Rudd Watch

Is anyone the least bit surprised??

2011-12-04T20:06:00.002Z

So, Kevin was the ratf***er. Who would have guessed?

A secret Labor Party report has criticised the government led by Kevin Rudd as lacking purpose and being driven by spin and implies that the former prime minister or his supporters were behind the leaks that almost destroyed Julia Gillard's election campaign.
It says the leakers ''should be condemned by the party''.
The report is the so-called sealed section of the 2010 election review conducted by party elders John Faulkner, Steve Bracks and Bob Carr and was never meant to be made public.
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Obtained by the Herald, the report's findings will inflame tensions between Mr Rudd and Julia Gillard, which were on display throughout the three-day ALP national conference in Sydney which finished yesterday.
Mr Rudd was upset that his role as prime minister was clinically deleted from Ms Gillard's opening speech on Friday and from a tribute to Labor's handling of the global financial crisis.
The confidential report cites a period of drift and complacency for the Rudd government which began in mid-2009 after the opposition under Malcolm Turnbull was crippled by the Godwin Grech-utegate affair.
Internal research began to show public doubts about the government's economic credentials, direction and priorities, despite its strong poll figures.
''Throughout this period there were 1900 press releases, however unlike with the earlier periods of government, there were no iconic issues for the public to latch on to,'' it says.
''Ministers would make announcements and then move on to something different very quickly. In this context, the government was beginning to be seen by a portion of the population as lacking a core purpose and being driven by spin.''
The report accuses the Rudd government of being rich on themes, announcements and talking up a narrative but short on substance and follow-through.
''What the government lacked was a refined political plan standing behind this narrative which concerned timing and execution, building community support and alliances, and prosecuting hard cases against all opponents with ruthlessness.''
The ''frenetic pace'' of government ''produced numerous reviews and media announcements which did not contribute to the core narrative of the government''. One contributor to the review said ''it was never a case of not standing for anything, rather it was a case of standing for many things but explaining them poorly''.
''The necessary groundwork just had not been done.''
The report says the bungled home insulation plan undermined the economic stimulus program, confidence in the government's ability to manage complex projects ''and its competence more generally''.
It criticises the design of the program and recommends that to prevent future bungles, the government ''establish a war-gaming group'' to scrutinise all major policies before release.
This group would include the prime minister's chief of staff, party leaders and party officials.
Mr Rudd was dumped by the party on June 24 last year after Labor plunged in the polls. His replacement, Ms Gillard, called an election three weeks later. Her campaign blew up when a series of damaging leaks emerged about her position on issues in cabinet.
The report points the finger at Mr Rudd or his supporters as well as those who continued to denigrate him after he had been dumped. ''The difficulties faced by a change in leadership so close to an election were fanned by some who opposed the change and some who wanted to continue a fight against a losing side,'' it says.
Every time Ms Gillard was generating momentum, there was ''another damaging round of internal disunity''.
''The review committee is unanimous … that these events were designed to cause damage to Labor's election chances and those involved should be condemned by the party.''
It notes that in the first week of the campaign, Mr Rudd ''dominated news stories'' and ''Labor's message was barely audible''.
It says the chaos was exacerbated when the former leader Mark Latham appeared on the campaign. ''Even though the party has and continues to do its utmost to distance itself from Mr Latham, he is still widely viewed as a Labor problem.''
Mr Rudd has previously denied being the leaker.

'Occupy Everything' morons - time to get serious

2011-11-01T09:45:00.003Z

Somewhat off topic, but ...

The limp-wristed pansified girly men of the Church of England are having trouble with the hippies parked on the foreground of Sir Christopher Wren's masterpiece:

The Rt Rev Graeme Knowles, the Dean of St Paul's, stepped down after becoming ever more isolated in his bid to take legal action to evict the Occupy London activists.
He became the third and most senior victim of the debacle, following in the footsteps of the Rev Dr Giles Fraser, Canon Treasurer, in resigning as his position became “untenable”.
Last night, the Rt Rev Dr Richard Chartres, Bishop of London, England’s third most senior cleric, was forced to take charge of cathedral operations as Mark Field, Tory MP for Cities of London and Westminster, said the charade had turned St Paul’s into a “national joke”.
He said: “The whole thing is farcical. You couldn’t make it up. It’s gone from the sublime to the ridiculous. This tented community has been there for two weeks and has hardly brought the foundations of capitalism to its knees.
“Ironically, the only capitalist organisation that has lost out is St Paul’s. I suspect that these resignations will only ensure that these protesters become more entrenched.”
The Dean of St Paul's had pushed hard for the church hierarchy to back legal action by the Corporation of London to remove the 200 or so tents from St Paul’s churchyard.
But the seven-strong chapter, depleted by the loss of Dr Fraser, were increasingly getting cold feet, concerned that the process would end in violence.
Eventually, the dean, already facing criticism over the closing and subsequent reopening of the Church, felt his position was “untenable”.
The development resulted in the Archbishop of Canterbury, Dr Rowan Williams, wading into the fray for the first time, warning that “urgent” issues raised by the protesters needed to be properly addressed.

They should hire an Australian priest.

Kevin O'Lemon cranks up the ratf***ing

2011-10-07T19:55:00.004Z

Yes, our worst nightmare is coming true. The hatchling is scratching through the skin of his egg. Boy, is he hungry.

After weeks of conducting a barnstorming media campaign, the naming of two Labor backbenchers pushing his leadership bid, the sounding out of union leaders for support and growing concern in the Labor caucus, Mr Rudd yesterday pushed leadership speculation to new heights.

Asked whether he was trying to actively undermine Ms Gillard to get back the top job, Mr Rudd did not deny the destabilisation. "What I am actively seeking to do is to do everything possible to prevent Mr Abbott becoming prime minister of Australia," he said.

This vignette was rather interesting:

On Monday, he invited photographers to record a visit to Princes Street Primary in Sandy Bay, where he talked about "Australia's place in the world".

School principal Sue Scott said she had been asked by Labor senator Carol Brown if the school would be interested in hosting a visit by the Foreign Minister. When Rudd arrived to speak, she asked whether he would also be willing to say hello to younger students as well.

"He . . . said, 'My word, I would'. He did high fives with them. He asked them what grades they were in and looked every child in the face and said hello. He was very impressive."

Some people really have low expectations. One wonders if Ms Scott would have had the same impression, were St Kevin to have stayed longer than 5 minutes, and begun calling the kids fat, stupid, smelly genitals, whingeing about ratf***ers, and throwing a tanty about how his tuckshop lunch was inadequate. I can only think that Ms Scott has been living under a rock for the last five years.

Then there are the delusions of grandeur:

Rudd's conviction is being driven and fed by signs of public support and sympathy, both as Foreign Minister and a betrayed leader. He has been "mobbed like a rock star" at spots as diverse as Port Moresby airport, Victorian schools and television panel shows.

Port Moresby airport. Schools. And wanker television programs. And he thinks this means the country wants him back.

On its own, this is simply gobsmacking. How can anyone take this nutjob seriously?

It only becomes partly comprehensible in the context of Julia's utter failure, and the completely unprincipled venality and desperation of the Labor Party.

OK then, here we go again ...

Preparations in train

2011-10-01T09:03:00.006Z

Wasps never live to see their offspring, but this has not prevented some of them from hitting on an ingenious way of providing for the future welfare of their young. They build clay cell, deposit their eggs in them, stock their cells with spiders, and seal them up. The spiders have been paralyzed by the parent wasp, by chemical means. The chemical not only does not kill the spider, but leaves him quite unharmed; it just immobilizes him. So the baby wasp, when he emerges from the egg, finds himself surrounded by food: first class protein at that, and fresh as a daisy.

For the spiders, if they are conscious of being paralyzed, the thing must be horrible almost beyond our ability to imagine. Not quite beyond it, however; because we have all known something like this paralysis in our dreams. We dream that we are in some fearful danger, and we try to flee or fight, but our limbs respond only faintly, or not at all, to our will. We try to call for help, or simply scream; but, most horribly, no sound comes out of our mouth. Our mental energies are all intact, but our physical energies have somehow vanished. This paralysis, all will agree, is the crowning horror of a nightmare.

But nightmares are not the only parallel which our experience furnishes to the spider's plight ...

[David Stove, Paralytic Epistemology, or The Soundless Scream]

No, certainly not, David!

Stove went on to describe how people in western societies, during the Cold War, had to live day-to-day with the knowledge that there were those among them who actually wanted the Soviet Union to come and take them over - and no matter their protests, this nonsense seemed to mushroom everywhere. Just think of the lunatic murderous hippies who formed the Weather Underground, for example.

Thankfully, the situation is now nowhere near as serious for us - apart from a dwindling band of goat-molesters in Pakistan and sociopathic investment bankers who, I suspect (well, I hope, anyway), are soon going to get their comeuppance, the most serious enemy of open societies is their citizens' softness and ignorance of what a treasure they have, and how fragile it is.

But in Australia, there is indeed another parallel to the story of the paralysed spider and the baby wasp. One in which you, and me, and all around us in this unbelievably lucky country, is to play the role of the fresh protein, and in which our friend St Kevin - who, like Mrs Jellyby loves all humanity but can't stand people - is to play our newly hatched and hungry devourer.

Dennis Shanahan writes today in the Aus that:

The destabilisation campaign is already under way, the Foreign Minister is being presented in the best possible light across portfolios and some ministers are trying to play down the impact of the internal campaign, but they concede it exists.

For a variety of reasons the strategies of those intent on removing Gillard and those intent on defending her position are coalescing with the same aim, that Gillard will remain Labor leader until at least December and then through to February next year.

One Labor MP, who is working to have Rudd's leadership resurrected and was surprised by the sudden, positive reaction to reports Rudd was gathering numbers, told Inquirer: "We don't want to go too early, everyone's quietening down now until November at least and probably until next year."

Another senior Labor MP said this week: "We're in no rush to go to an election."

Put simply, those who want to replace Gillard with Rudd, and even those who may take advantage of a Rudd campaign to make their own bid for leadership, don't want to act in haste. For a start, there is an ever-present danger that any attempt to tip Gillard out of her job will spark an immediate election that Labor would lose horrendously based on recent polling.

So that's it - the woman on whom Rudd's career depended at the end, and who cut him down, is now at the mercy of the same forces that brought her to the top. In other words, it's all over - the Labor Party is just waiting for the right monent, and away she goes.

And Rudd is being groomed to step into her shoes.

Dear friends, the Machiavellian, power hungry Labor Partiers have you all bundled up, ready to deposit in Little Kevin's clay cell. And when the time comes for him to hatch, he will crawl out, and subject you to the same toxically boring, offensive, prissy, dated, snide, glass-jawed verbal vomit that he inflicted on you the last time someone thought fit to put him in the Lodge.

And, until the next election, there is absolutely nothing that you, or I can do to stop it. We are, politically at least, paralyzed.

Rather terrifying, yes?

Get ready. He's already scratching at the inner surface of his egg.

By the way: if you're terrified, imagine how Brother Wayne feels! I suspect he's going to be given a very Queensland-style introduction to the 'rough end' of a pineapple.

Cloud of Flatulence declares: 'I am a fascist twat'

2011-09-29T12:16:00.002Z

Newspapers should refrain from publishing the opinions of average Australians, academic Robert Manne has said.

Professor Manne says they should report only the views of a "core" of experts in key debates.

At a book-signing in Sydney last night, he also urged the media to embrace greater contributions from controversial left-wing commentators such as US linguistics professor Noam Chomsky and Beirut-based commentator Robert Fisk.

Professor Manne is facing fierce criticism over his recently published Quarterly Essay, Bad News, in which he alleges that The Australian plays an "overbearing" and "unhealthy" role in national debates by publishing fringe views on controversial topics.

Professor Manne, who described climate change as the most serious threat facing the planet, has said only experts within the "core" of the scientific consensus should be heard.

"I do not believe it makes sense for non-scientists to have views on scientific issues," he told the gathering at Gleebooks, in inner Sydney.

"They should get scientists in the consensual core to debate it, but that would be so boring."

Preparing the ground for his return

2011-06-18T04:03:00.003Z

Well, I never would have believed it.

I actually had quite high hopes for Julia. She seemed intelligent, a listener, someone able to build a consensus.

Instead, over the past year she has been a complete failure.

I said to a colleague at work, back in February when she reneged on her promise of no price on carbon, that she was sunk, she would never recover from this bare-faced duplicity.

Since then, she has just continued failing - on border protection, on selling her message about carbon dioxide, and most recently on live cattle exports to Indonesia. The results of this are everywhere in the polls.

I'm quite dumbfounded at how poor her judgement is, and how obtuse is her mind. But it is a fact, and it has consequences.

So, she has left an opening for St Kevin to return to the Lodge. Bear in mind that just a year ago St Kevin had brought the house crashing down upon his own head. He was reviled by his own party and rejected by the wider community.

And yet the most cynical, self-serving and opportunistic politician that Australia has ever produced is still more popular than Julia - so poor has been her effort.

The halfwits in the press gallery are starting to twig that Julia will never turn this boat around. So are the increasingly nervous Laburistas in the caucus. They are shifting in their seats, alarmed by the lack of leadership in the face of what has been a simple, direct and lethally effective campaign by Nemesis to discredit them. And they appear to be turning to Rudd - for no reason other than the community dislikes him less than it dislikes Julia.

Rudd, being an egomaniac and lacking any sense of proportion, has never given up on the dream of returning to the Lodge, and has been waiting out the days, sitting by the river and watching Julia slowly slide into the mud. And now, he senses that it is the right time to move. Hence, the speculation in the tame press this last week, culminating in a piece in today's Herald by Rudd's most tame journo, Peter Hartcher, telling us how Rudd concedes that he made mistakes.

It is so patently false, so obviously a positioning document, as to be vomit making.

I thought my days watching Rudd were over. That the people of Australia - and the Laburistas - had come to their senses. 'Not for a long time', I thought, 'will we again have to endure a vile, cynical Man-Child holding executive power in our country.'

To my dismay, I may have been wrong.

For the moment, Julia has the support of the independents. If Rudd can terrify them into switching their support, while building support within the community, then he is 90% of the way to removing the pathetic failure that is Julia, and once again plonking his pudgy white arse on the prime ministerial swivel chair.

Should be interesting!

Post script: More evidence (if any were needed) that Kevin Rudd is a selfish, self-aggrandising turkey

2011-05-05T20:57:00.004Z

The man is even prepared to jeopardise serious anti-terrorism operations in order to garner just one additional headline for himself:

Foreign Minister Kevin Rudd has been drawn into an ugly international dispute over intelligence revelations, which Pakistan says could have disrupted the top-secret US operation to kill Osama bin Laden.

Pakistan's ISI intelligence agency claims Mr Rudd "shattered" a confidence by publicly confirming the arrest of Bali bomber and al-Qa'ida acolyte Umar Patek in late March.

The Department of Foreign Affairs and Trade's most senior official, secretary Dennis Richardson, yesterday dismissed the claims as "untrue and absurd".

But an ISI spokesman told The Australian yesterday Pakistani authorities had deliberately kept secret Patek's arrest in January - in the same town where bin Laden was found and killed this week - for fear that "subsequent leads would all go dead".

The spokesman said they were dismayed when Mr Rudd, on March 30, confirmed the arrest at the end of a Bali Process meeting he co-chaired with Indonesia's Foreign Minister Marty Natalegawa. "Information on the arrest of such people is not released for as long as possible so we have time to get his contacts because there's always a fish bigger than him," he said. "If the news gets out that this person has been arrested then all his contacts disappear. That's precisely why we did not do it but somebody else beat us to it. Your guys (Australia), in their wisdom, thought it would be good to score a point. They had no hand in his arrest. We're the ones who arrested him and we shared that information with them in confidence and that confidence we found was shattered when they immediately went public with the information."

The ISI's claims have the potential to disrupt diplomatic relations with Pakistan, at a time when military ties between the two nations are the strongest they have been.

Mr Richardson said yesterday: "Mr Rudd's statements on the matter were in conformity with the advice from the Australian security and intelligence community. They also followed comprehensive coverage of this matter in the international media.

"This has also today been confirmed by the US embassy in Canberra."

Yet there is ample evidence to suggest Pakistani authorities were sincere in their efforts to keep Patek's arrest under wraps and were irritated by Mr Rudd's announcement; either because he compromised their investigations or because he stole the thunder for their arrest.

Many security experts have also expressed surprise that the leaking of Patek's arrest in Abbottabad did not trigger alarm bells in the bin Laden compound and prompt the al-Qa'ida chief to flee the area.

Pakistan intelligence officials arrested Patek on January 25 after tracking him and his Filipino wife to a house not 10km from the bin Laden compound, following the detention of an alleged al-Qa'ida facilitator in Abbottabad known as Tahir Shehzad.

Patek was one of the last remaining leaders of Southeast Asian militant network Jemaah Islamiah still on the run since the Bali bombings triggered a US-assisted crackdown.

But news of the high-value arrest did not come out until early on March 30, when Associated Press was tipped off to Patek's capture in Pakistan by Philippines and Indonesian intelligence sources.

Just hours later, Mr Rudd confirmed the arrest during a press conference marking the ending of the Bali Process meeting he co-chaired with Indonesia's Foreign Minister Marty Natalegawa.

He declared it "a potential major step forward in the fight against terrorism".

However, Mr Natalegawa refused to confirm the arrest, citing operational concerns, and appeared annoyed by Mr Rudd's announcement.

"Not wanting at the same time to reject what Kevin, Mr Rudd, has said, I cannot confirm that fact," Mr Natalegawa said.

Patek, an explosives expert, carried a $US1 million bounty on his head for his alleged involvement in building the bombs that killed 202 people - including 88 Australians - in the 2002 Bali attacks.

On April 13, AP was again the first to reveal that Patek was caught in the Pakistani garrison town of Abbottabad, just 100km from the capital, Islamabad.

While that leak came from an ISI official, The Australian understands the story created serious blowback both within the ISI and for the Islamabad office of Associated Press.

When asked yesterday if he believed Mr Rudd's announcement on March 30 confirming Patek's arrest risked derailing the bin Laden operation, the ISI spokesman replied it was "academic now because Osama has been found and killed".

But he added: "Yes it was disturbing. That information should not have been released when it was."

It is not clear whether intelligence gathered during Patek's three months in detention helped lead to the killing of the world's most wanted terrorist.

A senior US counterterrorism official this week claimed it was "pure coincidence" Patek was in Abbottabad.

But just a day later Indonesian Defence Minister Purnomo Yusgiantoro said Patek was in fact in Pakistan to meet with bin Laden, who he is believed to have met in Pakistan's al-Qa'ida training camps ahead of the September 11, 2001 attacks.

While many have questioned why the Patek revelations did not prompt bin Laden to flee his Abbottabad compound, Pakistani security analyst Ayesha Siddiqua says the explanation could be there was nowhere left for the 54-year-old terror leader to go.

"Bin Laden was caught at a time when he was old and sick; when he could not have been saved," she told The Australian, referring to persistent rumours that the al-Qa'ida chief suffered from a debilitating kidney.

Kevin, you are unfit to run a chocolate wheel at the local fete.

Game Over

2010-06-23T20:51:00.008Z

It's over. Thank God it's over.

Time has run out for St Kevin. The RuddWatch Doomsday Clock has struck midnight. In the eyes of the electorate and of his parliamentary colleagues, Kevin Rudd has turned into a pumpkin.

Finally, the Labor hacks have peeked out from behind the curtains of the Caravan of Deranged Idiocy and seen that St Kevin has pushed them out into the desert, where nobody is there to listen to their incorrigible lying, spinning, trash talking and all round rubbish. As if this wasn't enough to cause them to wet their pants, when they questioned St Kevin he insisted to them that everything was fine.

For you see, the Poison Pixie is in denial. It is so obvious. The insane work ethic and the constant aggression and posturing is all compensation for a mammoth inferiority complex - a ploy to keep both the people around him and his subconscious doubts away from his trembling Self. Given this, St Kevin's ego simply can't handle the reality that he has completely lost the widespread support that he had enjoyed from the public for three years. The only thing left is denial. That's a very effective short-term survival tactic for Rudd, but it's proving deadly for his followers. So, as they should, they have acted.

It was so easy at first. After John Howard misread the electorate - in effect he ceased to listen to them - people became so desperate for change that they were willing to take a chance on St Kevin. They gave him a huge benefit of doubt and were happy to give him their support.

But St Kevin misread this. Desperate for approval - a result of his strong sense of inferiority - the Poison Pixie thought that people loved him for him. This in itself wouldn't necessarily have been a problem, if he had sought to return that love. He didn't. He abused it by sliming the population with lies, spin and all manner of verbal garbage. It had worked during his time as leader of the opposition, after all! And the press gallery were happy to let him get away with it, so - why not! Let substance come a distant second - if Kev could spin it, then he would.

In his delusion, St Kevin missed the lesson of Abraham Lincoln's wonderful insight: that you can fool all of the people some of the time, and some of the people all of the time, but that you can't fool all of the people all of the time. It started getting out of hand after the 2009 budget, when St Kevin couldn't bring himself to say 'The government's net debt will grow to $300 billion'. He kept saying '300', and wouldn't budge. He looked completely ridiculous.

And yet still people gave him the benefit of the doubt! Such was the goodwill of the Australian community, a much less cynical group of people than we here are at RuddWatch. But St Kevin didn't learn this lesson. Instead, he saw it as more proof that, provided you just told them the 'right' things, the population would let you get away with whatever you wanted to do.

It all changed in April, when, in a moment of monumental pissweakness, Rudd gave in to a boat of starving border busters holding him to ransom and blackmailing the country from Indonesia. Here, Rudd revealed his character and his misunderstanding of the Australian people. Not understanding the importance of taking a stand in support of one's country and the laws of the land, Rudd treated it as just another distraction to be cleared off the newspapers. The community rightly saw this as weakness, poor thinking, poor decision making and an unacceptable lack of leadership. St Kev's popularity began going into freefall. This was quickly followed by the backdown on the universe-saving C'P'RS. The public had their 'Roderigo moment':

Faith, I have heard too much, for your words and
performances are no kin together.

The public turned their backs, and St Kevin went into denial. The result is as you see today: by mid-morning, we will have a new Prime Minister. I wish her well.

This may be the last post that will appear here. The wash-up is going to be most entertaining, as the stories of much abused staffers finally emerge into the light, and we see at last the true character of the person who has been governing us almost single-handedly for nearly three years. If anything interesting comes out, I may post on it. But I have a busy life and many projects to complete. We'll see.

I truly hope that St Kevin takes the opportunity to slow down, go into the hall of mirrors and take a good hard look at himself. For thirty years he has been running away from himself. Now the fantasy world that he has been living in since late 2006 has evaporated, never to come back, and cold hard lonely reality is all around him. His marathon has landed him in the desert, a wilderness where he is accompanied by nothing and no-one but the multitude of his personal demons and the realisation that he has made a complete and total arse of himself all at the expense of others. Now is his best chance to start down the painful but infinitely rewarding path of self knowledge. What will emerge from such a journey is a more pleasant, more relaxed and more constructive human being - calm, centred and focussed on achievements that can be won by working together. Let's hope that this Lear, accompanied on the blasted heath by the Fool that is the memory of his enormous error, can also find a Kent to support him.

I also truly hope that the minions of the Labor movement learn that in life, character is everything, and that placing unstable and angry men with half-formed and incomplete personalities in positions of responsibility, apart from being cruel to such a person, is the path to failure. Such people simply fall to pieces when they are confronted with an essentially happy, successful and intensely focussed person, as Rudd was confronted in December with Tony Abbott - the most deadly political hunter-killer since Howard. Rudd's inferiority to the physically and intellectually superb Abbott is obvious, and it completely rattled Rudd, leading to the disintegration of his leadership that we see today. Start recruiting well balanced people who know how to work in teams to achieve common goals, and for whom hatred and anger are anathema. Otherwise the toxic culture that promoted, supported and then tore down so inappropriate a leader as St Kevin will continue.

We'll be celebrating with champagne and friends this evening. Many thanks for your support. Our country faces a fresh start with a new leader. There's still so much work to do. Let's get started.

It's ON!!

2010-06-23T12:49:00.002Z

Go Julia! Snip snip!

Meltdown Update - bringing the heavy artillery to bear

2010-06-23T10:04:00.008Z

OK team, snuggle down into that beanbag and have that bowl of popcorn handy. We're in for a show.

The hard men and women of the Labor Party - people who would have no qualms stealing lollies from children and then blaming it on Tony Abbott, the miners or whatever other ratf***er comes to mind - have issued a Code Red and are moving against St Kevin. And from this report they ain't gonna be shy about it any longer:

Prime Minister Kevin Rudd's leadership is under siege tonight from some of the Labor Party's most influential factional warlords.

The ABC has learned that powerful party figures have been secretly canvassing numbers for a move to dump the Prime Minister and replace him with his deputy, Julia Gillard.

It appears she has rebuffed the advances, but it is a measure of the disquiet which has been building in the party since Mr Rudd's approval ratings began their precipitous slide in April.

Ministers and party members have been lining up all week to voice their support for Mr Rudd but behind the scenes, party leaders have been contemplating a leadership change.

Although Mr Rudd looks likely to survive the challenge, news of the attempted coup will undoubtedly weaken him.

It is understood that the only thing holding the Prime Minister up is that his deputy refuses to join in a bid to bring him down.

Now why would Julia not want the job of Prime Minister?

I mean, it's not every day that someone walks up to you and offers you supreme executive power on a plate, is it?

Maybe because she thinks that St Kevin has so mangled the party's electoral chances that not even she would be able to win an election against Nemesis and his Team of Bumbling Morons?

Maybe because she doesn't want Kev to think she's a ratf***er? Too late for that, we think.

I don't know. I can't understand what motivates people to join such a sorry bunch of angry, disaffected, hate-filled misfits as the Labor Party, so I have no chance of knowing why they act as they do once in parliament.

But this is simply more evidence that the Poison Pixie remains in the Lodge only on sufferance of Julia Gillard. Politically he is finished. There is no recovery from here. All Julia has to do is take out the scissors and cut Kevin's lifeline and - poof! - the career of the least fit person ever to lead a political party will join his seriously crudulent essay on the shelves of the national archives.

Update:

Woah! The Oz is reporting that Kev really does think Jools is a ratf***er:

Labor MPs said last night the Deputy Prime Minister was "very angry'' with suggestions that her loyalty had been questioned by Mr Rudd.

Prompted by reports that Mr Rudd had sent his chief-of-staff, Alister Jordan, to check MPs loyalty and whether there were moves to replace him with Ms Gillard, MPs angrily accused Mr Rudd of disloyalty himself.

Several MPs have told The Australian Ms Gillard has put every effort into killing leadership speculation surrounding Mr Rudd, but has effectively been undermined by the Prime Minister who had questioned her loyalty.

"She has stood by him through the toughest time. She has not sought to exploit his problems for her own gain and this is how he repays her?''

Seriously peeved, hey Jools? Then get out the scissors love. Come on - do it for the country!

Update:

The graphic that killed off St Kevin's prime ministership. It's not the RSPT that is swinging people's votes, it's the Poison Pixie himself:

Meltdown Update - Simple IQ Test plus Free Music Video!

2010-06-22T12:54:00.004Z

RuddWatch presents: a test in pattern recognition.

All articles are from yesterday's newspapers.

First: from a Geoff Kitney piece in the Fin Review:

Though talk of a leadership challenge is not realistic, there is a growing willingness to criticise Rudd's performance because of what some Labor insiders say is his unwillingness to acknowledge the seriousness of the government's slump and to address the reasons for it.

Senior members of the government and backbench MPs have told The Australian Financial Review there is a view in Labor ranks that the Rudd team is in denial about the problems overwhelming Labor's political standing.

Secondly: from a piece by Glen Milne in The Oz:

Every federal Liberal who went to Penrith to campaign reported that voters raised two issues; Rudd and boatpeople. Joe Hockey and Marise Payne both informed the Liberal caucus last week in Canberra about these concerns.

"The boatpeople issue out there was white hot," said one Liberal yesterday ...

... Part of the reason I'm writing this column is that there are senior Labor figures who are so frustrated at Rudd's blind spot on asylum-seekers they see no other way to get the message to him than through the media: "We are bleeding to death on this," says one prominent backbencher loyal to Rudd. "Everywhere you went in Penrith they were talking about boatpeople.

"And people (read Rudd) don't seem to understand that over in Western Australia they may hate the mining tax. But they hate the boat arrivals even more."

Two weeks ago David Bradbury, the federal member for Lindsay, which takes in Penrith, stood in the partyroom. Bradbury, the chairman of the caucus economics committee, is a widely respected figure in the caucus, regarded as intelligent, hard-working and above all well plugged-in to his local community. Bradbury warned Rudd just how damaging the asylum-seeker debacle had become for Labor in his electorate. He was followed by the equally respected South Australian member for Wakefield, Nick Champion. The message was the same. And critically the demographics of Champion's seat are the same. In other words the boatpeople problem for Labor is national in scope.

Most commentators attribute Rudd's speed-of-light decline in the polls to his backflip on the emissions trading scheme. But if you look at Newspoll closely you can date the beginning of Rudd's decline from his mishandling of the Oceanic Viking affair. It was that episode that stripped him bare as a prime minister unable or unwilling to take tough decisions in the national interest. The ETS retreat simply reinforced that suspicion among more voters. The wheels of the government had been wobbling for some time over asylum-seekers. The ETS was just the pothole where they finally fell off. No one in the early stages really noticed except colleague Dennis Shanahan who attributed the downward movement to boatpeople earlier than most.

Liberal scrutineers on Saturday reported two recurring themes; voters bagging Rudd in highly personal terms and anger over the federal government's loss of control over our borders.

Following so far? OK, here is the third piece of the puzzle, again from the Fin Review:

Perhaps in a pitch to voters in the area, Mr Rudd did acknowledge yesterday that cost of living pressures were hitting people hard in western Sydney.

While Australia's economy held up well during the global financial crisis, it was "still very hard out there" and the government was picking the message that people were doing it tough in the suburbs, he said. He pointed to the government's next round of tax cuts, which will be paid from July 1.

Away you go.

As I type this, I have the lyrics and tune of Local H's classic Bound for the Floor going through my head. Most apposite, really.

Meltdown Update - One Minute to Midnight

2010-06-20T00:57:00.002Z

You will notice on the right that we have added a Doomsday Clock to the site.

It is now only a matter of time. After everything that has gone before, St Kevin's performances this week at the press gallery's ball and subsequently on The 7.30 Report have sealed his fate. He is unloved and his position is irrecoverable. His pathetic, lurching and erratic prime ministership is now at one minute to midnight.

I suspect that the Laburistas will dump Rudd before the election. Unlike in 1975, when the whole Whitlam cabinet was believed to be appalling, the public feeling now is now not against Labor as much as it is disillusioned with Rudd. A rational backbencher will draw the obvious conclusion that cutting the deadwood loose would considerably improve their chances of staying in parliament.

However, because I cannot vouch for the rationality of Labor backbenchers - not least because of their general tribalism, venality and all round poor judgment - I can't say for sure that this will actually happen before the election.

But Rudd's fate is decided. It is now only a matter of when.

Meltdown Update - a plea for sanity

2010-06-19T08:52:00.003Z

"It is distressing to see the level to which debate has sunk," write Leon Davis in today's Australian.

"The characterisation of the industry as dominated by vested interest and incapable of contributing to great national debates is one I find deeply and personally offensive.

"What is at stake here is the future prosperity of Australia. Surely it deserves better than the name calling, misinformation, personal attacks and time wasting we have seen in recent weeks."

Well obviously.

But you're not going to get any of this from a moral pygmy like St Kevin, and especially not when his political career is slipping through his fingers like sand.

He has lived and indeed thrived in the tribal environment of the Laburistas. You, Leon, and all your mates are enemies. You think you're having a conversation about national prosperity? The Poison Pixie and his intellectually challenged Treasurer just think you're trying to ratf*** them.

They can't think any more broadly than that.

Matthew Stevens goes on:

Davis has no issue with the idea that resources taxation requires reform, or with the idea that "if the system of revenues raising is not functioning well, the primary responsibility for initiating change lies with government".

But he insists the best reforms are built on meaningful consultation before, not after, "the direction of change is finalised".

Treasurer Wayne Swan promised miners there would be proper consultation ahead of reforms to resources taxes.

He did not deliver.

There was none and, for all the theatre of recent weeks, there still isn't any.

Davis writes: "For the sake of our common future, let us stop belittling the contribution the Australian minerals sector makes to national life and offer it the opportunity to participate in funding practical and workable means of improving the system of resource taxation."

Common future? Contribution to national life? Practical and workable? What you're really doing is asking for leadership, yes Leon?

It's Kevin Rudd you're talking about, mate. None of this will register with him. He wouldn't recognise leadership if it sat up in front of him wearing an 'I am leadership' t-shirt and hit him on the head. You can't talk to St Kevin, he has never listened and will never listen. He only understands the language of power. Therefore I recommend you give him a good, hard, cold serve of the stuff, straight to his glass jaw.

Meltdown Update - the Caravan of Deranged Idiocy moves further out into the desert

2010-06-18T10:06:00.005Z

It is just getting more embarrassing by the day.

