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Posts Tagged ‘interest rates’

Rates cut

One quarter of one per cent – confirming (again) that Brendan has no power to influence anything. Tip would have got it down a half. If he was in charge. If he could be bothered. But they wouldn’t back him last year, so he’s had enough. You’ll have to beg him to come back.

Then, and only then, will the Great Australian Dream of affordable houses for home-buyers (and investors), booming property values for home-sellers (and investors), rising wages, stable (maybe even falling?) prices, full employment, low taxation and excellent public infrastructure and services be realised.

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Oh no he didn’t!

Brendan Nelson – INSERT FOOT HERE:

“And now the Reserve Bank is in a position, in looking forward, where it is so concerned about the state of the Australian economy that it’s forecasting there may be room to reduce interest rates in the future.”

I understand that he has to attempt to criticise the Government and look for a line of argument that works, but did it not occur to him that some people might hear that and think, “I’d quite like lower interest rates right now”? And if he was trying to drum up fears of the ‘Rudd recession’, the phrase “there may be room to reduce interest rates in the future” really doesn’t get the job done. Serious boneheadedness.

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Shared delusions

On this morning’s Sunrise “All Stars” segment, the bobblehead from the Daily Telegraph whose name I have forgotten mentioned that Howard’s “sorry doesn’t mean I apologise” clarification was prompted by a ‘tough’ question from Dennis Youcannahandamanagrandershanahan.

This makes me wonder – did Dennis actually intend to prompt that type of response? I can’t reconcile all of my other experiences of Shanahan with the notion that Dennis actually wanted Howard to look bad, which makes me think that Dennis was asking the journalistic equivalent of a Dorothy Dix question. Except that he had to know that Howard was not going to apologise or take responsibility, despite having been happy to foster the impression in 2004 that he had interest rates on a string. Which means that Shanahan shares John Howard’s irrational belief that voters like to hear lengthy quibbling about the distinction between saying sorry and apologising.

Keep up the good work, Dennis.

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"Sorry, but" redux

Because this game of semantics pleases the electorate so much when he’s talking about Aboriginal people:

Mr Howard has repeated that he is sorry for the extra costs borrowers will bear because of the rate rise.

“I said that I was sorry they’d occurred, I don’t think I actually used the word apology, I think there is a difference between the two things,” he said.

“Just speaking as an individual, of course I’m sorry when interest rates go up because it does impose a burden on people, I understand that.”

Shorter Howard: “Sorry things suck for you right now, but don’t expect me to take any personal responsibility.” Except:

“We’re to blame for the strong economy,” he said.

“We accept full responsibility for the strong economy – we’re proud of it.”

And I have a horrible feeling we’ll get this same message for another two weeks, since the economy is all Team Howard thinks they have in their favour.

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Sorry, but

Best juxtaposition of statements in a piece on the interest rate rise goes to Coorey and Pearlman:

“Mr Howard needs to accept full, unqualified responsibility for his broken promise to the Australian people at the last election that he would keep interest rates at record lows.”

Mr Howard said he was sorry for the rate rise but said it was due predominantly to the strong economy, oil prices and the drought.

a.k.a., I’m sorry, except that it’s not my fault at all and it actually has a lot to do with how good a job I am doing.

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Hypocrisy ahoy!

This is the ad I am seeing repeatedly on TV this evening:

Someone needs to shove Hawke and Keating to the right and include the 22% under Howard.

I don’t know how it will play with voters who might swing to the Coalition, but on the day that rates have risen it only makes me think about how incoherent Team Howard are in articulating their economic message. Jim McDonald has done a nice job of capturing the essence of the Big Lie they are trying to sell. Rudd is responding sensibly and strongly, but should be looking to move the campaign away from interest rates – now that the deed is done, get back to talking about what Labor is going to do. I think the interest rate rise has been so widely anticipated and there seems little ground to be made in it – those who are willing to punish Howard for being a liar have plenty of other reasons to do so, and the others who won’t just punish Howard to see him hurt need to be won over to the fact that Labor is better for Australia, not just on the economy but in terms of our society’s future.

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Whip it out

Howard continues to engage in the Liberal vs Labor penis-size (a.k.a. interest rate) comparing contest. Two questions:

  1. Which government’s economic reforms broke the back of inflation? (Hint: it’s the government you took over from in 1996, when interest rates were steadily declining).
  2. Under which Treasurer were interest rates at 22%?

UPDATE: On tonight’s ABC News, Alan Kohler reported an analysis (attributed to Peter Cole) that shows Australian interest rates for the past 20 years have been, on average, 1.2 times higher than the OECD average – and this figure is the same under the Labor and Coalition governments.

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Future Howard

In his desperate bid for reelection, John Howard performs another stunning reversal:

In an interview earlier on Friday morning on Melbourne radio, Mr Howard acknowledged that a pre-election Liberal Party ad in 2004 had promised to keep interest rates at record lows and that had not been achieved.

