Sunday, February 15, 2009

$42 billion stimulus, Climate Change and Last Post ...

For reasons touched on in my previous post, I have decided to end this blog.

In doing so permit me to outline some concerns about the present political and economic issue of the day, the one costing $42 billion, in addition to the prevailing issue of the time, the “great moral challenge of our generation.”

The $42 billion Stimulus Package

As we digested the news surrounding the Rudd government’s latest fiscal efforts to pump prime our ailing economy, offset slackening demand and the effects of a world recession we are left to wonder, has the Government all but exhausted its ammunition in heading of a recession? Fiscally speaking one would think the $42 billion dollar assistance package would represent end game.

For all the rhetoric and analysis there remains the central question, how much can Western governments actually do to compensate for what appears to be a massive fall in business confidence, investment, and private consumption. The handouts component of the package will achieve one outcome at best, that off starving of a technical recession in the first half of 2009. Politically, it represents short-term brilliance, but in economic terms its damned expensive and completely unsustainable.

The infrastructure spending is perhaps the most intelligent element of the package but even this has limitations. For example, how does Government marry present urgency with the long lead-time associated with project fruition? Its effects will have little bearing on 2009’s economic data.

Thus, we return to post WWII styled economics that saw Western Governments launch the modern welfare state coupled with waves of deficit spending, namely, the kind of Social Democratic suppositions promoted by Rudd of late. Do not be surprised to discover that we are sowing the seeds for the next crises. My worry is that the remedies that may have worked in the past, the state intervention, may have unintentional and unpredictable longer-term effects unless they are confined to the present crises. Kevin Rudd’s latest ideological stirrings intimate that this shall not be the case.

In the end, it occurred to me that government spending only accounts for a small proportion of total economic output (25 percent at most) so no amount of public funding can compensate for the crises if the other 75 percent or so remains depressed. ALL indicators suggest that it will.

For presentation, speech dynamics, dramatics and general politicking, Kevin Rudd scores 9.99 out of 10 and a, 4.5 at best for economic responsibility. The stimulus-package debate has revealed the policy vacuum, the emptiness that is at the heart of the Rudd Labor Government.

In related commentary, please don’t suggest that Newsweek, got it right about America and hence, Australia too.

A decade ago U.S. government spending was 34.3 percent of GDP, compared with 48.2 percent in the euro zone—a roughly 14-point gap, according to the Organization for Economic Cooperation and Development. In 2010 U.S. spending is expected to be 39.9 percent of GDP, compared with 47.1 percent in the euro zone—a gap of less than 8 points. As entitlement spending rises over the next decade, we will become even more French...

Now comes the reckoning. The answer may indeed be more government. In the short run, since neither consumers nor business is likely to do it, the government will have to stimulate the economy. And in the long run, an aging population and global warming and higher energy costs will demand more government taxing and spending. The catch is that more government intrusion in the economy will almost surely limit growth (as it has in Europe, where a big welfare state has caused chronic high unemployment). Growth has always been America's birthright and saving
grace."
Climate Change nonsense

As revealed when one clicks on the “Climate Change” label of this blog, I have devoted a fair amount of online space to the question of Climate Change in the face of The Rudd Governments proposals to tax us over CO2 emissions. In ending this blog, permit me to add a further string to the impeding debacle that is, Anthropogenic Global Warming. The theories back of this nonsense have been turned into political ideology. It is no longer an environmental movement, rather a political activist movement that has become enormously influential at a global level, the great Liberal (term used in the America context) temptation of our time.

Environmental extremism can be traced back to the fall of the Berlin Wall and world communism as peaceniks, socialists and their sympathizers moved into the environmental movement bringing with them their neo-Marxism. Over the years, their green prose was utilized in such as way as to have more to do with anti-capitalism and anti-globalization than with the science of climate change. Post communism, the left was in a state of disorder so the attachment to the environment and following on, global warming should come as no surprise.

It is now common in the media to lay the blame for every major storm, hurricane, and wildfire on global warming. Hence, letters to The Age following Victoria’s recent bushfires:
I see pictures of the rows of tents in Whittlesea and wonder, are we looking at our first climate change refugees?
And this
This is what climate change looks like and it is terrifying, I plead with our state and federal governments to treat it like the emergency that it is, so these horrifying deaths, injuries and destroyed homes don’t become the norm.
So much for the information age; politics, and public debate in our newspapers are becoming emotionally driven and a bastion of ignorance, if part fuelled by the media itself. Some are even contending that Rudd will be to blame for any future bushfires because his carbon reduction targets are not high enough …

The world is changing in ways that should make present conservatives grimace and those past turn in their graves …

In recognizing, the role that it plays in the larger ecosystem of information, at this stage this blog shall, not be deleted ….