St Kevin's speech to the press gallery's mid-winter ball was seriously bizarre. And has done just as much irreparable damage to the prime minister - and the morons who still support him - as all his other dickheaded actions.

Threatening the miners like a street level mafiosi.

And then prattling on at length about ratf***ing.

Anyone who didn't before have doubts about the Poison Pixie will have them now. Especially after the interview on the 7:30 Report last night. There's only so long that people will put up with St Kevin talking irrelevant crap and avoiding questions before they turn off completely.

Keep pushing that caravan Kev! Go on son! Keep shoving your foot into your mouth mate!! We're cheering for you!

No-one told Wayne

2010-06-17T10:43:00.002Z

The consensus in the Labor party is moving towards a more consultative, less combative approach to the mining industry and some sort of negotiated compromise over the resources tax.

Even St Kevin is mouthing the right words - although it's transparently clear to all and sundry that his aim is not compromise but to have the miners wear the blame for when the talks eventually break down. He has no intention of compromise. However he is beginning to follow the script.

The same can't be said for poor Brother Wayne. He really has drunk the Treasury Kool-Aid on this one.

Treasurer Wayne Swan has delivered a passionate defence of the government's proposed resource super profits tax, saying he will not let windfall profits walk "out the door.

The government was asking mining companies to pay their fair share of super profits to the Australia people.

"We on this side of the house will not sit here and watch those windfall profits walk straight out the door," Mr Swan told parliament today.

"We are not going to let that rip-off continue."

Yes, Wayne actually thinks that businesses making a profit in full compliance with the law of the land is a 'rip off'.

We suspect the party machine men deliberately left Wayne off the list of people due to get the government's new script last Monday. Talk about enough rope.

Don't blame me, I didn't vote for these morons.

Caravan of Deranged Idiocy

2010-06-15T10:58:00.005Z

From RuddWatch, 12 June 2010:

I think it's important to say that one of the reasons that St Kevin finds himself in such trouble is because he thinks that he can spin his way out of any problem. He and his minions just say whatever crap they think will fob off the punters and Hey Presto! the situation will come right. And the reason why he thinks he can do this is because the public and especially the execrable press gallery has let him get away with doing this time and time again. Thankfully, no more.

From Peter van Onselen, in today's Oz:

Senior Labor sources believe arrogance is a key reason Rudd and his entourage don't seem able to turn around their fortunes. Says one: "The advisers around him work on the idea that 'we are smart; the punters are dumb; they won't recognise that we are running a scam'."

It's soooooo obvious. You wouldn't trust these people to run the chocolate wheel at your school fete.

Meanwhile St Kevin keeps pushing his Caravan of Deranged Idiocy further out into the loneliness of the desert:

"Reform is a tough business, reform is a hard business, reform is a controversial business," he told reporters.

"And the key thing in the reform process is for governments to maintain their nerve and for governments to maintain their unity.

"This government is doing both and will get on with it. We intend ... the same discipline as when we negotiated our way through the financial crisis.

"We'll work our way through this challenge."

Can he, in his black heart of hearts, believe that the RSPT has anything to do with reform?

Does he really think there is anything admirable about staying the course when the course is so clearly mistaken?

There really is nothing more that can be said.

Meltdown Update - the awakening

2010-06-12T22:47:00.003Z

I think the Keith de Lacy article in yesterday's Australian best sums up the growing disillusionment with St Kevin. Only a matter of time now.

My only question is - what took you all so long? Wasn't it obvious from the start?

I think it's important to say that one of the reasons that St Kevin finds himself in such trouble is because he thinks that he can spin his way out of any problem. He and his minions just say whatever crap they think will fob off the punters and Hey Presto! the situation will come right. And the reason why he thinks he can do this is because the public and especially the execrable press gallery has let him get away with doing this time and time again. Thankfully, no more.

Here's the de Lacey piece, verbatim:

I regret to say Kevin Rudd has to go. He is doing terminal damage to brand Australia.

He is also doing great damage to brand Labor.

I will be accused of coming to this conclusion because of a vested interest. Up to a point that's true, I am chairman of Macarthur Coal, and I am absolutely gobsmacked by the massive new tax on resources.

But I also have a vested interest in the future of Australia and in the Labor Party.

Let's start with the resource super-profits tax. It only could have been dreamed up by people with clean fingernails in the leafy suburbs of Canberra; and it only could be embraced by people who had never been out in the real world. As they say, if you are not confused by it you don't understand it.

The tax will have dreadful consequences not only for the resources sector but for the general economy and Australia's reputation as an attractive investment destination.

From a political point of view it has backfired enormously. And why oh why, with the fragility of the recovery and so much global instability, would the government do something like this now?

We have a Prime Minister who is so wounded from his many policy backdowns that he can't afford to compromise.

Or he feels a macho fight with greedy miners would overcome a perception of weakness.

Heaven help Australia.

What also upset me greatly about the RSPT was the crude class-war language used to sell it. Surely the Labor Party graduated from this years ago. I thought modern Labor understood that everyone benefits from high productivity and a strong economy, via jobs and increasing incomes, enhanced social programs and strong superannuation returns.

But worse still is the appeal to xenophobia, the anti-foreign investment rhetoric. It would have done Pauline Hanson proud. What message are we sending to the rest of the world?

Compare this with the PM's sentiments before the 2007 election: "We have prospered from the rise of China, the rise of India and the global resources boom. The benefits of this are washing through the economy, creating jobs, generating new businesses and boosting government revenue to an all-time high."

Is this the same person?

Therein lies the problem: the enormous gulf between word and deed, between spin and substance. This has led to the terminal loss of trust and respect that is reflected in the opinion polls.

Rudd has achieved what everyone thought was impossible. He has devalued the image of politicians. We used to say politicians were on a par with ivory smugglers, but now . . . as an old politician, it makes me sad.

Everything is sold with incredible hyperbole, but then he walks away when it becomes inconvenient. And every policy seems to be delivered with such administrative incompetence.

This may not all be Rudd's fault but, as they say, and especially after all of the overblown rhetoric, the buck stops with him.

Before the previous election he was a fiscal conservative, but my, how quickly he reverted back to the old prototype: tax, spend and centralise everything in Canberra.

And how the dynamics in the boardrooms have changed. I have been intimately involved in business and professional circles for the past 12 years. There has been no overt or ingrained anti-Laborism obvious. That all ended when Bob Hawke and Paul Keating introduced those pro-market, pro-competition reforms in the 1980s, reforms that were primarily responsible for changing Australia from "the white trash of Asia" (in Singapore's Lee Kuan Yew's famous words) to the modern, resilient and dynamic economy that is the envy of the developed world.

But that has all changed dramatically. Labor is on the nose. It is seen as anti-business. Rudd is fast becoming an object of ridicule. Mark Latham's diary excerpts are widely read and are most unflattering of Rudd. Who would have thought Rudd could have resurrected Latham?

The point is that all business feels insecure. He has not been able to confine the enemy to the resources sector.

I fear this will take a generation to pass.

If he thinks he can win by invoking a class war against miners he ought to go and talk to the workers in the mines. I can assure you there is no groundswell of support there for the RSPT. The workers know where their bread is buttered. The irony is that Rudd is in power today largely because he, and the unions, were able to portray John Howard's Work Choices as a declaration of class war.

Now Labor, with its war on the miners, is doing the same thing in reverse. It will surely get the same outcome.

I have a vision of modern Labor as fiscally responsible, cognisant that a strong economy delivers the most for everyone, that jobs growth is the best war on poverty. But it is still a party with a human heart, that still believes in a fair go, a party that can still extend the helping hand to the unemployed, to indigenous Australians, to refugees . . . dare I say more?

History hasn't been kind to the Whitlam government because of perceived issues of fiscal irresponsibility and anti-business attitudes. But at least Gough had passion, he believed in something.

Many in Labor are consoled by the belief that Tony Abbott is unelectable. But we were always taught that governments lose elections, oppositions don't win them.

Labor now runs the risk of being out of power for a generation.

I regret to say there is no alternative but to change the leader, for someone who cares about Australia and who cares about the long-term electability of the Labor Party.

There are plenty of them around. But I reckon there is little time to waste.

Meltdown Update - collapse on all fronts

2010-06-12T04:06:00.002Z

We are now in the endgame of Kevin Rudd's Prime Ministership.

It's not so much that the public has finally twigged that St Kevin is nothing more than a poncy, egomaniacal f***tard with a chip on his shoulder the size of Uluru. They always knew this. What has changed is that the public has realised that St Kevin's deep and fundamental character flaws are an insuperable impediment to his effectiveness as prime minister.

Or, in other words, they have woken up to the fact that, not only can't the bloke deliver, but that he will never be able to deliver.

Which is, incidentally, what we here at Rudd Watch have been saying since Day One.

The effect of this sudden and simultaneous disillusioning has been profound. The government's standing has tumbled. We now face the almost incredible prospect that the public will elect Nemesis and his team of bumbling incompetents to the Treasury benches at the next election.

The numbskulls in the press gallery have also, finally, caught on. Despite two years of mumbling 'say it ain't so Kev' in their sleep, the overwhelming weight of backbenchers ringing them to share St Kevin stories has finally caused their subconscious anxieties to break through to their frontal lobes. They are now openly discussing the possibility of Sister Julia's taking the leadership - and soon.

It doesn't get much worse than having David Marr - the thin-lipped prince of holier-than-thou moral scorn - tell everyone that you have 'anger management issues'.

It's all falling apart for the man who should never have come within a coo-ee of the Lodge. And it's all entirely his own bloody fault.

Unfortunately for him, despite, the attempts at conciliation with the miners, and attempts to 're-boot' the appalling Emissions Trading Scheme, he cannot succeed. People are too cynical about him. Everything he does is seen to be spin and shadowplay, rather than substance and negotiation. And worse, the miners can smell the blood of a wounded animal. Why be conciliatory when, if you just go a bit harder, you can get rid of the clown who has caused you so much irritation, and send a message of 'back off' to anyone who comes after him?

Kevin can't turn it around. What has led him to his very own political Death Valley is his own deep inadequacies and imperfections. It's too late to try to turn himself around and re-make himself. He neither has the time, nor the will, nor even the wit to recognise what he needs to do. Instead, he'll just keep going full speed towards the cliff.

Meanwhile the knives are being sharpened.

Here, for posterity, is the 'dead on the money' assessment of Keith de Lacy, former treasurer of Queensland, which I have copied shamelessly from today's Australian:

KEVIN Rudd should be replaced now because of the "terminal damage" he is doing to Australia and the Labor Party, says former Queensland treasurer Keith De Lacy who has known the Prime Minister for 20 years.

Mr De Lacy, now chairman of one of Australia's most successful resources companies, Macarthur Coal, says that, with Mr Rudd, there is an "enormous gulf between word and deed, between spin and substance".

"This has led to the terminal loss of trust and respect that is reflected in the opinion polls," Mr De Lacy writes in an article published today in The Weekend Australian. Mr De Lacy also accuses Mr Rudd of having a xenophobic attitude to foreign investment "that would have done (former One Nation leader) Pauline Hanson proud".

He says the Rudd government's 40 per cent resource super-profits tax would have dreadful consequences for the resources sector, the general economy "and Australia's reputation as an attractive investment destination".

Mr De Lacy was an opposition frontbencher in the Queensland parliament in 1989 when Mr Rudd became chief-of-staff to the then opposition leader Wayne Goss. When Mr Goss won government in December 1989, Mr Rudd was appointed head of the Department of Premier and Cabinet, and Mr De Lacy the treasurer.

"We obviously worked closely and had an amicable working relationship, but we were never close," Mr De Lacy said yesterday. "He had a lot of influence in the Goss government."

In reference to the resource super-profits tax, he said: "I have got the view that you do not help anybody by pissing money up against the wall, whether they are under-privileged or over-privileged. Consequently, I am particularly upset that Rudd has stooped to crude class-war language when trying to sell his RSPT. He should know that modern Labor understands that everybody benefits from high productivity and a strong economy, through jobs and increasing incomes, enhanced social programs and strong superannuation returns."

Mr De Lacy said the Prime Minister was "fast becoming an item of ridicule" and the Labor government he led was being seen as "anti-business".

Macarthur Coal operates several large open-cut coalmines in Queensland. Just a month ago, US coal giant Peabody Energy made a $16-a-share cash bid for the company, valuing it at $4.1 billion. Following the announcement of the proposed resource tax, Peabody cut its bid by $1 a share, wiping $270 million from its estimate of Macarthur Coal's value.

"The irony is that Kevin Rudd is in power today largely because he, and the unions, were able to portray John Howard's Work Choices as a declaration of class war," Mr De Lacy writes in his article.

"Now Labor, with its war on the miners, is doing the same thing in reverse, and it will surely get the same outcome."

Keep your eye out for that on-camera meltdown. It's sure to come! 'Go ahead, make my day'.

Meltdown Update - throw money at the problem

2010-05-28T12:34:00.003Z

OK, so, you've seriously screwed up what should have been a lay down misere - taxing a bunch of rich people.

You've screwed it up because you were inadequately prepared, you didn't listen to advice, you didn't consult, and you underestimated both your opponent and the community.

You've already backflipped so many times that you have zero credibility. Another backflip would be all she wrote.

What do you do?

You declare a state of emergency, and chuck millions of other people's money into an advertising campaign.

Yeah! That's gonna work. Great idea Kev! You're a friggin genius mate!

Meltdown watch continues. Hope you're enjoying it as much as I am. Can't wait for Kev to lose it on camera.

The only surprise is that anyone is surprised

2010-05-25T10:48:00.003Z

What you are watching on your telly screens, and in your newspapers, is the failure of a government.

The clowns in the press gallery haven't picked up on it yet, partly because they are numbskulls and partly because they are so left wing. But it won't be long.

Kevin Rudd will soon be marked by history as a failed prime minister.

The last time I saw this occur was in Japan, when Shinzo Abe was in the golden swivel chair. In November of 2006, one of my acquaintances pronounced that the government was unlikely to last very long. By the following September, Abe had been replaced.

The last time we saw this in Australia was in the last days of Bob Hawke. But by that time Hawke had been in power for eight years and had contributed substantially to the Australian community.

The failure before that was of Gough Whitlam: the parallels between that Ministry and Rudd's are close.

For instance: once again, we have a Prime Minister who won't consult, who won't take advice, who dreams up castles in the air and then gets all chitty when the populace fails to be inspired by his 'leadership'.

Once again, we have a moron for a Treasurer.

The disaster that is the resources rent tax is the icing on the cake. What might have been a good idea if it had been researched, workshopped, calibrated and introduced sensibly has turned into a fiasco, with the government engaged in a nasty and pointless slanging match with the miners about minutiae and relying on barefaced lying about royalties, slanders against foreign investors, completely obscure US academic papers and shonky tax statistics to support its threadbare case.

This is all deeply undignified. And Australians will no doubt see it as such, and will judge Rudd, Swan and the whole useless lot of them accordingly.

The thing is, none of this should come as a surprise. I've been writing this blog for over three years now because it was quite clear to me from the get-go that Rudd was completely unqualified to run the country. His deep character flaws - so obvious in all his public outings - were merely the most obvious pointer to that fact.

Why didn't anyone else get it? Why did they vote for him? I suspect that the judgement of history will be that the electorate used Rudd to retire Howard. They hoped he would be more than he seemed, but he isn't, and so they will, I think, discard him at the first opportunity. Quite a fitting end for someone who is just a pompous tool.

Until then, Ruddwatch recommends that you fire up the popcorn and get comfy in your beanbag - this is going to be interesting to watch.

Can't wait to see the appalling Rudd lose his temper on camera!

A Plea for Sanity

2010-05-16T03:21:00.008Z

It should by now be completely clear, even to rusted on Laboristas, that Kevin Rudd has absolutely no idea what he is doing. The hive of frenetic activity that is the Prime Ministerial suite in Parliament House has since October 2007 produced no ideas or plans of value, only ridiculous pre-fab and half baked schemes for grabbing the populace's attention at the cost of billions - can you believe it, billions - of taxpayer money.

The country is sliding, carried only by the momentum produced by the (on balance) good government of the previous Liberal administration. But that is quickly evaporating. The stock of surpluses has been spent. The goodwill of the local business community has been lost via unwarranted attacks on shareholders and business confidence. And now the mining companies - and especially the big international miners - are being lined up for a tax gouge.

A deeply distressing example of how stupid Rudd and Swan are. For most of our history, but especially for the last thirty years, Australians have relied on foreigners to fund our lifestyles. We have invited them to invest their money here, or to lend it to our banks, so that we could have growing industry and creature comforts simultaneously. And because our governments have provided a stable business environment for them, they have been happy to open their chequebooks. But Rudd threatens that arrangement: not only does he promise to introduce a ridiculously ill-conceived tax on the miners, while also threatening to extend it to the banks, but he justifies it by saying that most of the mining profits go overseas anyway.

You can imagine what the foreign investors are thinking: 'First they invite us to invest here, then once our money is committed they target us for a gouge.'

St Kevin hasn't yet explained how he intends to fund the obese current account deficit without these foreign investors. That is most likely because his short attention span hasn't caused him to think about this soon to arrive problem.

We should never have been in the situation that we would need to tax a wonderful and productive industry so heavily. That we are in such a position speaks to the waste that St Kevin has generated in only two years in power.

It would be entertaining, to watch this moron running around crashing the furniture in his own house, except that it's our house that he is trashing.

I can't say that I foresaw all this three years ago, when I started this blog. What caused me to write was the outrage that I felt at the bullshit that came out of Rudd's mouth, and his getting a free pass by the press gallery. 'Can't anybody else see that this guy is nothing more than a fake and a poseur?' I thought.

I suspected the consequences of a Rudd premiership would be bad, because if he was prepared to talk rubbish to the electorate, demonstrate a contempt for economics and good public management, and not be held to account by the public or the press, then when in power he would feel unconstrained. But I didn't realise just how badly it would play out, nor just how much it would cost us all.

Think about the schools building programme. Or the computers in schools programme. Or the pink batts fiasco. Or the bizarre paroxysms over global warming, and the subsequent abandonment of the universe-saving CPRS. Or the crap spewed forth by the 2020 ideas festival. Or the idea of spending 43 billion dollars on a broadband network that will never repay its expense. Or the crying hostess and the hair dryer incident. You couldn't make this stuff up.

The electorate used Rudd to retire Howard. They were happy to let him live in his fantasy world for a while, even at their expense. But the scales have fallen from their eyes.

It's well past time to cut the public funding for Kevin's fantasy world.

2009-12-01T11:02:00.003Z

Physical courage.

Moral courage.

The ETS, climate change and St Kevin - some perspective

2009-11-28T04:59:00.004Z

Having suffered all the noise and bluster of the past week, and all the 'analysis' that is going on among the talking heads of the press gallery, and with more to come next week as the Terminator's political career is given a final, long overdue termination, you probably don't want to hear that much more about politics and climate change.

However, I feel it is my duty to record for posterity some of the more perceptive insights and essays which have emerged recently. All from old favourites of this blog. First, the wonderful Henry Ergas, then the magnificent Terry McCrann, then the cool-eyed experience of Alan Wood, and finally a link to the superbly superior private-school-girl bitchiness of Equity Private.

Don't worry too much about St Kevin and this week's shenanigans. As long-time readers, you will have a good understanding of his character by now. What we are seeing is simply the natural consequences of his personality interacting with and dominating an environment of bullying and anti-intellectualism. We're suffering all this undue haste to implement an ETS which won't work, simply so that one egomaniac can look great at an international conference of his peers, and put another notch on his resume before he sends it off the UN.

It won't last. If, like me, you truly believe that the theory of man-made global warming is rubbish, and that the ETS will inflict more economic pain and disruption than people will be able to bear, then this dark period will pass. We will emerge into the sunlight with a healthy scepticism of 'scientists', 'science' and 'peer review', with the climate loons - Flannery, Bob Brown, Rudd and The Unspeakable among them - completely discredited, and with the ETS completely dismantled.

It's going to be all right! The planet's fine, the warming is entirely natural and well within historic ranges, there is no 'tipping point' to warming oblivion, and outrage over the ETS will see both it and the idiots who implemented it removed. We just have to wade through an ocean of idiocy in the mean time.

So, for posterity, the essays. First, Henry:

MELBURNIANS, beware: Robespierre is on the loose in Toorak. Blue-rinsed heads tumbling into the basket of the guillotine? The thought causes a certain frisson. Unfortunately, far from being humorous, the reality is sinister.

I refer to the Greens' candidate for Higgins, Clive Hamilton, who believes disputing climate change may be even worse than denying the Holocaust.

Hamilton is a professor, of philosophy no less. But it does not seem to have occurred to him that denying historical fact may be different from disputing a complex scientific hypothesis about the future. As Mark Twain observed, it seems quite unlikely that drawing such distinctions "could have offered difficulties to any but a trained philosopher".

As for equating mass murder with the harm that may come from climate change, it suggests a startling lack of moral compass. No doubt, if we were to get it badly wrong on climate change, great suffering could result. But that would also be true if we accepted the claims about climate change and they proved to be false. That is what makes the decision difficult and, in a real sense, tragic. But getting it wrong is surely different in kind from throwing children into gas chambers.

If Hamilton does not understand that, I suspect there is no way of explaining it to him.

The trouble, however, goes deeper. What Hamilton is really saying is that those who disagree with him are not merely incorrect: they are evil. In fact, they are murderers, wantonly risking "the lives of hundreds of millions in the future". And we know how murderers should be dealt with.

This is the logic that leads to the guillotine, the gulags and the killing fields.

Hamilton's embrace of that logic is what makes him a fanatic, a man unable to accept the fallibility inherent in human judgment. What is distressing, however, is that he is not alone.

The hacked emails from the Climatic Research Unit at the University of East Anglia show how far the rot has spread within the scientific community. I doubt the researchers involved view the issues in Hamilton's moralising terms. What is clear, however, is that these researchers regard scepticism as a dirty word.

Yet scepticism is the price knowledge pays for truth. We question our theories because that questioning is the means by which they will be displaced by better theories in future. The moment scepticism is abandoned for orthodoxy, scientific inquiry degenerates into pseudo-science, as with genetics in Trofim Lysenko's Soviet Union.

The failure to understand the value of questioning, however, goes much further than the researchers whose emails were leaked.

Consider the Prime Minister's recent speech on climate change to the Lowy Institute. Kevin Rudd is no fanatic. But what he said at the Lowy Institute is that the debate about climate change is closed and that any questioning of it is fundamentally illegitimate.

Since when do we have gag rules about policy issues? I thought democratic centralism -- Lenin's notion that political parties should be monoliths, presenting a single, agreed view to the world -- had collapsed with the Berlin Wall.

Rather, we should encourage views to be put and tested, including views that are unpopular. That should be the political system's key function: not to fake a consensus but to build it and, where it cannot be built, to express and explain the differences. Of course, decisions must be made, but even then it is entirely appropriate that debate should continue.

That is what distinguishes democracy, which is first and foremost an open process of deliberation, from authoritarianism. Democrats know one big thing: that they may be wrong. And they value one big thing: the scope democracy creates for mistakes to be set right.

Alexis de Tocqueville, surveying the nascent US democracy, saw that as the enduring virtue of democratic institutions: that they have "the faculty of committing errors that can be corrected". In that sense, disunity, far from being death, is the oxygen of society.

In contrast, the authoritarian cannot countenance opposition. He does not merely disagree with opponents; he despises them.

This is ground where the Prime Minister needs to tread more carefully than he has to date. His comments at the launch of Paul Kelly's book, The March of Patriots, were especially disturbing, highlighting a Manichean world view centred on a struggle between a Labor Party that stands for progress and a Liberal Party about which there must be "legitimate doubt" as to whether it is entitled to be a "partner with Labor in the great project of economic modernisation for Australia".

"Great project of economic modernisation"? There is more than a whiff of Maoism, with all its sectarianism, in phrases such as these, just as Building the Education Revolution evokes images of Julia Gillard leading the Red Guards, disguised as management consultants, as they "storm the schools" and "with long strides tear down the capitalist roaders".

But this is a government of doctrinaires without doctrine. Its rhetoric exudes a politics of moral certainty in which the light of dawn glows on the crucibles of human destiny. Its practice, however, is hand-outs and questionable deals, with sordid compromises, such as those on the ETS, that are as economically irrational as they are remote from the high ground of economic reform the government claims to cherish.

The result is a curious cocktail, in which policies that sprinkle rents far and wide, extravagant spending initiatives (such as the national broadband network) and an almost complete lack of progress in key areas -- health, education, federalism -- where so much had been promised, sit aside a tone ever more exasperated and ever more intolerant of dissent.

Power, the great US political theorist Karl Deutsch said, "is the ability to afford not to learn". That insulation from learning is the first step on the path to corruption and eventual collapse. But to learn one must accept to be challenged. Fanatics such as Hamilton are impervious to questioning; but government in hard times cannot survive without it.

The year ahead will be a tough one. All the more important, then, to open up the debate rather than constantly seek to shut it down. Doing so would run against this government's every instinct. But the alternative is ultimate failure, with a great deal of unnecessary pain along the way.

Now Terry:

THE events of the week would be unbelievable but for the fact that they happened.

They were exactly captured in the praise heaped on Friday afternoon by the woman who would be prime minister on the man who never will. Indeed, he is about to lose even the position of being the man who would be prime minister in the event of the voters losing their collective mind.

Inadvertently Julia Gillard projected the unbelievable: how the Prime Minister and the Opposition Leader this week joined hands to declare economic war on their own country.

That, plain and simple, is what Kevin Rudd and now also Malcolm Turnbull's Emissions Trading Scheme is. A direct attack on the foundation not just of our economy but of our very society and indeed modernity itself. Cheap and plentiful carbon-based power.

Such an attack would have been utterly unthinkable when we used to have grown-ups running the country. When we had a Treasury providing rational advice to government rather than worshipping at the altar of climate hysteria and endangered wombats.

The Treasury of today would have in the dying days of the Whitlam government been spruiking the merits of Khemlani, rather than attempting as the Treasury of that day did, to advise the government against a path that would destroy it and damage the country.

There was Turnbull prattling on at his bizarre press conference on Thursday night that we "had to do something about climate change". He wasn't asked what exactly the ETS would do about climate change.

The answer of course is nothing. Zip. Nada. Absolute zero. But it will do an awful -- and that word is chosen advisedly -- lot to our economy.

Why are we among the top emitters of carbon dioxide, measured per head? In the government's deliberate and only too depressingly successful lie: just about the world's worst "polluter"? Certainly, if you add on the CO2 emitted when our coal and iron ore is used somewhere else?

For the very simple reason that we benefit. The domestic emission of carbon dioxide and the export of minerals, so that others emit, is our core, utterly pervasive national comparative advantage.

Now if the rest of the world committed to CO2 cuts, whether rationally or not, we might have to reluctantly join, ceding some or all of what makes Australia successful.

But the emphasis has to be on that word "reluctantly". To lead the process makes no rational sense at all. To lead, when no one of importance is likely to follow, is insane. Or juvenile. Take your pick.

That's the macro reality. For a PM to propose such a policy is economic treason. For an opposition leader not to lead the opposition to it is beyond stupid and a dereliction of his most basic duty.

This goes also to the pointlessness of the negotiations to make the ETS "better". The devil is not in the detail, so changing the detail doesn't and can't make it "better". The devil is the ETS.

As is slowly beginning to seep into the national consciousness, the ETS is first and undeniably a tax. Broadly it's equivalent to increasing the GST from 10 to 12.5 per cent.

Except that it's much more pervasive than the GST. Some spending is exempted from the GST -- notably fresh food and medical and hospital services. Nothing is exempted from the ETS.

Not even farming -- one of the concessions "won" in the negotiations. Yes, farting cows would be "exempted" but farmers would pay the same ETS tax as everyone else on everything else that they bought.

That's the insidious reality. It's not just the direct impact of power bills going up a "few dollars a week". Of course they might also reduce for the periods of black-outs. Emphasis on the word might reduce; there's no might about the blackouts in an Australia of Rudd-Turnbull's ETS.

It is not just a pervasive tax but a tax of indeterminate rate and extent. Which is why the Treasury estimates that it will raise $114 billion out to the iconic 2020 date are an utter nonsense. At least they are of a piece with everything else Treasury has done on the subject.

The GST is 10 per cent on a measurable, defined and broadly predictable spending stream. The ETS is a function of the price of the permits set in the market. But a market that is as porous as emitters -- and indeed any and everyone else -- has unlimited access to buy them overseas.

So that $114bn could be $228bn. Or more interestingly, could be $57bn if the supply of permits drove the price sharply lower.

Further, the Treasury estimate assumes we seek only to cut emissions by 5 per cent. Which is the policy "implementation" of the insanity of mandating our ETS before Copenhagen.

Because 5 per cent assumes nobody else of significance follows us. We set out to "do something about climate change" -- in the inane Rudd-Wong-Turnbull-Gillard terminology -- and the planet still burns, baby, burns.

If we do get some sort of global deal, we are committed to cutting by at least 15 per cent. Or a thumping 40 per cent plus in per capita terms as this "save the world" Rudd grandstanding clashes head on with his populate and perish policy. And really screws our most valuable national asset.

Indeed, imagine if China really did sign up to the cause -- and stopped buying our iron ore and coal. Let's see Treasury "model" that.

Getting lost in the detail is utterly pointless. All the compensation in the world can't avoid the ETS destination: which stripped to its essentials is to close some at least of our power stations. When in the context of surging population we should be building more.

Further, the greater the compensation -- in the short run -- to some sectors of the economy like the power industry and minerals exporters

And Alan:

WHAT a mess. In the space of four months Kevin Rudd and Malcolm Turnbull will have burdened the nation with an ill-advised renewable energy target and a flawed and questionable emissions trading scheme, both in the name of saving us from an allegedly imminent global warming disaster, which they won't.

As a result we have seen the return of economic rent-seeking - the lobbying of government for taxpayer support - on a scale not matched since Australia's tariff wall was dismantled in the latter decades of the 20th century, and the economic and social costs will not be negligible.

The renewable energy target, an unproductive bit of political tokenism popular with governments across the world, was eagerly embraced by our local political class in August. The Productivity Commission, the body responsible for dismantling the tariff wall (to our great economic benefit), and others have pointed out why a renewable energy target is poor policy.

Briefly, it will be of no net benefit, impose unnecessary costs, including higher electricity prices, and encourage rent-seeking and picking winners. Look no further than the ineffective and costly wind power industry for evidence of the truth of this.

The ETS, which will presumably pass the Senate soon, faced much more vigorous opposition from both sides of the climate change divide. Climate change sceptics among the Liberals and Nationals, and Green zealots alike are opposed to its passage, obviously for quite different reasons.

The Rudd ETS is an open invitation to rent-seeking, which understandably has been taken up on an impressive scale by industries threatened by the government's gross intrusion into the economy. And this week the Prime Minister has tipped a few billion more into the pot to buy the necessary Liberal Party votes to pass his scheme. Why the rush to get out in front of the world with an ETS? To even ask the question is to identify yourself as a category-three climate change sceptic, according to Rudd's categorisation of those he accuses of rolling the dice on our children's and grandchildren's future.

An important part of the answer is: because Rudd wants an agreement to wave as he struts the stage in Copenhagen next month, even though there is no chance of the meeting achieving its original aim of producing a legally enforceable treaty to replace the failed and discredited Kyoto Protocol.

Mind you, our PM is hopeful a political agreement can be reached on limiting the rise in global temperature to 2C, on setting emission limits for the developed countries, on verifiable and measurable commitments from developing countries and on how many billions of dollars developed countries will hand over to helpChina, India and other emerging economies deal with climate change.

If this happens, he told a BBC interviewer this week, then a legally binding treaty document can be delivered next year.

And pigs might fly. The outcome, or rather lack of one, from successive G8 meetings where world leaders have agreed to save the planet and-or Africa says it all.

So why the rush? Well, first, Rudd told an interviewer in Brisbane who asked him this question, you go to the science.

"The international panel of climate change scientists is made up of 4000 scientists from around the world, all humourless guys and girls in white coats, who just sit around and measure stuff." And, according to Rudd, this crowd has concluded things are warming up and it's all our fault, so we need to do something, and do it soon.

Unfortunately, we have just discovered, courtesy of hackers who broke into a climate change science hub in Britain, that a few of the leading humourless white-coated guys have been rather naughty, suppressing important data, attempting to gag other white-coated guys who had a different opinion (and maybe even a sense of humour) and destroying important data that might have created doubts about some of their claims on global warming. Significant uncertainties still surround the science, as climate change sceptics have been pointing out for some time, and greater efforts need to be made to resolve them rather than suppress them.

A second reason action is said to be urgent is to resolve business uncertainty, but the Rudd ETS scheme won't remove uncertainty. It will take a global agreement involving leading greenhouse gas emitters - notably the US, China and India - to do that, and this still seems a long way off.

The idea Australia can set an influential example for the rest of the world is nonsense and nothing we can do here will make any difference to the global stock or flow of greenhouse gases, or the Great Barrier Reef.

And what Rudd regards as his killer argument against climate change sceptics, that their credibility depends entirely on a belief that the cost of not acting is nothing, is nonsense on stilts.

But they do argue that the cost of acting prematurely is likely to greatly exceed the benefits, a view supported by international economic modelling.

