Intellectual dishonesty is pure poison – A Crikey weblog

Do as we say, not as we do

   

Why is it that some pundits feel that the democratic voice of a minority is vitally important to listen to when it’s their candidate, but as soon as the tables are turned, any opposition to their candidate is “destroying” their party?

Darryl Mason asks – where’s their commitment to “democracy” now?

68 Comments

  1. 1
    Lee Harvey Oddworld
    Posted December 9, 2009 at 8:03 am | Permalink

    Bolt’s rubbery commitment to democracy, like his very flexible scepticism, is in fact a timid servant of his all-consuming hatred of the Left.

    It’s quite a thing, to be defined by your hatred. And no amount of gooey stories about sick kids or family birthdays can hide it.

  2. 2
    monkeywrench
    Posted December 9, 2009 at 9:41 am | Permalink

    Lee Harvey @1
    Hear hear!
    The man is so consumed by his hatred of environmentalists that it doesn’t occur to him that wanting to preserve the environment for one’s children can be a good thing. Therefore he will attack any green proposal, any method of reducing pollution as WRONG! and thus he has constructed his persona as the ideal dogmatic fundamentalist. It’s a profoundly ugly look.

  3. 3
    GaryM
    Posted December 9, 2009 at 9:58 am | Permalink

    This is more than an environmental issue, this is about the very essence of who these people(conservatives) are.They are having a bad case of shit on the liver because they’re propaganda and the general insulting of peoples intelligence, just ain’t washing.

    They’re born to rule mentality always rears its ugly head when they are getting a thrashing from the left, they are being made to look like idiots by the government and it is showing.Bolt and his ilk must have nearly choked on their Chardonnay when they found out Abbott was going to lead them into the promised land.

  4. 4
    Cuppa
    Posted December 9, 2009 at 10:29 am | Permalink

    Fancy spiting the future of your offspring in the name of a hatred campaign against a political movement.

  5. 5
    surlysimon
    Posted December 9, 2009 at 10:47 am | Permalink

    I think this debate highlights the fact that we need to redefine what a Conservative is. I don’t believe those (including Howard, Abbott or even Bolt) are truely conservatives, they are Radicals, advocates for an unfettered free market. Surely a Conservative is one who want’s little or no change, a society and ecconomy in steady state not this push to constant expansion of ecconomy.
    Traditional Liberals (Pre Howard) are generaly exponents of this steady state, the only major clashes with Unions happened under Labor Governments, and it was a Labor Government who started to deregulate the Australian ecconomy, funny old world isn’t it.
    The thing I have noticed most is the in moving to the Right the liberal party and it’s supporters have adopted a politics of “us and them” where “them” is wrong allways regardless.

  6. 6
    John
    Posted December 9, 2009 at 11:57 am | Permalink

    Darryl makes a great point I think, perhaps missing out on the fact that Andrew is knee deep in this shit. He’s not an objective “social commentator”, he’s openly campaigning against Malcolm Turnbull because Turnbull chose to believe peer-reviewed scientific reports over a book that rips off graphs removed from the Great Global Warming Swindle, which fails to even reference where they came from.

    In ten years Turnbull is going to look like a genius.

  7. 7
    PeeBee
    Posted December 9, 2009 at 12:33 pm | Permalink

    John,

    I don’t think it will take 10 years! His comments yesterday about TA have shown him to be pretty smart and now the he is in the backbench he has the chance to show it.

    Abott has surrounding himself with lightweight intellect but it won’t protect him from the determined MT.

  8. 8
    surlysimon
    Posted December 9, 2009 at 12:45 pm | Permalink

    I posted this in the “Us and Them” thread but I think it is realevent here it is startling the difference in parties, and remember the Conservatives will probably win the next UK election with a “drovers dog”

  9. 9
    beej
    Posted December 9, 2009 at 1:11 pm | Permalink

    I think this debate highlights the fact that we need to redefine what a Conservative is. I don’t believe those (including Howard, Abbott or even Bolt) are truely conservatives, they are Radicals, advocates for an unfettered free market. Surely a Conservative is one who want’s little or no change, a society and ecconomy in steady state not this push to constant expansion of ecconomy.

