MrGareth’s Missives

Recently, and quite coincidentally, I've watched three analyses of the 2008 financial crisis.  The Inside Job, a sensational documentary narrated by Matt Damon; and two dramatizations of the collapse of Lehmans: : The Last Days of Lehman Brothers (BBC) and Too Big to Fail (HBO).

The highlight of all three has to be this now famous "give it your best shot" moment with corrupt academic Glenn Hubbard:

 

We all know the story.  Outrageous risk. No regulation. Disproportionate compensation for irresponsible risk. Arrogance, conceit and deceit, and most importantly greed.

Shocking, horrible and involving tens of millions of job losses around the world and doubling the national debt of the USA, not to mention now threatening the financial validity of several European countries.  I remember sitting in a diner in Holywood when the first bailout bill fell over and the global stock market fell off a cliff within seconds.  After I had got over my own shock I realised that everyone else in the diner had also stopped what they were doing, had their jaw on their chin (like me) and must have been thinking the same as I: "We're fucked!"  Won't ever forget that.

I'm not aware of that many repercussions for many of the people that allowed this to happen, or engaged in it.  I'm not aware that many of those involved, with the exception of those working at Lehman Brothers, even lost their jobs, let alone went to jail or had their vast ill-gotten wealth removed. At best, some were literally rewarded with massive severence payments - paid for by the bailout money provided by the tax payers.  Often those same punters defrauded in the first place.

Then I read this article at The Guardian, and this arresting quote: 

"When governments seek to protect the rich from the poor, they act swiftly and decisively. When they undertake to protect the poor from the rich, they fanny about for years until the moment has passed."

That kind of summed up this whole mess for me.  You read the article, and - certainly in London it seems - regardless of a lack of punishment there's not even any real regulation efforts to stop it happening again!  But those trying to protest for change to stop it happening again are now being included among terrorist groups as a major danger from which society should be protected.

This is like the police allowing thieves to steal from citizens, buying the loot from the thieves with the citizens' money and then preventing the citizens from even complaining about it.

Then French Finance minister, Christine Lagarde, sums it up rather well at the end of Inside Job.  "The Financial Services Industry needs to remember it is a services industry...it needs to serve others before it serves itself."  Furthermore, Government needs to remember to serve us and not the financial services industry because we put them in power and we pay for what they do!

“Frankly, the nation is being governed by amateurs.”

Nothing pains me more than to agree with Tony Abbot but on this observation, we seem to be in agreement.  Now don’t get me wrong, I’m comfortably left of centre and with the Greens’ self-righteousness perennially turning me off supporting them, Labor is really all I’m left with.  But this government has lost all of my faith.  I am struggling to think of anything they have done that has been well thought-through, suitably socialised and then well executed.  If anything, were Homer Simpson to be Prime Minister, its unlikely there’d be fewer laughs.

They will immediately point to their management of the GFC, which admittedly is without parallel in the world in terms of its success.  However, I am one of those people that believe they benefitted from a strong Liberal Party legacy – albeit mostly ill-gotten.  Furthermore they were for once decisive and acted very quickly and secured a complete avoidance of recession in either the literal or the conceptual sense.  However, they did hurl a staggering amount of money at it – somewhat I feel like a father and householder losing a bet for $100 and mortgaging the house to pay for it.  It must also be remembered that much of that execution has been abysmal.  One can;t of course forget the disastrous “pink bats” scandal which, far from being badly managed almost seems not managed at all.  Not only did people die – about as bad an achievement a project could score – but untold amounts of money have been wasted in training, litigation and damage.

Fundamental to their management of the GFC has been the Buildings for schools program, and we must never forget who was responsible for that if we are to suitably judge just how much of an improvement we can expect in Labor’s change of leadership.  Appallingly run – or rather again, not run at all – the program has not only wasted hideous sums of tax-payer’s money, but is highly questionable in the way it provided Labor with countless valuable local photo-opportunities around the country.  For a period of time Kevin Rudd disappeared from the national press but instead scored a front page photo-story on the front page of every local rag coast-to-coast.  In time, it may be that in the dictionary they may define the term “pork barrel”  with the simple reference: “...see BER”

Outside of this, the Health reforms are stalled with the whole of West Australia refusing to be part of it.  The still-born Resource Profits Tax was antagonistically announced by-passing any kind of consultation and then desperately diluted in fear of a damaging fight with the mining industry.  There was the Apology and Kyoto of course, and they should not be sniffed at, but in terms of execution – Kevin saying a word or signing a all-but-superseded and impotent Treaty – they are not going to be remembered as radical reforms.

I’ve already described  how Kevin Rudd lost me after his scrapping – or rather never-never-ified – the ETS.  But after only a few weeks we can see that the style of this government has not dramamtically changed.  Bad process, a lack of consultation, spin-obsession and no stomach for an argument seem already to remain key planks of this government’s modus-operandi.  The Internet Filter has finally been shelved after two years of ever-circular debate and procrastination.  The Green Loans program  has also been dumped on the basis of, not surprisingly, poor management and budget blow-out.  Julia Gillard’s Regional Solution to the immigration problem (which isn’t really a problem with a flow equal to filling the MCG every second decade )– started off with a ring of quality.  To co-ordinate a program fastened to the UNHCR has an aura of credibility and seemed almost to seek the higher ground for a 24 hour period.  Her speech did almost seem as if it might be a watershed in the miserably xenophobic tone of the traditional migration debate.  However, as soon as the surface was scratched a wave of disappointment swept across the nation – as if they had all been collectively let down by the same scratchy card.  It was a nice-sounding though-bubble that was not properly consulted and given Labor’s track record, has almost zero chance of getting properly executed.  It wasn’t a solution, it was a political fantasy that had been brought no more reality than the voicing of someone’s “desire” to travel the world.  The East Timorian Prime Minister’s reaction to questions about the plan summed up its integrity – “Plan, what plan?”

For me, this sounded too much like The Old Boss.  Lots of high-minded rhetoric primarily focussed on generating satisfyingly positive and applauding headlines.  There’s nothing unusual about that in politics but that’s more or less where the Labor’s Party machine begins and ends.  There’s very little policy execution and what policy execution there has been has come to a grinding halt in the last six months.

The Prime Minister said, “I’m happy to be judged on what I say.”  Sadly Julia – like your predecessor - you’ll be judged on what you do, and to date your government has achieved very little of lasting quality but abject incompetence.  Expect more eggs.

<script type="text/javascript">

  var _gaq = _gaq || [];
  _gaq.push(['_setAccount', 'UA-7069961-2']);
  _gaq.push(['_trackPageview']);

  (function() {
    var ga = document.createElement('script'); ga.type = 'text/javascript'; ga.async = true;
    ga.src = ('https:' == document.location.protocol ? 'https://ssl' : 'http://www') + '.google-analytics.com/ga.js';
    var s = document.getElementsByTagName('script')[0]; s.parentNode.insertBefore(ga, s);
  })();

</script>