The conundrum at the heart of Rudd's climate policy is that if global warming is a grave and urgent problem, as he believes, then his ETS won't do much about it, and neither will next month's gathering in Copenhagen. Better hope the sceptics are right.

Theatre of the absurd

2009-11-26T12:26:00.004Z

I've been away three months. In that time, as you've no doubt noticed, a lot has happened. If you have been a regular reader of the blog, none of it should have come as a surprise.

But it has. Well, to me, at least. Even though I feel that, after observing him for nigh on three years, I know St Kevin and his character, and that everything that he has done - giving in to a bunch of Sri Lankan border busters, putting the kybosh on a dam so that a ridiculous looking turtle could stay put (what about building the dam and giving the turtle alternative accommodation? Never occurred to the government, apparently), or giving in to a bunch of rent-seeking publishers and authors, and then lying (completely transparently) about his involvement in the cabinet decision = has come as a bit of a shock.

It's one thing to know that someone is utterly appalling. It's something else entirely to see someone actually acting appallingly right in front of your eyes, no matter how much you have prepared yourself for it.

The present climate change shenanigans are beyond belief. At a time when the data on which the hysterical scare campaign has been revealed to be a sham, Rudd and the Climate Empress are hobbling the economy which will do nothing at all to fix this non-problem. To the accompaniment of a shrill speech accusing those who don't believe the government's line of holding the human race to ransom for base motives.

Add to that, The Unspeakable's deploring sceptics as being worse than the Nazis.

Meanwhile, the government refuses to carry out a cost-benefit study of the $43 broadband rollout.

I ask you: if you think the plan had the slightest chance of showing a net benefit, do you think they would have hesitated for a second? Of course not. The whole thing is a costly disaster. But St Kevin doesn't care because it's other people's money he's spraying around.

And the Oz's breaking news website tells us that the Navy has just intercepted the 47th - 47th! - boat of border busters since Rudd opened his heart - and your wallet - to the world, to show how 'compassionate' he is.

It would be great theatre, if it weren't actually happening to us.

But it is happening to us. And I'm appalled.

It's like watching an old jalopy fall apart in front of you, springs jumping out, radiator hissing, wheels wobbling as it trundles down the road, and the driver mouthing platitudes about what a good job he's doing and how everything's so much better now, switching randomly from calm and well-reasoned lying to hysterical shrieking.

Please just tell me:

You don't honestly believe anything these people - Rudd, Tanner, Albanese, Swan, Climate Empress, Gillard - say any more, do you? Surely you can see how utterly shonky they are?

Care and maintenance

2009-08-29T21:46:00.003Z

Loyal readers, I'm going to have to put the blog on 'care and maintenance' for a while. I am simply too busy with other projects, I'm sorry, to prepare the kind of analysis that I would like to write.

During this time, if you would like to contact me or discuss something, please use the email address that you see above. I'll check it periodically.

For those new to the site, have a look through the 170-odd posts that I have completed so far. These should give you an idea of my conclusions as to the character of Chairman Rudd.

White noise, red anxiety, Rudd bumbling

2009-08-15T23:18:00.003Z

You may have come across yesterday's article in the Sydney Morning Herald on the case of two Australians arrested in Dubai.

This sort of thing is not new. A few years ago, when al Qaeda started making itself known in Saudi Arabia, the spate of bombings were blamed on westerners feuding over alcohol imports. A number of British and American accountants and engineers, working for international oil companies, were arrested, tortured and held without trial for months before their governments could arrange for their release.

Equity Private captures the phenomenon associated with being in these places well:

I have spent quite a bit of time in Dubai and seen a number of sides of the "Middle Eastern Shangri-La," not least of which being the experience of a female expat in the jurisdiction. I can only describe this last as characterized both by the constantly disconcerting presence of an ill-defined malice (perhaps best understood as a sort of ambient white noise of potential danger) and the occasionally terrifying and instant materialization of real, even mortal danger from this shapeless white snow of audio. (This last I know only second hand, having watched the arrest of a friend without accompanying her into custody).

Sad as it is to say, much as these places - Dubai, Shanghai, Beijing, Moscow, Kuala Lumpur - look like western cities, the resemblance is only skin deep. Behind the facade lie ancient prejudices, colonial-era hatreds and hurt feelings, delusions of cultural superiority and deep anxiety about relations with the west and its power to overthrow illegitimate ruling cliques.

Stern Hu and his colleagues are victims of just such feelings. And Australia is now feeling - and will continue to feel, for some time - the anger of the paranoid inadequates in Beijing.

It is greatly to his credit that Kevin Rudd has perceived the nature of the communist regime in Beijing. He is under no illusions about them, as is clear from his writings and his speeches.

Unfortunately, his diplomatic skills are nowhere near as developed as his Mandarin. It has been his mishandling of Chinalco's audacious and completely unacceptable bid for Rio Tinto, the provocative defence white paper, his mentioning of human rights in Tibet to a roomful of Chinese students, his bumbling over the dinner with the propaganda chief, and the slight given to the otherwise unremarkable Madame Fu on Vritish television, which has landed us in the mess that we find ourselves.

The officials in Foreign Affairs are tearing their hair out in frustration.

But it's all of a piece with St Kevin's fantasy of himself as a peerless diplomat, and his desire to control everything while at the same time being unable to focus sufficiently on a task to deal with all the Hard Questions and produce both realistic goals and viable strategies.

Witness the Asian diplomatic community that he is pushing for - an unrealistic goal, given that it is something which no-one in the region actually wants - and his strategy for achieving it - sending 80-something Dick Woolcott out to spruik its benefits.

No surprises for guessing how this is going to turn out.

Meanwhile, the 'white noise' atmosphere of menace from the Red Kingdom will keep intensifying.

Theatre of the Absurd

2009-08-15T20:51:00.004Z

Yesterday my mother showed me a press report about Father Robert Fuller, the catholic priest who has been charged by the Police with attempting to solicit favours from pre-pubescent girls over the internet. Fuller was caught in a sting - thinking that he had found a young vicitm, he was instead actually propositioning a bunch of boofy middle-aged policemen.

While I found the news somewhat disturbing, it wasn't at all a shock. There have been so many scandals such as this that I've almost come to expect them. And the constant 'drip drip drip' of such scandals, together with the complaisant attitude of the management of the catholic and other churches, that has left me with feelings of near complete contempt for organised religion. If these priests don't at all believe in what they are preaching, then why should I? And if the church itself isn't willing to impose discipline on its own offenders, then why should it retain the respect of the community?

For me, the church, its leaders and its priests have lost all credibility. It appears to me that they have no idea what they are doing, their application of their own moral code is utterly inconsistent, their lack of contrition for the vile crimes committed by their fellow priests and covered up by the organisation is appalling, their thankless soaking up the time and resources of the many decent lay volunteers assisting them is exploitative, and their preaching in public is opportunistic. Like many others, I simply can't listen to a priest or other religious talk and take them at all seriously.

......................................

Of course, I wasn't always conscious of this feeling. It had been in my mind for a long time, really every since adolescence, when I and the other prisoners at the local catholic systemic school used to mock the brothers for their bone headed stupidity. But it really only came to the forefront of my mind when I realised the sheer number of cases of child abuse which had taken place not only throughout history but in my lifetime, and that but for, as they say, the grace of God, it could have easily happened to me or to my friends. And when I put this incident together with other episodes from my own experience - being roused on by alcoholic priests for innocent misdemeanours, seeing friends have their faith abused or their volunteer services exploited - it all came together. These people have no credibility, and ought not to be taken seriously.

That was the start of an awakening in my mind. I suddenly realised that those in positions of authority actually had little more idea of what was going on than I did, were actually less moral and less courageous than me and my friends, and were no more deserving of a serious audience than was I.

Almost immediately, evidence for this conclusion started pouring in. Watching the whole shemozzle of America's invation of Iraq unfold was a revelation. It was clear that the whole crew - Dubya, Cheney, George Tenet, Rumsfeld, Rice, Powell, Franks, Sanchez, Abizaid - had no idea what they were doing, and were completely at a loss when the war took an unexpected turn and began taking them out. Bob Woodward's books, looking into the US government's handling of the occupation, give the impression of a blockheaded Dubya watching things steadily deteriorate and sitting pat because he has no idea what to do next, no clue who he can call upon to turn things around, and no understanding of the urgency of the situation. He just reads the steadily worsening reports, says thankyou, and then goes out to do another press conference or local rally.

But what confirmed this belief was the events of last September. Suddenly, all that crap about how the finance sector employed the best of the best, that its risk management processes and products were top notch, that its managers deserved every cent of their multi-million dollar bonuses, that it could be trusted with the nation's savings - all that went out the window when a complete loss of trust and confidence caused the financial system to melt down. Clearly, the people who had placed themselves in charge of the system, and who had extracted enormous incomes for themselves by virtue of their self-proclaimed special insight into the operation of money, were just a bunch of charlatans.

Ruddwatch's disillusion was complete.

.........................................

What I had thought was a phenomenon confined to the more blatantly self-seeking, emotionally crippled and self unaware in our society appeared to be endemic. It wasn't just Kevin Rudd, or the clowns in the organised churches, who were intebt on perpetrating a fraud against the gullible and guileless. It was actually in the system: society somehow had no way of protecting itself against these bacteria, of guarding against their intrusion or removing them once they lodged themselves into its institutions. We are condemned to be put upon by fraudsters, hustlers, apolcalyptic lunatics, opportunists, careerists and criminals, because even after identifying them our system cannot rid itself of them.

The consequences of this failing, in Australia at least, became evident this week in the debates over the government's ETS legislation. There is no evidence that human activity is causing a serious environmental problem, there is no evidence that, even if it were, Australia's ceasing its economic activity would improve the situation, there is no evidence that, if we wanted to help the environment, this is actually the best way to do so. There is on the other hand plenty of evidence to say that the ETS will seriously impair the community's standards of living, and there is plenty of evidence to say that it will not help the environment.

In other words, this is, purely and simply, bad policy.

This rubbish has already passed through the lower house, on party lines. It failed in the Senate along party lines. But there is not consensus in the Liberal Party over just how bad it is. The Terminator's response has been to propose an alternative scheme, which would be more effective in curbing direct emissions of carbon dioxide and would impose lower costs on the community. But this is the wrong approach: surely the task of the national leadership is to admit that the whole exercise is bunk, that we don't need any scheme, and that to impose even the slightest costs on the community in pursuit of this impossible goal is madness?

Our leaders have failed us. They should have demanded, from the start, that the apocalyptics present hard science to support their claims, and that they answer each and every query from concerned citizens and scientists. What has instead happened is that, rather than leadership, we have had opportunism. First with some politicians jumping on the environmental bandwaggon, then with others following them in order to maintain their share of the vote.

The only person to have shown any courage in the debate has been Senator Fielding, who dared as the Empress about the New Clothes that she was 'wearing'. But even after this episode demonstrated clearly that neither the Minister, nor her department, knew the least thing about what it was they were using to beat the electorate into submission, the political juggernaut kept on.

So, we have arrived at a point where the nation's leaders have no idea what they are doing, but, driven by electoral pressures which they themselves have encouraged with years of their ignorant fear-mongering, are now trying to outdo one another in crippling the industrial base of our society.

These people have no credibility. They have no idea what they are doing. They ought never to have been allowed to run around without close adult supervision. In their pandering to religious zeal, they are going to impose significant handicaps and discomfort on their fellow citizens. They cannot be taken seriously.

We are fallen among fruitloops.

..........................................

Lest you think that I am completely in despair, let me reassure you that I do in fact hold out some hope for our society. The fact that we have, at the top of the economic bureaucracy, two people like Glen Stevens and Ken Henry, is evidence that the sytem can indeed place good, competent and serious people into positions of authority.

And evidence that the system can repair itself, even from serious damage, exists in the form of US Defence Secretary Robert Gates.

I just wish there were more of them at the forefront of our society. And that opportunistic charlatans like St Kevin, the Climate Empress and the Terminator were confined to the local parishes, where they belong, and where their pious bleating can do little harm.

Neverland, home of the Future Eater

2009-08-08T21:42:00.005Z

I must confess I didn't get too excited about the death of Michael Jackson. Nor could I see any justification for the media's wall to wall coverage of the event.

Yes he once had been very popular, and this popularity had reflected his talent. I'm thinking of the late 70s and early 80s. Even pre-teen Ruddwatch was bopping away to Thriller and Beat It in those days.

But by the late 80s not only was his best music behind him, but Jackson had turned into a one-man freak show.

I can remember rushing home after school one day to watch the premiere of his 'Black or White' song, with commentary by Molly Meldrum, would you believe, only to be left wondering why I'd bothered, and what the hell had happened to Jackson's skin, face and hair.

After that, it just kept getting worse. The face kept morphing. The lifestyle more extravagant, the marriages phoney, the interactions with other people, and, worryingly, with children, more bizarre.

Jackson spent the last third of his life until his premature death living in a fantasy world. One in which money never seemed to be an object, where wives could be acquired and then disposed of once they'd outlived their usefulness, where Jackson's inadequacies, stemming from his own troubled childhood, could be foisted upon unsuspecting kids.

Unfortunately for Jackson, reality kept intruding. It intruded in the form of parents concerned about what he was doing to their children. It intruded in the form of US attorneys general prosecuting Jackson for offences against children. It intruded in the form of medical problems arising from his lifestyle and body-scuplting. And it intruded in the form of creditors beating down his door and demanding that he open up a new income stream with which to pay his debts. And this last intrusion led to his untimely death.

For all his wealth, Jackson could not cut himself loose from the obligations and dependencies which comprise social relations. He could not separate himself from society, nor annul its obligations, nor escape its realities.

* * *

One thing that strikes me, as I have been reading through the press reports, watching the blather on the idiot box, and listening to discussions (both informed and uninformed) on the radio, is simply how far removed from reality a lot of the 'national conversation' has become. At least, as it is reported in the media.

It's not just things such as Michael Jackson, and the reporting on Kyle Sandilands and Jackie O. A good deal of the political conversation is similarly focused on trivia. Hence we are treated to acres of print, and whole reams of airtime, on such things as Peter Costello, Malcolm Turnbull's leadership, Godwin Grech's bowel, the soporifics of the Labor National Conference, etc. It fills in the available space, of which there is plenty, because there's nothing really important to talk about, right?

Even when there are matters of great pitch and moment, the coverage is superficial. However, the blame doesn't lie solely with the media. Actually, there are some honourable exceptions in this area. The main problem lies in the political class, which insists on dealing with these matters by focus sing on political priorities, rather than on good public policy. And although the opposition is complicit in this, the government is the chief culprit.

One instance of this is the discussion of amendments to the former government's industrial relations laws. St Kevin and his Parliament of Saints talk often about the need to improve Australia's productivity performance, and also about how they are against a return to the 'bad old days' of unions engaging in criminal behaviour on construction worksites. And yet the changes that they are proposing to industrial relations laws, including the abolition of the ABCC, will both remove the one impediment to union thuggery and reduce productivity growth.

The reality of the situation is not being addressed by those responsible for it. Instead, the public is given a stream of platitudes and is left to cross its fingers.

This approach is utterly cynical. Just tell the public what you wish to be true, and then do what you want to do anyway, even if it is at cross purposes and inconsistent with the outcome that you have mentioned as desirable in your public statements. Reality is a matter that can be safely dealt with tomorrow - for now, it is best to look after political interests.

* * *

This has, so far, been the government's approach to most of its policy preparation. For the most part, it has been able to get away with it because of the great reserve of wealth and good policy built up under 25 years of overwhelmingly prudent government under Hawke, Keating and Howard (and, we must also acknowledge, Costello). You can waste $100 billion of tax revenue on duplicate school halls and plasma tellies for the masses in some bizarre display of voodoo economics, without having a significantly adverse effect on the economy, only because previous governments were responsible and stored away the public's acorns.

And you can then write long and near-unreadable essays on how terrible your predecessors' policies were, how much smarter you are than the markets, and what a better job you and your cronies are going to do, safe in the prosperity and security that those policies delivered.

Rather like a full-bellied, warmly-clothed and safely-housed child berating its parents for their failings.

You can do all of this - the idiotic, self defeating policy, the cringeworthy essays, the strutting on the world stage - only because the hard work of those you berate has provided you with a cushion against reality.

That cusion is likely to last some time. In Britain, it took ten years before the folly of the Blair-Brown years became manifest.

However, once the cushion is gone, no magic incantations about 'neo liberalism' (whatever that is), nor appearances on soft telly shows like Rove, are going to bring it back. Then, it is back to the hard slog, which so many tried so hard to do away with last time - before you came along.

* * *

This is the case in most instances. St Kevin's indulging himself, at the expense of the rest of us and of future generations, is not bumping into any reality checks. But it is not universally true.

There is one area where reality will follow hard on the heels of policy stupidity. Come on down, Carbon 'Pollution' Reduction Scheme.

Longtime readers will know Ruddwatch's position on the widespread belief in anthropogenic climate change, and the hysterical fantasy cult which has sought to hijack public debate.

Ultimately, the blame for things having spun so far out of control, and the debate having moved so far from reality, lies with the political class. From the time when the scientists started flagging the possibility that people could be causing climate change, and that change could be dangerous to society, the political class - including those thousands of public servants responsible for policy advice - should have begun engaging with the matter. First, determining what the science was actually saying. Secondly, looking at the best way to approach the problem via rigorous cost benefit analyses. Thirdly, presenting all viable options to the public for their decision, via the democratic process.

Unfortunately, our leaders have not been up to the task. First, the debate was hijacked by 'chicken little' scientists intent on grabbing the public's attention with doom-laden scenarios and proclamations along the lines of 'we gotta do sumthin about this and do it soon and do it before anythin else and anyone who doesn't listen to us is worse than a child molester'. Because of this breathless stupidity, the science wasn't checked, so that the government was left relying on half-assed computer models and appalling frauds like the 'hockey stick' temperature forecast, and the cost-benefit analysis stage was completely bypassed, so that the costs associated with reducing social emissions of carbon dioxide were not weighed against the expected benefits, and alternative avenues of mitigation - such as using the wealth from unimpeded economic growth to develop new technologies - were left largely unexplored.

What we were left with was the loopy scientists and politicians vowing to 'do something' to curb emissions of carbon dioxide. Hence we have the collective lunacy of 'Earth Hour', groups of idealistic kids attacking coal trains, and St Kevin proclaiming climate change to be the greatest moral challenge of our time.

And, of course, the C'P'RS.

Now Mr Mole, being the utterly cynical short termist that he is, thought that he could use the scheme to earn brownie points with the electorate, win the greenie and climate-worrier votes, and postpone any intrusions of reality until well into the future, by setting the scheme's goals as far into the future as 2020 and 2050. You will, no doubt, recognise this behaviour as standard operating procedure for our friend the saint.

Until now, the Mole and his offsider, the stunning, show stopping, awe inspiring ice queen, the First Empress of Sun, Wind, Air and Sky, have done a good job of fighting off any opposition. Those questioning the science behind the whole climate movement are written off as 'denialists'. When it was demonstrated that a carbon tax would be a better policy than an emissions trading scheme, the government publicly ignored them but changed the scheme - fixing the price and offering unlimited credits - so that it in fact would operate just as would a carbon tax. And now that the scheme is up for a vote in the Senate, the government has so terrified an opposition weakened by The Terminator's drawn out political suicide that even an experienced and usually sensible politician like Tony Abbott is considering passing the legislation.

But reality has intruded. It has intruded in the form of the power stations, or , to be specific, the managers of the institutions which own the power stations.

Unlike the Great Mole and the Climate Empress, these are serious people, who are paid to consider the long-term consequences of near-term decisions, and who are directly answerable for these decisions, and only these decisions, in the near term - ie, immediately.

I now pass over to Robert Gottliebsen, in Ruddwatch's book one of our living national treasures:

It has no comparison in importance, but like the Washington Post writers on Watergate, every time I write on the Australian carbon crisis I feel this will be my last commentary on the subject. But every time I write, new information is put before me to encourage me to keep going.

Such is the power of Business Spectator that yesterday most of the players, excluding the Canberra public service, met with me (and Alan Kohler and Steve Bartholomeusz) under the 'Chatham House Rule'. What they told us had me reeling. Much of what I am about to write will be denied but have no doubt it is true. Having got through the GFC this is without doubt Australia’s biggest looming crisis and it will effect all citizens.

Effectively large segments of global energy capital will either black ban Australia or demand much higher returns with enormous consequences to this nation, including consequences for new renewable energy projects.

But we are getting ahead of ourselves. Let’s go step by step through what is about to happen to our nation because of an inexperienced government and an incompetent opposition.

-- In most parts of the world, apart from Australia, it is believed that the form of carbon trading scheme being proposed by Australia will not promote investment in lower carbon energy alternatives. We are about to prove the rest of the world right.

-- When a nation or a company is doing something stupid there will be a trigger that explodes the wrong strategy. In this case it is the Latrobe Valley brown coal power stations. These stations have huge debt repayments and emit a lot of carbon so the Canberra plan was that they should go broke and be bought at token prices. The plan was that the market would do its job and the power companies that own the stations and the banks that funded them will suffer well-deserved losses because they knew the risks they were taking when they made the investments and loans. If only it were so simple.

-- There are a number of large global players who invested in the Latrobe Valley, and they have not had big returns. The accepted practice in the US and Europe is that while there are no big profits for investors in legacy coal power stations there are no big losses. The power station owning groups need to have strong balance sheets to invest in renewable, gas and other low carbon power generating alternatives. Australia is thumbing its nose at the giants and global bankers and wants the world to follow us. We are about to learn what happens when you play that game and get it wrong.

-- The first step is that a number of the Latrobe Valley companies will halt long term maintenance. TRUenergy has already announced this, but at least one or two other Latrobe stations follow. The power stations say who in their right mind would spend cash when they have no idea whether the generators will be viable in the short and long term because the level of carbon charges and carbon policy is not known. Last summer every Latrobe Valley station went without a break down – the first time that has happened. This summer the odds are that they will break down. The companies are gradually abandoning long term contracts and going for the spot market which means that when there is a power station failure they will go into an Australian wide bidding process for power sending prices through the roof. However, there is a limited amount that can be sent to Victoria so Victorians will have the main burden of the price hikes and blackouts.

-- The banks will have the power to take control of at least one Latrobe Valley power station within six to nine months. They will be trying to extract as much money from the station as possible so will also cease long term maintenance and go for spot prices. If Australian and Victoria think the blackouts next summer are going to be bad wait for the following year when the full impact hits the nation.

-- Victorian Premier John Brumby’s staff know exactly what is going to happen to their state and realise that although this is a Canberra induced crisis they will cop the blame. Brumby’s people have gone to Canberra and been met with a wall of Godwin Greches. They might not fake emails, but they have no interest what so ever in the truth about what is going to happen. Fortunately there are some signs that not all the Canberra public servants are trained in the Godwin Grech mould and one or two are showing interest in discovering the facts.

Now even applying the usual 'hype discount' to journalistic forecasts, this is serious stuff.

I'll leave you to do the reading - not because I'm lazy but because Gottliebsen does a good job laying it all out and this post is already very long. There are links to other Gottliebsen gobbets at the end of the article I've referred to. But essentially, what you have to know is that the C'P'RS is affecting business decisions now. And power stations are only the most visible of the businesses pulling in their horns. Across Australia, all businesses will be adversely affected. The consequences for employment and investment are profound, and are being considered both in board rooms and around kitchen tables as we speak.

This reality should have intruded much earlier into St Kevin's little abbey. He is tremendously fortunate in having a vocal choir of climate loons singing from the First Hymnal of the Apocalypse, and a non-performing opposition. But it is beginning to intrude now, and will, if Gottliebsen is correct, certainly manifest itself in the coming year, in the form of power shortages in Victoria. Even then, St Kevin might be able to get away with passing the buck to his Victorian counterparts.

But, at least, now you know the Mole's game. He is living a political fantasy, courtesy of you and I, and the sacrifices you and I made over the past 25 years, and which our ancestors made over an even longer stretch, to get Australia where it is. St Kevin's fantasy trip is being fuelled by our future.

* * *

This is only one aspect, albeit the most serious, of St Kevin's adventures in Neverland. There is another, which is (so far) not relevant to broad policy but which is quite worrying in what it indicates.

One of Ruddwatch's favourite pastimes as a child was mucking around with Lego. Although not at all creative, and often building objects according to the wordless instruction booklet contained in the pack, lots of fun was to be had creating scenarios for the little yellow men and women who lived in the Legoland that I and my sister created. Best of all, the possibilities were unlimited. You could have one fellow locked up in the police cell. The firies dousing flames at a house down the road. Someone else jetting off to space. Or, following cups of red cordial, Godzilla smashing his way through the town.

You could let your imagination run free. The material - including the humanoid figurines - were all there ready to fill any part that you wanted them to play. They had no agency of their own, they never talked back, they were free to be where you needed them, when you needed them. Reality only intruded when Mum couldn't afford to buy the 'Castle and Knights' set, or when dinner was ready. Or when your sister wanted the same rare block as you, or when two blocks became stuck together, recalcitrant to separation via Mum's pearl-handled bread and butter knives or, in desperation, one's teeth. And when reality did poke its nose into the fun - well, didn't the frustration well up and vent itself in hissy fits!

And you see it all the time. Do you work, or are you at university, or even school? Call to mind when those around you suffered a hissy fit. It was frustration at the world not going their way which caused it, yes? People not fitting in with their appointed roles - heaven forbid, exercising some agency on their own part!

Remember, now, the hissy fit over the airline food? Or the hairdryer? Remember the terse, biting commentary and sarky dismissive statements, uttered through thin lips, whenever a difficult question was asked at a press conference?

Why do these clowns keep exercising agency? Why won't they simply fit in with my plans, my glorious plans, for governing Australia?

It gets worse. Remember the Sunrise episode. You know, where you arrange to change the timing of the dawn service, to fit in with your plans. Then you tell a lie, and say that you did no such thing - after all, who the hell are these clowns to question you? And then finally are forced to admit the truth when presented with documentary evidence.

Why don't these clowns all just buzz off and let me get on with my plans?

Or going further back, smearing the name of Aubrey Low, in order to create the fantasy of a childhood setback, and then berating at length the journalists who, in doing nothing more than there work, have discovered that you made it all up?

* * *

It's all a fantasy. The appalling essays. Howard's 'Bruitopia'. The neoliberal scapegoats. Sticking it to the Chinese on Tibet. The ridiculous working hours devoted to minutiae and political tactics and devoid of the hard work of policy development and strategy. The dream of a hot meal on every flight and a hair dryer in every tent. The plan for a $43 billion fibre to the home broadband network. All of it, just part of a game far removed from reality and for which others face the dangers and are picking up the tab.

This blog has been an attempt by me to alert people to this fact, and at least to get the Prime Minister and his cabinet to face reality, if not to stop the charade completely.

Will you join us?

Back physically, posts yet to come

2009-07-26T12:20:00.003Z

Dear patient readers, I have returned, but have not yet had the chance to put something together for you.

Hopefully this week I will be able to write a few posts. There is a lot happening: the economy, the C'P'RS, China, and of course another overly long intellectual imposture.

But, just quickly, isn't it odd how quickly things change. Just over a month ago St Kevin's star was waning, as a result of his own shortcomings. Then we got the story of the Ute, and things reversed very quickly. It now looks as though he'll win another term, only to face Tony Abbott at the election after.

I had hoped that I could wrap up the blog within a year, but it looks like I'll have to keep going. Anyway, whatever happens - let's continue to have a laugh together.

Real ugly

2009-07-06T08:44:00.004Z

I apologise, I'll be away on business for the next couple of weeks, and won't be able to post any of my analysis.

Meantime, you can enjoy watching St Kevin reveal his true nature. Now that he is clearly in the ascendant, thanks to the Terminator's bungling of possibly the easiest free kick that he will ever get in his life, St Kevin has turned nasty.

And how!

The Oz is in his sights, as a regular and persistent critic of the idiocy of Rudd and Co. And there are reports that St Kevin is sending The Uglies in to bully corporate Australia into punishing the more vocal of his civil society critics.

Not exactly the sort of behaviour you want to see from our nation's leader. To be fair, St Kevin isn't the first minister suffering paranoia - Peter Costello was known for chasing down critics. But there are still no excuses for it. However, this behaviour should come as no surprise to regular readers, familiar as they are by now with the shortcomings in the Rudd character.

Now you know why I operate under a pseudonym.

Until next time,

St Kevin 1, The Terminator -1, Australia -100

2009-06-27T01:24:00.005Z

Just when you thought things couldn't get more interesting, we have a week like the one that just was.

How utterly extraordinary. And how completely unpredictable.

David Marr and Phillip Coorey tell the story of how The Terminator fluffed the chance to claim the scalp of Brother Wayne - who is clearly up to his scapula in quicksand - and now finds himself under siege. Peter Hartcher draws on Paul Keating's surprisingly accurate dissection of the Terminator's character to tell us why.

Yesterday, Laura Tingle wrote a good column in the Financial Review. Clearly, the media is being swamped with 'backgrounders' trying to explain the extraordinary events and spin the coverage their way. I also liked Glenn Milne's piece, and await an essay from John Stone on the subject.

Meanwhile a government which deserves in every way to be copping a beating has, thanks to The Terminator's impetuosity, got its tail up. This is not good news. The ferocity of the government's attack on Turnbull, and the 'Chewbacca/Silly Monkey' defence that they have repeatedly vomited onto the national airways over the past week, demonstrates that they have mastered the arts of modern politics, just as surely as the OzCar matter, the irresponsible spending splurge, the failure of GroceryWatch, BankWatch et al., the re-regulation of employment, the return of the boat people prompted by so-called 'compassionate' policy amendments, etc, demonstrate that they aren't particularly fussed about governing in the national interest.

St Kevin appears to be morphing into the federal equivalent of Boob Carr. Having lived in NSW all my life, I can assure you, that is a terrifying prospect.

Here's an example of why. The Oz's Michael Stutchbury wrote an excellent piece explaining the consequences of St Kevin's economic illiteracy and visceral aversion to market-focused economics.

Although he has shown an effective side-step in the confessional, I still don't think it is too late for Brother Wayne to be called to account for his sins - they are so grievous that The Terminator might still be able to claim his tonsured scalp as a prize. But in the first big and utterly undignified contest between the heavyweights, The Terminator has damaged himself, and this makes him less effective in calling St Kevin and his frontbench to account.

And, given St Kevin's tendencies, that is a poor outcome for the country.

After such a horrible week, both in Australia and around the world, and after over two years of focussing on the shortcomings of our national leader, I feel obliged to introduce some positive elements into the blog. So, apropos of nothing, please enjoy the following pictures of cherry blossoms and jacaranda trees. Here's hoping that the coming week will be better.

'What about my little mate?'

2009-06-19T23:32:00.005Z

What an extraordinary fortnight - both around the world and here in Australia.

First we had the absurd sight of St Kevin trying his hardest to sound 'natural', and instead coming across like Chips Rafferty. You could taste the sawdust in the air at his press conferences.

Then we had one of the most incredible news-filled weeks that I can remember. Ruddwatch has been glued to the TV, radio and internet, watching for news about developments in Iran and North Korea.

At the same time, we had so much happening here. The complete and utter shambles that is the implementation of St Kevin's 'vision' for schools, as set out in the (I kid you not, this is it's name) Building the Education Revolution program. Angry emails and letters from school principals, P&C committees, even the education unions, complaining that it was a mess which was wasting literally billions of taxpayers' money. Much to the Haloed One's annoyance, the Oz has been chronicling it here. The sheer incompetence is jaw-dropping.

Yet again, Mr and Mrs Average are paying the price for Rudd's flippancy, and inability to concentrate hard enough on his work in order to solve small problems and iron out details. You can see him stamping his little pixie feet and shouting at his staff - 'Today, it has to be done today! Just do it! I don't care, just do it!'

You see - he really doesn't care about education. Just so long as the money gets dished out and he gets to look good. But what else did you expect from such a shallow man as St Kevin?

It's not just that the money is being spent on buildings that are not needed, at inflated prices, while buildings that are needed are not going up. It's that all this money could be being spent on teacher training and retention, or on new textbooks, or on subsidising useful things like music lessons, team sports and extra-curricular visits to other states and countries. Such a terrible shame for the kids, such a horrendous cost for the taxpayer.

Or even things that schools actually want and need. Apparently, while millions are being wasted on unneeded and unwanted buildings at some schools, others are being told that the hall or gym that they have waited for for years is at present unaffordable.

The government's response to criticism has been labelled by the Oz's Christian Kerr as a 'typhoon of unreason'. The best defence that they have of their program is that critics are unpatriotic.

That is pathetic. However, the award for pathetic behaviour goes to the PM for his performance in asking the principal of Holland Park State School, in Rudd's electorate, to write a letter praising the program, after the Oz had reported the principal as criticising the implementation of the program. If this doesn't scream 'style over substance' and shallowness, then I don't know what does.

On Tuesday we had the Senate's voting down of the appalling RuddBank idea. The Greens joined the Terminator's mob on the rather reasonable principle that those who are so redundant in business acumen that they have to go cap in hand to the government shouldn't be rewarded with million dollar salaries. Yet another occasion for Pixie to stamp his little feet and yell (no doubt Christian) obscenities at the nearest staffer.

