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Escalation

June 20th, 2009

The Great Ute Scandal has been bubbling along for weeks but I ignored it, partly because scandals are rarely interesting and partly because I couldn’t get to the starting point of working out what wrongdoing was supposed to have taken place (compare for example the Manildra business, which involved large sums of public money and provoked no serious concern). But in the last day or two the stakes have been raised dramatically, based on the alleged email from the PM’s office urging a prompt response to the concerns of a car dealer who contributed a car to Rudd’s campaign.

Whatever the significance of the putative email may have been, Rudd’s outright denial that any such email was sent means that it will be a major crisis for him if the email turns up, and possibly a terminal one if it turns out that the email was suppressed. On the other hand, if it can be proved that the email published by the Telegraph and referred to by Turnbull was in fact a fake, the consequences will be dire for Turnbull at least (I don’t suppose the Tele could lose much credibility). As my recent spam crisis demonstrates, I’m no tech expert, but I would have thought that the headers on an email would make it pretty easy to check whether it had been sent and that erasing all trace of an email would be just about impossible. And it would be grossly irresponsible to publish an alleged email if you received it with the identifying info removed.

Update

The news that the email was a fake confirms that the outcome will be bad for Turnbull, and could be catastrophic. The worst case, but a plausible one on the evidence to hand, is that the email was the product of a fraud cooked up between Liberal staffers and one or more corrupt Treasury officials. Even the best case, that the email was fabricated for some personal reason, and passed to the Liberals along with other leaks about the car scheme, doesn’t look good. I guess, given the twists and turns so far, it’s also necessary to consider the Machiavellian possible of a (highly successful) agent provocateur, luring Turnbull into a trap, as happened (IIRC) with Ralph Willis in 1996.

Further update

It now appears that the worst-case scenario is pretty close to the truth. Grech has apparently been working as a source of leaks to the Liberal party for a long period*. Apart from the obvious disastrous implications for the Liberals, this point also casts doubt on what remains of the case against Swan. If Grech was working for the Libs all along, he could easily have generated a large volume of emails, reports and so on, without any particular pressure from the government

* The term “mole” is commonly used in such cases, but the original idea of a mole was one of an agent in place who did nothing but burrow nto the target organisation, waiting for the time to act.

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  1. June 26th, 2009 at 13:28 | #1

    ABOM,
    Revoking legal tender laws will not stop FRB. FRB existed for a very long time before legal tender was even thought of. I would be happy to remove legal tender laws – they are (IMHO) unnecessary. Hulsmann (like Rothbard) is simply wrong on this. Whereever there has been a free market in banking FRB has dominated without there being any substantial inflation – in fact in most cases it has led to a zero inflation environment.
    Hulsmann is also employing the faulty analogy that Rothbard used; as if depositing money in a bank is somehow like putting furniture in a warehouse. It is not. A safety deposit box is like a warehouse – a bank is not.
    If you want to pay banks more fees and get no interest go ahead. I can guarantee what the rest of us (including, I would think, Alice) will be doing.
    FRB is just what happens if people are allowed to go about their business without undue interference.
    Accusing me of being a rapist is not a substitute for argument. I would appreciate it if you desisted. As I also have the curtesy to use my proper name, please use it back. I have never abbreviated or misused yours – even though you refuse to use it.

  2. Alice
    June 26th, 2009 at 13:35 | #2

    Spare me Andy
    “They did it through good risk management. It really is that simple. They took the money from the US Treasury only because they were told to and they paid it back as soon as possible. If any bankers deserve their bonuses this year it is the ones at Goldman’s.”

    I dont know what world you live in but I know a financial firm pays your wage. We know that. You act as if you are here to clean up their image. You can fool some of the people some of the time etc but no-one is fooled by Goldman Sachs. No one.

  3. Alice
    June 26th, 2009 at 13:45 | #3

    Goldamn Sachs are at the heart of what is wrong with our financial system. No government can control them and their reach extends into the oval office of the white house. Goldman turned the financial system into a massive Casino and they they destroy honest and potentially long term businesses by turning them into short term fly by nights (Goldman promote and punt these firms up the hill and then they punt them down the hill at their whim and in their media BS). Theirs is a world of hype, spin and speculation. These bulging eyed salivating executives make me sick. The pit bull kings of the financial pyramid with their empty holiday houses, gated communities and hoarded treasures. Sad Andy, just sad.

    Have I no respect for their stunning “expertise” Andy? (the answer is no) Might you have said it better?

  4. June 26th, 2009 at 13:55 | #4

    Alice,
    No financial firm has paid my wage for years. The last time I even invoiced a financial firm (and that was on behalf of my then empoyer) was over one year ago. Sorry – wrong again.
    Your increasingly frantic attempts to play the man fail every time. Perhaps you should try to inform yourself on the topic, rather than indulging in populist rhetoric.

