I don’t think Barnaby Joyce likes to think he might be wrong.
He’s followed up yesterday’s ‘net gross debt’ clanger with an incoherent op/ed in The Australian today. It’s described by Dennis Shanahan in what appears to be a news article (news is what’s published by News?) as using “his homespun analogies and simple arguments”.
False analogies and basic misunderstanding might have been a better characterisation.
Joyce continues to be obsessed with defending his claim that Australia might default on debt.
But, in so doing, he seems to have no comprehension of the difference between sovereign debt and private debt.
Glenn Dyer in Crikey today:
Most of this foreign debt – in fact the overwhelming proportion of it – is private foreign debt raised by companies large and small, from our big banks, to BHP, to CSL, to Caltex, down to smaller companies with trade finance arrangements in place offshore.
Australia cannot “default” on this debt. Only the holders of that debt can default.
As Dyer goes on to point out, this debt is actually investment in income-generating assets. It’s the import of capital, and has nothing whatever to do with Joyce’s rant about ‘Labor spending’:
In other words, money we owe the rest of the world has been invested in productive assets and in creating wealth in the future, unlike the US and UK where it was used to finance housing and current consumption (some in Australia has been used for that purpose, but not the majority).
Barney doesn’t understand that point: we are borrowing from offshore to invest in assets (Gorgon LNG, iron ore mines, gold mines, infrastructure, Queensland coal seam gas) that will generate income in future years to both meet the interest cost and repay the debt.
We can pay our way. There is rising concern that the likes of Greece might have trouble doing so on a continuing basis. That’s why there’s a tinge of default about these countries, and not about Australia.
Barney apparently doesn’t get that, either out of political calculation, or plain ignorance.
Elsewhere: Brian Matthews in Eureka Street.
I’m just impressed by any politician that mentions the Leyland P76 in any debate.
But, oh yeah, this guy shouldn’t be Shadow Finance Minister.
Which is precisely what he did on ABC News Radio this morning. The interviewer pointed out to him that Australia’s government debt was much lower as a percentage of GDP than most other countries, to which Joyce said something along the lines of “But that’s just sovereign debt. Once you count private sector debt we’re up with the worst of them.”
My brother once had a P76 … He took me on the most terrifying, reckless and exhilirating ride of my life in one — a ride so exciting I was glad that it never occurred again …
It is probably a little known fact that Tony Abbott owed and professed a great love for the Leyland P76.
Barnaby Joyce is just the same – a design lemon being supported for strange and unknowable reasons.
P76 owners, chronic overcompensators.
When Barnaby was an accountant was this …
a) as treasurer of the local bowls club?
b) in 1640?
Joyce’s grasp on economics is shakier than Abbott’s grasp on the iron.
Hehe.
The great boom in private debt happened under which governmnent?
Why Barnaby Cannot Rejoyce.
I’ve got an accountancy degree.
I’ve swotted up the GFC.
Learned all about bank guarantees.
So why won’t the media let me be?
And Tony should be glad to see
I’m out there on a speaking spree.
Instead he’s started punching me
And screaming like some mad banshee!
C’mon Shadow Finance Minister, level with us. Which national infrastructure or assets do you intend to privatise to retire this ooga-booga debt?
*crickets*
The guy is a liability. Is he worthy of a topic, Mark?
@11 – he is when his statements are reported as if they have credibility in the MSM, Rob. It’s important to call his nonsense for what it is.
Joyce article suggests Coalition would have no problem with borrowing for railways to nowhere or large unfunded tax cuts for higher income earners.
Mark: “I don’t think Barnaby Joyce likes to think he might be wrong.”
Perhaps we could sell Barnaby to the Greeks?
An improvement for both countries?
Besides, he’d be on message then, without having to worry about being wrong!
But could they afford him, Elise?
erm, mercurius, I think you must mean nationalise? Since that would be the way to reduce private sector debt.
