I am sure I am not alone in having a high opinion of Alan Kohler, who regularly reports on business and finance issues.
Hopefully many of you will have read the article published today (10/06/20) in the Murdoch press Business section, titled What we’re facing is not a ‘recession’.
If you can get behind the paywall to read the whole article on page 32, please do. Copyright does not permit me to reproduce the whole article here but this is a taster.
It’s not just the Federal Government. All Australian governments have made a series of decisions over the past four months that have destroyed thousands of businesses and put more than a million people out of work, and none of them have properly compensated all of the afflicted.
In fact, targeted support for those affected by the business closures should have been announced simultaneously with the closures and it should have been unlimited.
It is a disgrace that this wasn’t done, that so many lives have been devastated while others have sailed on unaffected because their employer doesn’t happen to rely on travel or crowds mingling together to make money.
Mr Kohler has no quarrel with the fact of the closures, which have almost certainly saved hundreds of lives, rather he says “The problem — the only problem — is that having decided to make people unemployed, reduce incomes and close businesses, they did little to help those affected for weeks, and when the help came, it was untargeted and capped.”
He goes on to offer a clear solution and to criticise the fact that the government is pretending it is being generous in giving help to anyone at all – instead of openly admitting that we all need help, that it is not our fault but theirs – if fault is the right word, because the reason was to prevent a more serious crisis.
But governments at all levels are complicit in the decisions made, and the implementation of those decisions, without a ready-made plan to minimise the damage.
Any government worth electing must be prepared for disasters. The Ruby Princess was another example of unpreparedness.
When you board any commercial plane, you are advised of the process to follow in the event of a disaster. It is very rare for any flight to experience a disaster, and we all know that the probability of surviving one unscathed is slim. But at least we have been provided with a hope of survival.
It would be an interesting exercise for someone to list all the disasters which can affect the whole population of a country, and a pandemic would have to be high on the list.
So procedures to follow have to be prepared in advance, ready to put into immediate effect – and we did get fair warning of the corona virus disaster!
But if governments are going to require the population to take actions which put their lives and livelihoods at risk, then it is those governments which have to wear the cost – and Alan Kohler’s article indicates a simple process for doing this (was that beyond the thinking of government officials?) and the outcome must be equitable.
If my memory serves me well, after the Bali bombings, a special unit was set up, based at the Royal Darwin Hospital to be immediately available in the event of another similar occurrence.
In the present crisis, public servants and many other workers have kept their jobs and are minimally affected.
But many in the arts and entertainment areas and in tertiary education have had their lives and their futures shattered.
And as for those non-nationals on visas, along with refugees in the community, and those poor souls, normally incarcerated offshore, but currently packed into hotels, and essentially forgotten while waiting for medical treatment – they are being damaged with no avenue for recompense.
PLEASE do not praise the Prime Minister for doing a good job.
Tell him to listen to the appropriate experts – and that also applies to developing policy to tackle the inexorable path of climate change.
I have noted in a previous article, how Darwin, looking like it had been hit by a nuclear bomb after Cyclone Tracy, was restored by the Federal Government (this was before the NT gained self-government) and experienced a cashless society for weeks, with the government covering the cost of establishing food drops for those who stayed and also assisting those who were evacuated inter-state.
Of course, there will be critics who say this occurred on Gough Whitlam’s watch and he spent money like water!
Well – none of us can survive without water, either, and the cost of caring is usually far less than the cost of ignoring a desperate situation.
PLEASE read Alan Kohler’s article if you can and pressure governments to seek advice from qualified sources rather than fumbling and bumbling along with ill-thought out plans, developed on the run.
What is always apparent with this Coalition government – it is reactive not proactive – and if we ever needed proactive policies it is NOW!
I end as always – this is my 2020 New Year Resolution:
“I will do everything in my power to enable Australia to be restored to responsible government.”
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With all due respect to Alan Kohler a lot of people and I was one of them, knew full well this recession was coming Covid -19 just brought it forward. And btw, this recession is in its infancy, it is going to get a lot worse by an order of magnitude.
