03 November 2010

Someone else's problem

Updated 4, 5 & 6 Nov with Lenore Taylor's responses

Lenore Taylor reckons that regulating the financial system is someone else's problem, bless her.
Joe Hockey has clinched his interest rates attack.
Is this the same as saying that Hockey, and by extension, the Liberal-National-LNP-CLP-OMG-WTF Coalition, have a superior policy offering to the government in this key area of economic and social policy? If you read on, it doesn't say this at all: this sentence gives false hope of presenting you with useful information. It's just about day-to-day bullshit in Canberra, feints and media tactics that chew up a lot of effort and media space but actually amount to bugger-all when it comes to effects on people, businesses and other features of life beyond the concentric roads of Capital Hill.
The grand finale came yesterday when he declared the Gillard government and its "insipidly weak Treasurer" owned the interest rate rises.
The "grand finale"? Really? Looks like just another dollop of bullshit to me. What's grand, what's final about such an announcement? Will interest rates and their impact on the economy cease to be an issue now that Hockey has spoken? I doubt it, and Taylor was stupid to frame such a humdrum announcement in that way.
Of course, the government doesn't "own" the rises at all. The Reserve Bank is independent and the commercial banks even more so. (Industry sources say at least part of the Commonwealth Bank's motivation in immediately announcing a rise well above that announced by the RBA was to send a very clear message to politicians of all persuasions that political bullying was not going to become a de facto form of price control.)
The commercial banks are not independent of government. They are companies which hold government banking licences, and which are subject to a range of regulations, including on fair trading. Nobody who has any idea of the amount of lobbying they do would describe them as "independent" of government.

Banking puts the lie to libertarianism as a viable economic system. Show me a country with a weak system of government (e.g. a brittle dictatorship or post-dictatorship kleptocracy) and I'll show you a country with a rubbish banking system. Show me a country with a strong system of government (e.g. the UK, Switzerland, Australia) and I'll show you a country with a strong banking system. Strong regulation makes for strong banks (and no, pummeling banks and bankers at every turn does not constitute 'strong' regulation).

Taylor is wrong to regard all proposals for changing the regulatory system under which banks operate as "bullying", as she did there. Australia's major banks have power of their own, and the power they exert is not just over politicians but over their customers. When customers have restricted ability to find less onerous interest rates by switching banks, because they're all doing it, they are disempowered; and when their politicians don't exert regulatory power over banks that keep them solvent while preventing abuses of power, this sense of disempowerment at the hands of the banks is magnified.
Hockey's sheeting home of "ownership" ignores the fact the Reserve Bank statement is clear that government spending had little to do with its rates decision.
A valid point, well made (finally). Then she overdid it:
And actually "acting" on banking competition is a lot more difficult than making a considered speech with a "nine-point plan".
Hockey is a politician, in opposition. "Acting", however you want to define it in a non-thespian sense, is beyond him because he's not the Treasurer but the shadow. Hockey's nine points may or may not be what's needed right now in bank regulation, but they're nine points more than Swan put forward when he held the job Hockey's in now. Costello treated Swan with contempt; a little unfairly perhaps, given Swan's political success in Queensland in 2007 and in keeping the state government from defeat at the last election (a record undone by the debacle of August 21). Swan cannot afford to brush off Hockey and his nine points as casually as Taylor would hope to do. It's one thing to regard Labor and Liberal as equivalent, but it's a basic error to extend this insouciance to government and opposition.
Wayne Swan told the Herald last month he was looking at tougher powers for the competition watchdog and more help for smaller lenders to try to increase banking competition.
Did he really? What a shame the Herald just sat on it. Its readers could have used that information. Maybe there could have been a public debate on what forms those high-level measures might take. Taylor has admitted to an anti-scoop, the antithesis of what her profession claims to be about.
He now says he'll unveil a banking competition package in December - just in time to have an answer when people realise they have way less to spend at Christmas. It is likely to include more powers for the Australian Competition and Consumer Commission. It may coincide with the Australian Securities and Investments Commission finalising how it will penalise banks for charging excessive exit fees for mortgage-payers who want to vote with their feet.