I could see Barnaby getting into the whole Rex Connor ‘buy back the mines’ thing. I mean, it would keep our precious national assets out of the hands of the ChiComms!!!
You guys don’t understand. Under KRudd the economy is rooned. It just is. All we need to fix it is to vote in the Coalition and get relaxed and comfortable. Even better we’ll get some tax cuts (funded by giving the lower classes the arse.)
As long as you aren’t one of the underclass you’ll be sweet!
I can’t understand what Barnaby’s getting at. My brain hurts when I try to read him.
ZOMG!
The sub-editor also obviously gave up reading Barnaby’s effusions before getting to the last para.
Joyce’s economic ignorance is gob-smacking. But a pox on The Australian for printing outright lies.
That he doesn’t understand the distinction between foreign net debt (mostly private) and public debt is just impossible to believe. He should be railing against NAB and Westfield and BHP for borrowing on the international markets to fund their business expansion – because that’s where the debt is coming from.
As Dyer points out, our foreign net debt more than doubled under Howard’s regime. People borrowed to buy homes. Banks sourced this capital on the international wholesale money markets. This shows up as Australia’s foreign debt.
Does he NOT understand this? Really? I suspect he does understand it. But like Tories everywhere these days, he will deliberate misrepresent the truth to make a political point.
Elsewhere: Brian Matthews in Eureka Street.
Abbott is surely going to have to pick an opportune time to move him sideways, out of finance. I can see the Labor negative campaign slots forming already.
The line won’t quite be “who do you trust to run the economy?”… more like “do you really trust these two guys (+Hockey) to run the economy?”
[cue silly Barnabyism soundbites, gratuitous Hockey in pink tutu shot]
Mark @ 17 – I see Abbot trying to whip up the insulation storm and Barnaby the debt drama hoping to develop something akin to the Khemlani loans scandal. Too bad the economy’s going so well and our GG is nothing the Queen’s man in 1975. What a bitch, Tony, no Kerr’s cur this time round!
Like Mr. Denmore I suspect Joyce does know the difference as this line has been peddled before and continued to hold currency long after it had been repeatedly discredited. Get the idea circulating again in the mainstream media, on talkback radio, get a few soundbites and then later repeat the claim in direct mail outs to voters. Who knows, we may even see the truck again.
Maybe Abbot could ask Roxon to fit Barnyard and sloppy J with financial ‘balls’
Forget the truck dj, it be more like ‘ten thousands of emails’ hitting the lib/nats in-tray, just as they did before they hoisted TB. Our democracy is evolving into a spamocracy.
Why didn’t the Oz run Barnaby’s drivel by Stutchbury. Wait, maybe they did.
Sorry, still can’t get the link thing right. With your permission I’ll carry this over from the Pink Batts thread to here where it’s more relevant. I just thought of a title too.
ALP’s song of Joyce
So lefties all let us rejoice
For they have Barnaby.
He’s out there now with charts to show
How one and one make three.
Queensland has given such a gift
A talent rich and rare,
No need to rage, at every stage
Their Barnaby is there.
As Tony strains to make some gains
His Barnaby is there!
Re: Brian Matthews in Eureka Street.
Fabulous.
Mark @15, Of course.
We wouldn’t be unreasonable about the transfer fee…
We could offer a sweetener, with Hockey, for a bargain 2-for-1 offer?
Hockey could perhaps throw in his tutu!
@30 – yeah, it was a clever article and a fun read.
I know that this is a bit off topic, but could I be so bold as to suggest that Patricia WA be considered as the LP poet in residence?
I’ll second that robbo…Gold!
Patricia is already Poetess Laureate cum laude
Now, to Elise:
“Perhaps we could sell Barnaby to the Greeks?”
It may be time to paraphrase Piggy Muldoon:
“If Barnaby Joyce emigrates from Australia to Greece, the average economic knowledge of both nations will rise.”
- at risk of being unkind to the venerable Papandreou dynasty.
Elise, your suggestion has merit, and I suggest he become a GIFT. No point in haggling over a price. What’s a few drachmas here or there?
