Sunday, January 25, 2009

A blowfly's perspective on the Prime Minister's thoughts on solutions to the financial crisis

Imagine for a moment that you are a common blowfly with a 'strong' relationship to the Prime Minister, Mr Rudd. You have managed to position yourself on his shoulder during the day.You are considered to be his 'official' fly. At night you sit atop his bedside light-- in whatever country you may be!

Your relationship is quite intimate, and, over your relatively short life you have managed, on occasions, to be able to read his thoughts.

Today is Sunday he is having some quiet time in his study. He is reading the weekend edition of the Financial Review. On the front page are the headlines for the included features. These include "Why the financial crisis wont go away", "Obama clears decks for action" and "Rudd Bank ready to act".

You can see the little wheels turning in his mind. He is an inveterate systems thinker and you know that he knows that these 3 headlines are connected.

Having told his electorate that he will spend whatever of taxpayers' money he needs to support the Australian economy you detect a thought in his head that he hopes he has done the right thing by proposing to put $5 billion into a special purpose vehicle to make up for the funds that foreign banks have, or a likely to, withdraw from the Australian economy.

Suddenly another thought comes into his head! "Gee, I hope I am not doing too much to help the banks. That deposit guarantee scheme I put in place gave them the best break they've had for decades. I didn't really anticipate that it would work that well. I was just doing what other countries did. It seemed like a good idea at the time!I didn't realise it was going to stuff all those property trusts.I must be more suspicious when Treasury gives me advice next time."

You see him turn the pages and he stops when he comes to the Obama article. A smile appears on his face and you have to take evasive action when he reaches to scratch his ear. The thought of Obama being President has been one of sheer joy for him. "Bush was such a fuddy-duddy", you hear him think,"and totally devoid of humour. That's probably why John Howard and Bush got on so well".

You detect him moving onto his next series of thoughts."I hope Obama can get a move on. The quicker he can fix the US economy the less I will have to spend propping our economy up. What will happen if we run out of taxpayers' money to fund this economy? Will we have to borrow more from overseas? Which country could we borrow from? Treasury told me I could just print more money. Could that be right? The Americans are doing that apparently!How can the US dollar stay up when they are just printing more of it?"

You see him become a little bleary-eyed and you think he might be about to fall asleep. You do a quick buzz around his ear to wake him up again. "No rest for the wicked", you think to yourself.
Another thought comes into his head. "I hope the Americans are tackling the cause of the problem.What are derivatives?I'll bet that smart-alec Malcolm Turnbull knows more than I do about derivatives.I wish I'd worked for Goldman Sachs for a few years after Uni. I'm just so dependent on what the boffins in Treasury tell me....................zzzz..............zzzzz."
You then realise you have lost him to the Sandman. Your heart sinks a little but you resign yourself to the notion that "a week is a long time in politics"(especially in Queensland where the Premier cant even have a botox treatment without it being mentioned in Parliament) and he deserves a little snooze." "So many questions", you think to yourself as your eyes slowly glaze over as well.

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