This government makes the Bolsonaro government in Brazil look like paragons of virtue, financial genius’s. Morrison can and will do as he please’s, the business’s will keep going broke and people will keep losing their jobs, there is no opposition. I was going to write to the Clerk of the parliament and ask him if there was a Doctor on standby in question time. Because it appears to me, the opposition members are either, dead, in a coma or, as Hawke used to like to quip ‘ Had a long lunch ‘ .Btw Albanese has all the charm and character of a dead pot plant. The Labor party had better get their collective thumbs out of their chutney lockers or, we are going to end up like somewhere like Yemen. Dramatic? A lot of my friends are talking about storming the Bastille.
Phil – I think you misunderstand. Without reading the whole of the article you cannot understand the distinction. I cannot on the AIMN publish the whole article but if you care to find my Facebook page it is there.
I found the article and you are confusing me. What have I misunderstood? The government is crap and have mismanaged their response to Covid 19. Correct and understood. Business’s are going under unemployment is on the increase, Correct and understood.
The economy has been has been retracting for months in the US,China and Europe and has been flowing on to us. The U.S has been pump priming its economy to the tune of trillions debt of a magnitude that is unsustainable. This is flowing on to us. I really don’t understand where you are coming from, I don’t agree that if the government had kept putting billions into the economy in the areas mentioned, it would not have gone into recession. I am not an economist, I just use common dog and read other people forecasts. Alan Kohler is respected so are other economists who say we were headed for recession with out Covid 19. If you can add what you think I missed, I’ll read it. My political rant I stand by.
I agree Phil. The Scummo Sacked from Marketing COALiiton Liarbral Nazional$ misgovernment is definitely the worst Federal “government” since Federation in 1901. The 2008 GFC strategy was available, easily put in place and proven to protect Austrian voters from foreign financial mismanagement ….. and Scummo et al BLEW IT!!!!! Why?? Because it was a LABOR PLAN of Kevin Rudd and Ken Henry THAT WORKED ….. “go early, go hard, go families” ….. as the world gleefully acknowledged!!
What did Australia get in 2020?? “Get around to it, she’ll be right mate, go corporations!!!”
Who knows his reasons, if any????? Certainly it was NOT seeking the best outcome for Australian voters. Some critics have suggested that Scummo did not have a clue about what he was doing and shrank off into a corner, avoiding his daily “I am the greatest” media rant, for which the Murdoch press gave him a pass.
Obviously the optimum job creation programmes involve expanding alternative energy generation especially by residential solar panels, but News Ltd knowingly and incorrectly blamed the Labor government for OHS deaths caused by employer apparent negligence and lack of training. His coal mining industry financial patrons would not be happy with this sensible development.
Alan Kohler is a credible media financial commentator who started in the AFR as Chanticleer and progressed onto television. HIs evidence based comment on commercial matters IMHO ranks him just below Dr Norman Swan on ABC RN plus Coronacast podcast for COVID-19 advice.
Alan Kohler knows what he is talking about and it’s a pity that probably no one in the present government will take his good economic advice.
Public life benefits immensely from the clash of opinion.
Churchill 1940s : “This movement among the atheistic Jews is not new. From the days of Spartacus-Weishaupt to those of Karl Marx, and down to Trotsky (Russia), Bela Kun (Hungary), Rosa Luxembourg (Germany), and Emma Goldman (United States)… this worldwide conspiracy for the overthrow of civilisation through arrested development” can you see anything like the overthrow of civilization happening today 2020?.
The Whole World can’t breath..US imperialism threatens everyone everywhere
Nations obeying a higher power in Washington are complicit with its criminality, harming themselves at the same time.
Public life benefits immensely from the clash of opinion. …..When the Lie Becomes the Truth There is No Moving Backwards……The COVID-19 crisis is marked by a public health “emergency” under WHO auspices which is being used as a pretext and a justification to triggering a Worldwide process of economic, social and political restructuring…..Social engineering is being applied (the worthy and the unworthy). Governments are pressured into extending the lockdown.