To those that arrive here through some Google or related search or by sheer accident, I cordially invite you to explore the many posts using the labels for navigation.

Otto
Federal electorate: Scullin

Thursday, February 05, 2009

The L Party: Break and Review

I will be taking a short break and posting might return by Monday 16 February.

To be perfectly honest, I am reviewing whether to continue or put an end to this blog hence, might return

A diluting Google PageRank - Lord knows why, I'll never understand googlebots - lack of dedicated unique visitors and general engagement from within the party itself - members and officialdom - have logically given rise to the question; to what end.

If anyone stumbling across this post can put forward a compelling reason to continue this blog, please do not hesitate to let me know via comment or email address as listed on my profile page.

Otherwise said, I think I am heading to that realm known as political homelessness, that is to say, I’m fast becoming comparable, but not exactly, like this bloke.

Institute of Public Affairs thanks Kevin Rudd

RUDD BLAMES INSTITUTE OF PUBLIC AFFAIRS FOR NEO-LIBERALISM

Prime Minister Kevin Rudd in his essay in The Monthly, released today, blames the Institute of Public Affairs for being the source of neo-liberalism in Australia. The Institute of Public Affairs is the world's oldest free market think tank. Executive Director of the IPA John Roskam said today that the Prime Minister had paid an enormous compliment to the IPA. >> more

Unions outlaid $65.5 million to oust John Howard

UNIONS outlaid a whopping $65.5 million in two years funding the anti-WorkChoices campaign and the ALP, an Age analysis reveals. The extent of the spending — far higher than previous estimates — has led to renewed calls for campaign finance reform amid concern about the greater role played by third parties such as unions and business groups in elections. >> more Ben Schneiders

Foolish Rudd stirs Costello

The Rudd Labor Government has made two major mistakes with its approach to the current financial meltdown. It has recklessly chosen to plunge the nation into levels of debt not seen since the nation was on its knees under Labor Prime Ministers Gough Whitlam and Paul Keating, and it has stirred former Coalition Treasurer Peter Costello from his somnolence on the Opposition back bench. No matter how much Prime Minister Kevin Rudd furrows his brow and adopts a serious mien, memories of Labor governments past will bedevil his efforts to sink the nation under a red tide of debt that will take generations to clear. More seriously, in the immediate term, he will find that it was unwise to provoke Costello by attempting to deride the Coalition government’s universally acclaimed economic successes. The former Treasurer has taken strong exception to a wordy essay Rudd has published in this month’s edition of the Left-wing Melbourne magazine The Monthly - and with good reason. >> more Piers Akerman
Is it game on yet?

Kevn Rudd: Champion of rhetoric

In a previous On Line Opinion article (September 16, 2008), I noted the level of intellectual dishonesty displayed by Kevin Rudd with his rhetorical attack on a supposed mean spirited Howard in an article titled “Howard’s Brutopia” (The Monthly, November 2006).

Since September 2008, Rudd has adopted considerable reforms that have upheld Labor’s policy platform: a minimalist (yet important) shift towards carbon trading to reduce greenhouse gas emissions, targeting vulnerable groups in a bid to boost consumption with $21.5 billion given to pensioners, families, and low-to-middle income earners in two packages (latest February 3, 2009), and increasing resources for public education and health.

But now Rudd - who is fond of telling us how Australia is in a better position to deal with the current crisis without giving credit to the Howard government’s elimination of Commonwealth debt - is guilty of another massive fib. In his Australia Day Citizenship address (January 26, 2009), Rudd declared:

… this great global crisis is not of Australia’s making, but as Australians we are left to deal with it … The causes of this crisis are complex. But ultimately they go to a set of values that are the very antithesis of our own. Values of unrestrained greed, encouraged by an ideology of unfettered markets. Nothing of courage and certainly nothing of concern or compassion for others, or the consequences of their actions.
Further, in the February 2009 issue of The Monthly, Rudd reportedly calls for immense policy change after 30 years of neoliberalism “with its flawed brand of free-market fundamentalism” which culminated in the current global financial disaster which he believes represents the ultimate expression of “extreme capitalism and excessive greed”.