Another story to emerge this week was Senator Steve Fielding's daring to hint that the heart-breakingly dishy ice queen, Climate Empress Wong, may be wearing no clothes. Buoyed by his trip to America for a conference given by scientifically endowed climate sceptics, Senator Fielding returned with three questions for Empress Wong. Here, I let Bob Carter et al., opponents of the 'Doomed Planet' hysteria, tell the story:

STEVE Fielding recently attended a climate change conference in Washington, DC. Listening to the papers presented, the Family First senator became puzzled that the scientific analyses they provided directly contradicted the reasons the Australian government had been giving as the justification for its emissions trading legislation.

Fielding heard leading atmospheric physicist Dick Lindzen, of the Massachusetts Institute of Technology, describe evidence that the warming effect of carbon dioxide was much overestimated by computer climate models and remark: "What we see, then, is that the very foundation of the issue of global warming is wrong.

"In a normal field, these results would pretty much wrap things up, but global warming-climate change has developed so much momentum that it has a life of its own quite removed from science."

Another scientist, astrophysicist Willie Soon, from the Harvard-Smithsonian Centre for Astrophysics, commented: "A magical CO2 knob for controlling weather and climate simply does not exist." Think about that for a moment with respect to our government's climate policy.

On his return to Canberra Fielding asked Climate Change Minister Penny Wong to answer three simple questions about the relationship between human carbon dioxide emissions and alleged dangerous global warming.

Fielding was seeking evidence, as opposed to unvalidated computer model projections, that human carbon dioxide emissions are driving dangerous global warming, to help him, and the public, assess whether cutting emissions would be a cost-effective environmental measure.

After all, the cost to Australian taxpayers of the planned emissions trading bill is about $4000 a family a year for a carbon dioxide tax of $30 a tonne. The estimated benefit of such a large tax increase is that it may perhaps prevent an unmeasurable one-ten-thousandth of a degree of global warming from occurring. Next year? No, by 2100.

The questions posed were:

* Is it the case that CO2 increased by 5percent since 1998 while global temperature cooled during the same period? If so, why did the temperature not increase, and how can human emissions be to blame for dangerous levels of warming?

* Is it the case that the rate and magnitude of warming between 1979 and 1998 (the late 20th-century phase of global warming) were not unusual as compared with warmings that have occurred earlier in the Earth's history? If the warming was not unusual, why is it perceived to have been caused by human CO2 emissions and, in any event, why is warming a problem if the Earth has experienced similar warmings in the past?

* Is it the case that all computer models projected a steady increase in temperature for the period 1990 to 2008, whereas in fact there were only eight years of warming followed by 10years of stasis and cooling? If so, why is it assumed that long-term climate projections by the same models are suitable as a basis for public policy-making?

As independent scientists attending the meeting, we found the minister's advisers unable, indeed in some part unwilling, to answer the questions.

We were told that the first question needed rephrasing because it did not take account of the global thermal balance and the fact much of the heat that drives the climate system is lodged in the ocean.

Que? What is it about "carbon dioxide has increased and temperature has decreased" that the minister's science advisers don't understand?

The second question was dismissed with the comment that climatic events that occurred in the distant geological past were not relevant to policy concerned with contemporary climate change. Try telling that to geologist Ian Plimer.

And regarding the accuracy of the Intergovernmental Panel on Climate Change's computer models, we were assured that better models were in the pipeline. So the minister's advisers apparently concede that the models that have guided preparation of the emissions trading scheme legislation are inadequate.

These are not adequate responses.

It was reported in the Business Age last July that the ministry of climate change's green paper on climate change, which was issued as a prelude to carbon dioxide taxation legislation, contained scientific errors and over-simplifications. Almost 12 months on, our experience confirms that the scientific advice Wong is receiving is inadequate to justify the exorbitantly costly upheaval of our society's energy usage that will be driven by the government's ETS legislation.

All Australians owe Fielding a vote of thanks for having had the political courage to ask in parliament where the climate empress's clothes have gone. Together with the senator, and the public, we await with interest any further answers to his questions that Wong's advisers may yet provide.

As usual, we will keep watching closely for signs that Climate Empress Wong has seen the error of her ways, and hoping that she decides to leave, irrevocably, the Dark Side of climate apocalypticism, to embrace RuddWatch - no, sorry, I got carried away, to embrace the healthy bright sunshine of enlightened scepticism. Penny, I don't mind that you come from Adelaide, I'll wait for you!

Then on Friday morning, as if a foretaste of what was to come later on that momentous day, the Oz reported on a Chinese academic's disembowelling of Rudd's execrable essay on neoliberalism, whatever that is (remember, if the Labor Party did it, then it's economic modernisation, whereas if John Howard or Maggie Thatcher did it, then it's neoliberalism. Confused? So is Kev). Rowan Callick reported thus:

KEVIN Rudd has been accused by a leading Chinese economist of being "either short of economic knowledge or misleading his readers" in his famous essay attacking neoliberalism [RuddWatch: I actually think he's both, but let that be for the moment].

In a scathing assessment, Xu Xaonian, economics professor at China Europe International Business School in Shanghai, lambasts the essay, now translated and published in China, as "shallow and crude".

Dr Xu says "Lu Kewen" - Mr Rudd's Chinese name - made a "big, big mistake" in forming his "confident opinions" based on "the observation that the crisis came as a result of neoliberalism and the absence of supervision".

Dr Xu, one of China's leading liberal economists, has savaged the Rudd essay in the weekly Chinese newspaper The Economic Observer after the Prime Minister's work was translated and reprinted in China's leading business magazine, Caijing.

Dr Xu, who has a doctorate from the University of California and was formerly managing director of the country's biggest investment bank, says it is not time to resurrect Keynesianism, as Mr Rudd proposes.

"Instead, it's time to announce Keynesianism's failure, time to announce the emperor Lord Keynes has no clothes."

He says the Prime Minister "has used electioneering-style tactics to brand neoliberalism as dogmatic, to paint a clownish portrait of it, seeking to pioneer popular antipathy to this artificial enemy, casting a moral verdict without seeming to care about truth or logic".

Dr Xu says: "Lu Kewen defined Alan Greenspan as a neoliberal, and claiming that his failure and that of the neoliberals is a failure of the market.

"Lu is either short of economic knowledge or is misleading his readers [RW: Both - he is guilty of both!]. Greenspan is a Keynesian, and a thoroughgoing one, not a neoliberal. Lu smartly transformed a failure of government into a failure of the market - a form of propaganda by him and his social democrat comrades which now looks as if it is working."

Dr Xu says that Mr Rudd "views himself as an heir of Franklin Roosevelt and Keynes - he wants to use expansionary financial policies to pull the economy out of recession".

"Instead, it will only add a fresh failure to the Keynesian list, while piling up votes, in the meantime, for the social democrats," he says. "Although filled with conclusions contrary to facts and unfounded policy prescriptions, it represents a popular post-downturn trend, especially because it comes from a country's prime minister."

Couldn't have said it better myself. Professor Xu is right on the money. He has marked St Kevin for the intellectual fraud and poseur that he is.

Then we have the spectacle of Sister Julia dismantling the Australian Building and Construction Commission, while the construction unions cry 'discrimination'! They just want the right to go on making a dishonest buck, after all - and Sister Julia is going to give them the means to do so.

Then, late on Friday night, while checking the internet news sites one last time before going home for the weekend, I saw that one Godwin Grech, Treasury official, narrowly avoided having a nervous breakdown before admitting that, although he could be mistaken, he was asked by Andrew Charlton - an economics adviser to Rudd and a man so girlie that he was struck dumb with terror by the Terminator's giving him some worldly advice the night before - to make sure that Kevin Rudd's mate, car dealer John Grant, be included in yet another of the government's 'cash for incompetents' schemes.

Now, I admit up front and openly that, at this point, the email sent by Charlton to Grech doesn't appear to exist. However, many emails between Grech and Brother Wayne's office, which Swan's adviser Andrew Thomas says were sent to Brother Wayne's fax machine, do exist, and testify to the Treasury's making extra efforts to get Kev Rudd's mate into the scheme.

So, we know that Kevin Rudd and John Grant are mates, that Grant didn't qualify for the scheme, and that someone put pressure on Treasury to bend the rules so as to get Grant into the scheme. We also know that St Kevin and Brother Wayne told parliament that they didn't know anything about this.

We can forget about Brother Wayne. He is now a walking political corpse. Let's focus on St Kevin.

There is no suggestion that Brother Wayne knew Grant. Grant's only link to Brother Wayne and the Treasury is through St Kevin. All the circumstantial evidence points to St Kevin asking Treasury, either directly or through Charlton, to do what it could to admit Grant access to the scheme's cash.

Godwin Grech says that this approach was made via email. This is where the story gets a bit weird.

All public service emails - ALL public service emails - are public documents, to be filed for a number of years before being destroyed. Even the ones where the Treasury officials arrange drinks after work, are kept on a computer disk, and then backed up to files, and then sent to the national archives.

If Charlton did send an email to Grech, where is it? Surely it should be on the email backup discs?

Also, the public service has since the year dot kept files, in which correspondence, minutes of meetings, minutes of phone calls and other documents can be kept for posterity, so that if anything goes wrong - and it usually does, as Grech is finding out - there is a record of exactly what happened, what was said, etc, for reference.

Where is the file? And why didn't Grech put the email on file?

Also, such a request - the Prime Minister asking for special treatment for a private citizen in a government program - would tend to immediately ring alarm bells in all but the most obtuse public servants. Why didn't Grech forward the emails to his superiors - nay, directly to Ken Henry! - so that they could see what was going on?

So something strange has happened. Either the backup system has broken down and Grech's filing practices are abominable (possible), or someone has nobbled the email records (possible, but not probable), or there was no email (highly probable).

But if so, then why did Grech risk both a nervous breakdown and being sent to a room with no windows, no computer and no phone on his desk for the remainder of his short Treasury career, in order to bring to light something which never happened? And why were the Labor senators and genuinely senior Treasury official David Martine so keen to prevent Grech from answering Senator Abetz's question about who asked him to do favours for Mr Grant?

Perhaps he just received a phone call from Charlton.

Let's go back to what we do know, and what makes sense: Treasury was asked to ensure that a Mr John Grant was given preferential access to public money. Treasury's efforts were monitored by the Treasurer, Wayne Swan. Mr Grant is a friend of the Prime Minister, Mr Kevin Rudd. Mr Rudd and Mr Swan have both said in Parliament that they have made no representations on behalf of Mr Grant. Lying to Parliament is a most serious offence, usually punished with the loss of one's place in the ministry.

Join the dots, readers.

I told you, a few weeks ago, after St Kevin's bizarre '300, no billions here' performance, that he had 'jumped the shark'. I had no idea that it would all begin unravelling so quickly for him. He has only been Prime Minister for 19 months. This is extraordinary.

My forecast that Rudd would preside over a one-term government was made with some confidence, but half in hope. I now think that it is a very strong possibility, and that he may not make the full term.

Time to get out the popcorn and settle into the beanbags - this is going to be fun.

Spinning to cover up - poll results

2009-06-19T23:28:00.002Z

Thanks to all those who voted in the online poll. Good to see that you maintain your healthy degree of scepticism.

Although I do find it concerning that you could believe that so sincere a LOUDLY SELF-PROCLAIMED CHRISTIAN as Kevin Rudd - one who bases his life on Dietrich Bonhoeffer - could possibly tell untruths. It's not possible, surely?

Would the real St Kevin please stand up?

2009-06-13T09:39:00.005Z

Some things are simply beyond parody.

Personally, I'm puzzled as to why Australians keep giving Rudd a free pass on being a phony. I can understand why the press gallery does it, but the rest of us - I'm afraid I don't understand.

What I'd like to hear is the real Kev Rudd language - you know, the stuff that he shares with journalists, or that he uses towards stewardesses and his private staff. Coming from a Kevin who says 'I can't play this game anymore, I can't wear these masks anymore, I can't pretend anymore. I'm going to be dinkum fair with the electorate - they'll get the unvarnished me'.

Spinning some more to cover failed spins of the past

2009-06-06T02:59:00.004Z

This tidbit from Laurie Oakes caught my eye this week:

Rudd and Wayne Swan played into Turnbull's hands when they botched the post-Budget sales pitch through an apparent reluctance to use the figures - a deficit of $57.6 billion and debt peaking at more than $300 billion.

But those pundits who put this down to misguided "spin" are off the mark.

It is the result of old-fashioned, unadulterated incompetence.

The advice of the spin-doctors - accepted by the Prime Minister and the Treasurer - was that the Government should embrace the numbers, not run away from them.

Swan did not leave the deficit figure out of his Budget speech deliberately. It was supposed to be there. Stuff-up, not spin, was the explanation.

And when Rudd kept saying that the debt would peak at "around 300" - without using the words "dollar" or "billion" - it was not a cunning ploy to avoid giving the Liberals a line they could use in their election commercials.

The PM is simply a sucker for jargon.

Saying "300" instead of "300 billion dollars" is Treasury-speak.

Having sat around with Treasury boffins for weeks preparing the Budget, Rudd started talking like them.

Is that so, Laurie?

Would you like to buy a bridge across Sydney Harbour? Special deal for you!

You credulous oaf. You are a fool to yourself, and a burden to others.

Oakes has been taken in by the Ruddster's attempts to spin himself out of a hole. Evidently, someone from St Kevin's sacristy has gone out and told the tale that St Kevin's idiotic 'no billions here' performance was a mistake, rather than a deliberate tactic.

Now, you're all adults, so you can make up your own minds. But, as someone who has worked closely with Treasury boffins in the past, you might be interested to know that they don't at all speak about budget numbers without mentioning the 'billions', 'percentage points' etc. attaching to them.

Saying '300' for '300 billion dollars' is NOT Treasury speak.

And even if this was the case, then why did it take a week of journalists asking him to say 'three hundred billion dollars' before he finally managed to say the words? Surely, he would have woken up to the problem earlier? If this was indeed the source of the problem.

I'm willing to bet a substantial amount of money that it wasn't.

It seems too much to ask, that St Kevin should ever actually look the electorate dead in the eye and be straight with us.

Anyway - what do you think? Let's put it to the vote!

Reaping where he does not sow

2009-06-06T02:40:00.004Z

I must say, I was genuinely pleased at how mild the GDP numbers were for the March quarter.

Every part of a percentage point in positive territory is worth thousands of jobs. So the result is not to be sniffed at.

Unfortunately, the statistics point to a real weakening in the economy this year, which is likely to become worse as reality - in the form of lower receipts for our exports - makes its way to the bottom lines of our companies.

As usual, Terry McCrann provides excellent analysis.

The fact remains, though, that the mix which got us that positive number was not indicative of anything other than a recession in Australia. And that unfortunately such wishing is unlikely to be enough or even sustained. The three critical elements were the big fall in business investment, the big rise in exports and the big fall in imports. The trade performance alone prevented us recording a 1.8 per cent fall in GDP -- a fall that would have been bigger than that in the US in the March quarter.

Sliding business investment and falling imports are not indicative of an economy even marking time, far less on the road to recovery. And increased exports are at best indicative of someone else's healthy economy. Also, it should be noted, it was in the March quarter, as the monthly April data rudely reminded us a day or two later, when the trade balance went negative.

The biggest "real" plus, for want of a better term, was consumption spending. Almost certainly that was driven by the Government's stimulus packages. But also by higher disposable incomes as a consequence of the big drop in interest rates in the December quarter.

On the day of the release, you probably noticed St Kevin and Brother Wayne spinning hard that our performance was much better than that of both comparable and larger economies around the world. And they're right about that.

But what they didn't tell you is why. Yes, they might have mentioned the cash splash, but as McCrann mentions, that didn't really deliver much bang for the buck.

Truth is, you won't hear St Kevin telling us the reason for our relatively strong performance. And that's because the reason is what he has dismissed as 'neoliberalism' in his juvenile essay of early this year.

You know - labour market deregulation, reductions in tariffs, floating the dollar, opening up the banking system, granting power over monetary policy to the Reserve Bank, Howard and Costello's fiscal discipline and tax cuts, setting up a strong regime of prudential regulation. All that stuff, which St Kevin derided as 'letting the market rip' and causing the global financial crisis, and which he know says he wants to overturn in favour of something called 'government'.

Do you know what 'government' means? It means letting Wayne Swan dictate economic outcomes - yeah, that fills you with confidence, doesn't it? So should the idea of people like Joel 'oh THAT suit!' FitzGibbon and Peter Garrett deciding what's best for you.

And having it all rubber stamped by the Great Governor, St Kevin himself.

Something to reflect on, next time you see St Kev and Brother Wayne chuckling to themselves and gloating about what a good job their doing on the economy.

Deliberative poll: and the winner is ...

2009-06-06T02:30:00.002Z

... the hair dryers!

Even as we speak, Helen Liu is competing with Kevin Rudd's car dealer to win the contract.

To those who mustered the strength to put a dot in a box - yes, even to St Kevin's lone friend - I say thankyou.

Three cheers - good on you Jenny

2009-05-30T02:52:00.002Z

Alice Springs' notorious Aboriginal town camps will be compulsorily acquired by the Rudd Government after Indigenous Affairs Minister Jenny Macklin said she could no longer tolerate the "appalling living conditions" and endemic violence some 2000 residents are forced to endure.

Several weeks ago, Ms Macklin met Aboriginal women in Hoppy's Camp, one of the worst camps. She said she saw about 50 people living under a shelter with no walls.

"They were living in filthy conditions. One parent raised with me the enormous problems with cockroaches. They were waking up in the morning with cockroaches all over the children.

"The conditions in these camps are horrific, I can't put it any more plainly," she said.

An exasperated Ms Macklin said the time for negotiation was over. "Today, I am giving notice we intend to acquire (the land)."

Confirming my prejudices

2009-05-30T00:44:00.005Z

Apologies for a light post this weekend. I appear to have formed quite a number of fixed ideas about St Kevin, his motives, his world-view, and his behaviour, so that my reaction to news about him is now more 'well, that's in keeping with his character', than 'I'll have to write a post about that!'

For example, who could be surprised to learn this week that the Haloed One had banished the former head of the international section at the Prime Minister's department to Stockholm, a relatively minor posting compared to Berlin, the one originally offered to him?

St Kev has dismissed talk of this as being his punishing a bureaucrat that he doesn't happen to like as rubbish with the line that Mr Borrowman's German is substandard, and therefore he isn't fit for a position in the German embassy.

This. Is. Rubbish. Don't you believe it. Let's go through some reasons why.

It's just not true. By the government's own admission:

Mr Rudd's claims on Tuesday that he rejected Mr Borrowman's credentials for the Berlin post because of inadequate language skills was contrary to a statement five days earlier from Mr Smith singling out his proficiency in German, Swedish and Mandarin, Ms Bishop said.

Not all people appointed to embassies speak the language of the country to which they have been posted. Some do, but not all - that is my understanding.

Foreign Affairs has an excellent language training program. If speaking German is so important for the position, then why not send Mr Borrowman there for a couple of months of intensive German, to tighten up his skills?

Like many workplaces, Foreign Affairs has its Important Jobs and Backwater Jobs, and a successful career will likely see a person occupying a few of the Important Jobs as he or she works their way up the greasy pole. Berlin is clearly an Important Job, and is offered as a plum to those who have done well or deserve reward or who have been Marked For Greater Things, language skills notwithstanding. Stockholm is clearly a Backwater Job. St Kevin's decision is all about taking a plum away from Mr Borrowman and putting him in a Backwater Job.

No, this decision had nothing to do with Mr Borrowman's language skills. It is all about a petty man abusing his position to settle a score with someone who crossed him in some way.

Which is exactly the behaviour you would expect from someone who would chuck a tantie over a lamb dinner, or a missing hairdryer.

No wonder they can't find a replacement for Mr Borrowman.

Then we learn, via the Senate Estimates process, that the $43 billion plan for a national broadband network was cooked up on a couple of plane trips that Nanny Conroy took with St Kevin after it was clear that the tender process had failed. No cost benefit analysis. No estimates of demand, of the responses of other media and technology players. Just a couple of Labor party hacks deciding to spend an amount of money nearly nine times the amount spent on the Snowy River Scheme on an election promise.

Then we get the madness of the hard hats and fluoro jackets, as St Kevin pops up out of the ground like a mole at building sites all over the country. Surely, work as important and costly as this has been subjected to rigorous financial analysis?

The Rudd-Albanese strategy is clear. Between now and voting day the Prime Minister and his Infrastructure Minister, Anthony Albanese, plan a "shock and awe" campaign with an onslaught of Labor MPs in hard hats advancing electorate by electorate armed with the heavy artillery of localised infrastructure projects paid for by government.

But there will inevitably be an Opposition counterattack and the shape of that response is already taking shape.

It should begin with questions about the transparency of this entire $22 billion enterprise. Infrastructure Australia, the arms-length body headed by Labor's handpicked business favourite, Rod Eddington, "chose" an initial "A" list of 10 projects in the budget for immediate go-ahead.

But there's a remarkable omission in all of this. Neither in the budget papers, nor in the National Infrastructure Priorities list published by the Government, nor on the Infrastructure Australia website is there any supporting cost benefit analysis of any of the chosen projects. None.

The Government is simply asking voters and the private sector to take them on trust. To say groups such as the Business Council of Australia are worried by such an approach is an understatement. They are now demanding the numbers that underpinned the choice of the selected projects be published so it can assess, on behalf of voters, how much productivity bang they're going to get for their buck.

Their chances don't look good. A spokesman for Albanese told this column yesterday that while the economic analysis in question was in the hands of Infrastructure Australia it could not be released because it is "commercial in confidence".

Which really means the Government plans to spend $22 billion of taxpayers' money without any explanation as to the viability of that spending. All of which made for a somewhat uncomfortable interview between Eddington and Alan Kohler on the ABC's Inside Business program yesterday.

Kohler made it clear he was less than impressed with the Infrastructure Australia budget process, to which Eddington could only reply: "We put forward the submissions we felt met all the criteria and where the work had been done with the rigour that we demanded and, to be frank, the Prime Minister and the Infrastructure Minister demanded."

Well that's great. But it's also a hard proposition to test without public access to the calculations supporting the spending. Especially when you get critiques like this from experts such as Paul Mees, senior lecturer in transport planning at the Royal Melbourne Institute of Technology, who's cast his eye over the budget funding for the Melbourne Regional Rail Link.

"The Victorian Government adopted the Eddington regional rail link proposal and forwarded it directly to the federal advisory body Infrastructure Australia, chaired by none other than Rod Eddington," Mees says.

You can add into this opaque process some unusually loose words on the planned national broadband rollout from the usually highly disciplined Finance Minister, Lindsay Tanner, during a week obscured by the budget babble. Tanner told the online finance news service Business Spectator that the estimated $43billion cost was the "outer limit", which included "a sizeable chunk of contingency built into it".

A couple of people have wised up in the last few days to the charade. Mark Thomson, from the Australian Strategic Policy Institute, has questioned the spending plans behind the defence white paper:

"We risk adopting a defence posture that is more talk than action," says the report. [What, like the Prime Minister? ed] "Having made the case, albeit elliptically, that we need to hedge against the rise of the Middle Kingdom [China], [the white paper] presents a response that will take decades to take form … The focus on the far-term comes at the expense of almost any information about what Defence will deliver in the meantime."

Then there is the frank appraisal of the Prime Minister coming from Beijing.

"We truly want Australia, which we view as a middle power, to play a bigger role internationally," he said.

"I think Mr Rudd's proposal for an Asia-Pacific community is brilliant, and has earned solid support from China. But there has been no follow-up. Nothing substantial is happening to take it further."

He said that "perhaps we should focus on Mr Rudd as a politician".

"He offers words that can be very touching, but may not be taken too seriously,"

You don't say!

He said that Mr Rudd "came up with a lot of thoughts".

"But how to put them into effect? Maybe he's just too much entangled in domestic politics.

A bit like the defence white paper, and the broadband network. And the infrastructure projects.

You see, St Kevin's workaholism is nothing more than constant movement and frittering away time on trifles. He doesn't have an appetite for hard work - planning, discussing alternatives, ironing out small but crucial details, nutting out costs and benefits, listening to dissenting opinions and forging a consensus. This is too hard. Better to think of a grand plan, sell it by wearing a hard hat, place it on the national credit card, and leave it to others to work out the details and pay for it later.

This flippancy and pettiness are going to cost us.

Delusions of grandeur, difficult realities not addressed

2009-05-24T01:17:00.003Z

I reflected a little, before dropping off to sleep, on what I had written yesterday.

St Kevin may truly have 'jumped the shark' with his performance during and since the budget.

The first thing is, this is a lazy budget. In a surprisingly good budget in reply speech, The Terminator mentioned that despite creating a $58 billion deficit, St Kevin and Brother Wayne had managed to find less than $2 billion in savings.

$2 billion, in a budget of around $300 billion! That's less than 1 per cent!

Rather than doing the hard work in identifying budget savings, Kevin was preoccupied early this year writing his execrable essay for the Monthly. His priorities aren't straight.

Follow this with the plain idiocy of squirming around in an attempt to avoid mentioning the size of the net and gross debt figures, and the hard people of the party, not to mention the backbenchers, must be shaking their heads wondering what on earth their leader is up to. The electorate certainly is.

Especially, if reports are to be believed, St Kev plans to use the Prime Ministership as a stepping stone to leadership of the UN.

His interests aren't exactly aligned with theirs. Nor with the interests of the electorate.

Meanwhile, the economy, and the budget, continue to deteriorate. We will likely be paying for St Kevin's Gaullist delusions of grandeur for a long time to come.

Bits and pieces

2009-05-23T03:14:00.004Z

Just some bits and pieces that I have picked up over the past couple of weeks.

On Nanny Conroy's broadband plan:

Lindsay Tanner has confirmed what was suspected. In arriving at its estimate that the cost of the revised national fibre-to-the-premises broadband network would cost $43 billion, the Rudd government essentially dreamed up a big number and then added to it.

Committing to spending up to $43 billion of taxpayer funds, perhaps more, perhaps less, without rigorous and detailed analysis and modelling of the economics of the network and its inter-action with existing broadband networks is extraordinary.

When one considers the time and effort Infrastructure Australia put into compiling its list of priority national infrastructure projects, the way the NBN decision was developed – essentially as a response to the failure of the original lengthy tender process that involved only $4.7 billion of taxpayer funds – is even more remarkable.

The evaluation that should have preceded the commitment will now occur, with the government commissioning an "implementation study", which one assumes will consider the complex economic issues involved and come to a conclusion whether the NBN is a viable commercial proposition.

And this:

OECD statistics used to support the government's $43 billion national broadband network also raise serious doubts about the prospects of a fibre-to-the-home project being sustainable without heavy ongoing subsidies...

... The minister has ignored statistics that raise doubts about whether the construction of a fibre network will be economically viable.

Data from other OECD countries with more advanced broadband networks than Australia show that consumers faced with a choice between fibre and high speed broadband over copper (ADSL2+) will not necessarily rush to connect to fibre.

On the Australian Building and Construction Commission:

There was never any real question about whether the ABCC would survive the first term of the Rudd government. Indeed, many industry observers are surprised that it will last to early 2010 given the trenchant union opposition to the organisation and the debt that the political wing owes its industrial brethren for making Work Choices electoral death for the Howard government.

But the pragmatic Gillard would privately know that the ABCC has brought industrial peace to the industry, as the updated 2009 Report on Productivity in the Building and Construction Industry released by the Master Builders Association last week makes abundantly evident.

It says in the executive summary: “All of this evidence supports the conclusion that there has been a significant gain in construction industry productivity. What remains is to identify whether or not the contribution from each source to the productivity gain can be separately isolated.

“The data sources … indicate that the significant productivity gains in construction industry productivity started to appear around 2002-03. This supports the interpretation that it was the activities of the Taskforce, established in October 2002 and, more importantly, the ABCC (given its enforcement powers) when it was established in October 2005 that made a major difference.”

Despite the unions’ claims to the contrary, the industrial peace has come without any undue impact of the industry’s safety record. From 2000-01 to 2005-06, workplace claims per 1000 employees fell from 31 to 25 and preliminary figures for 2006-07 put the figure at 22.

It's working, productivity is up, safety is still good, everyone is happy except the rent seeking bullies in the unions - so let's upset everyone just to please them! Great one St Kev. In another article:

Harder heads in the federal ministry and caucus, however, while privately conceding that the ABCC in its current form cannot survive, are deeply worried about what might happen in Victoria and WA once it has been abolished, and are anxious to ensure its successor can exert its authority over this industry.

They are acutely aware of the capacity of these two branches to cause industrial mayhem as witnessed in Victoria during the lengthy West Gate Bridge dispute.

You betcha! But it's not like they're going to do anything about it, are they, apart from wring their hands.

The stupidity of trying to define an alcopop in legislation, so as to tax it differently to other alcoholic products, hits home at makers of Belgian beers. Memo to Brother Wayne and the excise crew at Treasury - why not tax alcoholic beverages by alcohol content? That would solve all your problems.

Mitch Hooke of the Minerals Council of Australia brings in the heavy artillery, Brian Fisher, to do the analysis of the C"P"RS that Treasury should have done. No surprises in the conclusions:

The CPRS scheme will shed 23,510 jobs in the minerals sector by 2020 and more than 66,000 by 2030. These are direct jobs. All minerals sectors will be affected, whether in coal mining, gold and base metals, alumina refining, mining services, copper, zinc, lead and aluminium smelting and so on. No state, or the Northern Territory, will be spared, no mining region will be untouched. The impact on regional Australia will be severe, including thousands of jobs in the Illawarra and the Hunter in NSW, the Bowen Basin in Queensland, remote regions in Western Australia, including the Pilbara and Kalgoorlie, South Australia, Victoria's Latrobe Valley, Tasmania and the Northern Territory.

You can add to these numbers the jobs of the council workers, the school teachers, the nurses, gardeners, and employees in the hundreds of small businesses in the towns and communities that service these mining regions.

That's just the start, Mitch! Killing the mines will drag the rest of the economy down with it. And what will happen in the suburban shopping malls when the punters can't by plasma screen tellies, because we can't economically mine the minerals to pay for them? Revolution in the streets! Great idea Kev!

Then there's the budget, starting with the attack on employee share ownership schemes:

There are about two million Australian employees who have been gradually building up stakes in the companies where they work via what are called "qualifying" share schemes. They're pretty basic, and they work by getting the employee to buy shares out of pre-tax income, but then hitting them for income tax at the far end when they sell the shares, if they make a profit.

What's gobsmacked a lot of observers is how the Government has instantaneously alienated a big slab of middle Australia, the ordinary scheme participants, while laying itself open to the serious risk that revenue from those schemes was going to go down and not up.

The strangest element of all is that Swan himself has long been a champion of employee share schemes on the basis that they align the interests of the workers with the shareholders.

A lot of thought went into that one, yes? Again, as with private health insurance, the pensions, the C"P"RS, the support for the car industry, etc., St Kevin's ideological fetishes trump common sense and good policy.

Then there's St Kevin's promise to wear the hairshirt - next year, of course, not this year:

Opposition Treasury spokesman Joe Hockey highlighted his scepticism last night by ridiculing Mr Rudd's promise of a limit on growth in outlays, noting it would slap a virtual straitjacket on the Government for six years.

Insisting that no government would go to an election without spending initiatives, Mr Hockey said he did not believe Mr Rudd would stick to the commitment.

"There's no wriggle room for new spending in their assumptions," he told The Australian last night. "They've already broken this promise because they have promised 3 per cent real growth in defence spending a year."

Believe that promise, and you'll believe anything. Especially when it comes from a man who, despite claiming to be a fiscal conservative, and before his conversion to spend-a-thons, increased government spending by 13.5% - yes, that much! - in 2008-09.

Peter Costello warms to this theme:

"What I find extraordinary is (that) if there was all this unsustainable spending, why didn't he (Mr Swan) cut it in the last budget? Apparently last year he didn't think this was unsustainable and made no effort in relation to it at all," Mr Costello said.

"He has invented this in response to the fact that he has careered the budget into deficit."

Since handing down last year's budget, Mr Swan had committed to spend another $100 billion on economic stimulus packages and a national broadband network.

"This bloke has added $100billion to spending and then said it was unsustainable to start with."

Alan Wood, in the Oz, detects the same pattern emerging as RuddWatch has noticed, first here:

The Government is making much of the fact that, on the budget forecasts, almost all new spending will be offset in the final year of the forward estimates, 2012-13, putting it on track for a surplus in 2015-16, but it is hard to believe. The Government certainly sent the wrong signal with its decision to increase pensions in an allegedly tough budget intended to demonstrate its long-term fiscal prudence. Whatever the arguments about the adequacy of pensions, this wasn't the time to put them up.

I don't know what Treasury said to the Prime Minister and Treasurer about pensions in their pre-budget discussions, but I would be willing to bet it didn't support this increase. In fact, I wouldn't be surprised if it warned them that a rise threatened the credibility of their fiscal strategy. Remember, the Government flew a kite about backing off its pension promise in the run-up to the budget.

