Why is the Opposition antagonizing the banks?

Isn’t it curious that the conservative side of politics, the free-marketeers, are now at loggerheads with the banks.  All the more so with a leader who is an ex-merchant banker.

It was the previous Treasurer who defended so fiercely the independence of the Reserve Bank, and indeed took much of the credit for it.  Despite such affirmation of independence, when meeting times came around and interest rate determination was on the agenda, it did not inhibit the Coalition from giving thinly-veiled advice to the Bank Board.  “There is no reason for a rate rise” was often heard from the PM and Treasurer at times when they feared another.  But apart from these mild indiscretions, the Board was left to do its job, and it seemed to do it irrespective of what the Government said, even increasing the base rate during the 2007 election campaign.

Yesterday Joe Hockey lambasted the Reserve Bank during a radio interview.  He questioned the judgement of its members.  He insinuated that they had made a misjudgement when they had previously increased the base rate, especially during the election campaign, and implied that they were now correcting that mistake.  His questioned why increasing interest rates to bring down inflation had given way to now reducing them even although inflation was still unacceptably high.  As Shadow Finance spokesman, one would have thought he would have noticed the monumental change in global financial markets from last year, a change that required a shift from curbing inflation to stimulating a slowing economy.  He sounded angry.  Anger in defeat has been a feature of the behaviour of some Coalition members, Joe Hockey and Julie Bishop prominent among them. His outspoken condemnation would not have gone down well with the Board Governor, Glenn Stevens.  I heard no correction of Hockey’s outburst by Malcolm Turnbull.

But Turnbull too has taken aim at the banks, the commercial ones.  His insistence that they could afford to pass on the full rate cut, and his self-congratulatory assertion after they passed on 0.75 to 0.8% that they must have done so as a result of his pressure, would not have impressed the banks.  Indeed Saul Eslake, chief economist of the ANZ Bank, labelled his utterances as just political populism.  Most commentators agreed; just a few thought it was smart politics.  Turnbull’s characterization of the banks as greedy, something he says he knows about as he’s been a banker, must have been a calculated move.

So why would the Opposition, especially with an ex-banker as its leader, set out to upset the banks and the Reserve Bank at that?  Presumably it was based on an assessment that more would be gained politically by being anti-bank.  It’s a dangerous gamble.  Unless swinging voters move toward the Coalition as a result, and the polls so far give no indication that this is so, Turnbull and Hockey, with Bishop trailing well behind, will have gained nothing, and lost favour with the commercial banks who would be less inclined to support the Coalition financially, and more significantly the Reserve Bank, alongside which every federal government has to work in managing the nation’s finances.

But perhaps political judgement is being distorted by Turnbull’s ego.  There has been much talk about it since he entered parliament, but any doubts about its size will have been dispelled during the rate cut discussions.  His interview with Fran Kelly on ABC Sydney radio left her astonished that he could be so confident that he’d influenced the banks; the only concession he was prepared to make was that he couldn’t say how much.  If Turnbull’s ego overrides his political common sense to that extent, we shouldn’t be surprised at similar lapses in the future.  The pity is that while the focus is on his ego, either because he makes it so, or because the media home in on it, he's not engaging in meaningful debate about the diverse factors that contribute to the global financial mess we’re in.  As Wayne Swan put it: “...there are some events in the world which are much bigger than Mr Turnbull’s ego."  Whether Malcolm is able accept this may determine his future.

 

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janice

9/10/2008Turnbull's ego will turn out to be his achilles heel and bring him undone. I believe that the former merchant banker has concluded that the electorate are mostly ignorant and if he is seen to oppose the banks and accuse them of being greedy in not passing on the whole of the interest rate cuts (regardless that he knows full well the reasons they cannot), he will be seen to be a financial wizard who knows it all. What he doesn't seem to have taken into account is the fact that this crisis is global and there is a real risk of recession if not a global depression. His ego has got in the way of common sense and prudent politics. I believe we will see more and more of the coalition using populist tactics as the effect of this crisis impacts more on our own economy. I also believe it will not work as well as it has in the past because there is a stream of responsible information being fed to people to help them understand what has gone wrong and the steps that are being taken to put it to rights. Economists at home and internationally, as well as Rudd and Swan, are not attempting to gloss over the seriousness of the crisis and warn that it is going to be a long hard row to hoe.