    Perfectly said SS, I tire of hearing the likes of those you mentioned self-identifying as Conservatives, when they are really Hard Right “expand the economy at all costs and privatise everything with no checks” Super Capitalists. A Conservative would take a more cautious approach with safety nets in place and a “protect a steady economy and not take too many radical risks” approach.

    Kinda like false advertising to me…

  10. 10
    Sancho
    Posted December 9, 2009 at 1:32 pm | Permalink

    I agree with surlysimon. It’s misleading to lump free-market privateers, the authoritarian Right, and social-conservative fundamentalists all together.

    At any one time, one of those groups is leading the other two, but they essentially base their conservatism on different principles: greed, fear of uncertainty, and fear of death, respectively.

  11. 11
    Bloods05
    Posted December 9, 2009 at 1:59 pm | Permalink

    Abott has surrounding himself with lightweight intellect

    Yes, isn’t that interesting? Abbott is a whacko, but he is not stupid, so why has he surrounded himself with people who are? Does this indicate an insecurity about his ability to control the party, that he has chosen people on the basis of ideological position rather than intellectual and administrative capacity?

  12. 12
    surlysimon
    Posted December 9, 2009 at 2:03 pm | Permalink

    Great to see the Ludittes engaging in a reasoned debate on the Climate Change Emails

  13. 13
    surlysimon
    Posted December 9, 2009 at 2:03 pm | Permalink

    Oh and thanks to Tobias for that one

  14. 14
    Jay
    Posted December 9, 2009 at 2:11 pm | Permalink

    Bloods05 @ 11

    Essentially yes it’s insecurity. It takes a strong person to surround themselves with strong people, as opposed to a bunch of yes men. Essentially it seems he would rather do this than learn the lessons of the last election.

  15. 15
    Chistery
    Posted December 9, 2009 at 2:13 pm | Permalink

    #5 I think this debate highlights the fact that we need to redefine what a Conservative is.

    I don’t think the Liberal Party exists in a new category of conservatism. There are social conservatives and economic conservatives. The liberal party is socially conservative (stability, order, traditional Christian values) but libertarian in terms of economic values (individual liberty, free market capitalism, smaller government, less of a welfare state).

    Personally, I fit well in the libertarian side of politics (but am not against state ownership of certain assets and socialised health care) but am more liberal in the social values (don’t support fundamentalist Christian attitudes towards abortion, stem cell research, gays etc). I don’t regard myself as a ‘radical’.

    None of which has anything to do with having a position on climate change.

    However, I do think we need to redefine ‘fiscal conservative’.

  16. 16
    oldskool
    Posted December 9, 2009 at 2:27 pm | Permalink

    @Chistery,

    The liberal party is socially conservative (stability, order, traditional Christian values) but libertarian in terms of economic values (individual liberty, free market capitalism, smaller government, less of a welfare state).

    Given the previous Government is it possible for the Liberal Party to say that they believe in Small Government and less of a “welfare state” when they so darmatically increased the size of the Government, and the amount of Welfare (mainly to the middle classes..)?

    I nearly choked on my coffee when Bronnie stated in an interview last week those very beliefs. Saying you believe something is very different to acting in the belief of something, and the Liberal party currently have a very big disconnect on that front.

  17. 17
    surlysimon
    Posted December 9, 2009 at 2:34 pm | Permalink

    Chistery
    The Liberal party in australia is not socialy conservative, it wants to go back much further than yesterday, it is radical socialy. The british Conservatives are now much more like the conservatives of old, they want what they had when they were groing up (National Health, etc) while talking of balancing the books.
    Interestingly I am a conservative on some things, I want free universities like I had, A properly funded public Hospital system, Government owned Qantas, Commonwealth Bank, Telstra, Electricity, water and Public transport just like we used to have when I was a lad. So you see if the liberals were real conservatives that’s what they would want too.

  18. 18
    Bloods05
    Posted December 9, 2009 at 2:42 pm | Permalink

    None of which has anything to do with having a position on climate change.

    No, that’s purely a matter of whether or not you accept the weight of scientific evidence and opinion, or whether you think there’s some kind of huge conspiracy going on. In other words, whether you’re sensible or mad. And for some reason, there seem to be a lot more mad people on the conservative side. Why is that?