It rapidly retreated in the face of a hostile response from pensioners. This was politics, not good policy, with Labor safe in the knowledge that on this issue the Opposition was equally irresponsible, so it was free to follow its welfarist instincts...

...[I]n the next couple of years the Rudd Government will need to take much tougher measures to rein in the bloated entitlement spending that is the dark side of the Howard government's legacy than it has shown in this budget, and a much more disciplined and consistent policy approach than we have seen from this Prime Minister.

And then here:

The big threat here has nothing to do with economic growth forecasts. It has everything to do with Rudd's chaotic and unpredictable leadership style and his obsession with political spin. This is a Government that couldn't make the hard spending decisions in its first budget, has managed only a half-hearted effort in its second and is unlikely to do much in its third, an election budget.

It hardly inspires confidence it will turn into a strict fiscal disciplinarian if it wins a second term.

Paul Kelly links this clear and present problem to St Kevin's refusing to say the 'B' word:

This Government's communications problem can be summarised in one question: does anybody believe that a Prime Minister and Treasurer too frightened to announce the deficit and debt numbers on television have the fortitude to wage a six-year-long campaign that keeps growth in government spending to below 2 per cent in real terms to achieve a budget surplus by 2015-16?

The answer is obvious. This is Kevin Rudd and Wayne Swan's real problem. Keen to promote themselves as decisive leaders during an economic crisis, this week they looked scared, silly and subservient to political spin. Until sanity prevailed at week's end, Australia had a Prime Minister and Treasurer who refused to answer questions about their core budget numbers with the directness of a primary school student. Their instinct was to avoid putting the words "dollars" and "billions" around the $57.6 billion deficit or projected $188 billion net debt.

This is the point where political spin lost touch with reality. It offers the insight that there are Rudd government tacticians who actually believe this is smart politics. It means, you see, Rudd and Swan weren't delivering a damaging media grab to be recycled. But it also sent another message: that the Rudd Government cannot look Australians in the eye and speak the truth.

What is extraordinary is that this tactic continued into a second week after criticism of Swan for omitting the deficit figure from his budget speech. The evasions this week left the impression of a Government desperate to hide something. The effect was only to reinforce attention on the size of the deficit and debt. The tactic reeks of the corrupted culture of NSW Labor, where spin is used endlessly to try to conceal the economic mire into which Australia's largest state has sunk. This mentality seems embedded in the Rudd Government's culture and it is a potentially terminal disease.

Rudd and Swan are better than this and they need to rise above it: this should become a test of their political character. They don't seem to comprehend the doubts fermenting about their Government in boardrooms across the nation (despite deep gratitude for the fiscal stimulus) and that this behaviour only further undermined their credentials.

And, lastly, we'll finish with a dose of reality, as the scales fall from middle Australia's eyes, and they see St Kevin's hypocrisy for what it is:

Even Kevin Rudd felt compelled to wade in on the matter by calling on all sporting clubs to give women more respect and giving his tacit agreement to the Nine Network's sacking of Matthew Johns.

At the same time there are many in the sporting world who believe that Johns was unfairly treated and who believe the Prime Minister should have stuck to commenting on his budget rather than the morality of larrikin footballers.

This newspaper's House Rules blog echoed the thoughts of many on Rudd's eagerness to put his own moral views on the situation. One blog commentator, "Skipper", wrote: "So the man who reduced a female RAAF member to tears and failed to apologise and made a drunken visit to a strip club is telling others to show respect to women. Curious!"

More to the point was "Oracle", who said: "No law was broken. This is purely a moral issue and if Johns can be sacked based on moral values can we sack Rudd for visiting strip clubs?"

Hear hear!

Have a great weekend.

'300': absolutely the stupidest most pathetic performance I have ever seen in my life

2009-05-22T21:39:00.010Z

"But I don't know if I've ever seen anything so awfully, skin-crawlingly, knuckle-bitingly embarrassing as the Prime Minister and Treasurer this week, struggling to avoid voicing the exact dollar figure of Australia's expected degree of public debt in years to come."

That's Annabel Crabb, in the SMH, summing up how a lot of people felt about the performance of St Kevin and Brother Wayne in the wake of the Budget.

I must admit, it made my head spin.

"Embarrassing for us, the audience, who slowly and incredulously come to realise that they are doing this because they actually think we're dumb enough not to pick it up."

Yes, they actually believe that too. They think that no-one will notice.

I don't feel that I can blame Brother Wayne for this. Just as with his avoidance of the words 'deficit' and 'recession', I suspect the orders came from the PM's office.

What it represents is a failure of leadership. What has happened is that somewhere, St Kevin has been advised, or has come to believe, that if you don't say it, then the public won't notice it, because they are so gullible. It is an extraordinarily arrogant approach, one entirely in keeping with his Gaullism. But he doesn't have the wit and the judgment and the modesty to realise that people aren't stupid, and that treating them as sheep would in the end only cause him to look utterly ridiculous.

But really, can we blame St Kevin entirely? Think about it this way:

When he came out with complete and utter rubbish in his Letters to the Philistines, published in The Monthly, his errors and misjudgements were ignored by the press and the populace.

When he said 'I'm an economic conservative', the press and public didn't question him on it, they simply took him at his word.

When it came out that he had entirely made up the story about his family's eviction at the hands of Aubrey Low, the public didn't punish him.

When it came out that he hadn't been entirely truthful about his relationship and dealings with Brian Burke, the press let him off the hook entirely, and his popularity was unaffected.

When it was revealed that he'd gotten blind drunk in a strip club in the US, his weak as water explanation that he 'couldn't remember anything because I was too drunk' was accepted unquestioningly by the press gallery, and his popularity actually increased. People just gave him a free pass.

When he played games like 'avoid the R and D words', the press just chuckled knowingly, and again gave him the free pass.

When it was revealed that he had reduced a lady flight attendant to tears with his outrageous behaviour, there was hardly a peep in the media, including from all the self-appointed cultural dieticians and so-called feminists.

And now he's tried to get away with easily his greatest ever fraud: inflicting an appalling budget, full of increased spending and buggerall by way of expenditure restraint (that's going to come later, apparently), and backed up by forecasts that are nothing less than seriously dodgy, and the press gallery again gives him a free pass - although the population appears to have wised up somewhat.

Now with that track record, wouldn't you think it reasonable that Rudd, who already starts with an inflated opinion of himself, would hold the public in such contempt as to think that he could get away with simply using the number '300' to explain the budget deficit? It's a reasonable assumption for a person such as Rudd, I would have thought.

So we shouldn't be surprised with this week's antics. It's exactly the sort of thing that the Australian people, and especially the clowns in the media, have not only been turning a blind eye to it, but have rewarded him with sky-high approval ratings and even the keys to the Lodge.

* * * * *

The reason why I set up this blog is because, from the start, from the first Sermon to the Philistines, I could see that Rudd was a phoney and a fraud. I wanted to make sure that he didn't get away scot-free with his outrageous misrepresentations, and I wanted the public to know just what sort of man he was, and still is.

I haven't been very successful in this. I am very fond of all my audience, but there aren't many of you. And I certainly haven't had an impact on the political landscape, let alone St Kevin himself. But everything I have said is all here, all my judgements of St Kevin's behaviour, in public, for all to see and judge. Have a look at all the entries in the 'Rudd Rubbish' category.

And, finally, it looks as though St Kevin, with his '300' stunt, has finally jumped the shark. The public gave him plenty of rope, and he has now hanged himself with it. His credibility has taken a tremendous blow in the last couple of weeks.

RuddWatch is actually quite fond of 'Dirty Harry' quotes. One, which my father was quite fond of, and ingrained in me, was his signing off line in Magnum Force: 'A man's got to know his limitations'. St Kevin has no idea of his 'limitations'.

Expect more tantrums.

* * * * *

I didn't feel a need to set up such a blog about Kim Beazley, or Simon Crean. Those two men were entirely decent, and entirely sincere. The 'spin' that they employed was, to my mind, of a more innocent kind, a way of focussing public discussion and capturing people's attention, rather than concealing what ought to be known to the public and manipulating opinion. And there was nothing questionable about them personally. They had a full grasp on reality, even if their judgement was occasionally awry.

Nor was there a need to do so when Mark Latham was Labor leader. From the very first press conference, when he acted out people climbing the so called 'ladder of opportunity', it was clear that. like Paul Keating, this bloke wouldn't last, and that the public would need no assistance in seeing through him. My judgement, as it turned out, was correct.

But it was different with Rudd. I judged that this bloke was not 'on the level', that he had no compunction about saying whatever it was he had to say in order to win that day's headline, no matter the truthfulness or otherwise of his claims. And that this was dangerous for Australia, because, as the public's flirtation with Latham showed, they wanted something different from Howard, and Rudd had timed his run perfectly.

This year's awful budget, and the more awful ones to come in the next few years, have borne out my concerns.

* * * * *

I want to leave you with a contrast, to demonstrate clearly just how far our public leadership has fallen.

Here are some extracts from a speech which BHP Chairman Don Argus gave this week in Brisbane. I strongly recommend that you read the speech.

There have been some unorthodox government and regulator responses to the report and some progress in stabilising financial markets.These measures have not yet restored confidence. Nor have they arrested the negative relationship between weakening national economic activity and intense business financial strain – particularly in the United States, the United Kingdom and Europe.

The IMF report and others make it easy to conclude that the road to economic recovery will be slow. Hence – my cautious response to recent political rhetoric. There is also enough evidence to show that recessions that follow a financial crisis are usually severe. This time we are living through a global recession that coincides with a financial crisis that emanates from developed economies that were once powerhouses of the world economy, particularly the United States. I believe the evidence suggests this is a recipe for a long global recession and a protracted recovery.

I believe a real concern in troubled economic times, is that anxiety about the economy will encourage protectionist, paternalistic policies by some governments. There is already some evidence of that. I have no problem with governments developing strategies and standards that encourage business initiatives and behaviour that is the interest of shareholders and community alike. It becomes a question of balance. Economic recovery will not come from sustained government intervention in business and direct management of financial services and credit creation. It will come from the correct balance of comprehensive and carefully applied regulation to independent businesses working to well conceived, transparent and efficiently executed strategies.

The 17 years of continuous economic growth we had prior to the current downturn was largely fuelled by mining developments and exports. To underpin future growth, it has been estimated that Australia will need to finance A$210 billion of large-scale long term capital projects over the next five years. It will also need to refinance up to A$108 billion of debt in the next two years. The weakened condition of global capital markets makes that challenging.

This is leadership. This is clear eyed analysis. This is an honest facing of difficult facts. This is respect for the intellectual and moral capacity of one's audience.

Now, here is an extract from St Kevin's appearance on Lateline:

TONY JONES: OK. Let's move on. What's the peak figure of the projected public debt in terms of tens or hundreds of billions of dollars in the coming years? What's the peak figure?

KEVIN RUDD: Well, these are clearly outlined in the Budget papers and they're usually expressed in terms of a percentage of GDP. We peak, in around about 2013, at about 13.8 per cent of GDP.

TONY JONES: How much of that is in tens of billions or hundreds of billions of dollars; how much is that?

KEVIN RUDD: Well, let me step back in terms of the elements of this. First of all, 70 per cent of our overall position here is determined by a $214-billion collapse in tax revenue. That's one slice of it.

TONY JONES: OK. I understand - we understand that. So what is the figure of peak debt in hundreds of billions of dollars? What is the actual figure?

KEVIN RUDD: Well, Tony, I'm about to come to that when I go to constituent parts. About $214-billion comes from a collapse in tax revenue and that is happening right across all the advanced economies across the world. That's about two thirds of it. Then you go to the remaining third of it, which is made up of what we're investing in infrastructure and other forms of temporary stimulus. And of that remaining one third of our total borrowings, the largest proportion is made up through infrastructure investment and the smallest proportion is made up through other forms of temporary stimulus. Put that altogether...

TONY JONES: But all I'm asking for is one figure.

KEVIN RUDD: Well, I'm about to come to that, Tony. I'm taking you to the constituent parts. Put all that together and you'll see clearly outlined in the Budge papers, that we're aiming to a gross figure of 13.8, which comes out at about $300-billion). The Liberals have said about $275-billion and then they've failed to nominate or to support $22-billion of savings in the Budget, which makes our positions virtually identical. That's the point I was making.

TONY JONES: That figure is $300-billion, is that right?

KEVIN RUDD: As I said before, 13.8 per cent of GDP as described accurately in the Budget papers. There's nothing new about that.

TONY JONES: Is there a political spin rule which says the Prime Minister must not say that figure? Because it seems very hard to get you to say $300-billion.

KEVIN RUDD: Well, Tony, there seems to be a political spin rule on your part to go back to this time and time again. The Treasurer made this absolutely plain in the Budget papers. I said before the figure was $300 (billion) as the Liberals' was $275 (billion). Add $22-billion of non supportive savings, they come to a similar figure. The key thing, though, is this - let me just add this point. This comes to some 13.8 per cent of GDP by the time it reaches its peak at around by 2313, 2014, and then comes down to something like 3 per cent of GDP across the decade.

The point I wish to make is this: this is the lowest net debt of any of the major advanced economies. Secondly, it is lower by the factor of seven, that is it is seven times lower than the average net debt of the major advanced economies. And finally, Standard And Poor's international ratings agency, when they evaluated our budget, not only reaffirmed the Government's triple-A rating, credit rating for Australian sovereign debt, but on top of that, indicated in its statement that Australia's public finances were in sound working order. This needs to be put into absolute context, therefore, against the dishonest debt and deficit fear campaign being mounted by the Liberals.

This is not leadership. This is disrespect and contempt for the intellectual and moral capacity of one's audience. This is dodging of difficult facts. This is evidence of being divorced from reality. This is an ego out of control. This is irresponsible. This is pathetic.

Budget: St Kevin channels St Gough

2009-05-17T02:51:00.002Z

Stephen Kirchner says it better than I could: St Kevin, that so called 'economic conservative', has morphed into Gough Whitlam:

THE 2009 budget forecasts the biggest expansion in federal government spending since Gough Whitlam. While the budget deficit is being sold as a necessary response to the worst global economic downturn since the Depression, government spending will hinder growth long after Australia's recession is over.

The Government has made much of the reduction in revenue flowing from the global downturn and the resulting domestic recession. But this is only one side of the budget deficit equation. The unprecedented deterioration in the budget balance is also driven by the biggest increase in government spending in a generation.

The federal government spending share of gross domestic product will increase by 2.6 percentage points this financial year, with a further increase of two percentage points forecast for next financial year, the biggest increases since the early 1970s. Government spending will reach 28.6per cent of GDP in 2009-10, a figure unprecedented in peacetime.

It is appropriate that the Government should allow the automatic stabilisers to work in response to an economic downturn.

However, the deterioration in the budget balance has been made worse by discretionary fiscal stimulus packages of doubtful effectiveness.

There is little reason to believe that these discretionary policy decisions have been effective in supporting economic growth. Even Treasury concedes "it is not possible to measure precisely the actual impact of the economic security strategy".

It should be recalled that Australia also has seen an unprecedented easing in monetary policy, which has made a much more timely and significant contribution to supporting economic growth than the stimulus packages.

Monetary policy can be tightened again when recovery begins, but the legacy of the Government's fiscal stimulus packages will be with us for much longer.

While the Government talks up the short-term stimulus effects of government spending, it neglects to mention the crowding out of private investment by government borrowing that will occur long after the recession is over.

In the US, the Congressional Budget Office has recognised that these crowding-out effects will see fiscal stimulus measures subtract from economic growth in the long run.

Most of the effect of the Government's infrastructure spending will not be seen until the recovery is well under way. Even then, the economic benefits of some of these projects may turn out to be less than the opportunity cost of the resources they consume, leaving Australians worse off.

The danger is that the Government's fiscal stimulus measures simply divert resources from one sector of the economy to another, rather than bringing unemployed labour and capital back into employment.

The Government says it will keep real growth in government spending capped at 2 per cent a year in the future, but no government in recent history has shown this degree of expenditure restraint.

Real growth in spending averaged 4per cent between 1971-72 and 2007-08, which excludes the Government's recent stimulus packages. [RuddWatch: note that St Kevin hasn't said exactly how he is going to achieve this restraint in spending - my bet is that he doesn't know and that, like everything else he does, the claim is purely for placating current concerns over his credit card binge]

Government spending has increased 13.5per cent this financial year, an increase unprecedented since the Whitlam era, and it will increase by a further 3.9 per cent in 2009-10.

There is a large body of literature demonstrating that the size of government matters for long-run economic growth. Economist Gerald Scully estimated the optimal tax share of GDP for all levels of government in the US at 23 per cent. Above that level, the size of government begins to subtract from, rather than contribute to, economic growth. The welfare costs of big government are enormous. Scully estimated the US had lost $4 of national income for every $1 in tax beyond the optimal level of taxation.

The Australian economy is structurally similar to that of the US, so it would seem unlikely that our optimal tax share is significantly larger than that of the US. The tax share of GDP for all levels of government in Australia is already 30.8 per cent.

The Government is forecasting a return to surplus in the medium term, but these forecasts are well and truly overshadowed by the elephant in the room: the huge long-term fiscal deficits projected in the previous government's 2007 intergenerational report. That report projected net debt to rise to 30 per cent of GDP by 2046-47, with further increases expected beyond the Treasury's 40-year projection period. Treasury indicated that the expected path for net debt was unsustainable in the absence of key policy changes.

The government spending share of GDP was expected to rise by 4.75per cent during the same period.

The next intergenerational report, prepared by the Rudd Government, will proceed from a worse starting point. Although this will be offset to some extent by saving measures announced in the budget, it is likely the report will again show that the federal Government's finances are not on a sustainable long-term footing in the absence of significant policy changes.

The projected fiscal gap and the associated growth in government spending points to unsustainable growth in commonwealth debt. This situation can be resolved only through some combination of higher taxes or reduced spending.

Most Australians would not want to go down the higher tax route. Yet neither side of politics has shown much appetite for the required expenditure reforms. The unsettling conclusion is that Australia is on the path to a permanent expansion in the size of government that will lower living standards for future generations.

Off-topic: Stuart Littlemore, the original 'Watcher'

2009-05-17T01:26:00.006Z

This is a rather tangential posting, but I think this is important and I want to have my say. And I can't do so anywhere else.

Quadrant, through a link to Australian Conservative, has noticed that the ABC's retrospective of its Media Watch program failed to include footage of the now classic Lateline interview on 11 November, 1997, in which then Media Watch host Stuart Littlemore appears with US journalist Steve Brill, Jennifer Byrne in the compere's seat, and a rather dishy Pilita Clark.

Littlemore has been criticised for being pompous and arrogant, and his appearance here was heralded as his downfall.

But I invite you to watch the clip without prejudice, and listen to what Littlemore says. For mine, the only misdemeanour I can accuse him of is to have lost his temper.

At the beginning of the clip, you can see that Littlemore wants to be constructive, and responds to provocation by pointing out the shortcomings in his interlocutors' thinking. I actually find him quite reasonable: even when asked whether he or his staff have made any mistakes, he doesn't say 'no we haven't', but rather 'none that I am aware of, and none have been brought to our attention'.

Littlemore's critics leapt onto his assertion towards the end of the program, that he worked for free. In fact, Littlemore did receive a salary. But I would invite you to compare the salary that he received for his Media Watch work, which was likely to be rather small, to how much he could have earned by devoting his Media Watch time to his barrister's practice - as a QC, he would have been entitled to many, many times more the money per hour that he earned on Media Watch. Stuart, you weren't working at the ABC for free - it was actually costing you money! But this just emphasises the fact that money was not Littlemore's motivation - he genuinely wanted to raise standards in the media.

Around a month after this episode, and after Littlemore had announced that he was going to retire from the show, I was working in a summer job as a 'gopher' in a barristers' chambers in Sydney. Littlemore's chambers were in the same building, on another floor. I once caught a lift down to the ground floor with him. He was very tall and stood with a stoop - actually I was surprised how old he appeared. I wanted to say 'Mr Littlemore, thankyou for your show', but being a nervous young man, and possibly intimidated by his character, I stayed stumm.

So, let me now say: Mr Littlemore, thanks for the show. I appreciate what you were trying to do. You inspired this blog. I can only hope that I have the same positive impact on someone 'out there' that you had on me.

And I'll try not to lose my temper :-)

Il n'est pas 'un homme serieux'

2009-05-16T23:59:00.002Z

This year's budget has been a revelation.

That our Prime Minister is not a serious person.

If ever there was a budget in which tough decisions had to be made, and could most easily be made, this was it. Ours is a nation heavily dependent on foreign savings, and last year's financial crisis has caused the people who own those savings to re-think how they allocate them - and especially their allocations to profligate societies.

At the same time, the budget is scheduled to go heavily into deficit for the foreseeable future. Forget Treasury's forecasts of a strong rebound after two years of very weak economic performance. We are entering a period of debt deflation, similar to that experienced by Japan after its financial bubble burst in the early nineties, and economies don't grow very quickly during these times - the only thing that grows robustly in this environment is government debt. And if you believe St Kevin's promise to limit real government expenditure growth to 2% per year for the next X years - well, there's a nice bridge in Sydney I'd like to sell you.

The government has taken no tough decisions, that I can see. Even the increase in the age at which people become eligible for the pension is to occur over a 15 year period! St Kevin and Brother Wayne will (hopefully) be long gone by then.

The government appears to have framed the budget free from any understanding of the reality of economic and financial conditions facing Australia, and the world. I cannot emphasis enough to you how grim the outlook is. The sizes of economies of the US, Europe, Japan and the UK have likely shrunk by 10% in the last six months. Ten per cent! It's almost unbelievable. On top of that, you have the loss of wealth from the deterioration of housing markets around the world, and the collapse of stock markets. The world is a lot poorer than it was. Finally, after the disgraceful and inept behaviour of the financial classes, the savings-heavy countries no longer trust the savings-short countries with their money. In short, money is about to become very hard to come by, for a country as profligate as Australia. The only thing sustaining our national income at the moment is the fact that the contracts governing prices for our resources exports are yet to expire. But they will.

In the face of this, the government has continued increasing spending, made a few cuts here and there, more out of political considerations than consideration for the efficiency of the economy, made hardly any new savings, and decided to place the difference on the national credit card. Moreover, it has told us that it expects everything to be fine in the future.

St Kevin, Brother Wayne, Sister Julia with her fantasies about re-regulating the workforce, even gorgeous Penny with her ideas of 'carbon pollution' - none of them are taking their jobs or the world seriously.

Instead, St Kevin places priority on receiving a hot meal on all his flights ('No %$#&**# lamb!') and presenting Taliban observers with a blow-dry while meeting our courageous soldiers behind the front lines in Afghanistan.

RuddWatch's suspicion is that this is an election budget. St Kevin couldn't be too hard in this budget, despite the overwhelming need for tough decisions and facts to be faced, because he intends to call an early election - before the next budget at least.

That would probably be a wise thing to do, because I suspect the next budget is going to be a shocker.

You may have heard of the term Ricardian equivalence. I suggest that you put it into practice by banking what one of RuddWatch's delightful colleagues called her 'Kev Dudd cheque' into your savings account, and leaving it there for a year. You'll need it next year, when Brother Wayne passes the plate around to fill the enormous hole that he and St Kevin have torn in the nation's fiscal fabric.

In any case, Kev's fiscal stimulus plans aren't going according to plan, if this report is to be believed.

But since September, the market has bounced back, creating a huge, unfulfilled demand for the televisions.

"A week before the stimulus package came out, it went absolutely crazy," Mr Kerr said.

Since September shops have been besieged by buyers and retailers are still working through a backlog of orders. "We couldn't get our hands on enough stock," Mr Kerr said.

Plasma screen tellies aren't made in Australia, and imports don't contribute to domestic income and employment. Congratulations - your taxes, earned by the sweat of your brow, just paid for someone else's luxuries!

The boost to the first home owners' grant isn't exactly going to work, either. What it is doing is pulling forward a whole chunk of demand, as guileless newbies rush in to grab the tax cash before the offer expires. This just means that, when the payments do cease, there will be a rather large hole in the home-buying market, down which home prices will fall - just as the recession is getting started. St Kevin's Treasury advisers would have told him this, I suspect - but who listens to the neo-liberals any more??

Thank God for St Kevin, patron saint of social engineering!

More thoughts on Plimer, Manne, and the value of free speech

2009-05-10T00:00:00.005Z

Forgive me for going on about it in a third post, but I have had even more thoughts about Ian Plimer's book, and the reaction of the climate alarmists to it.

Much of our society's greatness has come from the open debating and contestation of ideas. The greater the consequences for society of a particular policy or change in understanding, the more crucial and important has been the debate.

The policy that governments adopt on climate change will have significant consequences for society, and not least for the poorer in our society. Thus it is crucial that we have a good, robust and wide ranging debate.

Yet everywhere, we see the climate alarmists either asking for any debate to be shut down, or refusing to debate the issues, instead 'playing the man'. Robert Manne's attack on Plimer makes both mistakes. A review of Plimer's book appearing in the Review section of yesterday's Oz makes the second mistake.

The great Sir Arvi Parbo put it best, in his speech at the launch of Plimer's book in Melbourne on Wednesday: '

"The extraordinary feature of the so-called debate on global warming so far has been that there has been no debate.

“The proponents have virtually ignored the arguments of their critics.

“Instead of debating the issues, there have been open attempts, including, unbelievably, from some otherwise respected scientific institutions, to intimidate the sceptics into silence, accompanied by the extraordinary claim that the science is settled.

“The whole climate change issue has become heavily politicised.

“One would think that if there is evidence that the critics are wrong, the proponents of human-caused global warming would be only too keen to present it.

“If they don’t do so and, instead, try to silence and, sometimes, vilify the critics, doesn’t this suggest that there is no such evidence?”

Something else occurred to me, while reflecting on Robert Manne's ad hom sliming of Professor Plimer.

One of the questions that occurs to us when people like Manne ask us to take things on the authority of the experts is: 'Which expert?"

Sometimes it's not difficult to know, as the experts are in agreement. But sometimes, learned and reasonable people disagree among themselves. Climate change is one area where this happens.

Manne's argument is that we should accept what the experts are saying about climate change - not on the basis of their arguments, but for the reason that they are, well, experts.

A consequence of this is that, for his argument to succeed, Manne must deny Plimer any legitimacy. Hence, Manne never refers to Plimer's scientific qualifications, his knowledge of geology, or any other thing which might give us a reason to think that Plimer knows what he is talking about. Instead, he is dismissed as a pseudo-sceptic - with the 'pseudo' qualifier serving no other purpose than to cast doubt on his bona fides.

In order to make his 'appeal to authority', Manne must necessarily diminish the authority of those who disagree with him, and that means he must 'play the man'.

This is yet another reason why it is always best to judge arguments based on their inherent quality, rather than on who is making them. Apart from leading us closer to the truth, it is also a lot more civilised.

Postscript: Older readers may remember a time when Manne wasn't so keen on using the 'appeal to authority'. Remember his crusade against economic rationalism, against all the advice of the economists? It would seem that the arguments he uses in favour of his position change, depending on how they sought his worldview.

Budget - focus on the numbers, not the spin

2009-05-09T23:16:00.004Z

I'm afraid to disappoint regular readers this week, but I really don't have much to write about.

The big story is going to be the budget, to be released on Tuesday evening. We're in store for a terrible time. Not only has the economy turned sour on us, but St Kevin de la Grande Tantie has already spent most of the surplus on handouts, not least the increase to the abomination that is the First Home Buyers' Grant.

Soon these handouts will have to stop. We can't just keep handing out billions willy-nilly in a doomed effort to inject buoyancy into asset prices and retail sales. Well, that's what logic would tell us.

The end of the handout culture will also coincide nicely with the other thing which has kept our economy buoyant - high prices for our commodity exports.

So we're going to lose a lot of stimulus, just at the time that we need it. And there won't be anything to replace it because St Kevin, in his wisdom, has already raided the pantry. There's not much left, and we'll have to be borrowing - temporarily, of course - for the next, oh, say, ten years or so.

RuddWatch will be looking closely at the figures for government spending. A comparison with those of the Whitlam years should be instructive. It took us twenty five years to finally overcome the Whitlam legacy. We've had around nine or ten good years - when the economy and the budget have been behaving more or less as they ought to behave. And now, thanks to 'economic conservative but non-extreme capitalism' St Kevin, we're about to go back into the dark ages.

Again, the budget outcome shows in relief the cynicism of the man we have elected to high office. Remember how he used to call himself an economic conservative? He will say anything to get himself out of a hole. Is there anyone out there who still believes anything this man says?

The evidence was on display this week, when St Kevin and heartthrob Penny announced - with serious looking masks donned for the occasion, that the government would have to delay the introduction of the promised emissions trading scheme for a year. This is the emissions trading scheme that was so urgent it couldn't be delayed later than 2010, remember?

The reason given for the delay was the economic crisis. Now the more attentive among you will remember the Treasury's analysis of the scheme, released last year, which essentially said that the scheme would have almost no economic impact. So, if the introduction of the ETS is supposed to be economically neutral, how come world economic conditions necessitate its delay? Somebody's got something wrong somewhere.

Your intuition is correct, dear reader. The ETS will have a substantial effect on the economy. A substantial negative effect. The Treasury analysis was just window dressing to reassure the public - a bit like the ACCC's 'analysis' of the Perth fuelwatch scheme. When Henry Ergas sought background information on Treasury's modelling, it was denied him. Hardly a vote of confidence in the government's assertions.

One thing that really struck me about the changes is that, after all the assertions that a trading scheme would be superior to a carbon tax, St Kevin has changed the rules so that, for the first year of operation, the scheme will actually be a carbon tax - a fixed price with unlimited quantity!

The whole thing suggests that St Kevin and his team really aren't thinking things through very well before opening their mouths.

It's not all bad. I'm hoping that they make it an annual event - complete with this year's 'Greek Tragedy' masks.

Anyway - may you enjoy budget night. In the meantime, I recommend that you read Terry McCrann's columns in the Herald Sun and the Australian. McCrann, for my money, has St Kevin nailed, and is tirelessly ringing the bell on his serial frauds.

Nullius in verba

2009-05-03T00:09:00.006Z

Last Sunday, after having written the piece on Plimer's sold out book, I happened to see a piece in the Weekend Oz by Robert Manne about the very same book.

Manne was complaining that the Oz had shown favourable treatment to a book contesting the orthodoxy on climate change, and that this treatment of books such as Plimer's constitutes a 'grave political, intellectual and moral mistake'.

Now, to me, this just doesn't follow. It might constitute an editorial mistake, even a mistake of market positioning, if you wanted to get the greenies supporting your newspaper. But it is hardly an intellectual mistake to cover the publication of a book on climate change by one of Australia's leading geologists. I can't understand what Manne means by a 'political mistake' - perhaps he means support for the wrong policy, in which case his comment is revealing about Manne. And as for a 'moral mistake' - will the editors of The Australian be damned in eternity for publishing glowing reviews of a geologist's book?

What Manne is really on about is shutting down debate. For him, the matter is decided: human actions are causing dangerous climate change, it is imperative to act now to stop or reverse this, and any argument about whether or not the orthodox science is correct will delay our taking action, to the detriment of humanity. Therefore, newspapers ought not to indulge the sceptics, but should focus on the policy debate.

Now this is a respectable position. You can imagine, if you were in a burning house, losing patience with your friends while they quibbled about the source of the smoke quickly filling the room.

The trouble is that it is not self-evidently obvious that human actions are indeed causing climate change. In fact there are good reasons for thinking that the climate change that we are experiencing is driven wholly by natural processes - Plimer has just written a book about them! More importantly, the choices that we make in response to climate change will have considerable impacts on everyone, but the poor will feel it in the greatest proportion.

This is why it is important to have a debate - we have to know whether we are facing a genuine problem, and if so what to do about it.

Now you would think that, if the science really were decided, then it would be simple to demonstrate that Plimer is mistaken. This would be the rational thing to do - the debate would quickly die, and we could move onto working out the best policy response.

So it makes me more than a bit suspicious when responses to books like Plimer's are not of the 'he's wrong, and here's why' type, but of the 'he's unworthy and he ought to be shut out of the public space'. The first thing I think is: what are these people so worried about, that they have to resort to ad hominem arguments?

Manne's piece glistens with ad hom slime. Plimer's writing is 'zealotry'. There are doubts about his 'capacity for fair-mindedness'. The book is 'self-evidently extreme' (really? Apparently questioning the orthodoxy is enough to make one an extremist). He is a 'typical member' of the sceptics camp (what could this mean, to be a typical member?). He is a 'pseudo sceptic' (that's right, he's not a scientist, not even a genuine sceptic, but a pseudo sceptic, whatever that means).

Manne then goes on to say that, with thousands of scientists agreed on anthropocentric global warming, and only a few 'pseudo sceptics' - many of whom are funded by the fossil-fuel lobby - disagreeing, then it is only rational to agree with the consensus of scientists, dismiss the ravings of the pseuds, and move on to the debate about policy.

And because laypeople, such as Manne, the editors of the Oz, and you and I, aren't trained in climate science, then we really ought to just sit back and accept what the scientists are telling us.

This is utterly ridiculous.

We spend billions each year educating ourselves. We do so, in order to be worthy of our democratic inheritance. And some of the skills that we learn are to be sceptical, to think logically, and to weigh and question evidence.

