Month: January 2009

Blood still boiling

Posted by Chief Blogger – 31 January, 2009

If Rudd wants to wage an ideological war then let’s have it. Hawke and Keating in the 1980s were smart enough to recognise the failings of socialism, Rudd hasn’t arrived at that point yet. He wants to take this country back to the Whitlam-Fraser years of stagnation and heavy government intervention. Malcolm Turnbull is well placed to take the fight to Rudd and his neo-socialist mates and win. History is on our side.

Now in the past I have not been a great fan of MT, but on the economic front MT gets it right and knows what he is both saying and doing. Unlike Rudd, MT has made it in business. In the US the Republicans are facing a similar neo-socialist challenge, from Obama and the Democrats. Former Governor and presidential candidate Mitt Romney - who like MT has also made it in business – had the following to say about this neo-socialist challenge:

The difference between us and the Democrats is this: they want to stimulate the government, and we want to stimulate the economy.

And the same applies here in Australia. Rudd is about increasing taxation and regulation to strengthen the hand of government, while the Liberals are about reducing taxation to stimulate the economy, i.e. helping individuals and families. The issue is about providing people with the right incentives to invest, employ and spend to get the economy going again. This means reducing taxation, getting rid of regulations that protect special interests (unions, ALP funding sources, welfare lobbyists) and controlling excessive government spending. Let Rudd argue why he wants to protect the government and MT can argue why he wants to protect individuals and families through economic prosperity underpinned by free market economic liberalism. I’m confident MT can win.

Cold War II

Posted by Chief Blogger – 31 January, 2009

As we all knew from the very beginning, Rudd mislead voters about his economic persuasion. He is no economic conservative, but a hard-core socialist determined to undermine the efficiency of free markets with odorous government intervention in the form of higher taxes and over-regulation. Writing in the hard-left Monthly magazine, Rudd had this to say about the recent economic downturn:

…it falls to social democracy to prevent liberal capitalism from cannibalising itself…

Nothing could be further from the truth. It is depressing and infuriating that the PM does not understand the main causes of the recent economic downturn. Government intervention in the US mortgage market is the main cause, even Bill Clinton (though not without blame himself) admitted as much last year as he chided his fellow Democrats for blocking his attempts to solve the problem. The same happened to Bush. Social democrats in the US Congress are the main culprits here, not so-called free market neo-liberals.

At the moment I am living and working in the US for a top 30 US Bank. My bank did not make any of the sub-prime loans which have been the cause of so much trouble. With good reason too. These so-called NINJA loans – no income, no job and no asset loans – were issued by Banks because of Congressional regulation, to people that never had any hope of making the repayments. These NINJA loans were pushed by the most extreme social democrats in the US Congress – House Financial Services Committee Chairman Barney Frank and Senate Banking Committee Chairman Chris Dodd – to boost rates of home ownership amongst minorities. They sought to achieve this through wholesale mortgage financiers Fannie Mae and Feddie Mac – which are government business enterprises able to be manipulated by their political masters for special interests. This was backed up by the so-called Community Reinvestment Act, or affirmative action for mortgage lending. Even the left-wing Boston Globe has admitted this:

…the Community Reinvestment Act, empowering regulators to punish banks that failed to “meet the credit needs” of “low-income, minority, and distressed neighborhoods.” Lenders responded by loosening their underwriting standards and making increasingly shoddy loans. The two government-chartered mortgage finance firms, Fannie Mae and Freddie Mac, encouraged this “subprime” lending by authorizing ever more “flexible” criteria by which high-risk borrowers could be qualified for home loans, and then buying up the questionable mortgages that ensued.

All this was justified as a means of increasing home ownership among minorities and the poor. Affirmative-action policies trumped sound business practices. A manual issued by the Federal Reserve Bank of Boston advised mortgage lenders to disregard financial common sense. “Lack of credit history should not be seen as a negative factor,” the Fed’s guidelines instructed. Lenders were directed to accept welfare payments and unemployment benefits as “valid income sources” to qualify for a mortgage. Failure to comply could mean a lawsuit.

NINJA loans would have never made it in a free market, but the market was not free. It was clouded by special political interests to the final detriment of everyone. The last thing Australia needs is more government intervention when excessive intervention was the main source of the problem to begin with.

