inevitable hue and cry I predicted.

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