“Labor Can’t Manage Money!” Says Leader of The Party Who Left A Trillion Dollar Debt!

Now before the fact checkers get stuck into the headline, I’d like to withdraw it and admit that the Coalition did not leave a trillion-dollar debt, it was, in fact, a mere $889,000,000,000. However, headlines aren’t about accuracy; they’re either clickbait or some sub-editor’s way of making some pun that is neither funny nor actually connected to the topic.

Anyway, the point of this piece isn’t to point out the absurdity of Peter Dutton because we’re getting to the stage where doing that is like making one of those remarks which are totally unnecessary like, “It’s hot today, isn’t it?” or “Barnaby seems to be pissed.”

No, after talking to a couple of people yesterday, I realised that the average person finds much of the economic news confusing because they often think something is good news and it turns out to be bad news. At first I tried to explain that – when it comes to the economy – there’s actually no such thing as good news, there’s only news that isn’t as bad as it could have been or “I’m all right, Jack, so who cares about the millions that this news is screwing over…”

For example, take the Reserve Bank. They have decided that their one aim is to fight inflation. Therefore, they raise interest rates in the hope that this will bring inflation down without strangling the economy. And, of course, when I say without strangling the economy I mean without strangling it in a life-threatening way… It’s sort of like the Reserve Bank feels that this strangling is like some sort of consensual sex act. rather than the act of a psychopathic killer. Of course, the fact that it’s not consensual for a large number of people doesn’t alter the fact that the Reserve Bank is only doing this for our own good because what could be worse than inflation?

Ok, some might argue losing your job or your house or your business, but if you think long term then you’d have to agree that it’s a small price to pay to ensure that the Reserve Bank meet their inflation target of 2-3%.

For the average person with a limited knowledge of the way that markets work, the news that unemployment had drifted slightly higher would have been a cause for concern. However, the stock market reacted positively because the unexpected loss of jobs increases the likelihood that there’s a recession around the corner which will lessen the chances of an interest rate rise because conditions will be tougher and this will mean a reduction in profits of the stocks that went up in anticipation that there are fewer interest rate rises in the near future, which will, in turn lead to the price falling… but that’s next month’s concern.

Similarly, data that the economy is performing strongly may lead to a sudden crash in the price of a number of shares because there’s a fear that this will increase the likelihood of the government easing any stimulus measures such as quantitive easing. Now, for those who don’t understand it: Quantitive easing is when the central bank buys bonds, which it pays for them with newly created money, thus increasing the amount of money that banks have available to lend, which in turn can lead to increased lending and investment. So if we had a period of lower interest rates and QE there might be a situation where there’d be more money and people might use it to invest in things like… well, building new houses which would increase supply, which would lead to less inflation in the housing sector. But it would also lead to inflation in other areas such as champagne and caviar.

Anyway, as you can see through these simple explanations, there’s no such thing as good economic news, just things that the market can react to positively or negatively, and as every cloud has a silver lining, bad news is often good for the stock market, particular the stocks with holdings in silver deposits. On the other hand, sunny times may lead to sunburn and the market may react cautiously to good news because there’s no such thing as a free lunch, and the billion dollar profit may lead to the government increasing taxes on windfall profits.

And speaking of windfall profits, it was good to hear Peter Dutton stand up for the struggling gas producers who seemed happy with Labor’s proposal because they didn’t know any better. Dutton complained that Labor saw business and industry as instruments of the state and that the government wanted to “use the chains and whips of regulation and tax to control”, which, thanks to his softer side, he would never do, unless it was someone who desired chains and whips such as people who are unemployed or asylum seekers. He then quoted that intellectual giant Ronald Reagan who “let freedom solve the problem through the magic of the marketplace.” So, we are going to choose magic over whips and chains. I wonder if that will be the slogan for the next election. “If You Believe In Magic, You’ll Want Dutton.”

Finally, I can’t let this week slip by without bidding farewell to Stuart Robert whose service to Australia has included such things as single-handedly ensuring that at least one Internet company was making massive profits. He’s also responsible for clearing up that misunderstanding that politicians should ever tell the truth when the Cabinet policy is to ignore the law and lie through your teeth. A man whose lack of presence will be missed by all.

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