  19. 19
    Dom Ramone
    Posted December 9, 2009 at 2:58 pm | Permalink

    From the horse’s mouth, so to speak ( not an exhaustive link)…

    What does the Liberal Party stand for?

    We believe in a just and humane society in which the importance of the family and the role of law and justice is maintained.

    We believe in preserving Australia’s natural beauty and the environment for future generations.

    http://www.liberal.org.au/about/ourbeliefs.php

  20. 20
    GaryM
    Posted December 9, 2009 at 3:02 pm | Permalink

    What is it with revisonist history and redefining what a conservative is?Conservatism is an ideology,whether they are hard right or moderates they’re still conservative.

    Conservatives want the institutions and stable policy’s that keep the working class from having any input to the means of production and hence a decent life style.

    But hey what’s in a name?

  21. 21
    Bloods05
    Posted December 9, 2009 at 3:10 pm | Permalink

    What does the Liberal Party stand for?

    We believe in a just and humane society in which the importance of the family and the role of law and justice is maintained.

    We believe in preserving Australia’s natural beauty and the environment for future generations.

    Whereas the the Labor Party hates motherhood and the Greens can’t stomach apple pie.

  22. 22
    Pedro
    Posted December 9, 2009 at 3:49 pm | Permalink

    Surly seems not to understand what a conservative is.

    It’s easy, really.

    Conservatives stand for small government and the idea that you work hard and save a bit to pay your own way through life.

    The left stand for Big Government to tax the Conservatives so someone else can pay their way through life.

    I hate to bring up all that silly personal pride and integrity stuff, but I know which one I’d rather be.

  23. 23
    GaryM
    Posted December 9, 2009 at 3:59 pm | Permalink

    “What Pedro meant to say!

    It’s easy, really.

    Conservatives stand for big government and the idea that you work others hard and steal a bit to pay your own way through life.

    The left stand for fair Government to tax the Conservatives so they can pay taxes just like every one else, so eothers don’t pay for their decadent way of life.

    I hate to bring up all that silly personal pride and integrity stuff, but I know which one I’d rather be.Yea, me too.

  24. 24
    Bloods05
    Posted December 9, 2009 at 3:59 pm | Permalink

    That’s a ridiculous caricature of both sides Pedro. This place is supposed to expose intellectual dishonesty, not perpetuate it.

  25. 25
    Johnny Come Lately
    Posted December 9, 2009 at 4:07 pm | Permalink

    Pedro @ 22:

    “Conservatives stand for small government and the idea that you work hard and save a bit to pay your own way through life”

    They may say that but the reality is that they stand first and foremost for big business. Why do you think they want to talk about border protection / terrorism etc? (A), It’s a distraction from what their true agenda is, that is stripping away workers rights to help their corporate mates realise larger and larger profits, and (B) split the electorate on these divisive issues such that many traditional Labor supporters will vote conservative out of an irrational fear for our national security (that’s how little Johnny stayed in power for so long). Can you not see that Pedro?

  26. 26
    Jay
    Posted December 9, 2009 at 4:12 pm | Permalink

    Yep Pedro, because I’m somewhat left I have no personal pride or integrity. In fact I feel downright ashamed that I believe in a little bit of spreading the wealth (through tax…oh no hang on, the left only tax conservatives) to help out others less fortunate in life. I wish I had more integrity so it could be about solely about me and bugger the rest.

  27. 27
    Posted December 9, 2009 at 4:16 pm | Permalink

    Pedro, could you please give an example of one of these small government conservatives? Howard and his crew of reactionaries certainly don’t fit that criteria.

  28. 28
    Mr. Peabody
    Posted December 9, 2009 at 4:30 pm | Permalink

    Pedro @ 22:

    Two points: 1. The size of government increased under Howard and 2. Abbott’s solution to AGW is to introduce government regulation on a massive scale.

  29. 29
    confessions
    Posted December 9, 2009 at 4:54 pm | Permalink

    That’s a ridiculous caricature of both sides Pedro. This place is supposed to expose intellectual dishonesty, not perpetuate it.