If we give him to Greece, we can also reverse the old warning about Greeks and gifts:
“PRAISE Greeks who ACCEPT gifts!”
Apologies to John O’Brien
Said Barnaby
“We’ll all be rooned,” said Barnaby,
In homespun, folksy tone,
In Canberra, where the Opposition
Goes to be alone.
The journalists were huddled round,
Hanging on every word,
Abuzz and feasting greedily,
Like flies upon a turd.
“We’ve hit the wall, we’ve done our dash,
“We’re on the slippery slope,
“I’m running out of cliches,
But where there’s life there’s hope.”
“What to do?,” said
old TuckeyIronbar,“How will we pay this debt?”
“There’s 10 percent of Telstra left,
That we have not sold yet.”
But Barnaby was not deterred,
“Now listen all you blokes,
“We’ve got to put the straiteners on
This great big warming hoax.”
“My hat was Made In China,
“The streets are full of yobs,
“Burt Newton’s off the telly,
And the migrants take’rrr jobs.”
“The waste and graft is out of hand
“I’ll reign the spending in
“Who needs a national broadband
“When we’ve got a tin with string?”
“Unemployment’s five point five,
“And interest rates are low,
“We’re safely through the GFC,
This government’s got to go!”
“It’s crook alright” said old Bill Heff,
“Our nation is beset!”
“We’ll all be rooned,” said Barnaby,
“If we don’t pay this debt.”
“We can’t raise tax, we can’t cut health,
“There’s nothing left to sell,
“Our farmers need their subsidies,
We’re going straight to Hell!”
“It’s worse than that,” said young Chris Pyne,
“You’ve got to think in billions,
“But when you try, you still can’t tell,
Your millions from your trillions.”
“I think I see the problem now,”
As Barnaby reflected,
“With me as Shadow Finance Minister,
We’ll never get elected.”
The party room was dour,
The mood bereft of cheer,
When each man squatted on Glenn Milne,
And whispered in his ear:
“I’ve got a story, just for you,
“That you didn’t hear from me,”
“A vote for Mad Monk Tony,
Is a vote for Barnaby!”
And ’round the land, the call went out,
The gallery made its choice,
“The Libs are knifing Abbott,
And the new Leader is Joyce!”
The election came, in Kev’s good time,
Rudd’s victory was a rout,
“We’ll all be rooned,” said Barnaby,
Before the year is out.”
Mercurius..heh..you left out Ironbar…k
I’m still scratching my head about Barnaby’s contention that HECS is part of Australia’s sovereign debt. I thought it was a life sentence whereby I paid my debt to Australia!
Aawww, Gawwd, Mercurius. Bloody good work, that.
OK Zorronsky, I fixed it, just for you.
I must applaud your effort Mercurius.
The man is certainly a ignorant buffoon of the first order.
Elise @ 14,
Send Barnyard to Greece their colony in the Med have one clown already in Downer, another one might be misconstrued as an act of war.
Mercurius @ 36 any music to go with that brilliant piece.
Well I have two explanations.
1. The man confuses “credit” and “debit” on the ledger. His former accountancy clients ought to check the states of their finances. Perhaps he thinks it’s like a bank statement, where they tell you that money you owe them is “credit” (well it is from their point of view!). So HECS *debt* means the Guvmint owes YOU money.
or Perhaps 2. He confuses the constitutional basis of the idea of “sovereign” with the old monetary unit of “Sovereigns”. Perhaps he considers that all debt is really measured in “Sovereigns” and not Australian or US dollars. so “Sovereign Debt” is all debt. However I personally prefer to pay in Guineas – a much more manly unit of currency if you ask me.
Aw shucks. Gotta say without LP I wouldn’t have written a word of these pollie pomes. Mercurius and Ewe2 and all the other great satirists who send in stuff will tell you that tho’ the internet’s a miracle for contact, quality readers all at one site like you guys are bliss. Congrats to Mark and Co. for setting up the LP forum and encouraging such a high standard for comment on political issues and being so tolerant of humour and verse too.