  5. ABOM
    June 26th, 2009 at 13:55 | #5

    Dear Mr Andrew Reynolds,

    I finally got to you.

    I knew the veneer of civility would shatter if I pushed hard enough.

    Revocation of the FRBer’s “Achilles’ heel” – monopolistic, coercive, govt-enforced legal tender laws (and by extension gold and silver) – was the last straw. You’re a zombie-robot-monopolistic-socialistic-bwanker under that gaudy free market make-up.

    I finally got to you. No more “Mister Free Market Nice Guy”, eh?

    Good.

  6. June 26th, 2009 at 14:29 | #6

    Hardly, ABOM. You seem to be insisting (against all evidence) that FRB relies on legal tender laws. It does not. Any history of banking will show that FRB existed long before legal tender laws and does not rely on them.
    That is one of the reasons whay Rothbard is dismissed as a crank on this matter – he is simply and demonstrably wrong. His analogies do not hold up.
    On the other hand, if you are happy not to ban FRB and merely to revoke legal tender and let the market sort it out you will not find an argument from me.
    As for the rest, if you want to persist in being rude, go ahead. I was merely trying to see if you could be polite. Rudeness does not improve the quality of your argument.

  7. Chris Warren
    June 26th, 2009 at 14:34 | #7

    ABOM

    What is this stooge?

    Maybe you are shouting at the face at the bottom of the well.

    Legal tender laws are a symptom so fiddling with them will only shift injustice and exploitation into other areas.

    I think you will find that the biggest problem is debt creation – which exploiters can do just as easily without legal tender laws. In fact capitalists will have a field day without legal tender laws.

    Have you examined the monetary history of Australia?

  8. jquiggin
    June 26th, 2009 at 15:05 | #8

    We seem to be far off track, but until I post again on FRB, I’ll leave this to run. Please keep it civil.

  9. Alice
    June 26th, 2009 at 15:47 | #9

    Rum, portugese coins, spanish currency, promissory notes, red cedar, whale, trepang – what didnt they use for tender?. It was only when they made the British Treasury the the source of all legal tender and the Commissariat the venue for all trade in goods we had our first depression after they closed it for 6 months. The first bank holiday!

  10. June 26th, 2009 at 16:02 | #10

    Exactly, Alice. Free market working fairly well under the circumstances. Government attempts to control it in ham fisted manner -> recession. The period from 1830 to 1890 is also worth looking at, along with the period from 1890 to 1959. They are both very instructive.

  11. ABOM
    June 26th, 2009 at 16:25 | #11

    Agreed Andrew. If the govt lets the market work it always seems to muddle through. Once they crush it with legal tender laws and regulation, they centralise the process which weakens the whole structure.

    At least we can agree on that.

    What we don’t agree on is the degree of regulation in a monopolistic gvot-enfroced legal tender environment. I think paper gives a grossly unfair advantage to central banks/FRBers. You think de-regulation can still work wonders even in this environment. That is our real point of difference.

    Hopefully respectfully put. Just don’t mention Sacks of Gold again and I will keep it civil.

  12. ABOM
    June 26th, 2009 at 16:31 | #12

    Andrew,

    I FULLY support your view that revocation of legal tender laws and allowing FRB is preferable to enforcing full reserve banking, by the way.

    Just wanted to surprise you with that clarification. I think we have reached some kind of consensus on that hypothetical.

    However, I support very heavy regulation where there ARE monopolistic legal tender laws and central banking. The low-level embezzlement which occurs with FRB and gold gets completely out of control in a monopoly-paper (or e-money) environment.

    And that’s where we are now – chaos caused by (1) monopoly legal tender laws (2) central banking supporting out of control bwankers like Sacks of Gold and (3) a corrupt govt that cannot stand up for the children of this country.

    Hence the need for even more debt to “solve” the problem of too much debt.

  13. June 26th, 2009 at 18:36 | #13

    I fail to see how you can square that with your initial comment supporting the retention and increase in the current regulation, but I am happy that you seem to have at least something of a belief in freedom left.

  14. ABOM
    June 26th, 2009 at 19:56 | #14

    FRB = Legalised embezzlement. Therefore revocation of legal tender laws = stable money and economic freedom.

    FRB with Central banking/fiat toilet paper/corrupt govt = chaos and socialised money = monetary fascism. Therefore control of FRB within coercive monopoly fiat is essential to protect children against monetary rape.

    What is there not to understand?

  15. Alice
    June 27th, 2009 at 14:53 | #15

    Sure enough Grech has gone to ground unwell (Maybe for quite some time? Next they will be suggesting he has lost it – I hope he tells all – like that some other mole sent him the email and the Coalition boys decided to meet him prior to get him to play ball- after all Grech WOULD ABSOLUTELY have kept copies if it was real, and Malcolm is suggesting “we had no reason to doubt it was false etc”…

    Hannibal Turnbull and entourage – if you cant find a way through just make one? (up?).

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