    Thanks Bloods! I’ve just sprayed coffee at my laptop. LOL

  30. 30
    Pedro
    Posted December 9, 2009 at 5:08 pm | Permalink

    Dave, the last small government conservative that I can think of was Ronald Reagan.

    I’ve only lived in this country for 24 years but I have seen that small government conservatives are unelectable in Australia. Even the right has been spoon-fed for too long to allow it. Canada, where I grew up, is no better.

    GaryM. I meant nothing of the sort. If YOU have something to say, please own up to it.

    Johnny. It is the private sector – big or small – that drives a country. Not government. And it was the strength and numbers of the private employers that saw this country through what could have been a true Keating-style recession.

  31. 31
    Posted December 9, 2009 at 5:19 pm | Permalink

    Pedro, Reagan increased government debt and budget deficits, what’s so small government about that?

  32. 32
    John
    Posted December 9, 2009 at 5:23 pm | Permalink

    Pedro, Reagan increased government debt and budget deficits, what’s so small government about that?

    He did it with a smile and a homespun quip.

  33. 33
    Chistery
    Posted December 9, 2009 at 5:26 pm | Permalink

    #27
    http://www.theaustralian.com.au/news/springborg-sizes-up-fat-cats/story-e6frg6oo-1111119018046

    Springborg wanted to cut QLD state gov public servant jobs.

    “Labor had been hiring 10,000 extra public servants each year, he said. ”

    Of course, Queenslanders didn’t like the idea of public servant job cuts. They preferred Anna Bligh’s increase the debt and save jobs policy. She didn’t tell them about the state asset fire sale policy.

    #25 Why to you guys always associated the political right with evil corporate ‘fat-cats’. The bulk of the right consists of small business owners. Job creators. Economy boosters. Plenty of right wingers are (hold your breath)… employees There are plenty of small business owners who take risks in starting up a business in the hope that it will pay dividends down the track. Meanwhile they work 100+hr weeks and pay themselves after their employees have been paid. Their hourly rate is a pittance as they try to build up their business. Rather than having a born to rule mentality as so many of you assert, they struggle to keep a viable business when some employee turns out to be a dead-wood ‘owed a living’ parasite who can’t be sacked without 6 months redundancy. The right believe that an improvement in your standard of living comes with having a job taking responsibilty for your life. That job is created government focus on maintaining a healthy economy and it is earned, not owed. The left believe it is your god given right to have a high standard of living regardless of how much of a shirker you are and that you will be taken care of as long as you remain part of the collective.

    #20 Yes, Gary, socialism has done such a wonderful job at giving the working class a decent lifestyle.

  34. 34
    GaryM
    Posted December 9, 2009 at 5:29 pm | Permalink

    Pedro, look me ol China I know under that hard shell of conservatism you wear, you really are a caring sharing socialist, trying to come out.I know it’s not easy putting ones real feelings on display,I know that conservatives all have that real “Muchismo” thing and that’s not as easy as to hide your light under a bushel so to speak.

    I am sure if you keep trying your real socialist persona will come out, and I am sure you will be soon working with the poor in India, or some other greatness that is yet unknown.

    Be strong, I know it takes guts to break away from a life of false hopes and dreams, and come into the true light only socialism can reveal.

  35. 35
    surlysimon
    Posted December 9, 2009 at 5:36 pm | Permalink

    Pedro
    You have obviously lost your dictionary, a conservative is one who wants things the way they are/were
    A Conservative is someone who follows a right wing political agenda, note the capital C.
    You do realise there is a difference between a liberal and a Liberal don’t you? Really you should have paid attention at school.
    I am a conservative, I want what I had when i was growing up, it’s simple really.

  36. 36
    GaryM
    Posted December 9, 2009 at 5:41 pm | Permalink

    Mien Gott as a small business owner myself (now retired) employing people, and working a 100 hours a week turned me into a socialist.

    Where did I go wrong Chistery?

  37. 37
    surlysimon
    Posted December 9, 2009 at 5:42 pm | Permalink

    Pedro
    If you want to be entirely accurate you should describe your self as a Tory which predates Conservative (with a big C) and once stood for all the things you claim to stand for.

    Dave and don’t forget that Howard was the biggest taxing PM we ever had

    My view is the left taxes the rich, the right taxes the poor.