Now, let’s get stuck into Barnaby again!
The collective intelligence of the Canberra press gallery at the moment is only slightly lower than Barnaby Joyce’s own.
@ 42 Bilko, think slow, drawling harmonica (perhaps from public radio soundtrack stock) interspersed with the occasional desultory rattle of a lagerphone.
@ 43: Maybe Barnaby is forgetting his double-entry bookkeeping rules and which accounts balance to ‘debit’ and ‘credit’? It’s confusing enough for enbrained Australians, let alone Barnaby.
Sen.Joyce is described as an ‘accountant’ apparently he didn’t study economics,or perhaps he hopes that enough voters won’t know the difference between sovereign and private debt.
To be fair, Russel W, his an accoutant. You wouldn’t typically study macro economics in an accounting degree. Finance sits somewhere “between” accounting and economics.
Still agree he hasn’t really got a handle on what he’s talking about.
@48 – Angharad, as an accountant, you’d think he’d understand the difference between debit and credit! As T Rex and Mercurius said at 43 and 46.
How could anyone seriously claim that HECS is a debt owed by the Commonwealth?
@49, Mark, if I scramble my brains enough to make sense of the idiot-savant’s utterances, I suspect he was trying to infer that a considerable proportion of HECS owed to the Commonwealth may be considered an irrecoverable debt, and that this is something about which We Ought To Be Alarmed.
Technically, HECS recipients are debtors to the Commonwealth. Their loan balances appear on the asset side of the Commonwealth ledger, balanced by an expense for higher education provided. What’s boiling Barnaby’s egg is that the expense occurs in the current year, but the debt will be recovered at least several years hence, if at all.
BTW, the asset grows every year in line with the CPI, so it maintains its real value over time.
In Barnaby’s febrile imagination, he envisages a time when the Commonwealth, facing a cash-crunch, would want to call in all its debtors, stat. That would be impossible of course, as a great many HECS debtors wouldn’t have the cash to repay their loans instantly. So the Commonwealth would have to look to short-term money-market loans to tide it over and pay its own debts as and when they fall due.
Companies address this issue by keeping an expense account called ‘Provision for Doubtful Debt’. The expense is written into the Annual P&L (Federal Budget) and the balance is carried forward into the next accounting period. That is to say, so long as the Provision for Doubtful Debt is a good guess, it enables an accurate snapshot of the company’s (Commonwealth’s) solvency (forward estimates).
So the “problem” is accounted for and carried forward every single year. It’s only a problem if companies make no Provision for Doubtful Debt, because then their cash flow projection presents an overly rosy summary of their solvency.
I may be mangling the accounting terms a bit, but you get the idea.
I daresay that public accountants in the Dept of Finance have already thought of this, factored in a Provision for Doubtful Debt in relation to HECS, and thus the published numbers for the Commonwealth’s balance sheet and projections of debt payment and recovery are sound. It’s a non-issue, in that it’s already accounted for in the future estimates of Commonwealth solvency.
My guess is that Barnaby fell asleep during the ‘Provision for Doubtful Debt’ lecture.
More to add:
I forgot to add another item – over time, the receipts of HECS payments from the “good” debtors will eventually converge upon, and even exceed, the Commonwealth’s annual Higher Education expense account. By now there’s something like 20 years of HECS debt (asset) on the Commonwealth books. Repayments dribble in every year, paying off a few percent of each loan at a time. As the Commonwealth’s loan book becomes ever vaster, that few percentage repayment of old loans will cover the Commonwealth’s current account expenses in Higher Ed. I’m sure there’s a Finance Department graph around somewhere that can you show you which year the two lines are estimated to cross. In that year, the provision of Higher Education will become revenue neutral in the Federal Budget!
Cheers, Merc!
Top stuff, PWA and Mercurius! Here’s another desecration of Milne while I think of something truly awful:
Barnaby
Tony Abbott goes
Barnaby, Barnaby,
Barnaby, Barnaby Joyce.