Holden on a winner despite Pontiac

Posted by Chief Blogger – 30 January, 2009

The most powerful and best Pontiac ever, the G8 GXP,  has recently been released in the USA to general critical acclaim. The G8 GXP is basically a HSV R8 re-badged (VXR8 in UK) with some design changes, including slightly less power thanks to moronic US environmental regulations. Still 412 hp is not bad, but it is not the 425 hp that HSV gives you; I think the HSV looks a little better too. The actual car you buy from Pontiac comes with some bling-bling chromed wheels, which unfortunately look kinda cheap.

Pontiac G8 GXP

HSV R8

I’m pretty certain those hood vents on the Pontiac are also fake. Honestly, there are good reasons the US car industry is going down the tubes and the conversion of the HSV R8 to the US market is a good example of it. The problem is in a distinct feeling of ‘fake luxury’ in everything they produce. At this price range, if it has no practical function don’t have it! Put it this way, even Pontiac are having to imply through their promotional material that it is the best car they have ever sold. So doesn’t say much for their local capacity if a bunch of bogans from the out skirts of Adelaide can out do them. Holden through the G8 and previously the GTO (Monaro) have resurrected the Pontiac brand, despite Pontiac management.

Still waiting for a rear-wheel drive, mid-size and mid-priced vehicle from Holden, i.e. the Torana. There is a gaping hole in the market just crying out for a vehicle to fill it. As long as Pontiac and the rest of US GM don’t get a hold of it, it should be a winner.

Costa endorses MT for PM

Posted by Chief Blogger – 30 January, 2009

Former NSW ALP Government Treasurer, Michael Costa, has slammed, and I do mean slammed, the PM’s commercial construction Ruddbank proposal. His article in The Australian is a brutal take no prisoners critique of Rudd’s idea (which – for less loyal and true readers – I have previously covered).

IN rejecting the Government’s Australian Business Investment Partnership, Opposition Leader Malcolm Turnbull has shown the sort of leadership you expect from an alternative prime minister. In proposing the $4 billion scheme, Kevin Rudd has confirmed his inability to provide reasoned and financially responsible responses to the present economic problems.

BANG!!! Costa is effectively endorsing MT over Rudd for PM because of Ruddbank! Rudd’s response to the economic downturn has generally been abysmal. There is wide acceptance now that Rudd’s stimulus package of $10 billion has been a complete failure. That’s half the forecasted surplus gone for no gain. And of course, there was the debacle with changes to the government insured deposit threshold draining money from mutual funds and the corporate bond market.

Costa remains at a loss as to why the PM is implementing Ruddbank. Either the banks are in trouble and need support, or they are doing fine and therefore don’t need government support. Which is it? From Swan last week:

…the banks are not, at this stage, having problems accessing what’s called term finance, internationally. Many of the banks, just prior to Christmas, were very successful in their fundraising activities overseas.”

Something dramatic must have happened between January 19 and 24, when the partnership announcement was made….

According to Finance Minister Lindsay Tanner the companies the Government will lend money to are profitable. Indeed, “the money involved won’t affect the Government’s coffers”, and because “this is an investment, it will make a return to the Government”.

This raises the question, if these are profitable investments and the overwhelming lending to this sector is domestic, why can’t the domestic capital market provide the required funds? This is where the Government’s whole story becomes confused.

And provides further evidence of Rudd’s incompetent response to the economic downturn. It also might help to expose Rudd’s conflict of interest with providing tax-payer funds to protect the ALP’s main donors, the CFMEU, Westpac and other banks that the ALP and its associated entities have invested in to provide a cash stream for their re-election.

Bush 24 action hero

Posted by Chief Blogger – 29 January, 2009

From the People’s Cube.

Fairfax Press protects the NSW government

Posted by Chief Blogger – 29 January, 2009

The SMH has published a damning story of public health budget management. The story describes hospitals being unable to pay their bills due to either a lack of funding or poor management. This has impacted on vital services and medicines:

SENIOR doctors at Dubbo Base Hospital are threatening to quit after running out of morphine and watching patients in the intensive care unit swelter in 37 degree heat for five days because pharmaceutical companies and maintenance contractors had not been paid.

