The Topsy-Turvy Relationship of the Banks and the Labor Party
October 2nd 2008 23:51
Correct me if I am wrong, but has there ever been a time in Australian history when the Liberal Party has accused a Labor Prime Minister of being in the tank for the big banks? No, I didn’t think so. It’s almost as if we have fallen down the rabbit-hole and found ourselves in Wonderland, where everything is topsy-turvy and the old stereotypes no longer apply. I mean, it’s not so far out of the ordinary to think of Kevin Rudd, the man, as an economic conservative. He told us that he was enough times throughout the 2007 election campaign, trying to piggy-back onto the territory of the John Howard and Peter Costello double-team. But to think of Kevin Rudd, the first Labor Prime Minister of the 21st Century, as someone who is an apologist for the banks. The big tycoons of the banks aren’t exactly the working class type that Labor was created to protect and have consistently supported over the years to the point of bordering on socialism at some parts of its history. Yep. We are definitely in Wonderland.
An apologist for the banks is exactly what Malcolm Turnbull has accused Rudd of being, with what seems like little resistance from the Rudd camp. Self-admittedly, they are in the corner of the banks in this fight. Yesterday the Prime Minister said that while defending the banks may not be the popular thing to do at the moment, it was the “responsible course of action”. But that really doesn’t make it any less weird does it? This kind of support for the banks is the type of thing you would hear coming out of the mouth of a Peter Costello or a John Howard or even a Joe Hockey. Not a Queensland diplomat who has been a member of the Labor Party since he was a teenager. In this case, he is right in any event.
He is right because, looking at the US situation; it is the failure of the banks that is the issue. Helping bolster confidence in financial institutions will surely stop something like the US situation happening here. But then again, that is highly unlikely. The Australian banking industry is significantly different to its American counterpart. Our banks currently have been raking in record profits, and the banks regulatory system is second to none in preventing total breakdowns of the system before it even began. And while it might be admirable for Rudd to be chivalrously defending the honour of the banks, the guy really needs to choose his battles more wisely.
You see, Rudd isn’t defending attacks against the banks about the way they run the economy and keep the system flowing. Rudd is defending the banks against perfectly reasonable question marks over whether or not they should be passing along the full interest rate cut made by the Reserve Bank. The banks say that they can’t afford to pass along a full cut. Rudd is backing them up and saying that because borrowing costs have soared, banks might not be able to make the full cut. Which is not exactly music to the ears of the regular punters and home-buyers out there that have been waiting for a decrease in interest rates for months. It doesn’t look good for the banks either. You see, they have been saying that they have to keep bumping up interest rates as the Reserve Bank does in order to keep themselves fluid. But now that the Reserve Bank is saying that the best idea is to cut rates, there is another excuse. Excuses may keep the banks in the lifestyle they are accustomed to but they don’t cut it with the punters. Luckily, bank executives do not get elected the general public.
But politicians do. And by siding with the banks on this one, Rudd may think he is doing the right thing and he is right. It is the right thing to do, in general, to support the banks and make sure you bolster confidence in their ability to control money. It seems like the war is the right one, but the battle might have some problems. Supporting the continued excuse making of the banks is risky business, both for Rudd’s political prospects and for the banks who keep trying to balance between keeping customers and continuing the make a profit. A huge profit.
So, welcome to Wonderland. Where the Labor Party support the banks to the detriment of the worker and the Liberal Party tell people to tighten their belts. It’s a strange world down the rabbit-hole.
An apologist for the banks is exactly what Malcolm Turnbull has accused Rudd of being, with what seems like little resistance from the Rudd camp. Self-admittedly, they are in the corner of the banks in this fight. Yesterday the Prime Minister said that while defending the banks may not be the popular thing to do at the moment, it was the “responsible course of action”. But that really doesn’t make it any less weird does it? This kind of support for the banks is the type of thing you would hear coming out of the mouth of a Peter Costello or a John Howard or even a Joe Hockey. Not a Queensland diplomat who has been a member of the Labor Party since he was a teenager. In this case, he is right in any event.
He is right because, looking at the US situation; it is the failure of the banks that is the issue. Helping bolster confidence in financial institutions will surely stop something like the US situation happening here. But then again, that is highly unlikely. The Australian banking industry is significantly different to its American counterpart. Our banks currently have been raking in record profits, and the banks regulatory system is second to none in preventing total breakdowns of the system before it even began. And while it might be admirable for Rudd to be chivalrously defending the honour of the banks, the guy really needs to choose his battles more wisely.
You see, Rudd isn’t defending attacks against the banks about the way they run the economy and keep the system flowing. Rudd is defending the banks against perfectly reasonable question marks over whether or not they should be passing along the full interest rate cut made by the Reserve Bank. The banks say that they can’t afford to pass along a full cut. Rudd is backing them up and saying that because borrowing costs have soared, banks might not be able to make the full cut. Which is not exactly music to the ears of the regular punters and home-buyers out there that have been waiting for a decrease in interest rates for months. It doesn’t look good for the banks either. You see, they have been saying that they have to keep bumping up interest rates as the Reserve Bank does in order to keep themselves fluid. But now that the Reserve Bank is saying that the best idea is to cut rates, there is another excuse. Excuses may keep the banks in the lifestyle they are accustomed to but they don’t cut it with the punters. Luckily, bank executives do not get elected the general public.
But politicians do. And by siding with the banks on this one, Rudd may think he is doing the right thing and he is right. It is the right thing to do, in general, to support the banks and make sure you bolster confidence in their ability to control money. It seems like the war is the right one, but the battle might have some problems. Supporting the continued excuse making of the banks is risky business, both for Rudd’s political prospects and for the banks who keep trying to balance between keeping customers and continuing the make a profit. A huge profit.
So, welcome to Wonderland. Where the Labor Party support the banks to the detriment of the worker and the Liberal Party tell people to tighten their belts. It’s a strange world down the rabbit-hole.
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