Whenever I tell him
Politely to stop it, he
Claims the polls give him no choice.
If he stopped Barnaby,
He couldn’t go anywhere,
Poor little Liberals
Couldn’t go anywhere…
That’s why he always goes
Barnaby, Barnaby,
Barnaby,
Barnaby,
Joyce.
Mercurius @ 51
You can’t expect poor old Barnaby “Get a Grip” Joyce to be able to digest such complexities of Commonwealth finance as “cash flow”, “repayments”, or those spawn of satan’s devilish eyes graphs and charts, can you? All those tempting colours and lines. Look it says “Legend” right there on it so it can’t be true!!!
A mate of mine has taken to calling him Barnaby Joist, and making jokes about structurally sound support for the Coalition position. He does seem to be a plank.
Perhaps he could seek some advice from Bolta? That could be interesting…
Of course Barnaby knows he talking utter rubbish. But he also knows he’s talking rubbish to people who don’t know it’s rubbish.
To someone profoundly ignorant of economics or even simple accounting (ie the people he’s appealing to), it will all sound reasonable just so long as its delivered in folksy language and with homespun analogies. Abbott’s right – he’s a very good retail politician. Underestimate him at your peril.
I dunno, DD @ 57, he looks and sounds (to me) as though he’s been hitting the piss really hard – blotchy complexion, puffy face, and verbal incoherence. I don’t reckon it’s an act.
DUI(nr) “I don’t reckon it’s an act.” Absolutely correct.
How could anyone with common sense or self respect put on an act “talking rubbish to people who don’t know it’s rubbish.”? dd @ 57 is correct though in agreeing with Abbott that he is a very good retail politician. It’s not hard for him to get the Nationals’ message across at grass roots level because essentially he is one with his constituency. He’s the real deal there all right. But do Australians at large want a backwoods Queenslander running the country’s finances? Surely they got the message across loud and clear back in 1987 with they rejected the crazy Joh for Canberra campaign.
dd is right in another respect. We underestimate him at our peril. People like him can cause enormous damage to our democracy. Remember the lies that Bjelke-
Peterson threw into the Khemlani loans affair debacle which resulted in the dismissal?
My opinion of Joyce is that he is limited and will never think beyond his logic tight box of accountant/book keeper. But he loves the power he’s found in talking “sense” for the man on the land and in rural towns. So he’s become a politician with no real education and all the morals of a sewer rat who’ll eat anything to survive.
Sorry – my comment @ 59 should have reference to DI(nr) and also should have made it clear in para 1 I was talking about Barnaby Joyce. Left the computer briefly and a certain person from next door who shall be nameless sent off my comment before I had reviewed it!
Barnaby Barnaby Joycey Joycey buggered in the head was he
Took great care of imaginary finances though he was only a political flea
Barnaby Barnaby Joycey Joycey said to Tony said he
You must never go down on the body politic unless you go down with me
Barnaby Barnaby Joycey Joycey put on his senatorial gown
Looked superficially at the HECS scheme and put on a confected frown
Barnaby Barnaby Joycey Joycey said to his supporters said he
“That HECS debt is sovereign and soon will be coming the Mortgagee”
Barnaby Barnaby Joycey Joycey’s moronic supporters said they
Oh Barnaby Barnaby Joycey Joycey we can but only agree
We think you are so clever by half, but we have political labotomy
Barnaby Barnaby Joycey Joycey said to himself said he
(There’s a sucker born every minute who supports the National Partee)
King John Howard put up a notice , “Lost or Stolen or Strayed”
Joycey Joycey’s finance policy seems to have been mislaid
Last seen wandering around, quite of its own accord
It tried to go down on the body politic, ministerial position reward
(With apologies to AA Milne)
I dunno, Patricia, misnaming me DUI is quite funny. (I don’t, usually, but I do hit the piss a fair bit myself. The Taxi industry is beholden to me.)
