You know what my favourite type of justice is… poetic justice. This is the type exacted on the most deserving of antagonists – in a manner usually including some delicious irony. Given that I’m partial to this sort of cosmic ledger-balancing, I had a particularly pleasant week – capped as it was with yet another interest rate rise and continued decline of the Howard re-election campaign. Allow me to elaborate. For many of his 11 years as PM, Howard has frequently played the interest rate card. The basic story goes: rates were through the roof (and in the teens) when Labor was last at the helm under Keating/Hawke and have been significantly lower ever since – how can we ever trust Labor again…ever. In 2004, low rates was one of the pillars of his comfortable election win (along with fear of terrorist attack and fear of Mark Latham). At stages when Labor momentum has mounted, the economic scare campaign has only intensified and the same old comparisons to the Keating years are made.
So it seems fitting then, that the pressure of rising interest rates is finally coming to bear on the Coalition. Following six successive rises since 2004, rates have reached a 10-year high – and the media are all over it. Costello is finally admitting that the rates are not totally within the government’s control (set as they are by the independent Reserve Bank) – while Howard is meekly reciting an “it would be worse under Labor” mantra. Pathetic. Finding themselves backed into an economic corner, the Libs reach for the miniature hammer hanging beside the small glass cabinet above Howard’s desk which reads “In Case of Emergency Break Glass”… and hurriedly bust it open.
Apparently inside they found a small slip of paper, penned by Howard himself when he was younger and bolder. The paper merely reads: “Spend the surplus!” – and so (promise to) spend they do. School tax rebates exceeding $9 billion, tax cuts of $1.6 billion for first home buyers and over half a billion for child care – bringing Howard’s total promises to greater than $60 billion (The Age noted: “In a speech… lasting just over 42 minutes, Mr Howard's pledges amounted to spending at a rate of $3.7 million a second”). The actions of a desperate man – but again, actions tinged with irony. All that spending is guaranteed to lead to only one thing: higher interest rates.
You know what my favourite type of justice is… poetic justice. This is the type exacted on the most deserving of antagonists – in a manner usually including some delicious irony. Given that I’m partial to this sort of cosmic ledger-balancing, I had a particularly pleasant week – capped as it was with yet another interest rate rise and continued decline of the Howard re-election campaign. 
1 comment:
Right you are: spending 60 billion dollars (a noteworthy percentage of Australia's GDP) over 3 years is going to have a huge impact on inflation, and then interest rates. What a lot of people are failing to see is the joker up the sleeve of the PM. That joker is Workchoices, and its going to make jokes out of all of us. You see, if I'm correct, Howard's plan to control interest rates is by curbing our out of control spending spree that has manifested itself as a result of free money for all (baby bonus, bonuses for pensioners and single parents, and the house buying incentives) and easy credit. The way to do that is by cutting wages. Or at least give companies the means to cut them. We are only seeing phase 1 of this dastardly plan, we can only shudder in anticipation as to what phase 2 is, but rest assured, it will only lead to one thing, reduced spending. This will effectively reduce inflation, which will reduce (or at least keep steady) interest rates. You can't spend money you don't have, and if you have less money at your disposal, credit companies and banks will think harder about lending "unlimited" credit.
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