- German Industrial Output Fell 7.5% in January, Biggest Decline on Record (Bloomberg)
- Australian jobless rate at four-year high as ‘economic cyclone’ hits (AFP)
Prime Minister of Australia, Kevin Rudd, made headlines the beginning of last month ahead of the release of his prepared essay regarding the global financial situation. His solution is a new world order, whatever that means. Included in that piece is this:
"Neo-liberalism and the free-market fundamentalism it has produced has been revealed as little more than personal greed dressed up as an economic philosophy. And, ironically, it now falls to social democracy to prevent liberal capitalism from cannibalising itself."
Rudd also proposes …
“A system of open markets, unambiguously regulated by an activist state, and one in which the state intervenes to reduce the greater inequalities that competitive markets will inevitably generate.”
Our response to this mindset…Scary and sickening!
FX Trading – Obama and Rudd in the Same Boat on Economies
Australia – a country made famous to the United States thanks to Outback Steakhouse, Foster’s beer and the Crocodile Hunter…and of course, The Black Swan.
Beyond my research on Australia’s economy (as it pertains to the markets), I can’t claim any other awareness of the land down under. But Barack Obama and Prime Minister Kevin Rudd are seeing to it that Americans and Australians become accustomed to similar styles of government.
In comparing two stories this morning on Australia’s employment and jobless situation, Mr. Rudd’s approach becomes fairly clear.
On the one hand, we’ve got a news story citing no Official (with a capital ‘O’) opinion on the matter except the source of the data that had been released. From that article we gather two things:
- The jobless rate in Australia increased.
- Australia added jobs for a second straight month in February.
Sounds contradictory, for sure, so the article shuffled through other numbers to show full-time job losses versus part-time job additions, rising unemployment rate, etc. The tone of the article was balanced, ultimately showing that Australia is experiencing economic instability, but the employment outlook is not yet calamitous.
On the other hand, we’ve got a news story that’s heavy on the words of Prime Minister Rudd. The article is aimed at discussing the same employment data that’s just been released. But from this article we gather three things:
- The jobless rate in Australia hit a four-year high.
- An “economic cyclone” is crossing through Australia.
- The government-led $42 billion stimulus package was justified.
Thing #1 cannot be denied. Thing #2, while we feel Australia’s growth picture further deteriorates from here, Mr. Rudd was just dishing out sound bites to excite the media attention. Thing #3, while it’s tough to say if any of these stimulus packages are justified, follows unsurprisingly the general economic perspective of elected officials.
For Australia’s sake, we hope Mr. Rudd is right that $42 billion of government spending was justified; we wouldn’t want to see his decisions fail. (I’m sure James Carville will agree.)
Nevertheless, my point here is that government officials around the world can make this game of analysis all the more complex. In this case, we think Mr. Rudd is fairly accurate with his expectations for global economic developments to negatively impact Australia going forward. However we’re not itching to jump in the boat of socialism of which he seems to think he’s been made captain (see ‘Quotable’ section above).
That just goes to show you how much this type of commentary goes towards the agenda. As Mrs. Hillary Clinton reminded us the other day while speaking in Europe, never waste a good crisis.