Secret letters written in 1975 by the Queen and her man in Canberra, Sir John Kerr, can now be released by the National Archives – if the Australian establishment allows it. On November 11, 1975, Kerr infamously sacked the reformist government of prime minister Gough Whitlam, and delivered Australia into the hands of the United States.
During the Whitlam years, 1972-75, Australia briefly achieved independence and became intolerably progressive. Politically, it was an astonishing period. An American commentator wrote that no country had “reversed its posture in international affairs so totally without going through a domestic revolution”.
Today, Australia is a vassal state bar none: its politics, intelligence agencies, military and much of its media are integrated into Washington’s “sphere of dominance” and vast war plans.
The last Australian troops were ordered home from their mercenary service to the American assault on Vietnam. Whitlam’s ministers publicly condemned US barbarities as “mass murder” and the crimes of “maniacs”. The Nixon administration was corrupt, said the Deputy Prime Minister, Jim Cairns, and called for a boycott of American trade. In response, Australian dockers refused to unload American ships.
….Billy Hughes Aust Prime Minster ,”The Montefiores ( jewish bankers) have taken Australia for their own, and there is not a gold field or a sheep run from Tasmania to New South Wales that they haven’t got their dirty grubby hands in” … (Billy Hughes PM).
I’m sure after this lot I’ll fall into the unworthy .
I am going to leave the following for those who claim they know nothing about economics, NOTE “money from thin air”
Yes Alan Kohler is totally accross this.
Senator PATRICK: Just to help me with a bit of 101 monetary policy: you said that you have borrowed $50 billion from government through the bond market and, I think, $19 billion through the international market. Is that what you said?
Dr Lowe : No. The Reserve Bank doesn’t borrow money. We bought, in the secondary market, $50 billion of government bonds, issued by both the states and territories and the federal government. To date, we’ve lent $5 billion to the banks. We’re prepared to lend the banks up to $100 billion. So the Reserve Bank hasn’t borrowed from anyone; we’re the ones buying and lending.
Senator PATRICK: Sure. You mentioned $19 billion in a bond sale.
Dr Lowe : The AOFM issued [inaudible] two weeks ago and raised $19 billion. There was demand for maybe $50 billion or $60 billion. It’s not the Reserve Bank doing that; it’s the financing arm of the Treasury, the AOFM.
Senator PATRICK: In terms of the government making money available for things like the JobKeeper program, that’s a separate activity to what the Reserve Bank is doing. You’re trying to provide liquidity to the financial system. The source of your money to do that is what?
Dr Lowe : The source of the Reserve Bank’s money—this is the beauty of central banking: central banks are unique entities in that they can create money. When we want to buy a government bond from a pension fund, the way we pay for that is credit—if you buy it from a bank—at the bank’s account at the Reserve Bank. We are the one entity in the country that can create money just out of nothing. That’s why it’s incredibly important that the governance around that process is very strong, and that, as I said in response to Senator Whish-Wilson’s question, the separation of monetary and fiscal policy is kept. We have seen, where that has not been maintained, that it can be abused—creating money out of thin air and financing government expenditure without checks and balances.
Senator PATRICK: It sounds like a great job, if you don’t mind me saying!
Dr Lowe : The governance of it is incredibly important. It’s mainly about interest rates, but the central banks are the only entities that can create money out of thin air. We take that responsibility incredibly seriously, and it’s not to be abused.
https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;db=COMMITTEES;id=committees%2Fcommsen%2Fa3af0917-dc51-4d01-a86f-69153eb93040%2F0001;query=Id%3A%22committees%2Fcommsen%2Fa3af0917-dc51-4d01-a86f-69153eb93040%2F0000%22
Surely if the PM does one thing right but ten things wrong, he has f#cked up .
The incompetence stems from ideology finding solutions for the wrong problems. Right wing ideology doesnt see the world as having problems to be solved. It sees the world as spheres of influence. “Solutions” are applied to maintain the sphere of influence.