  38. 38
    Pedro
    Posted December 9, 2009 at 6:17 pm | Permalink

    Dave: “Pedro, Reagan increased government debt and budget deficits, what’s so small government about that?”

    I know you are smarter than that, Dave, so I’ll assume you are just baiting me. Context is important. Reagan did not just write a bunch of cheques and walk away during the recession he inherited. He reduced taxes for both the employers and the employees. THAT is what got his country back on track at the time.

    Gary and Simon, your silly responses aren’t worth my time.

  39. 39
    Pedro
    Posted December 9, 2009 at 6:27 pm | Permalink

    Now speaking of big business, where’s our gutless Prime Minister over Westpac?

    As far as I know, our government is still guaranteeing the assets of the big banks’ account holders – so why doesn’t he just announce that Westpac’s deal is now void. That would get them moving. Or at least get the account holders switching.

    Or is just standing in front of a camera and frowning a little considered doing enough?

  40. 40
    ShaunHC
    Posted December 9, 2009 at 6:46 pm | Permalink

    Pedro @39. Look, I think we get it. You hate Labor and anything they do is wrong. We all know this, so why labour the point? It gets tiresome after a while.

    Oh by the way, how did Reagan manage to inherit the recession of ’82-83? Carter left office in ’80

  41. 41
    surlysimon
    Posted December 9, 2009 at 7:01 pm | Permalink

    Pedro
    If you can’t acknowledge simple english then why should we respect your views? If you don’t understand the definitions how can we trust your arguments?

    And what should our government do with westpac, last time I looked they are a private business and as a Conservative you wouldn’t be suggesting the government interfere in a private business?

  42. 42
    confessions
    Posted December 9, 2009 at 7:08 pm | Permalink

    Now speaking of big business, where’s our gutless Prime Minister over Westpac?

    Only a Big Government Socialist would advocate government dictating how a business operates.

    Or does that dictum only apply to Obama?

  43. 43
    GaryM
    Posted December 9, 2009 at 7:41 pm | Permalink

    Pedro that’s not very nice, and I thought we were making progress.It’s worse than I thought.I can see more time will be needed to make the conversion from the dark side to the enlightenment.

    Just a thought, have you tried turning the picture of John Howard you have on your bed side table towards the wall it may just help.

  44. 44
    confessions
    Posted December 9, 2009 at 7:41 pm | Permalink

    and 2. Abbott’s solution to AGW is to introduce government regulation on a massive scale.

    AND spend like crazy: he will have to in order to achieve the government’s targets (that he has signed up to) without having a price on carbon.

    AND he reportedly supports Wilson Tuckey’s brainwave :idea: of government-owned tidal power in the Kimberley.

    Abbott’s Liberals? Communism here we come!

  45. 45
    GaryM
    Posted December 9, 2009 at 7:43 pm | Permalink

    Hey Surly you sure your not getting me confused with Pedro?I’ve been called a big C.

  46. 46
    confessions
    Posted December 9, 2009 at 7:49 pm | Permalink

    LOL at Chistery! The Nationals are the biggest bunch of pork-barrelling commies this side of China! What’s the bet he would take away PS jobs only to hand it out in some other way to more sympathetic constituents. That’s been the ‘conservative way’ for a decade now.

    And I make this prediction: when we eventually (if ever) see the coalition’s climate change action policy I’m betting we see huge subsidies to the agricultural sector. You don’t put a blathering Nat in charge of Finance for nothing.

    *Ding ding!*

  47. 47
    surlysimon
    Posted December 9, 2009 at 8:51 pm | Permalink

    No GaryM I would never call you that.

    confessions:
    In my day we called the Country Party the “Agrarian Socialists” ….”Elastic Sides Boot Subsidies, cop that you smart city bastards”- Naked Vicar Show

  48. 48
    GaryM
    Posted December 9, 2009 at 9:10 pm | Permalink

    I reckon they should return to the super phosphate subsidies the farmers enjoyed in the past, it would be a dead set boon to the light aircraft industry.Well maybe not, the drought due to global warming is sending them broke in certain areas.There’s an irony there somewhere.