I’m not entirely sure the majority of our private debt has been used to fund productive assets. This article suggests most of our private debt has been used to bid up the prices of existing houses.
Where does Dyer get his numbers from?
Are there any economists reading who can clarify this?
I really have no interest in scoring political points for or against Barnaby — he is clearly a buffoon — but I wouldn’t be so quick to jump to the conclusion that Australia doesn’t have a debt problem. We certainly don’t have a public debt problem, relative to other countries at least, but we do have have higher levels of private debt than, well, just about anyone.
Does private debt matter? The Ayn Rand crowd will tell you no, but Australia’s private debt of around 150% of GDP still has serviced by someone in our economy, which surely must be a drag on our growth … particularly if the debt was largely used to purchase existing housing stock.
Peter Kemp @ 61 I loved your parody. I can see it wouldn’t make sense but I would have loved to read “unless you go down on me” in your last line first verse. Great stuff.
Miss P. WA
Louche U R
Louche U B
I C U R 2 louche
4 me
Headmistress @ 65 – Relevance, please!
Who R U
2 censure me
R U
Ewe2
Or Joe 2 2
The 1 IC
Of Barnaby
That Number 2
And National
Leader’s Deputy?
A note for the Headmistress.
I’m fond of B.J.
In an odd kind of way
So I’m sorry you see
That it had to be he
I called Number 2.
But what could I do?
There was no other choice
But Barnaby Joyce.
Most Liberals agree with me too.
Thanks Patricia WA. Did a similar nursery rhyme/pisstake some while ago “Miss DFAT had a Dolly who was thick thick thick…”
Must be something inspiring in the stuff we learnt as kids eh?
I am neither ewe2 (U2?) nor joe2 too.
Your pomes are very good, but you have strayed into some areas only too attractive to the teenage mind. When you have reached my very senior and mature years, you will realise that innuendo is to be abhorred (check the spelling of that, no ‘w’ is involved, young lady).
Miss Manners in the English Dept will be furnishing you with further germane advice. I did not censure you. I merely expressed my own reactions based on my own (very senior and mature) tastes.
Dear Headmistress, I regret to say that
Despite this crescendo
Of sniping innuendo
Your style comes through quite clear
And your name has been reported by Miss Greer.
Maturity? What fatuity!
Of all the incongruity!
She sensed the contiguity
Of that trademark ambiguity.
It’s U! Ambigulous!
Of this abuse
Je vous accuse!
U R really quite mistaken.
In your self-confessed senescence
U R confusing adolescence
With my 2nd infancy
In which I’m very happy
Such joy 2 rediscover
And openly uncover
For all the world 2 C
My very lst creation.
It brings me such elation
To bring before the nation
My very crappy nappy.
PS. And thinking of Number 2, I commend young Abbott, formerly of 1D. Whoever would have thought he would grow up to change the level of national discourse to this more liberated airing of our motions?
Patricia:
1000 times after school -
Romani ite domum
Ms Patricia WA
Your pomes are second only to your detective work.
YY U R
YY U B
I C U R
YY 4 me.
Carry on.
Can’t see why the harder Libs won’t protest over all this making-them-look-like-fools-at-parties…. even the young crack-smokers won’t be happy at be laughed at!
Hey, who’s got the Barnaby Joints?!!?
Carry on? My name’s not Cleo!
Y should I?
Y don’t U?
U R a TT.
U mind
Your QQ
And PP.
U BBt!
Sorry, Fascinated, haven’t finished my lines yet. I was interrupted by that ridiculous Ambigulous! And there’s another reason. Replaying old Life of Brian skits took up a lot of my time!
Is the vapidity of this thread – evidenced by the poetry competition that has seemingly emerged – a reflection of the jejunity of the Shadow Finance Spokesman?
Rob!
Vapid? Moi? Ambigulous, vapid?
And jejune! Do you know what that means??? Dull! Insipid! Puerile! Juvenile – well you might be forgiven that.