Such arguments are flawed. Australian governments (including Labor) and voters embraced such policy decisions in recent decades because they believed that it was necessary to uphold both national and international economic goals. And if US consumption (more than 25 per cent of world GDP in 2007) had not been boosted by debt (and even sub-prime lending), then Australia may not have enjoyed the same level of economic growth in recent years. >> more Chris Lewis

Have a look at Chris Lewis's past articles here

Malcolm Turnbull Address to the Nation

Wednesday, February 04, 2009

Rudd is plunging us deep into the red

Prime Minister Kevin Rudd’s latest multi-billion attempt to stimulate the Australian economy would have had achieved a degree of credibility if he had not blatantly politicised the issue in his parliamentary address. Rudd is, as ever, an opportunist first and foremost. When it suited him, he and Treasurer Wayne Swan talked the economy down, when they finally awoke to the crisis others had already foreseen, they attempted to change their tune in mid-song. Too often this team has been caught flat-footed, too often it has thrown money at the problem without having any notion whether their solution has any chance of succeeding. The Rudd-Swan Christmas splash did nothing to stop the spiral. >> more Piers Akerman

Kevin Rudd according to Peter Costello

The PM has been revealed as a Whitlamite in conservative clothing. Every now and then you see a change in the political spin-cycle that is so audacious, so contradictory that you have to go back and check the facts — just to make sure you haven't imagined the whole thing. >> more Peter Costello

Welcome to Rudd’s Neo-Keynesian World

[N]o recession has been brought to an end through increased levels of public spending, but many recessions have been ended by a return to sound finance and fiscal discipline.

Recessions occur because goods and services are produced that cannot be sold for prices that cover their costs. There are reams of possible reasons why and how such mistaken production decisions occur. But when all is said and done, the causes of recession are structural. They are the consequence of structural imbalances that result from errors in production decisions, not the fall in output and demand that necessarily follows.

This cannot be emphasised enough. Modern macroeconomics is built around the notion of the level of demand, while prior to Keynes recessions were understood in terms of the structure of demand. The difference could not be more profound. To policy-makers today, the basic issue in analysing recessions is whether there is enough demand in total. To economists prior to Keynes, the central issue was to explain why markets had become unbalanced.

In modern economic theory, rising and falling levels of spending are for all practical purposes what matters. That is why increasing public spending and adding to deficits are seen as an intrinsic part of the solution, not as the additional problem such spending actually is.

Missing in modern economic debates is an understanding of the importance of structure, that the parts of the economy must fit together. What’s missing is an understanding that if the entire economic apparatus goes out of alignment, recession is the result and recession will persist until all of the parts once again begin to mesh.”
Via: The Australian Conservative

The entire Keynesian solution is wide of the mark in the context of the present crises, not once but many times, it has been discredited. To expand one’s knowledge about why government bailouts will make the problem worse see also:

To understand why Keynes was so wrong
What's Wrong with Keynesian Economics?

Tuesday, February 03, 2009

The Alarming Collapse of U.S Domestic Demand

Friday's U.S. GDP numbers showed that nominal spending or domestic demand in the United States crashed in the 2008:Q4. The BEA release showed that final sales to domestic purchasers--GDP minus private inventory change minus exports plus imports--declined at an annual rate of about 10%. This rate is the sharpest quarterly decline for the entire post World War II era. >> more
It is unwise to draw any direct parallels, as our two economies are substantially different. Nevertheless, what should concern us is that we are talking about the world’s largest economy, and when America goes south, the related implications affect us all. Click on the graph at the link provided to get an enlarged view; it’s a steep decline.

See also: U.S. economy shrinks 3.8% in Q4

On a world stage, it is not looking good so just perhaps, Rudd ought to slow down the spending a tad, it may be money down the drain; an exercise in futility.

Monday, February 02, 2009

Pro-Life Ad Featuring Unborn Baby Obama

As a conservative that considers the time-honored family to be one of the most important institutions of our society, and one who strongly advocates traditional Judeo Christian values, I was disturbed though not surprised at President Obama’s recent decision to allow state funding for foreign abortions. It was just as disturbing to learn that NBC has rejected an affirmative pro-life advertisement submitted for its Super Bowl broadcast this Sunday. After several days of negotiations, an NBC representative in Chicago told CatholicVote.org that NBC and the NFL are not interested in advertisements involving ‘political advocacy or issues.’