“That particular advertisement lasted two nights and then it disappeared. It didn’t get out of my mouth,” he said.

“Interest rates are not at record lows now, I understand that.

“The advertising did refer to that for two nights, I accept that.

“I acknowledge what was said.

He really is committed to the process of reconciliation with mortgagors. Here is a man who is willing to acknowledge what a television advertisement, authorised by his very own Liberal Party, said.

But John Howard can’t be expected to do more than acknowledge the self-evident content of that advertisement. What, you think he should apologise? That would be completely inappropriate. Why, you ask? The answer lies in his other pleading reelection-seeking statement on interest rates:

The important thing was the future, he said.

“What we have to focus on with interest rates now is not so much what was said three years ago – I’m quite happy to answer questions on that but people are interested in what will happen in the future,” Mr Howard told Southern Cross Broadcasting in Perth.

“And they have to ask themselves, do they really think at a time of world financial turbulence, the economy will be better managed by the Labor Party, that interest rates will be lower under the Labor Party than they will be under the coalition?

“All the evidence tells me that they won’t be and the evidence of course is that when Labor was last in office interest rates were much, much higher than they are now.

“More importantly than the history, it’s the future.”

It’s the future. You can’t judge Team Howard based on the past – interest rates might have risen five times since that ad ran, with a sixth on the way, but that was Team Howard in its fourth term, and that ad was run by John Howard in 2004. The voters have to make a judgment about John Howard in 2007, and he’s an entirely different person. Why,did you know that he’s not even the same age? Nope, he’s three years older. And he’s grumpier. And … well, I’m sure there are other differences.

No, it’s not appropriate for John Howard in 2007 to apologise for something that John Howard in 2004 did. He might feel sorry that the ad ran and that voters were alarmed and misled by it, but John Howard in 2007 can’t apologise because it was not something that he did.

It’s the future – remember that when you cast your vote.

UPDATE: Kevin Rudd mistakenly believes he is campaigning against Howard Mk 2004:

“What Mr Howard is saying is that his promise at the last election on interest rates lasted only two nights, and therefore from his point of view didn’t really count,” Mr Rudd said in Perth.

“Well, a lot of Australians who voted for Mr Howard at the last election did think it counted, and now they are paying the price for it with five interest rate rises on the hop.

“He has lost touch with working families if he thinks that you can say to them, down the barrel of the cameras as that Liberal ad did, that they would keep interest rates at record lows in order to get that last election in the bag and then get working families marooned.”

Silly Kevin – you can’t attack Howard 2007 for what he has done in the past – you can only attack him for what he has done in the future!

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MegaGeorge points out that the Libs’ advertising appears to be looking further down the road than 24th November. Here is the latest ad he is talking about:

Megalogenis notes that:

What it neglects to mention is the year when this hole is supposed to appear in Labor’s tax scales. It’s five years from now, in 2012-13, according to the material Peter Costello supplied this week.

The message, then, is don’t vote Labor a second time.

Does that mean the Libs think this one is lost and are laying groundwork for the rebuilding process? The alternative is that they think a very abstract scare campaign is going to work – that the electorate will be both willing and able to contemplate how we will stand in relation to tax scales, employment levels, and wage-driven inflation several years down the road. There doesn’t seem to be much sign that it is working, and I can’t imagine it will – the threat is much less direct and the credibility of the Liberal Party less strong than in the 2004 fear-mongering about interest rate rises.

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Tsunami warning system

One of the nice things about an independent central bank is that, if the Treasurer wants to try to interfere with monetary policy for political reasons, he has to do it via the media:

In his first newspaper interview of the campaign, Mr Costello predicted the US economy would weaken in the wake of its subprime mortgage meltdown, and said the breakneck pace of Chinese growth could not continue.

At some stage, likely to coincide with a move to a floating exchange rate, the Chinese economy would unleash even greater instability on global markets than the US had.

“That will be a wild ride when that happens,” he said. “That will set off a huge tsunami that will go through world financial markets.”

Instability on global financial markets between now and the next Reserve Bank board meeting on Melbourne Cup day is seen by economists as the only force that could stay the bank’s hand from raising rates to the highest level in a decade.

I also noticed that the renowned financial expert and highly-skilled television host, David Koch, suggested this morning that there are a lot of “Howard fans” on the Reserve Bank board who won’t want to be seen to interfere with his chances of re-election. At this point, the economic consensus seems to be that inaction on the inflation figures would be the most egregious form of political interference.

Team Howard risks drowning itself in economic hogwash. They’ve been telling us ad infinitum that the Australian economy is strong and robust. However, at the slightest sign of a hiccup on the road, they warn us of potential instability to come and assure us that we need a steady pair of hands on the wheel (I’m not sure whether that set belong to Costello, Howard, or whether they each use one hand). There is no coherence to their arguments – they will trot out whichever line of rhetoric suits the current political aim.

ELSEWHERE: Darryl Mason has an interesting post about Costello’s scare tactics.

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