I’m waiting with ba(i)ted breath for Keithy to enlarge on Barnaby’s latest escapade. Has he been smoking the weed? Would explain a lot. But no, that’s too much to hope for! What’s the story, Keithy? I don’t Twitter so I’m out of the loop on a lot of the hot goss.
You are right of course, Rob, it’s all just a load of crap. But that’s the Coalition for you.
Rob: More like a reflection of an inability to conceptualise a world outside one’s own experience.
Barnaby Joyce has done several things that (not to generalise) are outside the comprehension of many on this site:
Joined the National Party,
Moved to a central western “centre” of a couple of thousand people,
Supported his family not from a sinecure of some sort,
Has chosen instead to set up in business in that town,
… and the really incomprehensible part:
Is a straight talker (not a common feature in the experience of political groupies)
… on top of that:
He not only has formal qualifications in finance/money/economy areas, but has been able to apply that qualification in a practical manner. (That last step is the hard one, almost anybody can TALK)
Straight talk and lack of “sophistication” is often interpreted by those prone to “bigotry by postcode” as mental backwardness of one from the “backblocks”.
Hence threads such as this, where people sit in a circle & all agree “Barnyard Joint shore is stoopid!”
You know, you’re right Steve @ 79. The Senator is a good retail politician: so much so he’s having a pre-election closing-down sale with 80 to 90 per cent off all stock.
And Patrica @ 78, it was the thread to which I attributed the word.
Yeah, who knows?
Chauncey Gardener-like Finance Minister Senator Joyce may astonish the usual suspects at some finance summit, causing an epistemological earthquake in the world of finance.
Yes Virginia, there is a Santa Claus.
Well, Katz, just ‘being there’ at any grass roots meeting of Nationals helps one’s political career. Being able to voice the feelings of the crowd and work them up into not just enthusiasm, but fervor, is a gift indeed and guarantees selection for the senate ticket.
Is he really likely to have the same effect in New York, London or Geneva? I guess they’d make allowances for the Aussie accent and rough edges. You may be on to something there.
My God, I’m going to quote McCrann…
- “Our entire economy now pivots on just two pillars: resources and property. Not just any property, but second-hand property”
- “we have now built our prosperity on an extraordinarily narrow base: China directly and indirectly, and lending for increasingly expensive second-hand homes”
- “In the mid-1990s … For every dollar spent on a new house, three went on a second-hand one. Today, for every dollar that goes on a new house, five go on second-hand ones”
- “In 1989 … Commercial lending was more than 50 per cent higher [than home loans] at $90bn. Now it’s reversed. Bank commercial loans of $630bn are swamped by home loans of $910bn”
- “And where exactly do the banks get the money for their lending? Mostly from you as depositors, but nearly $500bn has come from foreign investors”
Australia: Resource income leveraged up and splurged on existing housing stock.
I can see why you are having trouble with accepting McCrann.
According to this: “In the half-decade to last year, our exports to China quadrupled from just $10 billion to $39bn. Our total exports of coal and iron leapt, though, from $16bn to $89bn.”
He then goes on to imply that it’s all about China, so, they took 29 billion more, yet total exports exceeded that by 50 billion extra. Doesn’t that point to someone else buying?
This one’s for Patricia( whom I’ve plagiarised shamelessly)
Abbot’s lament
Dulce Et Decorum Est
Bent double, like old boxers under sacks,
Knock-kneed, coughing like hags, we cursed Barnaby’s sludge,
Till on the taunting media we turned our backs
And towards our distant rest began to trudge.
Joe marched asleep. Bronwyn had lost her boots
But limped on, blood-shod. All went lame; all blind;
Drunk with fatigue; deaf even to the bells
Of disappointed doorstops that dropped behind.
Debt! Debt! Quick, boys!– An ecstasy of fumbling,
Fitting the clumsy earmuffs just in time;
But Barnaby was still yelling out and stumbling
And floundering like a man in fire or lime.–
Dim, through the misty panes and thick green light
As under a green sea, I saw him drowning.