Brian Burch, President of CatholicVote.org added, “There is nothing objectionable in this positive, life-affirming advertisement. We show a beautiful ultrasound, something NBC’s parent company GE has done for years. We congratulate Barack Obama on becoming the first African-American President. And we simply ask people to imagine the potential of every human life.”

You may recall Catholic Vote’s 2008 brilliant"Vote Life" advertisement - view it here - featured during the presidential campaign that, sure enough was the most watched political ad on the web in 2008.

Well, find below the current ad that NBC in their wisdom, has decided not to air. Interestingly, it has been viewed over 760,000 times online to date. Once again they have done an excellent job.



Feed readers visit site to view.

Via: American Power, Gateway Pundit and LifeSiteNews

Read more via Catholic News Agency

Sunday, February 01, 2009

Jobs for Australia: Malcolm Turnbull gets serious on economy

In an effort to harness that 'can do' spirit in times of adversity, the Coalition has launched its Jobs for Australia website.

The portal is designed with simplicity in mind making it easy to navigate and accessible to all. It's goal is to gather and share ideas about ways to create employment and thereby aid the Coalition policy development process.

Image credit: The Australian Conservative

The problem with Bail-outs

The political eagerness to bail out failing companies just reveals that they — like a lot of us — don't quite understand what is going wrong with our economy. It's actually a bit misleading to describe our economic woes as a crisis. If anything deserves that title, it was the asset bubble that was burst in the crash last year. All the downsizing and unemployment that we face over the next year is not the crisis, it is the correction. >> more Chris Berg

What does Kevin Rudd really stand for?




Fact is who knows? In 2006, he touted himself as a Christian socialist, then as the 2007 election loomed, he was all of the sudden, an economic conservative. In Rudd's words:

A number of people have described me as an economic conservative, when it comes to public finance it’s a badge I wear with pride
Now in 2009, says Bolt, “a year after his election ads, and in the very same Monthly, Rudd has pinned yet another badge to his chest".

“Not for the first time in history, the international challenge for social democrats is to save capitalism from itself:..(T)he time has come, off the back of the current crisis, to proclaim that the great neo-liberal experiment of the past 30 years has failed, that the emperor has no clothes ...(T)he social-democratic state offers the best guarantee of preserving the productive capacity of properly regulated competitive markets, while ensuring that government is the regulator, that government is the funder or provider of public goods and that government offsets the inevitable inequalities of the market...”

Do we really know what Rudd stands for? Is he a socialist, economic and fiscal conservative or, a social democrat who rejects “great neo-liberal experiment of the past 30 years” and demanding a “a new contract for the future”?

On the question what Rudd really stands for, Peter Costello flagged his concern before most.

It brought to mind a Time magazine article following the November ’07 election:

Whether a Labor government would manage Australia's $1 trillion economy as adeptly as have Howard and Costello remains a voter concern, according to polls. However, Rudd has largely defused economic management as an issue. The thrust of his case is that Australia's strong economy is less the result of any judicious handling on the part of the government than of the ongoing minerals boom and watershed reforms undertaken in the 1980s by Labor governments. He's repeatedly cast himself as an economic conservative and tried to prove it by declining to match the government's spending promises.

Rudd is offering the country just enough tinkering around the edges of government policy in the areas of Iraq (a phased pull out of Australia's 1,400 troops), industrial relations (abolition of an unpopular Howard program) climate change (ratifying the
Kyoto Protocol), education (more laptops in high schools) and communications (faster Internet access) to convince Australians that it's worth making a change. "After 11 years, it's now time to turn the page on this government," Rudd says. "Australia is a great country but not as great as we can be."

All this temperance has injected one big question among Australians: who is this man who is likely to become the country's leader? Traditional, left-leaning Labor voters are generally lukewarm about Rudd and his softly-softly approach, but hope he'll fire up once in power. Labor's environment spokesman Peter Garrett gave them encouragement when he told an off-duty talkback radio host: "Once we get in we'll just change it all" — a remark condemned by the rest of his party as a monumental gaffe. That's precisely why Australians are uncertain of Rudd: is he the Steady Kevvie who's been on show this past year, or is he simply an old-fashioned lefty play-acting the only role that can undo John Howard's rule?