Dave55

9/10/2008What annoys me is that the media, and even the ABC, haven't gone to town on Humbull's arrogant comments. Had the same comment been made by Rudd, Swan, or Latham or Beazley in opposition, the arrogance comment would have been headline stuff, yet against Humbull - 'oh, that's just his ego' ... As with your earlier post, Bishop's inexperience has come to light this week and yet, from the media, nothing. Maybe it's just that Labor's media attack dogs aren't as vicious as the Lib ones of Ackerman, Bolt, Milne etc, or maybe they, and the more impartial media, are just amused by watching the Libs look silly (this is the take I get from Fran Kelly's interview and the earlier one on the 7.30 Report where he said much the same thing) - the problem is, a lot of people read Shanahan, Milne, Bolt and Ackerman (as much as we hate to admit it) and trust their judgement. When this judgement is so one sided, the perception out there is swayed accordingly. I don't want this to come across as a pro Labor post because it is actually a criticism of the media or at least sections of it. With a few minor exceptions, the Journalists with a more left bent generally try to be balanced and comment on the issues - things like arrogance are acknowledged but the policy is generally what is debated. The problem is, the public don't get exposed to the 'feel' of the candidates from both sides when the negative characteristics of one side aren't laid out to bare in the same way as those of the other are; when a large percentage (dare I say it the majority) base their assessments of other people on their feelings, this imbalance in reporting results in an unrealistic (and from an objective viewpoint, an irrational)take on the candidates and election results are swayed accordingly. The Democrats refusal to rebut the baseless accusations against Kerry in the 2004 POTUS elections and instead debate the policies was a perfect example of this in action and how it turns out. Not all of us watch the 7.30 Report, listen to Radio National or read excellent blogs like this (with the occasional jaunt over to Piers for balance f course) and debate and consider the policies - most people go simply on what the see in quick grabs on TV and their feeling they get of the candidates from these grabs. Unless (or until) the left in the media, or even the more balanced journos, start pointing out some of the character flaws from the conservative politicians, he right wing attack dogs will continue to have a disproportionate influence over voting habits. The reporting of the past week, and in particular the lack of reporting on Humbull's arrogant (and ludicrous) claim that he influenced the banks following the rate cut is a perfect example of this.

janice

10/10/2008I agree with you Dave55. The media in the majority are blatant in their support of the conservative parties while the few journos who are left bent or even perhaps, neutral, present informative, balanced commentary on the issues. The left leaning commentators have no trouble criticising Labor if they deem it necessary and even give praise to the opposition on the (rare) occasions they come up with something fair, reasonable and in the interests of the nation. For a long time I have thought that Labor fights cleaner and appears reluctant to go to the lengths of completely destroying an opponent's character and career to gain political points. The Coalition remind me of a pit bull which is only satisfied when its prey is mangled and dead. The public at large do not take the time to question beyond the headlines or the biased comments of journalists pushing their own agenda. They fear what they do not understand and so fall prey to the cliches and innuendos designed to stir the pot of personal prejudice, and to cover the multitude of sins contained within the spurious policies the conservative parties and media want to push. If all this isn't having the impact that is wanted, then there is always the 'christian' religion to fall back on. I read a blogger comment the other day (obviously a conservative still grieving over Howard's downfall) who referred to Julia Guillard as 'the shoe lady' because she was arrogant enough to go shopping (for shoes?) and allow her partner to carry the shopping bags. He/she also stated that Julia is a liar because she was 'sprung' when she stated she had not had any connection with the Communist Party since University when it was since proven she'd been a member until a 'few' years ago...I asked the blogger if he/she had thought to question the agenda of the journo who wrote the gossip piece or if he/she had bothered to get the whole facts re the 'liar' accusation. No answer, of course.

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10/10/2008janice and Dave55, your comments are germane. I agree that the media has not homed in on the Turnbull ego to the extent it did on, say, Rudd’s 24/7 behaviour. It’s almost as if a big ego is regarded as normal, so why comment on it, even when it does seem to be override common sense. Likewise, the media has not ridiculed Julie Bishop by saying she is still on her training wheels (which she obviously is), although Wayne Swan was pilloried with this taunt for months. The media is not even-handed. There seem to be four variants among journalists: George Megalogenus, Mike Stetakee, Paul Kelly, Lenore Taylor, Brian Toohey and Shaun Carney are among the even-handed; Dennis Shanahan, Janet Albrechtsen, Andrew Bolt and Piers Akerman are among the Coalition support group and Phillip Adams the Labor support group; Glen Milne doesn’t seem to mind which side he supports, so long as it’s a good story, often based on scuttlebutt; and the fourth group comprises journalists of indifferent quality, whose writings or utterances will seldom ever amount to anything – there’s plenty of them. All but the first group are potentially treacherous to the Labor cause. Your lament Dave 55 that the Labor attack dogs seem less active than those the conservatives unleash, reminds me of the classic bar-room fights we saw in old Western movies where the bad guys always fought dirty, while the good guys fought ‘cleanly’. The good guys usually won. I think Rudd and his ministers have deliberately avoided the really dirty side of politics, the character assassination, the dirt files, the personal attacks. Although they’re fighting like the good guys, I’d prefer that even if their opponents seem at times to gain an advantage. It’s the media bias I find most disconcerting. The media has such influence, and they know it. But as you say janice, the public, or at least the public that counts politically – the swinging voters, are becoming more discerning and politically astute, and able to recognize dross when they encounter it. There some bloggers, the rusted on supporters, who will never see anything of merit in the other side. They use extreme language, faulty logic and often have their facts wrong. We all find them intensely irritating. I comfort myself by accepting that they are not the ones who change a government, it is the thinking swing voters who can see both sides.
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