In all my dreams, before my helpless sight,
He plunges at me, guttering, choking, drowning.
If in some smothering dreams you too could pace
Behind the debt truck that we flung him in,
And watch the white eyes writhing in his face,
His hanging face, like a devil’s sick of sin;
If you could hear, at every jolt, the garbage
Come gargling from the froth-corrupted lungs,
Obscene as cancer, bitter as the cud
Of vile, unfathomable claims on innocent tongues,–
My friend, you would not tell with such high zest
To children ardent for some desperate glory,
The old Lie: Dulce et decorum est
Pro patria mori.
(apologies to Wilfred Owen)
Unless I’m very much mistaken China became our largest export market several years ago. Our dependence in China deepened in 2009 because exports of raw materials to most countries slumped, but export volumes to China grew rapidly.
Check out these extraordinary graphs of Chinese import volumes. Note that the huge spikes took place in the depths of the GFC. At the same time, China’s exports (to the US, Europe, Japan etc) slumped 20-25%. Is that not curious to say the least?
But back to debt. This is how the Australian economy currently works:
- We dig up rocks and sell them almost exclusively to China
- We use much of this income stream to borrow overseas (private debt=150% of GDP)
- We use this credit to invest in an unproductive asset, namely existing housing stock
cybercynic – oh dear, have I used “dulce et decorum” anywhere? Can’t find it.
I’ll have to read your parody more carefully before commenting. Meanwhile thanks for pointing me back to the original poem and Wilfrid Owen whom I find so searingly honest and anti-war that I couldn’t imagine myself parodying anything of his. Maybe an alter ego….
His contemporary, Siegfried Sasson now, a satirist of the bitterest not humorous kind, almost begs parody or exploitation, so straightforward are his structures and rhymes. Yet his messsage is grim. In a sense he makes the point I should have made to Rob @ 77 about the use of verse and satire whether humorous or not in political debate.
Instead I just couldn’t resist the opportunity for another ‘bon mot’. Sorry, Rob, I wasn’t at all personally put out! Oh, the irony! I’ll have to find out how to use those Smiley gadgets.
Meanwhile back to satire at its best. How powerful, yet straightforward, is this?
Arms and the Man by Siegfried Sasson, WW I poet and decorated war hero.
Young Croesus went to pay his call
On Colonel Sawbones, Caxton Hall:
And, though his wound was healed and mended,
He hoped he’d get his leave extended.
The waiting-room was dark and bare.
He eyed a neat-framed notice there
Above the fireplace hung to show
Disabled heroes where to go
For arms and legs; with scale of price,
And words of dignified advice
How officers could get them free.
Elbow or shoulder, hip or knee,
Two arms, two legs, though all were lost,
They’d be restored him free of cost.
Then a Girl Guide looked to say,
‘Will Captain Croesus come this way?
I dips me lid to Wilfred Owen.
Cybercynic@85. Bravo! Encore!
If I wasn’t so busy right now moving amber fluids through my body, I’d be inspired to respond.
I’ve always thought one of the great things about the Aus blogosphere, regardless of ideology or attitude, is how it has provided a great vent for the deep-seated Australian love of wordplay, posey and balladeering.
“-We dig up rocks and sell them almost exclusively to China (&) invest in an unproductive asset, namely existing housing stock”
And guess whose money is propping up prices in that housing bubble?
We’re importing slops of the property speculation bubble from Shanghai Beijing etc: prices are so high there, our houses are bargain. Fly in for the saturday auctions, Buy up, and Fly out. Repeat several times a year. A temporary visa is good enough.
danny @ 90: I doubt that Chinese buyers are having much direct impact on property prices. Perhaps in a few select suburbs near desirable schools, but not nationwide.
The big impact China is having is through its resources demand. They are spraying money into Australia by buying huge volumes of our resources at top dollar, while the rest of the world is in recession.
Pat @ 78, noone twitters: end of story!