Now from the year dot, as far back as I can remember, I have been told, by worthies in the newspapers, on the telly and the radio, that climate change has been caused by humans and is a real existential problem. Year after year the same evidence has been trotted out. And whenever anyone has got up to say, 'hang on a minute, I don't think that's right', they have been dismissed as self evidently wrong, self evidently extreme, or a 'denialist'.

As far as I can tell, there has never been a proper debate about humanity's role in climate change. The closest that we came was a live debate after the ABC filmed 'The Great Global Warming Swindle', but because time was limited and the atmosphere so tense, it shed much heat but little light.

What I want to know is: what do the scientists agree on? Once we know that, then we can work out where the differences are, and decide from there.

But we're twenty years into this anthropocentric global warming issue, and we've never had a debate between the believers and the sceptics, and we don't know what their common ground is. And Manne, with his calls for passivity, is just perpetuating this unsatisfactory state of affairs.

What we should be doing - what we should have done twenty years ago - is ask hard questions of the scientists propagating the 'global warming' hypothesis. This is what Plimer's book is doing. As such, it is to be applauded and promoted. And this is what the Oz was doing - promoting debate about climate change.

Deliciously, Manne gives his game away about halfway through his piece:

This dilemma is relatively easy to resolve. In regard to the science of climate change, as Clive Hamilton has put it, the only decision citizens have to make is not what to believe but who.

Regular RuddWatch readers should by now hear the alarm bells ringing. If The Unspeakable's name appears favourably, in any context, then it's usually a sign that a poor argument is just around the corner. And our alarm doesn't let us down. What Manne is using is the old 'appeal to authority' - these people are trained to know about this sort of thing, therefore we should trust them implicitly. From that, he assumes that you can judge the value of a person's ideas not by the strength of the argument but by who they agree with. The problem comes with choosing one's authority - who are we to trust? The answer is not to take anyone's word, but to examine their arguments, and support the strongest and most reasonable one.

This is all you need to know about Manne. It's all about having the right opinions. And anyone who doesn't have the right opinions is simply a numbskull, a 'pseud', an interested party, who ought not to have access to the public space. You see, there is no need for a debate - everyone just has to agree with the opinions of the experts that Robert Manne likes.

The rule of thumb that you can disregard a person's opinion if they look like a nutcase works well most of the time. If you hear a self-confessed neo-Nazi or neo-Socialist talking on the radio, you could deduce quite quickly that there is something very wrong with their thinking, and that anything they have to say is not worth listening to. But the rule can be misapplied. And applying the 'nutcase' rule to a Professor of geology who has written a 500 page book is a mistake which gives rise to biased thinking.

The Unspeakable makes exactly the same mistake.

And John Quiggin is no better.

The causes of climate change are things that reasonable people can disagree about. This is because, contrary to what you have been told, and contrary to what Manne alleges (because someone told him so, presumably - he doesn't have an opinion of his own) the science is not settled. That Ian Plimer can write a 500 page book outlining an alternative case for climate change is evidence that it is not settled. The response to the intellectual challenge posed by sceptics ought to be 'show us what you've got, make your case'. That's why I want so much to read the book - I want to hear what the other fellow has to say.

And I am very suspicious whenever the response to an intellectual challenge is a denial of the substantive issues, ad hom ranting, and calls for debate to be shut down.

Update: Plimer appeared on Radio National's Breakfast program on Friday 24 April to talk about his book. I encourage you to listen to the snippet, but allow me to quote Plimer at the six minute mark:

This is actually an attempt to play the man, rather than deal with the science, and it's actually rather poor journalism in my view, because you need to get in contact with the people. They're not stupid, they don't like getting treated with disdain, they don't like the ABC putting its own line of political purity because these people are helpless and disenfranchised. That's why this book has run off the shelves, because people know that they're being conned by the arrogance of scientists and by various media outlets who are creating hysteria.

In a nutshell.

La Gloire

2009-05-02T22:35:00.007Z

The first thing RuddWatch thought when I read about St Kevin's plans to expand the material available to the armed forces was - 'Thank God, an Australian government is once again taking the military seriously.'

The package is not entirely good news. The army - the poor bloody infantry, on whom we rely so strongly for defence, for our expeditionary forces and for our middle-power diplomacy ('The Americans want some help - send a brigade of special forces') - is to be left at a strength of eight brigades, which is clearly insufficient for maintaining anything more than a token force in the field. And the army's equipment doesn't appear to have been upgraded. Currently, Dutch regular infantry are as well equipped as our special forces, who are in turn much better equipped than our regular infantry. There is much to be done here.

But the overall approach is one that indicates that the government has recognised that the military has not been equipped to do the job asked of it, that the Asia-Pacific region is experiencing a flux which will intensify in the medium-term, and that if Australia is to have a say about how the region is shaped it must have the military capability to be taken seriously by other countries.

So, in sum, we welcome the expansion.

The problem comes with paying for the program. The current estimate is for spending of about $300 billion over 30 years, or $10 billion each year. This is quite a sizable sum. However, St Kevin hasn't given us a plan as to how he will pay for this spending. Will we face higher taxes? Or will expenditure be diverted from other programs - like grocery watch, perhaps? - to fund the acquisitions?

These are not trivial questions. It's not for lack of trying that previous governments couldn't fund our defence forces adequately. The iron laws of democratic politics dictated that revenue be allocated to more pressing popular concerns, like, um, baby bonuses, and the Fishing Hall of Fame. St Kevin is asking us to take on trust that his government, and a number of future governments, will be immune to these pressures.

You've probably noticed that the budget is under considerable pressure at the moment. The 'magic pudding' years are over for a decade, and Brother Wayne is going to have to beg, borrow and steal revenue from everywhere simply to keep future deficits from blowing out beyond $50 billion - or around 5% of GDP. On top of this, he is being asked to find the money for the defence force expansion and the broadband rollout. At the same time, you can imagine that portfolio ministers will want to spend up in order to bolster their popularity during the economic downturn. Something will have to give here. Unless St Kevin can produce a plan for funding his commitments, then my money's on the defence forces losing out again.

However, the unveiling of the plan caused a few connections to come together in RuddWatch's head. Suddenly, I had a realisation about the true nature of St Kevin.

Let's put a few things together:

1. He has a visceral disdain for anglo-saxon market capitalism, and a strong preference for state-directed, corporatist-type capitalism. This has been made apparent in his essays for The Monthly, his comments in Parliament and at St Paul's Cathedral, his misplaced concern that 'we don't make anything anymore' (memo to Kevin: we do), and also in his willingness to push market forces aside and 'muck in' with industry. He sees the incentives provided by the market as producing many 'second best' outcomes, he thinks he and an army of bureaucrats can do better, and he believes doing so is in the national interest.

2. One consequence of this misunderstanding of, and disdain for, basic economic and social laws is that he is in favour of government spending per se. He betrays no hint that there are limits to this spending, or that it could have harmful effects on the rest of the economy if taken too far. If St Kevin sees a problem, his preferred solution is to throw money at it. Worryingly, this appears to be an impulsive response - there is no cost-benefit analysis, no accounting, no planning. St Kevin has recently taken two decisions to increase spending massively - on broadband and on the military - without having thought through - and I mean seriously considered, beyond just saying 'the private sector will join in, or we'll use general revenue' - how he is going to finance them.

3. Another consequence of this misunderstanding-disdain is overconfidence in the ability of top-down regulation to solve social problems. Sister Julia's proposed changes to industrial relations and wage-setting laws seek to solve the problem of underpayment of workers, but fail to account for the costs associated with doing so in this manner - higher unemployment, slower productivity, and lower economic growth. Not to mention the increase in misery and dissatisfaction among the community which inevitably follows the creation or strengthening of a two-tiered insider-outsider society, with the outsiders losing out considerably. Apparently the solution for unemployed teenagers - of whom there are about to be many more, thanks to a combination of bad financial and economic policy in America and Sister Julia's moral crusade against what she considers poor pay and conditions - is some sort of 'boot camp' arrangement. It might be full of colour and movement, but it will do little to give vulnerable teenagers access to the labour market.

4. A third consequence of the misunderstanding-disdain is pandering to special interests, who are thought to be, of themselves, important for the national interest. Hence we get St Kevin's support for the car industry (memo to Kevin - they are all foreign-owned, their profits, largely consisting of taxpayer handouts, go offshore). This is despite the fact that no-one outside the government, the department of industry and the car industry itself thinks this (have a look at the traffic next time - see all those imported cars that people have bought?)

5. St Kevin also has a strong belief in muscular diplomacy, and Australia's need to be counted as a military power in the region. This sets him apart from many of the prime ministers that we have had.

6. Lastly, there is a tremendous arrogance and lack of consideration for others, be they his own staff, the public service more broadly, or even a humble Air Force hostie. At all times, the most important thing in the world is St Kevin, and the universe in his immediate vicinity must bend to his will or he will regress into a two year old and unleash an almighty tanty.

Now, put all six points together. Does this remind you of anyone, or anything?

Yes, that's right dear reader. St Kevin's true political orientation is French. Or rather, Gaullist. S. Kevin est un Gaullist.

Now, I invite you to spend some time considering the social problems besetting France - the mediocre economy, the insider-outsider labour market, the high unemployment, the massive strikes in defence of ridiculous privileges, the tax evasion and black marketeering, national insolvency from debt accumulated to buy off the masses with an unaffordable welfare state and to pay for ridiculous 'projets d'importance nationale', the unbelievable crime levels, the lack of trust and feeling that one is being ripped off all the time so that one might as well rip off all others. Then add the appalling art and architecture of modern France, Citroen cars, Jean-Paul Satre, unfathomable movies where everyone is moody and desperate, the graffiti and vomit on the Metro, the dog poo on the footpaths.

Quel horreur! A bas les Gaullists!

Kevin Rudd - the people smugglers' marketing tool

2009-04-26T03:15:00.002Z

From The Australian:

Indonesia experienced an increase in the number of suspected refugees transiting through its borders at the same time Australia was softening its border protection policies.

Indonesia's ambassador to Australia, Primo Alui Joelianto, said Indonesian-based people-smugglers had exploited changes to Australian law as a way of drumming up business.

... I think maybe the traffickers use this as a trial to organise more of flowing of the refugees, because they get the money for that," Mr Joelianto said.

"So maybe they use this new policy, but I don't know exactly."

Mr Joelianto's assessment echoed that of Immigration Minister Chris Evans, who said the smugglers had used changes to Australian law as a "marketing tool".

Economic SOS

2009-04-26T02:19:00.005Z

'Just now, Kevin Rudd is throwing money around like confetti at an up-market wedding'.

That's the verdict of Henry Thornton, writing in the Australian on Tuesday last. Henry's article was mainly concerned with finding words for his disbelief at St Kevin's grand gesture of spending up to $43 billion - billion, I still can't believe it - on a communications network that will not make money under the most optimistic forecasts, and likely will be almost completely redundant by the time it is finished.

Add to this jaw dropping amount all the other expenditure on stimulus packages, and soon you're beginning to talk real money.

$300 billion, in fact.

Here is the other Henry, Henry Ergas:

Rudd's errors are not merely the odd concession to economic folly, they go to the core of our economic prospects.

How can one justify reducing labour market flexibility when it will determine whether millions of Australians are condemned to unemployment? Rudd is fond of quoting Olivier Blanchard, the chief economist of the International Monetary Fund. Only a few years ago, Blanchard found that unfair dismissal laws increased the duration and severity of unemployment, in a result confirmed by a vast empirical literature.

How can one justify an emissions trading scheme that imposes large costs for purely symbolic benefits? Originally, the Government, adopting Churchillian tones, portrayed those costs as the white man's burden. That wore thin, not least because Rudd and Penny Wong look less like heroes than like dentists who might convince us to sit in the chair, but not to seek certain death on the barricades. Predictably, the replacement rhetoric was that the scheme wouldn't hurt a bit. Now the scheme's defenders are reduced to saying it could be worse.

How on earth, in a world short of capital, is a savings-short nation going to afford this? Especially as borrowing of this magnitude will place pressure on our credit rating, at the same time as we will have to raise the interest rates that we offer to investors in order to attract them to our debt?

Don't ask St Kevin. The man lives in a fantasy land where the economic rules don't apply.

From the start, when St Kevin gave his sermon on Friedrich Hayek to the gentiles at the Centre of Independent Studies, back when he was just the shadow foreign minister, it was clear that economic truths and laws were not something about which he was very concerned. During the election campaign, and for the first year of his premiership, he had to hide behind the veil of being an 'economic conservative' (whatever that is) in order not to scare the horses. But with his Letter to the Philistines that he penned for The Monthly, the mask has come off, and St Kevin has revealed himself as being someone who holds economics and economic tenets in disdain, who believes that there is a crucial role for government and government spending in shaping society, and who isn't one to think too deeply about the causes of economic phenomena and the consequences of his actions.

I hope you realise what has happened here. For the first time in 25 years, since the ascendency of Bob Hawke, we have a Prime Minister who holds sound economic policy in disdain, who can see little downside in large-scale government spending, who can't see any problem with imposing serious costs on business via the ETS and tighter unfair dismissal laws - even to the point of disdaining cost-benefit analyses - and who is going to act on his commitments.

This is, genuinely, a recipe for economic stagnation and decline.

You think I'm wrong? Consider what happens when a drunken sailor gets control of a country's Treasury benches.

Then also consider an alternative way of dealing with crisis. One which pays respect to the laws of economics, and the need for debtor nations to maintain their credit in the eyes of their creditors.

Then please spend some time with Henry Ergas.

By the way, Rudd's reforms to industrial relations aren't just having an effect on employment. The thugs in the union movement are also back, with their tails up, to make life miserable for the rest of us:

... by chance today, I had lunch at the Melbourne Press Club with the Victorian Police Commissioner Simon Overland.

I asked him this question: “How many police have been diverted to the Westgate Bridge inter-union dispute. Are you concerned that one group of unions has hired bikie gangs to intimidate rival union members?”

In his reply Overland agreed that the police had allocated significant resources to the Westgate dispute and he confirmed that bikie groups had been used by some of the unions and he was examining that.

Make sure you read the 'Japanese lessons' story referred to in that piece. Oh by the way, you know the Australian Building and Construction Commission - the body that has done so much to remove criminality from Australia's construction sites?

St Kevin has promised to close it down.

Do you get it yet? He doesn't care.

The sound of pennies dropping

2009-04-25T23:15:00.004Z

RuddWatch admits to enjoying spending time in bookstores. The larger the bookstore, the better.

So I was looking forward yesterday to visiting my favourite store, browsing for an hour or two, and then purchasing a couple of books that I'd had my eyes on for a little while.

One of these books is Heaven and Earth, by Ian Plimer, a professor of mining geology at Adelaide University and noted sceptic, including about human-caused climate change.

You know, the thing that Kevin Rudd thinks is the greatest moral issue of our times. Sort of like, dare we say, a religious thing.

Now already the detractors are writing his book off. Professor Barry Brook, the head of Adelaide University's Research Institute for Climate Change and Sustainability, said that Plimer had used evidence selectively, brought out the old 'he's saying the experts are deluded, self-interested and ideological' argument, says that the book is confusing and finally damns it as being a case study in how not to be objective.

Note well - Brook doesn't note a single flaw in Plimer's argument.

Brook goes on to say:

What Ian doesn’t say is that the vast majority of these authors have considered the totality of evidence on the topic of human-induced global warming and conclude that it is real and a problem. Some researchers have show that the Earth has been hotter before, and that more CO2 has been present in the atmosphere in past ages. Yes, quite — this is an entirely uncontroversial viewpoint. What is relevant now is the rate of climate change, the specific causes, and its impact on modern civilisation that is dependent, for agricultural and societal security, a relatively stable climate. Ian pushes mainstream science far out of context, again and again.

I want you to hold that thought in your head - I'll come back to it.

The querulous pixies at Crikey can only think of the book in terms of the place that they give it on the political spectrum - as if scientific argument can be pigeon-holed into a pre-fab schematic inappropriate even in student politics.

Meanwhile, rank stupidity appears to have broken out like an infectious virus among the political classes. Not only do we have St Kevin and gorgeous Penny Wong bleating about climate pollution (George Orwell, come back, we need you more than ever), and not only do we have poor misguided fools attacking coal trains (can you believe it) in their youthful exuberance, but we now have this:

The Administrator is proposing to find that the current and projected concentrations of the mix of six key greenhouse gases—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)—in the atmosphere threaten the public health and welfare of current and future generations. This is referred to as the endangerment finding.

This is now beyond a joke. It is moving beyond religion - under which one could condemn 'disbelievers' in order to shun them from polite society - and moving into cultish fanaticism - according to which, those who 'disbelieve' become harmful to the existence of the group, and must be either coerced into giving up their beliefs or else removed from society.

We might laugh at the morons attacking a coal train. But when they realise that no-one really cares, this realisation, and their ongoing belief in the need to halt climate change at all costs, will likely result in more drastic action against people and property. It's just the way of things - Baader-Meinhof and the Red Brigades and Armies being good examples. And the political classes should know better - their words, by fanning the flames of fanaticism, will come back to haunt those less able to defend themselves.

Anyway, what was that Professor Brook was saying a minute ago?

What is relevant now is the rate of climate change, the specific causes, and its impact on modern civilisation that is dependent, for agricultural and societal security, a relatively stable climate.

OK - rate of change, causes, and impacts on a society that needs a relatively stable climate.

Here is what Plimer's book addresses:

Professor Plimer argues that the undergoing climate change is not unprecedented in history and that the temperatures in the 20th Century are not outside the range of natural variability. He rejects the unscientific idea that the explanation of climate change can be reduced to one variable (CO2), the proposition that there is a strong relationship between measured temperature and CO2 emissions, and the almost religious belief that we will stop climate change by reducing CO2 emissions. He rightly assumes that humans will be able to adapt to any future coolings or warmings.

That is: the rate of change is within natural variability; the cause of the variation cannot be solely attributed to carbon dioxide emissions, let alone human carbon dioxide emissions, and that we will be able to adapt to future changes.

There, Professor Brook - does that address your concerns? Can we now have an argument about the science? You know, the argument that RuddWatch, and many others, have been waiting for for many years now?

Don't hold your breath. But in the meantime, read Jan Veizer's take on the science of climate change. Interesting, fresh, scientifically-based, and non-dogmatic.

Oh, and what about my search for the book?

Well, I enjoyed a little browsing at my favourite store, but I couldn't find Plimer's book. So I found its location on the store computer and went to the designated area. Not there! Nothing for it then - I went to the information counter.

'We're all sold out, sorry', said the young woman behind the desk - who sounded as though she'd said the same thing a hundred times before that day.

So I browsed other stores, and found the same thing - all were sold out. The supplier is sold out. Copies of Plimer's book can't be had for love nor money.

As I wandered out of that last bookstore into the street, I thought I could hear the sound of tens of thousands of pennies dropping, as people began to realise what an almighty and disgraceful fraud has been perpetrated upon them.

Reflections on broadband and other bad ideas

2009-04-19T01:08:00.003Z

Paul Kerin exposes beautifully St Kevin's hypocrisy in promoting guidelines for government projects one month, and flouting those guidelines completely when it suits him.

Note also the car-salesman spruiking of investments in the project, and the complete contempt with which St Kevin and Nanny Conroy treat questions about the economic and financial viability of the project. How on earth can they expect to be taken seriously, when they come up with rubbish like this?

Henry Ergas is also worth reading.

This is truly appalling policymaking, but it is well in the tradition of Grocery Watch, Fuel Watch, the recession-panicked spend-a-thons ($52 billion and counting), the car industry handouts, the 'education revolution' computers in schools and re-unionisation of university campuses, and most tragically of all the 'softening' of approach on illegal immigration.

I suspect the mantra that I've been repeating for the last couple of weeks is true - they honestly don't care, about you, about the country, about the unemployed, about the people in the boats. They'll say and do whatever they have to say and do, just to keep the Labor party ship afloat and heading towards election 2010.

How depressing.

Oh please God no, not this problem again

2009-04-18T23:23:00.006Z

RuddWatch reckons there are two ways that you can tell if someone is a better thinker than most people.

One indicator is if they can appreciate the parts of an issue that are unseen, but are crucial to a well-rounded understanding of that issue. For example, when faced with a news bulletin featuring the Prime Minister spruiking the 'Aussie bonds' that will help pay for the national broadband network, a careful thinker will place this spruiking in the context of a world economy where capital has become very scarce, and professional investors aren't going to invest in white elephants dreamed up by a political party with a poor record for delivering good projects. This context then allows our sophisticated thinker to better see things as they are, rather than how the media or St Kevin or whoever else would like us to see them.

Another indicator is if that person is comfortable with the idea and the existence of a paradox, that is, a truth which simply defies intuition. The Christian mysteries of the incarnation and the triumph of the crucifixion ('Life's own champion slain, yet lives to reign') are examples. So is Adam Smith's concept that those who seek to satisfy their own wants are led 'as if by an invisible hand' to promote the good of their community.

The issue of asylum seekers is one which requires careful analysis and good clear thinking, both because the emotion surrounding it can lead people to forget the context in which it is happening, and because the solution to the problem of boatloads of asylum seekers washing up on our shores is paradoxical.

RuddWatch well remembers the madness of 2000 and 2001. Boatloads of Chinese migrants turning up well down the east coast, down near Sydney, startling locals by jumping off their ships and making a dash for local shops - they'd been told in China that Sydney needed people to work at the Olympics. Then there were the increasing numbers of asylum seekers braving the hazards of the northern seas and the harsh Australian wilderness. Then there was the emotion of the Tampa's rescue of a drifting boat, quickly followed by the saved's unforgivable intimidation and threats to the crew that had saved them (they'd paid for a trip to Australia and by God they were going to get one), the government's drawing a line in the sand, and a section of the Australian community going ballistic over what they saw as heartless treatment of a bunch of innocents. And then there was the unforgivable mess of Children Overboard, with only our magnificent navy emerging with any credit.

Then the intellectuals and the literati got on board. David Marr and Marian Wilkinson wrote a one-sided account of the crisis and the subsequent election. Others saying they didn't recognise their country anymore and wanting to emigrate. The Christian Brothers hosting conferences to talk about the heartlessness of the government's policy. Tony Kevin accusing minsters and the military of a conspiracy to commit mass murder after the 'SIEV X' sank. Thousands of people marching to demonstrate their 'compassion' and declare 'shame' on the government. The acres and acres of video and audio reel on the ABC and SBS sanctifying the asylum seekers. Barrister Julian Burnside's wife offering her bedroom to a lucky asylum seeker. Thousands of Australians bitching about how racist, fearful and heartless their compatriots were and how ashamed they were of being Australian - 'but what will the world think??'

What all of these people didn't concede, indeed probably didn't even realise, was that the people arriving on our shores were the lucky ones. They were the ones who had thousands of dollars to pay people smugglers, to bribe customs and immigration agents in end-of-the-world countries. They weren't the luckless buggers who had absolutely nothing, facing rape, starvation and massacre every day of their lives - think of the poor buggers in west Sudan. No, they had a bit of money, they didn't like their situation, they wanted to buy their way to a better place, so they decided on Australia, entered into a conspiracy with ruthless criminals to break the laws of a number of countries, Australia included, forswore requesting asylum in the places that they visited on the way - Pakistan, Kuwait, Indonesia, etc (they probably didn't offer the 'lifestyle' that these 'asylum seekers' wanted), put themselves, their families and the lives of Australian servicemen and women at risk by taking a boat to Christmas Island, purposely destroyed their travel documents, scuttled or otherwise disabled their vessels, and then had the gall to claim asylum.

The only way to stop them coming was to be tough on them. And here is where the paradox arises. Sometimes, you have to impose conditions and penalties on one person or a group of people, which seem harsh and unfair, because if you don't the wider community suffers.

A good example is the Royal Navy's policy of relieving of his command a captain who loses his ship, for whatever reason. Imposing the penalty, regardless of conditions, means that captains spend a hell of a lot of time ensuring that their ships - and so the lives of their men, and the men on other ships - are safe. Another example is the treatment of deserters - if you aren't tough on them, military discipline falls apart.

And so, the Liberal government decided that the best way to prevent people from risking their lives to come to Australia was to make it clear that they had no hope of staying here, and that they would be locked up in detention camps until they decided to go home again.

And it worked. For all the claims of inhumanity and shame, this humanitarian policy worked.

But there was a problem. The non-thinkers - those who cannot appreciate wider context, only being able to comprehend images in front of their eyes, and who also cannot appreciate the paradox that by being tough on illegal immigrants the government was saving the lives of many people and opening places in our immigration program for the luckless, cashless and hopeless to emigrate to Australia - had the loudest voices in the public debate. And by thinking only of decent treatment for anyone who turned up on our shores, regardless of how they got here, they turned the debate into one about 'compassion', rather than what was in the best interests of Australia.

And the Labor party, seeking the votes of these people, said that it would 'soften' Australia's treatment of illegal immigrants.

So the policy was softened. The people smugglers' ears pricked up. And now, the border busters are back.

And guess what? More people have now died.

The only thing one can say is that, by trying to 'care', the government has created the conditions for more people to lose their lives.

This is grossly irresponsible policy. We know what works, we should stick with it.

But, there's no point telling Kevin. As with the unemployed, it's more important to look as though you're doing the right thing, than to actually do good. When it comes down to it, St Kevin just doesn't care.

We learnt difficult lessons when we dealt with this issue before. For the love of God, let's not have to go through this again.

Broadband and abuse of the market economy

2009-04-11T23:39:00.005Z

Well, what do you know??

Nanny Conroy's grand plan for a national broadband network has been dumped. Too expensive for the outcomes likely under the plan. And imagine giving $30 billion to Telstra!

Cheaper just to build the network yourself!

And so we end up with St Kevin's grand plan for wiring the nation. The idea is to invest between $21.5 billion and $43 billion of taxpayers' money - the actual amount will depend on the extent of private involvement - to build a fibre optic cable capable of delivering the internet to around 90% of homes, at speeds of up to 100 megabits per second.

(Given that pornography is the most frequently accessed material on the web, we can' help wondering why St Kevin would want to facilitate this sort of behaviour. But it was an election promise, you see, and no matter how stupid, election promises must be honoured.)

The government plans to build the network, open it to retail internet providers, and five years after completion, to sell its stake in the company.

RuddWatch has no problem with the government wanting to improve Australia's communications infrastructure. We are lagging far behind the rest of the world in the speed and quality of our internet connections, mainly because Telstra has stood in the way of upgrades, in order to maximise its takings from the legacy copper wire network it inherited from Telecom. And the reason it behaved like this is because the Howard government, in an act of gross unutterable stupidity, rather than splitting Telstra's retail and wholesale businesses, decided to privatise a natural monopoly. You know, like it did with the airports.

Been to Sydney airport recently? Gee, that idea worked out well, didn't it?

What we question is the method of improvement. The plan appears to have been cobbled together at the last moment, with St Kevin reacting to the failure of Plan A by putting all his chips on No. 43 and going for 'quadruple or nothing'. The government has not released any independent and detailed analysis of its plan - soemthing you might expect would be a sine qua non of a plan to spend up to $43 billion of taxpayers' money. Well, you would - unless you were Kevin. Apparently the government can't even say who would head up an implementation inquiry. Clear the decks for more 'policy-based evidence'.

Now, the government says that it wants the project to earn a commercial return, so as to attract private sector investment and give taxpayers some return on their investment. If that's the case, then the obvious question is: why would a project which offers a commercial rate of return need to be completed by the government? Why aren't businesses in their now, attracted by the money already on the table? The answer is obvious - the project can't generate a commercial return. Any words to the contrary are fanciful.

To see why, you just have to do some basic maths, as Stephen Bartholomeusz has done at Business Spectator. He estimates that, in order to make a commercial return something like what they are earning now, internet retailers would have to charge around $100 per month for the service. If trends in fixed access lines continue downward, the wholesale price itself will have to rise to $100 per month, meaning retail prices will rise much higher.

This fellow reckons the monthly cost to consumers will have to be around $200, just to make a commercial return on the investment. I'll quote him in full:

PAUL BROAD: Well if you project yourself 10 years ahead, you have a $43 billion investment. On any sort of reasonable return, say of 10 per cent, you've got to generate $4.3 billion just to make a return on the investment. And you add up all the bits to run a wholesale and retail business, you'll see that the average punter will be paying something like $200 a month for this service. And when you think today they get not 100 megabits, but they get probably 50, 45, for about - well, for less than half that. I mean, I just don't think that people'll are going to pay double for something they don't need. And I always get reminded of the Cross City Tunnel. You know, wonderful piece of infrastructure, but no one wants to use it for the price.

And there's the problem. At the prices that the wholesaler will need to charge in order to generate a commercial return, there won't be a market. You can't square that circle, no matter how much taxpayer money you throw at this problem. As Broad says in his interview, there just isn't the demand there from homes - the economics doesn't stack up.

Researcher Peter Adams of Charles Sturt University has spent the past seven years researching household broadband adoption. He says research last year showed householders were not convinced they should spend their income on higher-speed broadband. "Clear information must be provided to consumers about the benefits of NBN services," says Adams, a home broadband specialist at CSU's Centre for Research in Complex Systems.

And about the price ... At this stage, the costs to consumers for the 100 megabits a second service are unknown, but presumably they would have to be well under $100 a month to attract even a sizeable percentage of households. That will make the Government's pricing of wholesale access particularly sensitive.

Are there alternatives? Well, Broad discusses a few. The most rational comes from Paul Kerin in the Australian, where he says that the government should bite the bullet, spend $70-75 billion buying back Telstra, split Telstra up to remove its natural monopoly over copper wire, sell the split component businesses to make back your money, and let the different types of broadband carriers - copper-ADSL, hybrid fibre co-axial cable, and wireless - compete with each other. Wholesale competition - what a great idea!

Which leads to another question about St Kevin's plan: if the whole problem with Telstra is that the government privatised a natural monopoly, won't St Kevin's promise to sell off the company owning the fibre to the home network just create the same problem?

- - - - -

What the broadband mess does throw light upon is St Kevin's strange approach to economics. Here is an excerpt from his speech on 31 March speech in London's St Paul's Cathedral - a speech for which, strangely, no transcript has appeared on the Haloed One's website - time to throw a tantrum at your slack staff, Kevin!:

Over the last quarter of a century [the balance between the right to individual enterprise and responsibility to the common good] has begun to be eroded. Unfettered free markets became worshipped as a god, and we know that that god was false. This ideology held that markets were self-regulating, that governments’ regulation of such markets was interference and that the unrestrained pursuit of self-interest was not only morally legitimate but, equally, to be morally encouraged.

Now, as you will no doubt recognise, and as I have written before, this is complete and utter rubbish. Nobody could possibly believe that anyone anywhere on earth worshipped 'unfettered free markets'. Surely not even the PM could believe his own hyperbole on this subject?

Well, maybe not. But he certainly does have a bee in his bonnet about this topic. We've read about it in his letters to the Philistines, heard it in his sermons. If he doesn't believe these sentiments exactly, then he believes something like them. And he wants you to believe them, too.

More than that, it is reasonable to presume that he is going to act in accordance with his beliefs. Wherever we get a poor outcome from the operation of a market, no matter the cause of that poor outcome, St Kevin is going to regulate it, or spend taxpayer money, or ... um ... something, until the problem goes away.

Something that St Kevin doesn't realise is that the reason why we have done so well as a society over the last 25 years, and why we have until now survived the growing world crisis so well, is that over that time our leaders accepted the laws of economics and legislated and regulated according to them. None of our banks have collapsed, unemployment, while now rising, is coming from an unbelievably low base, the community is wealthy and optimistic, and the national budget and balance sheet are in great shape.

These are the same laws of economics which St Kevin is now trashing in public, in order to win the public to a view of things which he calls 'balance' but which actually means belting society into a shape alien to it but in conformity to the vision inside St Kevin's head.

The result is not going to be pretty.

On the other side, St Kevin's ignorance of the laws of economics means that he keeps racking up spending and charging it to the national credit card. The idea to build a national broadband network is just another such spending spree which we wouldn't be able to afford even in good times, but now that times are difficult, it is even greater folly. At the same time as decrying markets, St Kevin likes to use the wealth that the market economy generates for his own pet projects, not caring about the damage that he is doing to that economy and to broader society in the process.

This is the first time in our history that we have had a leader who has been prepared to so openly decry our current social arrangements for the production and distribution of wealth and the laws of economics, in favour of a fuzzy concept of 'balance'. He is of course not the first prime minister to govern in opposition to those arrangements and laws. But that course of action always ends in tears.

He doesn't understand economics, and he neither understands nor likes market arrangements and outcomes. And he wants to change things so that markets can operate in ways that he likes, and with outcomes of which he approves.

Nobody will win from this. St Kevin is setting us up for an almighty fall.

Christianity and forgiveness - an Easter Sunday sermon

2009-04-11T22:47:00.003Z

Just some last comments on the 'hostie abuse' matter.

It seems odd that someone who spouts his Christianty at the drop of a hat, publicly dedicates himself to the better treatment of workers, and uses both things in his electioneering, would be so free in his abuse of other people. Aren't they exactly the people he is dedicated to helping?

