Now I know some people will think I am harsh using the term “Rudd’s recession” but when you claim to be able to solve many of the world’s problems, you also have to take some heat when your mystic powers cannot fix everything. Mind you not everything is going against Kevin Rudd as it seems parts of Antarctica are not melting after all and in fact some of the icy bits down south are getting bigger! So Kev07 might have made a dogs breakfast of the economy, but he just might have just saved the planet!
At least now the Government and Reserve Bank of Australia seem to be able to utter that dreaded word…recession. Finally after months of looking at data that had recession stamped all over it the economic managers of this nation (the fools on the hill) have finally worked out that cash handouts for plasma T.V’s and rebates for pink bats, just doesn’t make up for three of your top trading partners being in an economic downturn.
Sadly if you believed Rudd, Swan and the RBA late last year when they kept saying Australia could avoid recession then I am sorry to inform you that you were misled. But I do not blame people for being misled, because they expect officials in important positions to know what they are talking about. So back in late October 2008 when Deputy Reserve Bank Governor Ric Battellino stated that Australia was on track to avoid a recession, and his views were publicly supported by the Prime Minister, then many people would have felt reassured. (see: Rudd says Australia can avoid recession) However their reassurances last year about the Australian economy were a bit like Noah telling those not coming on his boat not to panic, it was just storm and all would be well in a few days.
How could anyone not under the control of aliens think that Australia was going to avoid a recession after the Lehman Brothers failure and the collapse in commodity prices? Don’t these people watch Bloomberg? Why were the Australian public being told Australia could avoid a recession when it was pretty clear that the economy would enter a recession?
Worse still, why did the RBA fail to meet in January and cut rates then rather then have their summer break even as the world economic situation went from bad to worse? Were the Australian public misled because of honest mistakes or miscalculations (bordering on incompetence) or were the Australian public being subjected to a calculated campaign of misinformation to prepare them for Rudd’s wide reaching social agenda? Why are these tough questions not being asked by the mass media and why is the public suddenly so gullible?
But do not expect the media to focus much on past events because they are too busy singing Rudd’s praises in order to get a seat on the VIP jet. You know the one with gourmet hot meals served to your satisfaction or you get to yell at the staff. And while we are on the subject, isn’t it curious how Belinda Neal was given a dressing down by Rudd and sent to anger management sessions for yelling at restaurant staff, but the Prime Minister is allowed to merely say sorry after harassing a member of the Defence Forces on his “my CO2 footprint is bigger than yours” VIP jet.
I guess Kev reckons since he has walked along the Kokoda track for a television show that he is now an ex-serviceman, and therefore it is quite okay to bark out instructions like a drill sergeant. Maybe he should try that little yelling routine (without his bodyguards) at a pub out in the suburbs sometime?
Anyway as readers of this blog will know, I have been critical of the economic management of the Rudd Government for some time and back in December (see: Be prepared for the recession we might have avoided) I made it pretty clear once again, that I thought the Government and the RBA were behind the curve in dealing with this economic crisis. A few people wrote to me and said I was being unfair to Rudd (but I never yelled at him and made him cry!) and that I would have to eat my words in 2009 when Australia avoided a recession. Well it gives me no joy as an Australian and as an investor to see the Australian economy in recession, but I also feel I need to do my bit to try wake people up, because if they don’t things will just get worse.
Yes the situation can get a lot worse because Rudd is getting himself into a corner. He has made plenty of big statements indicating that the Government will do all it can to lessen the impact of the global recession, so what will happen if the Australian economy starts to get hit harder than many other countries? What will happen if Rudd’s billions do not deliver the sort of results expected? What will the Government do if the Treasury’s economic stimulus package calculations were as good as the ones they did for the alcopops tax, and as a result we find they have made a complete mess of their number crunching?
I am guessing the Government would launch another stimulus package; put Australia into more debt and hope that by the time they have spent a few hundred billion dollars that President Obama will have saved the day. But this would be a mistake; because even if the world economy starts to recover there is no guarantee the Australian economy will bounce back quickly as it will take some time for commodities volumes and prices to recover.
Australia may have been one of the last of the OECD nations to go into recession (or admit it was in a recession), but it could also be one of the last to come out the other side. I am not saying this will be the case, but it is certainly a possibility. The next few months will be critical and I just hope that this years Federal Budget will be better than the one handed down last year!