Despite the damning nature of the story, no reference or mention is made of the NSW Government, with only a passing reference to a former Health Minister at the end of the story. Instead, bureaucrats are singled out for scrutiny, as scapegoats. I can’t help get the feeling that the Fairfax Press, as a left-ward leaning media outlet, is protecting the Government. Surely the current Health Minister is the one in charge and should be made to answer for the current mess within the NSW Health Department. Did it never occur to the reporters or editor to obtain a response from the Minister? Even a no comment back from the Minister would have justified one line in the article.

Contrast this with an unusually ALP critical article from the ABC (normal editorial staff must have been on leave):

The ABC has learnt that two secret reports commissioned by the Government found the state’s health system could be short of nearly a billion dollars in funding by March.

The reports say the Health Department has a liquidity crisis, and hospitals cannot afford to pay their bills.

The Opposition’s health spokeswoman, Jillian Skinner, says the reports show the Government has lied about the problem.

Funding death

Posted by Chief Blogger – 29 January, 2009

Obama recently signed an executive order lifting the ban on government foreign aid being used to fund abortion in the developing world. In Australia we still have in place the ban, brought in by Alexander Downer. We remain the only developed country with such a ban. I once covered the bogus argument used last year to support the lifting of the ban. This argument basically ran that the same standard that applies to abortion in Australia should apply to our foreign aid programme. However, abortion is a state issue and there are various level of restrictions by state on access to abortion. It also ignores the moral issue as to the correctness of abortion to begin with.

Well there is now continuing pressure from the Parliamentary Group on Population & Development to lift the ban on the basis that it will reduce the rate of maternal deaths in the developing world. Former SAS Commander, Brig. Jim Wallace Ret. has responded:

Trained midwives, blood stocks and a clean birthing environment are far more effective in preventing maternal death than providing abortions. In fact, it’s estimated that the provision of $2 birthing kits could cut maternal deaths in the Third World by up to two-thirds. The current aid guidelines already provide for safe and effective family planning methods, including contraception.

Abortion is rarely about saving people’s lives, so the above considerations are irrelevent to abortion proponents. Abortion has become the sacrament for the secular left, and unless you partake in some manner you are excluded from their church.

Obama-Rudd make up time

Posted by Chief Blogger – 29 January, 2009

Looks like Obama is having second thoughts about his relationship with Rudd. Apparently they both had a make up call after Obama had originally ignored Rudd:

Obama telephoned Australian Prime Minister Kevin Rudd and Colombian President Alvaro Uribe, his first talks with either leader since his Jan. 20 inauguration, the White House said.

Still I’d be feeling pretty hurt by it all. Australia now only ranks with civil war and drug ravaged Columbia under the Obama administration. I guess Rudd does not have the kudos Howard carried.

Want more politicans? Vote for a republic

Posted by Chief Blogger – 28 January, 2009

Another great article from No Republic’s Prof. David Flint:

The conservative republicans fear the people would want to (elect) the president and vice president, governors, lieutenant governors etc. So we seem to be talking about up to 27 federal and state votes…

If the people actually approve all of these, we’ll be voting forever for about 16 more politicians every few years.

The point is the first plebiscite calls for a vote of no confidence in one of the world’s most successful constitutions without any indication of what is to follow and with every likelihood that a subsequent referendum will not pass.

In other words this is actually designed to achieve a period of constitutional instability.

This is not only a divisive and expensive manoeuvre. It is difficult to think of a more irresponsible proposal.

The comments that followed from readers are pretty funny:

Geoffo: If a referendum is held, the question should be “Are you in favour of Australia becoming a republic within the British Commonwealth?”

Doh: With so many different forms of republic, that question may as well be “Are you in favor of Australia becoming an amorphous blob”.

Rudd dumped

Posted by Chief Blogger – 28 January, 2009

Rudd and all his mates on the left have been dumped by Obama. Apparently there are other leaders in the world more important than Rudd. It may take Rudd and the left some time to get over this broken love affair.

But almost a week after his inauguration, the new president is yet to pick up the phone to Kevin Rudd, the leader of America’s most steadfast ally.

This should come as no surprise. Recent Democrat leaders have traditionally been dismissive of Australia compared to Republican leaders. In their multi-lateral world, close allies are less important, so Australia slips down the list in favour of bigger players. So I guess that means no future Medal of Freedom for Rudd.