Well they are. It's just that St Kevin cannot see it. He loves and cares for humanity in the abstract. It hasn't yet sunk in to him that there is no 'humanity in the abstract'. There is just the people around us, who are affected by our decisions.

Mother Theresa said it best: 'God didn't tell us to love everyone, He told us to love our neighbour.'

And it seemed to escape St Kevin, when he sought understanding of his behavior from the electorate on the grounds that he was merely human, that so was the flight crew who delivered him the erroneous meal. He had no understanding for them or their predicament - why should we extend him a courtesy that he denied to others more innocent?

Your lesson for the week: Matthew 18, 23-35.

Muddled, angry and at the helm - part II

2009-04-04T22:45:00.008Z

I must say, I did feel sorry for Kevin Rudd this week.

It's clear that the man has what HR people would call an 'anger management problem'. There have been numerous stories circulating this week about tanties that he's thrown at people over minor issues, which usually start with someone not meeting his expectations, and end with St Kevin spraying profanities and general personal comment.

I've commented before on how controlled - to the point of pursed lips - St Kevin is when he appears in public. Well, he has to be! He has to keep a lid on the volcano of rage welling within him. The public gets to see the controlled, ultra-focussed Prime Minister, while those who deal with him have to deal with a three year old.

So it comes as no surprise to hear that an RAAF flight attendant was reduced to tears by a Rudd screed back in January. She had brought him an in flight meal containing red meat, apparently. Hardly the sort of thing to get one's knickers in a knot, yes? Well, not for Kevin!

(This incident reminds one of the behaviour of another vegetarian world leader, who used to fly off the handle if things didn't go his way. Computer-savvy youngsters are having lots of fun at his expense, by changing the English subtitles on clips of his German-language rants, as portrayed in the movie Downfall - I hope some tech-savvy wit invents a rant about the RAAF food service!)

Awful as it is, I still felt sympathy for St Kevin. Anger tends to be driven by both a deep unhappiness and a lack of integration of one's personality. However old he is - 40-something, 50-something? - he still hasn't dealt with a lot of issues that many people work through in their late twenties and early thirties. Prime Minister or not, and even with the wonderful family he has, it can't be much fun to be St Kevin.

As the hostie incident also shows, St Kevin also has little 'feeling' for other people. Whether this stems from his irrational anger, or from somewhere else, I don't know. But it compounds the anger management problem. Get angry at poor service if you must, get into a rage, even - but to take it out on a young hostie? Or the staff around you? That's another problem.

And it manifested itself in a couple of incidents this week. One was Rudd's appearance with British Foreign Secretary David Miliband and Chinese ambassador to the UK Fu Ying. Given all the controversy surrounding Chinese assertiveness, and Rudd's inability to be open about his lunch with the Chinese propaganda minister last week, it's no surprise that he would rather have sat next to Miliband than Mrs Fu.

The problem was, when he couldn't change the seating arrangement, and had to sit next to the ambassador, he made a face as though someone had stuck gooey French cheese under his nose. He didn't have the interpersonal skills to accept what had happened and play his role.

The lack of interpersonal skills came out most starkly - and, for RuddWatch, most sadly - in a video on the Oz's website. Surrounded by the abnormally charismatic Barack Obama, and the genial (if loopy) Lula da Silva, and someone who I think is Canada's Steven Harper, Rudd looked decidedly uncomfortable. After giving Lula an overly familiar one-armed hug, Rudd responds to an Obama line with an apparent joke (for the life of me I can't understand what he was driving at) which no-one hears (thankfully, in my opinion) and then looks completely out of place again. Rudd looked so lonely in the midst of it all.

So, I felt sorry for him.

But that lasted about two minutes.

I thought of the poor hostie. Yes, young women tend to cry at the drop of a hat. They can be fragile. But there was still no excuse for going into an infantile rage about red meat. Why not just have the veggies and leave the meat at the side of the plate?

Rudd's behaviour brought to mind comments about how John Howard deported himself with others. Apparently, he only swore once - and that was when the dimwits at the ABC decided to ignore what had happened between Howard and Indonesian President Megawati, and rather than report that the Indonesians had accepted Australia's reasons for going to war in Iraq, instead decided to report the opposite - completely in line with their ABC prejudices. There was no excuse for this stupidity, and Howard told Jim Middleton 'I am bloody annoyed'.

Once, in a 34 year career.

Howard was also known for being gracious - for instance, he always said thank you when receiving a humble cup of tea. And if that cup had too much sugar, or too little milk? Well, we never heard about it, did we.

Then there was St Kevin's 'apology'.

"As I recall it ... I had a discussion with, I think, one of the attendants on the provision of food," Rudd said. "It didn't last very long and if anyone was offended by that, including the attendant concerned, of course, I apologize."

If.

'If' makes a statement conditional. That one word 'if' defines the whole sentence.

Rudd shouldn't be apologising for offending anyone. He should be apologising for his undignified behaviour. It shouldn't matter whether anyone was offended or not - the apology should be driven by a sense of shame, not by the response of other people.

As far as I'm concerned, it's yet another measure of the smallness of the man. For all his trumpeting of Christian principles, in terms of character, we have a midget sitting in the most important chair in the country.

But there is another reason why I feel little sympathy for the Prime Minister.

Currently, you'll hear a lot of rubbish about how the government is rolling back the Liberals' (truly appalling) Work(Non)Choices legislation to make workplaces fairer.

The government's changes will do nothing of the sort. They are just going to make it harder for businesses to employ people, and push up the costs of doing business.

You've probably noticed that this is entirely the wrong time to be making it harder for people - especially small business people - to do business. This means less employment and slower economic growth. I can assure you Kevin Rudd knows all about this. The problem is - he doesn't care:

CHRIS UHLMANN: Prime Minister, how does pushing up the cost of labour protect jobs?

KEVIN RUDD: Our belief is that when you look at all the measures that this Government and, for example, governments like the Queensland Government, are investing in the economy through infrastructure; we are out there supporting jobs at the same time as the global economic recession is having an effect on pulling jobs out as well. But…

CHRIS UHLMANN: But you're making labour more expensive.

KEVIN RUDD: But what we believe is that the right thing to do, consistent with our undertaking to the Australian people, is to provide proper protections.

CHRIS UHLMANN: But those protections cost money and business has to pay it.

KEVIN RUDD: But can I say to you that the overall balance in our workplace relations reforms is right. We crafted this over a long period of time in Opposition; a lot of consultation with Julia Gillard and business over the last 12 months to get the balance right. This is part of the balance, and if you're out there and you're one of half-a-million or so workers who would be thrown to one side by Mr Turnbull and his latest flip-flop on policy, well, that's a matter for Mr Turnbull…

CHRIS UHLMANN: Prime Minister, I can just establish this. You say you're pushing the balance back and you're pushing it back towards employees, that makes the cost of labour more expensive for employers, doesn't it?

And your award changes will do the same thing. How does that protect jobs?

KEVIN RUDD: The whole challenge with a workplace relations system is to get the balance right, and in the economy overall, to make sure that we are doing the right thing to provide support for economic activity.

You've got workplace relations here, implementing our mandate, getting the balance right, and at the same time, us quite clearly investing a large amount of money in the economy at a time of global recession to lift the prospect of further jobs in the economy.

CHRIS UHLMANN: And in a time of global recession, do you need to make the cost of labour more expensive? Won't that just mean that employers will not hire people?

KEVIN RUDD: At a time of global economic recession, what you need to do is to honour your word, get on with the business of providing proper protection for people in the workplace, as we said we would, as Mr Turnbull said we had a mandate to do, and if you are one of those half-million Australians right now, you're going to be looking for the protection which we promised to give them. Only the Senate and the Liberal Party stand in the way of that.

CHRIS UHLMANN: One last question. Doesn't more expensive labour mean less jobs?

KEVIN RUDD: What you do, as far as overall economic management is concerned, is you advance on a range of fronts. You get out there, you invest in infrastructure to support jobs, you provide payments to people to support 1.5-million employees in the retail sector, you are out there across a whole range of different policies supporting jobs in the economy, and at the same time, as part of a balanced overall approach, giving proper protections to people in the workplace.

This is a tragedy. Despite what you are hearing, the government's spending your earnings on a range of goods and services will not rescue the economy. Increasing government expenditure when labour conditions have been tightened is a recipe for high-inflation, high-unemployment stagnation. The government's changes might give current employees more money, but it will also cause a lot of them to lose their jobs.

Most importantly, it will mean that young people have a harder time getting into the job market. Having tramped up and down the streets of Sydney in my late teens and early twenties, asking businesses if they had any work available, this is not something that I want to happen to today's young people.

But Kevin made a deal with Julia and the unions. He's not big enough to be able to take control of the situation, go back on his agreement and prevent this idiocy, in the national interest. So, for the sake of a 'deal', he's prepared to sacrifice the economic wellbeing of millions of Australians.

On realising this, any sympathy that I had for him well and truly dried up.

I'll let you devise your own adjectives for this man. I know what mine are.

UPDATE: Ironic, isn't it, that Kevin Rudd campaigned so hard at the last election on ending 'workplace bullying', and named his industrial relations campaign 'forward with fairness'. Tell it to the RAAF crew of # 34 squadron. As I've said, so many times, when it comes to Kevin Rudd, he talks the talk but doesn't walk the walk.

Also, we get a profile of another ALP leader. Sound familiar?

And - just by chance - here is Kevin's apology after the Scores incident became public:

"If my behaviour caused any offence to anybody whatsoever that evening, I of course wholeheartedly apologise'' he said.

Again with the 'if'! It's as though he thinks that something's being right or wrong depends on the reaction of others. A strange belief for a Christian. Why not just apologise for the behaviour itself?

Bits and pieces

2009-03-28T23:41:00.004Z

Tony Boyd gives an example of why Senator Conroy's plan for a national broadband network will be a waste of money.

Paul Sheehan quotes Mark Latham to blow the whistle on St Kevin's confected outrage about 'neoliberalism'.

Outstanding economist and Australian Warwick McKibbin blows the whistle on St Kevin's dash for cash.

And can Philip Adams be a RuddWatch devotee? Listening to the beginnings of Late Night Live a couple of weeks ago while curled up in bed, I heard Adams refer in passing, apropos of nothing, to Malcolm Turnbull as 'The Terminator'. Can Philip be a reader? Or is he just channelling RuddWatch? How interesting! Philip, if you are reading, congratulations. You are a member of a very small but distinguished club. Perhaps I should make up a t-shirt (in black, of course), for members.

Through the looking glass

2009-03-28T22:17:00.005Z

I don't know about you, but reading the papers over the last few weeks has given me the impression that planet earth has moved out of the Milky Way and into some bizarro parallel universe.

There are a number of reasons.

The first is Earth Hour. I can't imagine why people think turning the lights out is a good idea. Take it to its logical conclusion - if it's good to turn off power some of the time, then why not turn off the power all the time? The earth will live again! You won't, but the earth will!

This year's winner was, as always, North Korea. Congratulations Pyongyang - a pile of Danii Minogue CDs is on its way.

However, St Kevin's ETS for reducing carbon 'pollution' should allow us to give Kim Jong-Il a run for his money next year.

RuddWatch almost fell over yesterday while washing up, when he heard the Science Show's Robin Williams promoting Earth Hour on RadNat yesterday lunchtime. As if this rubbish was supposed to be uncontentious and, like motherhood, a Good Thing. What next - publicity for pro-abortion rallies?

And they wonder why people complain they are biased.

The next piece of idiocy was the government's lawyers' defence of the Commonwealth's power to spend tax revenue as it pleases. This right is being challenged in the courts by one Brian Pape.

Mr Pape says that the government does not have the constitutional authority to make the $900, etc payments to citizens that Kevin Rudd thinks will save him from a recession. The government's defence, outlined on page 41 of the Financial Review, is that, well, the government receives all this money, and what do you expect it to do with all this money if it can't allocate it as it pleases?

Mr Pape's response - 'That is preposterous' - is absolutely right. Good on you Brian!

Then, seven-and-a-half years after the twin towers terrorist attacks, and 26 years after the Lod Airport massacre, we had fifteen bikies brawling for fifteen minutes in the domestic terminal at Macquarie Bank's Sydney Airport - with not a policeman in sight, and none of it caught on security cameras.

Then we get to the actions of the cabinet.

First, we have the Prime Minister hosting Mr Li Changchun to lunch. Mr Li is the Chinese Communist Party's propaganda chief.

We suspect it was an innocent matter of St Kevin looking to improve his Mandarin - say, by learning phrases such as 'Chinalco has no connection to the Chinese Communist Party'. But then we learn the extraordinary news that the media tart mascarading as world leader, neglected to tell the Australian media about the lunch! Despite its being paraded all over China's state-run media outlets.

What on earth is going on?? What does Kevin Rudd want to hide? Is this not important, and nationally significant?? Especially as the Chinese media were publicising the meeting with the tag-line 'Australian PM promotes China's role in IMF'.

Mr Li then went on to have another 'discreet meeting', this time with the head of the ABC, Mark Scott. Mr Li apparently has some complaints about bias in ABC news coverage. And he doesn't appear to have much faith in the ABC's usual channels for airing grievances.

Memo to Mr Li: take a number and join the queue.

None of this is a good look for the PM. Here he is trying to have secret lunches with Chinese communist party bosses, on the eve of a world tour aimed at promoting China's place on the world stage. Meanwhile China is seeking to incorporate Australian companies into its plans to become a dominant power in the world of mineral resources, and is using thousands of spies to keep tabs on the Chinese community in Australia.

Did I mention that the Chinese military is rather, how should we say, 'lacking in government oversight', and preparing for a confrontation with the US over Taiwan?

God only knows what the Americans think of these shenanigans. We're supposed to be an ally of theirs, remember.

Of course, none of this has anything to do with Ms Helen Liu. RuddWatch doesn't think for a minute that she has done anything improper. But it doesn't do the defence minister any good to just happen to forget two trips to China paid for by Ms Liu. What was he thinking?

Then we get the sheer Soviet-style bureaucratic stupidity of the Minister for Communications creating not only a list of websites to be blocked by Australian internet service providers, but the keeping secret of that list. To the point that, when it was leaked on the excellent 'Wikileaks' site, Wikileaks was itself then banned! In the meantime, a few people - including a Brisbane dentist - had discovered that their own innocuous sites had been banned.

How to explain this behaviour? Doesn't Conroy have enough to do getting the national broadband network off the ground?

Thankfully, the ETS farce appears to be dying a well-deserved death. The government's cancelling of its own inquiry into the scheme - because it had become 'politicised', apparently - strengthened my feeling of being in a parallel universe. St Kevin thinks that you can say anything and the public will swallow it. Anyway, not even Penny Wong appears to believe in it anymore, especially now that people have begun realising that the Treasury 'modelling' is an exercise in self-delusion and that the cost to the economy and employment will be considerable.

The same can't be said for Sister Julia's changes to Workplace Relations. Despite St Kevin's running around talking about the need to protect employment from the Great Neoliberal Crisis, Sr Julia is well on her way to making it that much more costly and harder for small businesses to employ people. This is Sr Julia's price for supporting St Kevin's bid for the prime ministership, and it is also the unions' price for supporting the Labor team so strongly at the 2007 election. On reflection, I suppose this is more in keeping with how Labor and the unions operate in the real world, rather than anything to do with being in the bizarro universe.

Michael Stutchbury tells part of the story in his usual 'take no prisoners' style. There's more here.

Then we have Nicola Roxon turning into a temperance advocate, when the Senate decides to reject the government's alcopops tax and $290 million has to be returned to brewers because the government was so disorganised it waited until the last minute to bring its legislation before the Senate.

And really, it's a bit rich for a person who got so blind drunk at Scores that he couldn't remember anything that happened, to call the Terminator's party the party for binge drinking.

After all these goings on, I wouldn't be surprised to see Alice and the Red Queen playing croquet with swans on the croquet fields next to the Canberra Hyatt.

Muddled, angry, and at the helm

2009-03-08T00:03:00.005Z

The more RuddWatch has thought about St Kevin's letter to the Philistines, the odder it appears.

Broad swathes of it are completely divorced from reality, as in his blaming neoliberalism for having caused the current world crisis. These hyperbolic passages are then followed by lengthy - too lengthy - expositions on the causes of the crisis, which read as though they are briefing notes prepared by a staffer. We then get the breathless agitprop again.

Now, having read The Terminator's piece in yesterday's Oz, RuddWatch learns (since we haven't been in a position to observe directly) that St Kevin's parliamentary fulminations include demonising The Terminator as 'the member for Goldman Sachs'.

Okay, so this is part of the usual parliamentary idiocy that the electorate is expected to suffer as our representatives go about their business. But, for us, it points to something quite disturbing.

All the evidence points to St Kevin being what polite society might say is a 'queer fellow'. But this isn't really a problem. The problem is that his mind appears to be unusually unbalanced against anyone who might be labelled as a 'have', as opposed to a 'have not', and that this imbalance is expressed vindictively and with spite.

Hence the untrue, unwarranted and unusually bitter comments about his parents' landlord. The divorced from reality ranting about neoliberalism, whatever that is. And his ad hominem attacks on Malcolm Turnbull.

Rudd appears to be able to make up fantasies about those with whom or with which he disagrees, get all worked up about them, and use this anger to drive his personality. It's not attractive, and it's not good for the leadership of the country.

* * * * *

Especially now, when our troubles are deepening. In case you hadn't noticed, the world economy is in serious trouble, and the previously-stellar Australian branch - which had been going great guns, with nary a hint of any of the problems that St Kevin would say are inevitable after 30 years of doing without his brand of socialism - is being taken down with it.

The crisis that we are facing calls for serious policy responses and an admission that getting things back to normal is going to be a long.

Okay then - what have we had so far?

Well fiscal quackery comes closest to describing it. Taking billions of dollars of taxpayers' money, extracting from it the 20-30 cents in the dollar needed to process it through the Tax Office, and showering the remainder on the less fortunate of the community in the hope that their spending will give the GDP numbers enough of a boost that they will stay positive for just one more quarter - enough to buy St Kevin time for an early election.

Well, it doesn't work that way. It never has.

St Kevin is fond of saying how much he admires Adam Smith. This is Adam Smith the good economist, you see - not those nasty wogs, Hayek and von Mises. And let alone Milton Friedman! Well, if St Kevin had spent less time indulging his essay-writing fantasies and actually read a little of Smith's Wealth of Nations, he might have come across this quotation:

The man of system, on the contrary, is apt to be very wise in his own conceit, and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests or the strong prejudices which may oppose it: he seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board; he does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it.

As Smith predicted, and as St Kevin, in his contempt for his fellow human beings, failed to even consider, the pieces on the chess board of the Australian economy chose to act contrary to St Kevin's expectations. Wisely, and entirely rationally, they have reacted to the crisis by maintaining or reducing their consumption, increasing their savings and paying off debt.

And the result? A negative GDP figure for the December quarter last year - which was bound to happen anyway - a restoration of private household balance sheets - which also was bound to happen anyway - and an unwarranted increase in the national debt - which 0need not have been so large, and which puts at risk Australia's AAA credit rating.

Arguably, of all three outcomes, it is the credit rating that we want to protect. Here's why. The world crisis is one of capital shortage - a tremendous amount of wealth have just been destroyed, it cannot be replaced quickly. The remaining wealth has to be rationed among many many governments around the world, all of which are moving towards deficit spending, to be funded with borrowed money. This rationing will increase the cost of that borrowing. Anything that can be done to reduce the cost of borrowing will be important - it could mean billions of dollars a year in savings on interest payments. An AAA credit rating will be key to keeping our interest costs down.

Terry McCrann tells it like it is, in his usual inimitable style.

Memo to St Kevin, and Brother Wayne: forget about fiscal policy for the moment. Let the Reserve Bank take the lead with interest rate cuts - it appears that your unwise spending has encouraged them to keep interest rates higher than they otherwise would be. Only reach for fiscal policy in an emergency. And do what you can to keep our AAA credit rating!

* * * * *

The test of a statesman, or indeed stateswoman, is the ability to recognise the national interest, and to then guard and promote that interest while also maintaining enough support in the community and getting the numbers in caucus to win the political battles.

Bismarck could do it. FDR's skills in balancing the demands of the isolationists with the demands of national security were legendary. It is the skill that historians look for when judging the quality of national leaders.

Clearly - and again it is Terry McCrann who writes most clearly about this - circumstances have so shifted that St Kevin's stunts on rolling up WorkChoices - you remember, the neoliberal reform which, for all its many faults, encouraged a dramatic fall in structural unemployment - and delivering on the appalling emissions trading scheme are no longer in the national interest.

Will St Kevin press on with them. 'They were key election commitments', he says. But they would harm the economy, and at present, we have to do everything that we can to preserve the economy.

The test is set. Come on Kevin! For all that I've said about you, you are nevertheless our elected leader, and for the sake of the country I want you to succeed. Be the statesman - scrap the ETS and the absurd, anti-employment legislation!

Spot on

2009-03-01T00:52:00.002Z

"In short, the social democratic cat vanished long ago. All that remains is the grin: the warm glow of pretending to be nicer, fairer, kinder than one's opponents, but with no guiding principles that are social democracy's own. Rudd's alternative is therefore no alternative at all."

Henry Ergas says everything that RuddWatch would have liked to have said about St Kevin's Letter to the Philistines, but says it much better.

Also important:

Terry McCrann on the threat posed by St Kevin's "raiding of the donations boxes".

And Jennifer Hewett on the ETS mess. Clearly, the ETS is going the way of FuelWatch - the previous Kevin Rudd die-in-a-ditch-to-defend-implement-my-election-promises disaster.

It is clear, from the ETS mess, the FuelWatch debacle (haven't heard much about that proposal recently, have we?), the idea of introducing employment-killing labour restrictions in what looks like becoming a depression, giving away billions of dollars of taxpayers' hard earned so that pensioners can by underwear, and continuing to talk big about Aboriginal Australia while delivering buggerall, that St Kevin is out of his depth in government.

Nothing but a boring extended calumny

2009-02-15T03:19:00.003Z

Well, RuddWatch finally got around to reading St Kevin's Third Letter to the Philistines.

It is execrable.

It is hard to believe that someone with intellectual pretensions could think that the undergraduate idiocy displayed in the essay would be acceptable to serious people.

It is even worse than the previous two 'Letters'.

RuddWatch had planned to review the essay, pointing out the mistakes and offering helpful suggestions, but we have given up on the idea.

Life is too short for that.

Instead, we offer to faithful readers links to some much better authors on the causes of the crisis, and likely preventive measures.

First, Adair Turner, Chairman of the UK's Financial Services Authority.

Second, John Taylor, renowned monetary economist. Also this piece.

And lastly,

Third, Peter Wallison of the American Enterprise Institute.

I will leave it for readers to come to their own conclusions as to why it is that Kevin Rudd, with an army of staffers and a wealth of information and briefings, got it so wrong in his essay.

What women (don't) want

2009-02-08T01:24:00.002Z

On three separate occasions over the past fortnight, three women of various ages, none of whom know each other, have - spontaneously and of their own accord, and apropos of nothing - mentioned to RuddWatch that they can't stand St Kevin.

In all cases, the reaction appeared to be visceral.

Rudd Essay: prelude - what actually caused the crisis

2009-02-07T23:46:00.004Z

RuddWatch walked and walked around his local area yesterday, looking for a copy of The Monthly magazine, so that he could read the Chairman's latest pronouncement.

Unfortunately, none of the newsagents in the local area carried the magazine. Lots of titles carrying busty women, hotted up cars, sewing, fishing, cooking, home renovations, even Quadrant - but no Monthly.

The reason that I had wanted to read the essay was simply because
I want to comment on it. Everyone else seems to have done so. From the introductory few pages, it looks like the usual pseudo-cultivated rubbish that Rudd likes to revel in occasionally and which the morons in the press misread as being 'philosophic'. But it wouldn't be fair to write it off without having read it.

What I can do for those loyal readers is give an overview of what actually caused the crisis. This should serve as a prelude to a discussion of Rudd's essay: if Rudd is going to blame the 'neoliberalism' straw man for causing the crisis, then readers ought to know why he is wrong, and what actually happened.

* * * * *

As you can imagine, there is no single cause lying behind the financial crisis. A lot of things had to go wrong, a lot of people had to make mistakes and/or not pay attention, and a lot of plain bad luck had to occur, in order to generate something as widespread as what we have witnessed.

The primary problem is that a lot of money was lent to a lot of people who just plain couldn't repay that money. There are a few reasons why there was a big pool of money ready to be lent out. One of them is that China, Japan, the oil-producing states and other large exporters earned a lot of US dollars selling their goods - mostly consumer goods and oil - around the world. Rather than use this money to invest in their own countries or buy goods from their customers, they saved it up and pushed it back into the US money markets, which both pushed down the cost of money (interest rates) to borrowers and encouraged the bankers to lend it out in great wads.

Other reasons are that the US federal reserve kept interest rates very low in the early years of this decade - again, lowering the cost of borrowing and encouraging lending. Also, millions of baby boomers, having kicked the kids out of home, were in there final years of work and saving massively for their retirements. All in all, there was a lot of money sloshing around, and those countries with highly sophisticated financial systems - the US, the UK and Australia in particular - saw large increases in household debt as a result.

One of the effects of this avalanche of cheap money was to encourage investors and investment managers to take greater risks. With money flooding into what we might call 'normal' assets, such as the share market and housing, the cost of investing in those assets rose, and the proportionate returns on those investments fell. But investment managers are paid on performance.

So they began looking at more exotic and unusual investments, in order to gain those higher returns. Unfortunately, those more exotic investments were unusual for a reason - they carried much higher risks of going bust. One of the more unusual investments was - yes, you guessed it - lending money to people with poor credit ratings, also known as 'sub prime lending'.

Sub prime lending enjoyed a boom for a couple of other reasons as well.

One reason was because banks had found a way of moving the risks of sub-prime lending off their balance sheets, via securitisation. In the past, when a bank had lent money to a borrower, that loan stayed with the bank. If the loan went bad, the bank lost its money. So banks tended to be very careful who they lent to. But in the 1980s, they discovered that, if they bundled up a whole lot of loans with similar characteristics, they could 'sell' the repayments on those bundles to investors. All the bank had to do was collect the money from the borrowers each fortnight, and forward it on to the various owners of the bundles. And if the loans went bad and the borrowers stopped paying, well ... that wasn't the bank's problem anymore!

Securitisation removed the risks of bad loans from the banks to investors. This meant that, if the investors didn't mind holding investments in sub-prime loans, then the banks didn't mind making such loans. And, so long as ratings agencies could be relied upon to certify the securitised bundles as AAA investments, then the investors didn't mind at all. The facts that 'AAA' didn't mean what the investors thought it meant, that the ratings agencies made mistakes with their ratings, and that the banks were no longer checking who was getting loans, didn't matter anymore. Everyone involved in the game stopped paying attention, because they thought that they weren't facing any risks. 'More please' was the catch cry.

A second reason for the boom in sub-prime lending in the US was that it was politically popular. Home ownership, like motherhood, is a Good Thing, to be encouraged, yes? And encouraged it was, right down to people with no income and no assets. The reason? Why, if you can say that you've facilitated home ownership, and especially among the most marginalised in a community, then you'll be pretty damn popular! Just ask John Howard, or even St Kevin himself! The fact that, by pushing loans onto people who have no business borrowing any money whatever, you are laying the ground for the misery of bankruptcy down the road, not to mention systemic crisis for the banking system, didn't occur to politicians consumed by the tyranny of the present. Attempts at preventing this criminal stupidity by the Bush administration - those paragons of neoliberalism - were rejected by Congress.

By 2004, the game was proving itself to be very profitable for all involved. As economic growth strengthened following the slowdown in 2000 and 2001, the 'exporting countries' generated more and more wealth, to be lent back to the US, which in turn bolstered its economic recovery. The cycle of lending boosted house prices, which kept the sub-prime borrowers in the game as they paid off old loans by selling their houses, and dived back in with newer, more expensive homes paid for with bigger loans. As you can guess, if there's a buck in it, investors will pile in.

It is here that we start running into problems with regulation.
No, not with deregulation, or no regulation, or even neoliberalism, but with the quality of regulation, and of regulatory supervision. There were two problems in particular.

One lay in the general rules, agreed to by most countries, for regulating banks, known as Basel I after the town in which they were agreed. Basel I allows banks to set up things called Structured Investment Vehicles (SIVs), and to keep the details of these asset lockers off their balance sheets. That is, the banks could use these lockers to borrow money from the short-term money markets, lend the money to sub-primers, stuff the lockers full of the high-paying but long-term and very smelly sub prime loans, and pocket the interest differential. All very profitable, all above board, all kept off the bank's balance sheets, no need to hold reserve assets against contingent liabilities. You can see what this led to: bank lending went ballistic.

The other problem lay in the supervision of investment banks in the US. The investment banks had long complained that the regulatory rules they operated under made them uncompetitive with European banks. In 2004, the US Securities and Exchange Commission (SEC) gave in to their pleading, and agreed to allow the largest investment banks to take more risks, in exchange for the banks providing the SEC with more information about their activities.

In effect, just as with the commercial banks, the investment banks - Goldman Sachs, Lehman Brothers, Bear Stearns, Morgan Stanley, and Merrill Lynch - now had a way of increasing their borrowing without needing to increase proportionately their reserve capital. So, yes, you guessed it again, they reacted just as the commercial banks above had reacted - their lending went ballistic. Lehman Brothers' liabilities went from eleven times assets to thirty three times assets.

This leverage greatly enhanced the profitability of the banks' operations. But it also made them many times more vulnerable to adverse shifts in the prices of assets and liabilities. By rights, the SEC should have prevented this over-leveraging. But the SEC couldn't use the information given to it by the banks: there was neither the will, nor the expertise, needed to supervise the bankers.

The problem wasn't that banking regulation was based on neoliberal principles. It most certainly wasn't. It was that the regulator couldn't do its job. St Kevin can talk all he likes about re-regulating the finance industry: if you don't have the right people, and the will to regulate, it won't make a bit of difference. And even then, you're up against it: under any system, highly-motivated professionals will run rings around public servants any day of the week.

This madness continued until the music stopped in early 2007 [CHECK]. The game had exhausted itself, and house prices first stopped rising, then began falling. Increasing numbers of sub-prime borrowers failed to make their repayments. With income streams drying up, the value of mortgage backed securities began falling. Hedge funds relying on the value of these assets holding up in order to stay solvent, started failing. In June 2007 two of Bear Stearns' hedge funds failed - all their money, billions and billions of dollars, all gone. In less than a year, Bear Stearns itself was gone.

Money market lenders, suddenly suspicious of where the banks were lending their money, stopped funding the SIVs. The SIVs failed, and had to be brought back onto their parent banks' balance sheets. The banks - HSBC, JP Morgan, Royal Bank of Scotland, HBOS, Washington Mutual, Wachovia - not having held capital reserves against these contingent liabilities, suddenly faced crises of solvency.

Fear was pervasive. People just stopped lending to anyone else, even to the biggest banks. The wholesale funding markets dried up. The value of mortgage backed securities plummeted - no-one would buy them. As their prices fell, the solvency of the banks became more and more fragile. One, by one, they started failing. Finally, Lehman Brothers failed, and the world economy suffered its first ever - first ever - heart attack.

Just an indication of the seriousness of what we experienced last September: the gold market went into backwardation for the first time ever - ever, in the history of humanity. Holders of gold would not sell their gold at any price. They were hanging onto it, the fear and uncertainty were so pervasive.

Brother Wayne makes a goose of himself

2009-01-23T23:15:00.002Z

Brother Wayne has been tilting at windmills again:

"The Treasurer has urged policy-makers around the world to seize the opportunity presented by the crisis to craft a new "global economic order" by implementing a wave of reforms that will lay the foundations for renewed economic prosperity.

Mr Swan made the comments early today in a speech to business people in New York. He said the collapse of global credit and stock markets had been caused by "spectacular regulatory failure" that had exposed the folly of the view among some policy-makers and commentators in recent decades that the state had no role in the free market.

"Recent events have exposed such thinkers as false prophets," Mr Swan said. "Our best approach is not to dismiss government, but to develop a coherent and modern view of the role of the state in an open economy."

Ummm ... who, exactly?

Ruddwatch has been observing the economy and financial markets for some years now. And we can't remember a single policy maker or commentator ever saying that the state had no role in a free market.

So come on, Wayne, name some names!

Of course, Wayne isn't being serious. This is just the usual low-quality populist guff that we have had to endure in Australia from our political class, and it doesn't appear to be disappearing.

What Wayne should be thinking about, and discussing with his advisors, is why the mountain of regulation already in existence in the US, the UK and Europe failed to prevent the most irresponsible growth in liabilities in human history, one which has set us up for a terrifying economic contraction.

He might also want to ask why it is that Australia has so far escaped with nary a scratch. Did you know that Australia's 'big four' banks are now among the ten largest banks in the world??

It's near unbelievable. But it's true, and it's due to good regulation here at home. Regulation put in place by governments Labor and Liberal over the last thirty years.

The problem isn't the regulation. We've done remarkably well there.

The problem is St Kevin's 'quick fix' welfare handouts, which sought to give the economy a 'tinsel led recovery' in December. Plainly, and for obvious reasons, it didn't work. Would it be asking too much for us to now have some serious policy, worthy of the crisis in which we find ourselves?