Winning elections is more important than humanity, assylum seekers, more important than honesty, sports rorts, more important than people, newstarve. Their solutions have nothing to do with the problems. $30m to murdoch to do as he wishes. What problem was that trying to solve?
Simples really.
I must admit that I was shocked and appalled that the Australian government did not have any contingency plans for such an event such as covid -19 when it has been well known that a pandemic, such as this, was very much on the cards for a long time.
The governments lack of preparedness is an indictment of incompetence, corruption and criminality and I am calling for there to be consequences, because if there are no consequences for this appalling lack of (proper)government then what incompetence, crime or corruption will they not commit?! For example during the Second World War Britons where issued with gas mask to protect the domestic population from gas attack, a sensible precaution, but the Australian government had no prophylactic policies at all despite being well aware that a covid -19 event was inevitable given our hyper- connected world. Appalling, what do we pay theses monkeys for!!!!
The blame for the damage done by the way the shutdown and the supposed financial relief have been managed belongs to one group only – those in Canberra who decide how it will be administered.
The one thing they did right was to listen to the medical advice. Everything else has been screwed up.
While not having read Kohler’s column, I think what he reportedly says about the Government’s response and responsibility is right. However I am not so sure he is worthy of too much praise as an economist after all he toes a very traditional line and nightly sprains two of what I, not an economist, consider to be symptoms of the worst of the capitalist systems: the Stock Exchanges and the currency markets. The trade in stocks and shares, once related to money-raising for a company’s Development but exchanges have become little more than casinos, witness the fact that the Australian Stock Exchange has become a Stock on its own exchange. As for the currency markets, I fear they no longer reflect the relative values of one currency against another but have instead become another casino with the efforts of currency traders doing nothing productive but enriching themselves by manipulating artificial rates of exchange. I find the nightly recital of share prices rises and falls meaningless without any context and likewise the currency values. I read today that the ‘Aussie’ has appreciated 30% or something against the Greenback since some time in the past for no apparent reason. Well it’s apparent to me that this might reflect a belief that our government isn’t as bad as that of the US. In the meantime I look at the Aussie’s value against the Japanese Yen and it has plummeted. And can someone tell me, if currency shifts are so important, why don’t we see the Chinese Yuan exchange rate quoted, given China’s role in our economy. OK, I know I could probably find it if I bought a Newspaper, or I could google it but… anyway, As noted above I am not an economist so probably shouldn’t even venture a comment in this space. Good on you for giving it a go RJ.
I don’t know why ABC accepts Alan Kohler as a Finance News Reporter when he has his own column in InvestSmart.com?! He is also a paid commentator for a number of private investment firms including his own Eureka Report which will constantly barrage you with subscription fees to join their clique!
When it comes down to it, Alan Kohler is all about the current system of capitalism and it’s totally unfair distribution of wealth.
Might be alright for him, but not the majority.
Interesting reactions many Australians (like elsewhere) had during and after GFC that are similar to Covid-19, although the latter has not even started economically. At first fear and anxiety supporting Keynesian helicopter money for households in the GFC but when critical period had passed and catastrophe avoided it was all deemed to be unnecessary waste of taxpayers money by many LNP voters….. yet to hear any corporates in receipt of helicopter money for Covjd-19 complain nowadays?
The LNP govt., with all the support it receives from media (often means ignoring them), is rewarded for incompetence aka Thomas Frank’s ‘The Wrecking Crew’, strangle govt. service funding, downsize or merge departments, outsource policy to IPA etc. and make political appointments to ensure incompetence; libertarian strategy of fait accompli to justify small govt. and low taxes.
One struggles to identify any competent and/or normal LNP senior MPs, Birmingham and Chester? Meanwhile Labor opposition is disappeared from media except for perceived negatives and to sometimes defend themselves vs. presenting details of alternative policies or ideas (even when they do, too similar to LNP).
Phil – the term ‘recession’ is usually applied to a ‘natural’ cyclical phenomenon, whereas our current financial crisis is one we have been pitchforked into by unplanned government action. It just happens to have occurred when a recession was being predicted.