  49. 49
    Bloods05
    Posted December 9, 2009 at 9:20 pm | Permalink

    THAT is what got his country back on track at the time.

    That’s one shortarse little track!

  50. 50
    surlysimon
    Posted December 9, 2009 at 9:53 pm | Permalink

    And Bloods05 It’s the legacy of Reagan’s insane economic policy that led to what we have to day, a huge mess.
    Interesting that while the Liberals here accuse Rudd of folly for his stimulus package, the Japanese have just announced a second US$80 Billion stimulus, and no one would accuse the Japanese of being Socialists.
    The Right makes the mess, The left clears it up and takes the blame, it was ever thus.

  51. 51
    surlysimon
    Posted December 9, 2009 at 10:04 pm | Permalink

    Cuppa’s comment is I think worth noting here
    http://blogs.crikey.com.au/purepoison/2009/12/07/open-thread-december-7-11/#comments

  52. 52
    Johnny Come Lately
    Posted December 9, 2009 at 10:31 pm | Permalink

    Pedro @ 39:

    “Now speaking of big business, where’s our gutless Prime Minister over Westpac?

    As far as I know, our government is still guaranteeing the assets of the big banks’ account holders – so why doesn’t he just announce that Westpac’s deal is now void. That would get them moving. Or at least get the account holders switching.”

    Pedro, I agree with you here. The tax-payer is bearing the risk while the banks make these astronomical profits, without adding real value to society (they don’t innovate, they’re just fucking leeches). Labor is a right of centre party too remember (economically speaking, not socially) – but Kev is the lesser of two evils here. It’s a lite version of corporate socialism compared to the U.S., where tax-payers bailed out big banks in exchange for NOUGHT ZERO ZILCH, sanctioned by the right-wing Democrats and the ultra right-wing Republicans.

    This is typical of conservatives, only interested in helping their corporate mates, while the workers and yes Pedro small businesses pay extra taxes and higher fees so these fucksticks can drive around in sports cars. And people fall for all the tricks, hear the dog whistles and vote the arseclowns in.

    rrrr rant over.

  53. 53
    surlysimon
    Posted December 10, 2009 at 8:48 am | Permalink

    Pedro
    So your small Government Conservatives are now in favour of BIG regulation
    “OPPOSITION Leader Tony Abbott has opened up the prospect of re-regulating the banks in response to Westpac’s outsized rate increase, saying Prime Minister Kevin Rudd gave Westpac ”enormous support” during the financial crisis without getting influence in return.”
    Of course we rember how well the banks were regulated under the Government Mr Abbott used to be a part of!!!!!

  54. 54
    confessions
    Posted December 10, 2009 at 8:58 am | Permalink

    Those arguing against the bank guarrantee: what repercussions do you think there would be for investors if the bank guarantee was no more?

  55. 55
    Johnny Come Lately
    Posted December 10, 2009 at 9:37 am | Permalink

    confessions @ 54

    I am happy with the decision to guarantee the banks when everything collapsed. However I don’t think they need it any longer, their profits have increased substantially…they are now taking the us for a ride.

    I don’t care about investors.

  56. 56
    pugsley
    Posted December 10, 2009 at 10:04 am | Permalink

    Just back from the UK, popped into Bolt’s Blog to see if things had improved.
    What the hell has happened, over there? It seems to be a single issue group. Sixteen pages of idiotic comments, all in furious agreement, over climate change, or rather the lack of it.

  57. 57
    confessions
    Posted December 10, 2009 at 10:26 am | Permalink

    The bank guarantee guaranteed the deposits held in banks for a period of 3 years, when hopefully conditions will be normalised. I wasn’t aware banks actually received any funding for this underwriting by the Federal government.

  58. 58
    Johnny Come Lately
    Posted December 10, 2009 at 11:32 am | Permalink

    @57

    They don’t receive funding, but the tax payer is bearing the risk, not the bank which is unfair. They can therefore make dumb and risky decisions in the knowledge that if the shit hits the fan, the tax payer will be left carrying the can. We saw what happened in the States. Why should they make multi-billion dollar profits while we bear the risk? Fuck that – they offer nothing to our society, they don’t innovate, create, they just take. We should seriously think about what and who we reward within our system.