Cutting tax rates and raising thresholds would do wonders for the community's purchasing power - much more than a ten-year project to build a fast rail link between Sydney and Melbourne.

Reality bites

2008-11-19T08:42:00.002Z

Reality starts to bite St Kevin`s plans, as we predicted.

First, grocery watch is being rejected by consumers for the dud that it is.

Now Rudd`s grand vision for an Asian EU has come up against reality.

And FuelWatch has been euthanased in the Senate.

Let`s hope St Kevin gives up his pipe dreams and concentrates on governing well.

Character is fate

2008-11-17T01:53:00.002Z

Longtime readers of our blog would know how inappropriate we believe Rudd`s character is for the most powerful office in Australia.

One of the chief reasons for our critical attitude is St Kevin`s tendency to burn people and their reputations in order to promote his own interests.

The rather sensible Austrian economist Friedrich Hayek was trashed in order to give St Kevin a platform on which to misdescribe Australia under the Howard Government as a Bruitopia. Never mind that St Kevin kept almost all of Howard`s policies once in office: it seems that St Kevin is quite comfortable with Bruitopia, once he had his bum in the Prime Ministerial swivel chair.

Then there was the poor chap who just happened to be the owner of the Rudd family`s rented farm when St Kevin`s father died prematurely. That poor fellow had his reputation trashed in order to give St Kevin some `poor bugger me` street cred.

Now the prime minister has shown himself to be the prime moron by trashing George Bush. In order to build up himself and his importance, St Kevin has encouraged speculation that Bush is a clown who doesn`t know what the G-20 is.

Even if this is true, there is no excuse for leaking it to the media.

And don`t kid yourself that Rudd didn`t know about it, or doesn`t approve. Has anyone been sacked recently for this monumental blunder? No? Then you can bet it had Rudd`s sanction.

Bush is not happy. And you can bet that the ruthless fixers surrounding President-Elect Obama, if not Obama himself, will have taken good note.

But Rudd has not only made a prize galah of himself. In one go he will have lost the confidence of the international community of leaders - who would trust him enough to speak to him in confidence anymore?

We cannot know why Rudd made this idiotic decision. But we suspect that, like all the other poor decisions regarding people that he has made, the source lies in flaws deep in his character: an inadequacy that causes him to try to promote himself at the expense of others; an insecurity that sees him always seeking reassurance that he is cleverer that others; an insensitivity to the human needs of others.

The insecurity is evident in his response to the credit crisis: a panicked introduction of a destabilising banking guarantee, when all that was needed was some reassuring words and `as necessary` modifications to current arrangements; a bail out of a child care provider; wasting the precious surplus by giving it to people who will spend it on chocolates, tinsel and plastic toys; and the bizarre association of Australia`s manufacturing prowess with the continued survival of a mendicant and lazy car industry.

Our judgement remains: this bloke is not up to the job. He may have made a good diplomat (although, on his record so far, we doubt it) or Mandarin scholar, he may be a very good father, but as Prime Minister he just cannot cut it.

HIs flaws were evident well before the last election, and we tried to document them extensively. He has not changed, and we`re just going to have to endure this nonsense until he is replaced by someone more suited to leadership.

In the meantime, we fear for the heads of the public service, and Ken Henry and Glenn Stevens in particular. Someone in the Rudd cabinet has already had a go at Stevens, in the most disgraceful personal attack that we have ever seen on a senior public service. That was horrendous. And all because Stevens was carrying out his duties conscientiously. Henry is more vulenrable to dismissal.

Dismissal by the insecure man-child now, despite our best efforts, residing in the Lodge.

More thoughts on the crisis that Kevin caused

2008-10-29T02:30:00.003Z

More thoughts on Rudd's disastrous intervention.

Peter Costello writes a good column about St Kevin's using Ken Henry as a political prop, and makes the interesting point that:

On Sunday, October 12, Kevin Rudd announced the unlimited guarantee. He was, he told us, being decisive. Gone were all the months of setting up reviews and convening summits. He was now a man of action and he could make bold decisions.

This indicates a degree of self-knowledge on St Kevin's part that we hadn't credited him with: he knows that, if he acts precipitously, he will blunder, so he surrounds himself with committees and endless reviews. We should be praising him for having 'hit the ground reviewing'. Given how badly he has bungled the deposit guarantee issue, imagine the state we'd be in if he made quick decisions all the time!

Costello goes on to conclude:

If the public servants are used as part of the political process, it is natural and right that they be held accountable in the political process. They will not like it. They should not have to do it. And a decent government would not put them in that position.

More punches landed at Cut and Paste:

The Wall Street Journal Asia editorialises on the PM's error that created, rather than prevented, capital flight

WORLD leaders scrambling to rethink financial regulation may pause to consider Australia, where a poorly conceived policy has gone from beggar-thy-neighbour to beggar-thyself in two weeks flat. On October 12, Prime Minister Kevin Rudd announced that the Government - read: taxpayers - would fully insure $1.2trillion in deposits held at eligible financial institutions such as local banks. The move was meant to cut the risk of capital flight to other countries that had adopted or expanded such guarantees in preceding days. Rudd's move had an effect, but not the one he intended. Depositors big and small immediately moved funds from uninsured to insured savings vehicles. The Rudd Government backtracked on Friday, capping the deposit guarantee at $1million and including foreign banks with branches in Australia in the program. It's an embarrassing reversal for Rudd and may have been prevented with a little forethought. While the Opposition Liberals had proposed a $100,000 cap when the idea for deposit insurance first surfaced this month, Rudd unveiled his proposal with no advance warning and no formal debate. Perhaps Rudd felt global events warranted swift action. But now, having insured in haste, Canberra is forced to repent at leisure. At least Rudd is providing his peers across the world a valuable lesson: A financial panic doesn't suspend the law of unintended consequences.

But as Tim Colebatch points out in The Age, the PM still hasn't fixed the problem:

AUSTRALIA cannot afford mistakes in economic policy. Kevin Rudd made one with his hasty, sweeping pledge to guarantee all bank deposits for three years. That mistake was understandable in the circumstances, but the Government's failure since to admit it and fix it is inexcusable. Rudd's aim was to avert a potential threat to the banks; instead, he overdid it and created a real crisis for the non-banks. The reason 14 of the 20 biggest mortgage funds have frozen their deposits is because the Prime Minister - with the Treasurer away in Washington, and without even talking to the heads of the Reserve Bank and the Australian Prudential Regulation Authority - dramatically tilted the playing field against them. The Government had to concede its mistake and back down. Instead, on Friday it dug itself deeper into trouble by reaffirming that any bank account holding up to $1 million would be guaranteed free of charge. The threshold is so high as to be meaningless. Rudd is either getting bad advice or not listening. There is only one way out, which Rudd in Opposition did very well: eat humble pie, admit error, fix it and move on.

John Stanford at ABC.net.au Unleashed on the guarantee:

THE Government has committed the same mistakes that caused the global financial crisis in the first place. It failed to identify the risks of its course of action. It failed to price the risks anywhere near correctly. It relies uncritically on credit ratings. On top of all this, it has given a tremendous advantage to the Big Four banks. These banks have fully guaranteed debt of all types with only a low fee to apply in one month's time. They have been granted open slather by the Government not to pass on in full cuts in official interest rates. They are allowed to swallow up smaller banks, thus reducing competition.

And Stephen Kirchner takes apart Rudd's blaming everything on 'extreme capitalism' and "extreme free-market ideologues who influence much of the neo-liberal economic elite" (What a load of hyperbolic rubbish, and how unhelpful in the circumstances: I'll have to write a criticism of the speech).

Update: a withering critique from Alan Kohler.

'If you can keep your head when all about you ... '

2008-10-27T06:14:00.003Z

Milind Sathye skewers St Kevin over his too-hasty mindless 'guarantee EVERYTHING' banking deposit:

Why have we arrived at this situation less than a fortnight after the Government announced its decision, which initially was hailed by almost everyone? Could the run on non-bank financial institutions have been avoided? Did policy makers carefully scan what measures other countries took and why? Was there really a need to take an extreme measure such as a blanket financial guarantee in a hurry? Was a three-year guarantee ab initio necessary? And what do we do to get out of this mess?

Ireland was the first country to announce a financial guarantee, on September 29, as the global credit crisis deepened. However, it initiated the measure in stages. On September 20 it merely raised the ceiling on deposit guarantees from E20,000 ($40,664) to E100,000 and applied it selectively, only to individual deposits and to Irish credit institutions.

Nine days later the guarantee was extended to "all deposits" - retail, commercial, institutional and interbank - of selected banks. Significantly, the Government specifically announced it acted on the advice of its central bank.

It is important to realise that the Government took these decisions because Ireland was facing a property market meltdown, a credit crunch, its first recession in 25 years and the effects of the global credit crisis. Yet even in such an extreme situation the country approached the problem in stages.

Australian actions were in stark contrast to those of the Irish Government. The Rudd Government made an unprecedented change from no guarantee whatsoever (the $20,000 deposit guarantee was not approved by parliament) to a blanket guarantee.

And while the Irish guarantee was applicable to select financial institutions (domestic banks and other institutions), the Australian guarantee was applicable to all banks - whether domestic or foreign - credit unions and building societies.

Implementation in stages would have helped the Australian Government know the impact of the measures and then take further corrective action. This could have avoided the present distortion in the market.

Crucially, the Irish decision was made after advice from the central bank; in Australia we still don't know what the RBA advised.

Interestingly, the US and Britain, the worst-affected countries, didn't introduce blanket deposit guarantees.

In Britain the deposit guarantee was raised from pound stg. 37,000 ($94,631) to pound stg. 50,000. Again, Britain was severely affected by the crisis, unlike Australia, and yet still decided to move in stages. Of course, it introduced the emergency measure of recapitalisation of banks simultaneously. But these were extraordinary circumstances in the British financial system, not even a semblance of which was experienced in Australia, and still the British Government did not introduce a blanket guarantee.

The case of the US, the country most hit by the crisis, was no different. The Fed raised the deposit guarantee from $US100,000 ($161,342) to $US250,000 in the midst of the crisis but yet again no blanket guarantee was proposed.

Blanket financial guarantees are an emergency measure. Turkey, for example, underwent in upheaval in its financial system in the mid-1990s. Overnight interest rates had peaked at 1000 per cent, resulting in panic in the financial system. Banks faced a severe liquidity crunch due to substantial deposit withdrawals. The International Monetary Fund was called in, three banks were taken over and a full guarantee to all savings deposits was introduced until May 2000.

That is the kind of situation that calls for emergency measures such as blanket guarantee or bank nationalisation. Was Australia facing such a situation?

It seems that with the stock market tumble on October 11, panic buttons got pushed. Granted the markets needed a boost, but the Government could have moved in stages rather than taking hasty action with resultant adverse effects.

The Government's announcement on Friday of a free guarantee for deposits below $1 million and a paid guarantee for those above $1 million still doesn't address the distortion.

What it does is create four market segments: those below $1 million (99.5 per cent of the market) with either free cover or no cover, and those above $1 million with either paid cover or no cover.

Financial flows will continue in the sub-$1 million segment from the no cover zone to the free cover zone, and even in the above-$1 million segment from the no cover zone to the paid cover zone if there is an advantage after factoring in the cost of cover.

Also, if one has a deposit of $1million, one needs withdraw only $1 to get free cover, and if you have $10 million you just need to spread it over 10 institutions evenly to avoid paid cover. Such games will now begin in the market place.

To get out of this mess of its own making, the Government should unwind its blanket guarantee and instead cap it at $60,000. If required, it could be progressively scaled up. This would normalise financial flows in the market.

The unlimited deposit guarantee also puts the commercial paper market at a severe disadvantage in relation to the deposit market. As commercial papers are generally in denominations of $100,000 or more, a cap of $60,000 would permit normal functioning of the CP market.

Last, Australians need to know exactly what advice was given by the RBA. The Government says its actions have been supported by the RBA, but there is a difference between a recommendation and support. A recommendation is given prior to the decision while support is offered afterwards.

What we need to know is whether the RBA recommended a blanket deposit guarantee as the central bank in Ireland did. Given the problems in the financial flows that surfaced following the decision to offer a blanket guarantee, it seems unlikely the RBA would have recommended it.

If it had, it would mean that it was unable to foresee the problems that would arise in the market. That would suggest incompetence on the part of the RBA. This is highly unlikely and leads us to the conclusion that probably a decision was taken by the Government and the RBA was then asked to support it. If this is what has happened, then it is the Government that is undermining our economic institutions.

I'd put money on Milinde's conclusion. Rudd would have panicked, sent orders to the departments on what he wanted to happen, and ignored advice to the contrary, insisting on implementation.

Do you think that, if he had a recommendation from the Reserve Bank and/or the Treasury, given the criticism he has come under, he wouldn't have already waved it at the public at every opportunity?

He doesn't have the advice. The Reserve Bank and the Treasury would have known the plan was a dud from the start.

Rudd doesn't have the self confidence to stand to be told that he is wrong, that he has made a mistake, and that he should change his mind.

And this is the clown we have leading us, when we're just entering the maelstrom.

At least Ruddwatch can say that he spend the best part of a year warning you.

Update

2008-09-20T03:05:00.002Z

Sorry for having been away. Urgent and important business has kept me away.

We suspect that St Kevin will be mighty distressed that he is now facing The Terminator across the dispatch box.

The press already is full of a new energy and zing since he terminated Brendan Nelson's leadership.

Nelson, a tremendously decent and hardworking man, would have made a fine prime minister, we suspect. But The Terminator is made of entirely different stuff. He really is one in a million, for good or for ill, and he is going to give St Kevin a real run for his money.

The Terminator has taken on: Margaret Thatcher (result: a win for the Terminator); Kerry Packer (result: Terminator 1, Packer minus Fairfax); and John Howard (result: Howard, then in his prime, wiped the floor with him). He has no fear, he hates losing, and he never gives up.

The rather desperate and completely undignified attacks on The Terminator's wealth and background indicate that, even after almost a year in office, the government really doesn't have that much of substance with which to support itself.

And remember the moaning from The Haloed One that people were making personal attacks on him?

It just supports our conclusion that he is the most cynical and opportunistic politician we have yet seen leading the nation.

For substance, we have to go to his deputy. From many accounts - including the testimony of employers - her changes to Work(Non)Choices are quite moderate. She has had the intestinal fortitude to retain the ABCC, at least for the time being. And she would support the Victorian government's introduction of vouchers for vocational education.

Higher education is slowly moving into the 20th century. At this rate, it should move into the twenty-first century about ten years from now.

At least we know that, if The terminator does his job and Labor is forced to get rid of Kevin, there will be someone of substance waiting to fill his little red shoes.

Flight K-Vin07: restless passengers

2008-08-25T05:22:00.003Z

Well, Captain Rudd received some unwelcome news from Business Class last week, interrupting his efforts to drive the aeroplane that is the Australian economy into the ground.

There hasn't been any noise from First Class passengers, who seem to think that, surrounded by their champagne, cashews and DVDs on demand, and with time to worry about glacial retreat, they will be safe from the consequences of impact with reality.

But those in Business Class cannot be so complacent. They realise that the captain's current plans are disastrous. From Paul Kelly:

Business has put the Rudd Government on notice: it needs to revise its emissions trading strategy to avert a crisis for corporate balance sheets and the nation's economic health. Climate change, the dream political issue for Kevin Rudd at the 2007 election, has been transformed into a political and policy nightmare.

Make no mistake, the Rudd Government is now trapped by its pledge to proceed with an emissions trading scheme by 2010, before most of the rest of the world and, in particular, ahead of most of our trading partners. It faces a dilemma with no escape: it must either alienate the green lobby and climate-change believers to whom it has pandered, or proceed without sufficient support from corporate Australia in the teeth of warnings about corporate financial risk.

But the captain is insisting that the current course - driving the aeroplane nose-first into the turf - is the right one.

Mr Rudd says he welcomes talks with the BCA but warns emissions trading will come with a price tag.

"We, as a government, are committed to taking tough decisions and tough action for the economy's long-term interest and also for the environment's long-term interest," he told ABC Radio.

"Part of that is acting responsibly on climate change and part of that, in turn, means acting through a pollution reduction scheme.

"This will not come cost-free."

Thankfully, the captain is planning to tilt the plane's nose at the turf in 2010, before the next election. When the punters in economy class realise what the pilot is planning to do, Ruddwatch reckons they will quickly decide to replace him with a more sane, less headstrong and, well, less plain idiotic captain.

Yes, you heard it hear first: Ruddwatch is calling Rudd to be our first one-term Prime Minister. 'Worse than Gough' is what will appear in the history books. All because this otherwise intelligent man couldn't recognise a left-wing anti-industrial scare campaign when he saw it.

Nine months in: verdicts begin to appear

2008-08-08T02:12:00.004Z

With the best part of a year gone since his election, St Kevin and his Cabinet of Saints have had time to deliver on their rhetoric.

Here are some of the verdicts (all courtesy of The Australian: the Fairfax press is just plain useless these days).

* * * * *

Grocerywatch:

On Wednesday I raced to the new website to see how I was to be empowered as a consumer and use detailed information to save money on my weekly grocery bill. Unfortunately, like so many other consumers - and we're talking here about people forced to shop for the essentials of life, not big spenders on retail therapy - I was disappointed as a shopper and vindicated as a political editor.

After promising so much before the election, the Rudd Government delivered so little. And it was delivered in a form that's downright contemptuous of shoppers and an example of the nanny state stretched too far.

Apart from the blindingly obvious conclusion that competition brings down prices and a review aimed at trying to increase entry for foreign grocery chains, GroceryChoice is as sad, empty and useless as an old shopping trolley dumped in a stormwater drain. It's actually worse than that because the same shoppers who are outraged at the gimcrack gimmickry of a website that doesn't tell you real prices for individual items on the day you shop and where you shop, have to pay taxes to fund the scheme. They'd be better off if the money spent on the website were returned to them for spending on groceries.

For those of you thinking that this is the best system there is, I invite you to read this article.

When even the Italians are doing better than you, you know that things aren't good.

Anyway, let's continue:

Even the proposal for unit pricing, to enable easy comparison of different prices and quantities, is hardly going to make a dramatic difference to shoppers. When Bowen was being interviewed on ABC radio this week, Deborah Cameron asked a caller about unit pricing. Robyn replied: "Deborah, I have been doing mine, I would say, for the last 10, 15 years. When I go shopping, if there's something in a 250g package or tin as opposed to 500g, I would mentally, quickly work out whether it was worth buying the two 250s or the one 500."

After establishing that the shopper mentally multiplied a number by two and subtracted it from another number, Cameron declared: "You've got a very elastic brain. More so than me."

A lot of shoppers have elastic brains after years of practice. They don't need to use calculus, trigonometry or a website listing monthly average prices across a state to recognise savings and to know there's nothing government can do about rising grocery prices.

Tell that to St Kevin.

* * * * *

Kim Il Carr's ' For Chrissake Make Something' plans:

Productivity Commission chief Gary Banks has rejected arguments by Kevin Rudd and his Industry Minister, Kim Carr, that Australia must act to protect its manufacturing base.

And as the Government prepares to release special reviews into car and textile industry assistance, Mr Banks has insisted the economy would be better off by billions of dollars a year if the Government proceeds with scheduled plans to wind back tariffs and government payments.

In a speech that has deeply angered the Government, the Productivity Commission chairman also criticised Labor's recent decision to give Toyota a $35 million grant from its $500 million green car fund, which he said would neither help innovation nor cut greenhouse gas emissions.

He also attacked the Government's commitment to a "mandatory renewable energy target" - to encourage power sources such as solar and wind - and its promise to compensate electricity generators for the loss of asset value under its new emissions trading regime...

... Mr Banks, who was appointed Productivity Commission chairman by the Howard government, said arguments about a "new world order" were really "old wine in new bottles", like the discredited arguments for protectionism in the past.
"As illustrated by the latest reviews of auto and TCF (Textile, Clothing and Footwear), ongoing pressures from globalisation and emerging exporters, exacerbated by exchange rate appreciation caused by the mining boom, have been prompting calls for new measures to provide relief against imports or other assistance," Mr Banks said in a lecture at the University of Queensland on Wednesday.

He cited Productivity Commission findings that current car industry protection costs consumers and taxpayers $2 billion a year, or $300,000 a year for every car industry job. He said that slowing tariff reductions or offering new financial assistance could make industries less innovative because they were shielded from global pressures.

He said the Government's response to the two reports and a separate review of its broader industry assistance was critical and would "effectively set the course for industry policy and its contribution to Australia's economic future"...

... Senator Carr has said he is determined to ensure a future for manufacturing. But Mr Banks said "manufacturing should not be seen as having any special place - maintaining any particular industry should never be an end in itself".

And some more:

Carr has excluded the Productivity Commission from his portfolio's key policy reviews, in part because he knows Banks would insist on winding back the import tariffs that still protect the car industry and the textile, clothing and footwear sector.

It's also because the Productivity Commission rightly reckons that special handouts for some sectors typically burden other industries, consumers or taxpayers. And it's because Banks sees through the Carr push to use billions of dollars of government research money for "innovation" in favoured sectors.

The key to encouraging innovation, suggests Banks, is competition, not government assistance. Nor does Banks think much of the new "convenient environmental pretexts for supporting particular industries or activities". The green car fund is "unlikely to yield significant innovation or greenhouse benefits" on the evidence of its $35 million Toyota handout, he says.

By the way: for those who think the be all and end all of manufacturing is vehicles, and who ignore the fact that the workers in that industry are each, in net terms, actually destroying about $200,000 of value each year, consider what can be done in manufacturing without protection - here and here.

World class, value creating, innovative manufacturing, all Australian designed and engineered, expanding offshore - and not a cent from government protection.

* * * * *

The quangos:

Since coming to office, Rudd has established, ordered or held more than 150 reviews, or, to be more precise, something like 83 reviews, 17 committees, commissions or boards, 12 inquiries, 11 working groups and 11 discussion papers, seven summits, seven consultations and five audits.

Key parts of Rudd's narrative are getting delayed. Take one of those reviews, the Wilkins review, which is supposed to make sure Labor's climate change policies fit in with an emissions trading scheme. It was due last month. Nothing's appeared.

* * * * *

Add to that the carbon 'pollution' reduction scheme, the 'words not deeds' apology, the clumsy international diplomacy, the FuelWatch debacle, talking the economy down and inflation up, the very ordinary approach to fiscal discipline, and it's not an impressive record.

2008-08-05T06:33:00.002Z

St Kevin presented a paper to the Centre for Independent Studies’ Consilium conference on the weekend.

Having read his speech, which was repeated in yesterday’s Oz, I wonder why they bothered. It is completely and utterly vacuous, full of empty slogans and position points but carrying absolutely no substance.

Find below Ruddwatch’s point-by-point textual analysis, addressed directly to the sainted one (in italics):

Australia is facing some complex, long-term challenges that go to the heart of the nation's prosperity and security in the changing world of the 21st century. These challenges don't have easy solutions. If we're going to tackle them successfully, we must have thoughtful, robust debate and exchange of ideas.

We then also have to listen to that debate and its conclusions, rather than ignoring them and imposing an idiotic election promise – as happened in the FuelWatch debate. You can talk the talk, Kev, but …

As we saw at the 2020 Summit in April, Australians are genuinely interested in new ideas for our future.

Which Australians? Those who went to the summit are the ones that you and your cronies selected!

Australians are not much interested in the old battlelines of yesterday's ideological wars.

How would you know? Have you asked them? It sounds like you are trying to marginalise as ‘yesterday’s people’ those who disagree with you.

Watching the traditional Right and Left in today's policy debates sometimes reminds you of seeing your kid trying to put on last year's jumper only to realise it no longer fits. The old Right and Left thinking is often an ideological straitjacket.

Any examples? I’m still not sure what the difference is between the so-called old thinking and the new.

The solutions to today's challenges on productivity growth, on welfare reform, on indigenous policy, on workforce participation and on climate change won't come out of conventional Right or Left paradigms. The solutions will come from people willing to challenge the false choices

… another value judgment …

of the old paradigms that said that our only options are heavy-handed regulation or unrestrained market forces. We simply don't have to choose between Friedrich von Hayek and Leonid Brezhnev.

We never did. We never have. And it is wrong for you to frame the choices in terms of this false dichotomy. And this sounds like another attempt to smear Hayek, in an attempt to make yourself look reasonable.

The Australian Government sees itself as being at the reforming centre of Australian politics. We believe unapologetically in the power of market forces as the most efficient and effective means of generating economic prosperity.

Then why do you keep trying to frustrate them? Your conviction doesn’t run very deep.

Just as we also believe in the public goods that constitute the pre-conditions for a market economy to perform efficiently and effectively.

You don’t actually understand what a public good is, do you?

We also recognise that markets fail. As a matter of general principle we believe in using market mechanisms and incentives to design innovative approaches to these long-term challenges. We also believe in a compassionate society that endeavours to pick up those who have fallen down, and help them back on to their feet. Not through the episodic acts

… another value judgment, displaying a gross ignorance of how individuals in industrial societies looked after themselves in the days before mass welfare …

of private philanthropic endeavour, but through the actions of society through the state. Always, however, with an open mind as to the agency through which a compassionate society should act.

That is why we explicitly reject Hayek's view that society has no obligation to others who are unknown to us and his preparedness to allow fundamental social institutions such as the family to fend entirely for themselves against unrestrained market forces.

Umm, where did Hayek say that, exactly?

That is why, for example, we have a different approach to industrial relations, because we believe families need certain fundamental protections in the workplace.

Such as … ? The consensus is that your workplace arrangements really aren’t too far different from those of your predecessors.

This broadly is the philosophical framework we bring to government: recognising the power of markets but recognising equally the limitations of markets.

So far, your policy has had nothing to do with this framework, and has reflected only short term political expediency and populism … in direct opposition to your ‘philosophical framework’.

Consider the example of climate change, perhaps the greatest market failure in history. Yet we believe a market mechanism - emissions trading - is the best way to find the lowest cost and most efficient route to cutting carbon emissions.

Climate change has been happening since well before humans and their markets ever existed on earth. We think you mean ‘industrial emissions of carbon dioxide’. And this is only a market failure if you consider emissions of carbon dioxide to be a negative externaility. Considering that carbon dioxide is produced naturally by living things (including trees), and that its effect on climate is unknown, this claim is a bit of a stretch.

Consider also how micro-finance has proved so effective in developing nations in our region. Even very small amounts of capital have been effective in helping millions of people to start a business and start the climb out of poverty and despair.

How is this an example of a philosophy which recognises both the power and the limits of markets? Surely it is an example solely of the power of unrestrained markets to encourage innovation in the solution of human problems? No ‘limitations’ on display here.

The most productive intellectual and policy debates today often lie at the intersection between market failures and market mechanisms.

Any examples, Kevin? Sounds like another piece of empty rhetoric.

And the challenges of policy innovation and solving complex problems often arise from the nuts-and-bolts questions, such as how we design markets that harness the innovative potential of market incentives that operate transparently with informed and empowered consumers and that are supported by the most appropriate provision of public goods, while intervening where necessary when markets fail.

Again, the misunderstanding of what a public good is. Anyway, what about idiotic interventions in markets which are operating perfectly well (eg petrol, groceries) and where proposed government intervention (eg FuelWatch, GroceryWatch) would interfere with the efficient operation of those markets – to the detriment of consumers – but where the government is for political reasons committed to stuffing things up?

That is why the Government is building a stronger, fairer, and more secure Australia to help meet the needs of families and to see Australia through.

So you say.

From the day we came to government, we had to make a choice between two paths for Australia's future.

Oh dear, the ‘fork in the road’ is back.

Would we take the easy path of business as usual, hoping that the good times of recent years would just roll on. Or would we take the harder path and take on the big challenges, putting the long-term interests of Australia ahead of short-term politics?

This comes from a man who spends his exceedingly long working days watching Senate Estimates and putting out minor spot fires, while foisting half-baked interventions like emissions trading, FuelWatch and alcopops taxes on the public.

We are determined to take the latter path. We know that will often make things tougher for the Government. But it's why we're here. Not power for its own sake, but to prepare Australia for the challenges of a new century,

… talk is so cheap …

a century in which the Anglosphere that dominated the past two hundred years is unlikely to remain in ascendant.

What the … ?? Where did this come from? How does that fit with the rest of the speeh??

* * * * *

The whole speech looks like it was put together, in a hurry, with minimal research and consultation, by one of St Kevin’s harassed subordinates. It is intellectually empty rhetoric, containing absolutely no substance, and no relation to the world. I suspect that St Kevin didn’t put any effort into it, because the CIS and its supporters are not an audience that he is interested in talking to. He was simply ‘going through the motions’, and any old collection of platitudes would suit his purpose.

It confirms our essential understanding of St Kevin’s approach to his work. The man is obviously intelligent and hard working. But his approach is cynical and emphasises style over substance. When combined with the lack of a strategic approach to policy development and a focus on the short-term at the cost of the long-term, we are given the impression of a person who does not think deeply, is not interested in listening to or taking advice, and sees others and their ideas as pawns to be moved in his personal game of chess.

In short: intelligent without being intellectual; lacking clear goals, and so mistaking the means as ends in themselves; and deeply cynical in his treatment of people and ideas.

* * * * *

Glenn Milne on the GroceryWatch Farce.

And Michael Stuchbury takes the protectionism fight up to the Cynical One and Clown Carr:

Freezing the automotive and TCF import tariff cuts scheduled for 2010 would remove one weapon against rising prices when Rudd has declared war on inflation on behalf of Australia's working families. For example, the scheduled cut in auto tariffs from 10 per cent to 5 per cent could knock $1500 off the price of a family car.

As Ross Garnaut noted more than two decades ago, it's hardly good Labor policy to force the working class to pay more for their cars, clothes and shoes. Reid's book recalls that even Jim Cairns, the Victorian Labor left-winger who became Whitlam's treasurer, knew it was counterproductive to try to protect some jobs against foreign goods when it forced up the cost of "food and clothing for Australians all over the nation".

Climate fever

2008-08-02T04:15:00.002Z

Have you absorbed the Garnaut report yet?

Do you yet realise that, no matter what we do, the science on which the report is based predicts that civilisation is pretty much doomed anyway? If you doubt this, just read the first twenty or so pages of Garnaut's own report.

And what will our cutting carbon 'pollution' actually do to prevent global warming? Sweet buggerall, actually.

So why is St Kevin planning to trash the economy by implementing a 'save the planet' program that won't even work, and which addresses something which the latest science (not the late-nineties science used by the IPCC and St Kevin) says isn't even a problem?

Because it's the stylish, substance-free thing to do.

However, St Kevin's soaring popularity means that I must be missing something. Anyone mind telling me what part of the message I'm not getting?

* * * * *

The incomparable Henry Ergas skewers St Kevin again on the gap between his 'economic conservative' rhetoric and the interventionist reality.

"If the FuelWatch saga seems depressingly based on its ridiculous faith in government, at least it is confined to only one industry. We are only starting to come to terms with the big Kahuna of inordinate faith in government: the wonderfully renamed Carbon Pollution Reduction Scheme.

"The signs were never good based on the foundations laid by Garnaut. When it comes to addressing what Britain's Nicholas Stern described as the greatest market failure, Garnaut is Stern on steroids. Take this quote from the interim Garnaut report: "Occasionally the cost of a market failure will be less than the cost of government intervention, with all of its political economy and other risks and costs. But even in these cases, regulatory or fiscal intervention by government may be required to ensure an optimal response."

"Excuse me? The cost of government intervention is greater than the cost of the market failure, but the government must act anyway. Put "optimal response" at the end of the sentence and all is hunky-dory.

"Twenty years ago, governments finally recognised that even the best policies have unintended consequences. Those consequences undermine the certainty with which we can claim that interventions will make things better. Now, however, that recognition seems to have disappeared.

"A good example surrounds the distortionary effects from various arbitrary thresholds built into the emissions trading scheme. The Government has said that it will only place obligations on about 1000 liable firms, so that "more than 99 per cent of all firms in Australia will not need to be directly involved". The suggestion is that this will be a lighter touch than something like the GST. What this conveniently ignores, however, is the degree to which small firms that are not covered will gain an advantage over large firms that are, with all the potential distortions to firm decision-making that surrounds this sort of threshold. As output shifts from the larger (covered) firms to the smaller (uncovered) firms, what happens then? The answer is simple: coverage and the administrative costs expand remorselessly. This is, in other words, a scheme ripe for unintended consequences, but with supreme faith in itself the Government charges on regardless.

"As we await the public release of yet more reports to the Rudd Government - on grocery prices, car assistance and innovation - expect to hear even more about market failures, wise intervention and government solutions to problems. Talking about deregulation and less intervention is one thing. Doing it is something else again."

In other words, by not living up to its words, by not 'walking its talking', the Rudd government is setting us up for an economic disaster.

And, in case you hadn't noticed, we are sliding down the recession chute right now. The last thing we would need is Rudd to make it worse.

But that is what we have.

And I fear that all the outstanding public service that Professor Garnaut has performed over the years is going to be tarnished by his association both with the dodgy climate fanatics, the idiotic scheme that their rhetoric and shonky science ties him into, and the group of gormless poopulists that he is currently associating with.