    If they have been guaranteed for 3 years then I think that is far too long – they are doing fine now.

  59. 59
    confessions
    Posted December 10, 2009 at 12:47 pm | Permalink

    The guarantee was put in place because deposits in institutions in other countries had been similarly guaranteed by their respective governments. It was about the risk posed to the bank’s standing as a result of global events. To the best of my knowledge those risks are still present, and therefore the risk to deposits still very real, even though we avoided a recession in Australia. I also don’t think those other nations have removed their guarantees either.

    You also cannot compare financial institutions in the US with those here in Australia: there isn’t the regulatory framework in the US that covers our financial institutions. The behaviour of financial institutions in America could not happen here for that reason. And AFAIK the taxpayer only bears a cost if deposits are lost.

  60. 60
    Johnny Come Lately
    Posted December 10, 2009 at 1:57 pm | Permalink

    Confessions, I’m not arguing that the guarantee should never have been applied (I am against it in principle, but the situation dictated that it was necessary at the time – it is an imperfect system), but surely they can cover their own asses now – eg Westpac recently posted a net profit of $3.5B. Alternatively, if it is deemed necessary to maintain the guarantee as you argue, then okay sure, but why doesn’t the taxpayer receive a percentage of the profits for bearing part of the risk? It’s such a rort.

    Hypothetical: what would the government do if our banking system collapsed tomorrow?

  61. 61
    confessions
    Posted December 10, 2009 at 2:40 pm | Permalink

    I guess we’d all be fucked JCL, including the government. As for taxpayers not receiving a percentage of profits, welcome to the capitalist MO: privatise the profits, socialise the losses.

    ;-)

  62. 62
    gregc09
    Posted December 10, 2009 at 2:45 pm | Permalink

    My understanding (though I could be wrong about this) is that the banks pay for the guarantee.. it’s not just a gift. Though whether the price they pay reflects the amount of risk implicit in the guarantee, I don;t know. That’d be a pretty tough thing to determine…. though it’d certainly generate some nice consulting fees for the finance types.

  63. 63
    gregc09
    Posted December 10, 2009 at 2:49 pm | Permalink

    ok… a slight correction.. apparently only ‘large’ deposits attract a fee for the gurantee. deposits under $1m are guranteed by the government at no charge.

  64. 64
    Johnny Come Lately
    Posted December 10, 2009 at 3:25 pm | Permalink

    confessions, you took the words right out of my mouth.

    gregc09, that’s interesting, thanks for that. Indeed, anything below $1M is free, anything above attracts the following fee structure, dependent on the credit rating of the institution:

    Long Term Credit Rating of ADI1 Fee (in basis points per annum)
    AAA to AA- = 70
    A+ to A- = 100
    BBB+ and below and Unrated = 150

    As you point out, it would be difficult to determine whether these numbers are reasonable or not, but it sounds like SFA to me. Oh well, it’s something at least.

  65. 65
    gregc09
    Posted December 10, 2009 at 4:02 pm | Permalink

    just as a point of comparison – probably entirely inappropriate – since 70 basis points means 0.7 percentage points… it would be something like insuring a million dollar house for $7000. I don;t own a million dollar hous so i don;t know whether that’s steep or not…….

  66. 66
    Posted December 10, 2009 at 4:15 pm | Permalink

    I think that the risk profile of a million dollar house would be lower than the money market gregc09, so the analogy probably doesn’t hold very well.

  67. 67
    confessions
    Posted December 10, 2009 at 4:31 pm | Permalink

    Of course, the bank guarantee wasn’t meant to guarantee the state of Australia’s financial systems. Only deposits held within those individual institutions.

  68. 68
    gregc09
    Posted December 10, 2009 at 4:34 pm | Permalink

    yes, perhaps…. though on the other hand, bank deposits are also possibly less risky than the money market… so i have no idea whether a $7000 premium for insuring a $1m bank deposit reflects an appropriate risk premium… I guess we could drag out a few asset pricing models from finance for better comparisons… but then we probably ought to ask an expert.

    I think the banks were not required to take on the deposit insurance, and I don;t know the extent to which they did… if they used it a lot, that might suggest the risk was underpriced, which would hardly be surprising…

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