As policy goes, that's all fine.
"As policy goes, that's all fine"? What a piss-poor effort, an appalling indictment of journalism that is! These are hugely complex areas of policy, and a senior parliamentary press gallery journalist waves it away with "As policy goes, that's all fine"! Keep that in mind for any future developments in public policy reported by this person (if there can be any, following the "grand finale"):
Asylum seekers coming by boat will be machine-gunned and left to die in the ocean.

Lenore Taylor: As policy goes, that's all fine.

The means of production, distribution and exchange shall be taken over by the dictatorship of the proletariat.

Lenore Taylor: As policy goes, that's all fine.

[insert any policy you like that's stupid and wrong, yet not unlikely in the current environment]

Lenore Taylor: As policy goes, that's all fine.
That attitude shows that journalists aren't equipped to tell us what public policy developments mean, and how we might evaluate them. Merely reporting what was said isn't enough - especially not if you're going to sit on it for a month or so.
But politically he's been too slow. While he's been thinking, Hockey has got the jump on him - taking on the big banks and outlining his own ideas that are in many cases quite similar to those being investigated by Swan.
How similar, Lenore? Isn't it politically smart to get journalists to sit on important information? Now that the cat's out of the bag, are you going to explore the similarities and differences, and foreseeable consequences of each? Why not? Surely this blithe crap of "that's all fine" won't do any more?
Being shadow treasurer does not have many advantages over being Treasurer, but it is a better place from which to feel people's pain on cost-of-living pressures, because you don't actually have to do anything about it.
Assuming you want to be shadow treasurer all you life, maybe it could be regarded as a cushy job. When you're in a job like that, all you can do is make a speech and hopefully come up with some ideas that stand scrutiny - if there's any scrutiny to be had, from any professional journalists that aren't too busy having cosy chats with the incumbents. Maybe Swan could get it done in less time if he didn't have to butter up journalists, just as Hockey hasn't apparently been sitting around hoping Lenore Taylor might drop by.
Just ask Wayne Swan. As shadow treasurer he ran a cost-of-living campaign advocating Fuelwatch and Grocerywatch. It worked a treat. Until he got into government.
Do you think that if we'd had some analysis of Fuelwatch and Grocerywatch, we might not have been taken in to the extent that we (apparently) were? Where would we turn for some of that, Lenore? Let us have no more of this 24-hour-media-cycle nonsense when you can sit on a story for a month and observe idly while it blows up around you. That's someone else's problem too, I suppose.

Update 4 Nov: @lenoretaylor tweeted the following:
@Crabbometer not sure where to start with this bizarre rant by @awelder- but I did not "sit" on swan story I wrote it on p1.
You wrote it a month after being briefed, and a week after Hockey made his nine points. If Hockey was really operating along 'similar lines' to Swan you should have said so at the time, and said why you thought that. Never mind this 'unveiling in December' rubbish - if you have inside information on changes to the country's fiscal regulatory regime, tell us.

Oh - and it is possible for people to disagree with you without this 'bizarre rant' nonsense. Keep it civil, Lenore.

Update 5 Nov: @lenoretaylor tweeted the following:
@awelder no i wrote it on october 5 page 1 "Treasurer's rates edict to banks"
The article is here (thanks to the estimable Crabbometer for digging that up not letting this issue go).

The only bits of Taylor's earlier article which deal with Swan's position are paragraphs 1 & 3. It's fair to say they're vague about what Swan actually intends to do about regulating banks, and that analysis on Taylor's part is non-existent. There is no basis in this article to sneer at Hockey's nine points, unless you're privy to information not yet disclosed publicly.

The whole weakness of the Rudd government, and increasingly that of Gillard, is that they promise too much and deliver too little. When they do make a decision they tend to spring it on people, rather than leading a community debate and coming to a position that works for a wide range of stakeholders. Swan must bear some responsibility for that.

What should be happening with bank regulation is that Swan should be leading a community debate. Hockey started doing that with his nine points but he seems to have stopped. If Lenore Taylor knows more about proposals for regulatory change to the financial sector than she has so far let on, she should stand up and tell us: find out what proper regulation looks like, and judge Swan, Hockey, the Greens and whomever else wants to stick their oar in against that.

What shouldn't happen is this assumption that the incumbents have got it covered. The public service throw ideas around all the time, and some of them pass over ministers' desks. From now on, any idea the Opposition come out with could be rebutted by someone like Lenore Taylor responding 'yeah, government already thought of that', because as policy goes, that's all fine.

Update 6 Nov: This is the article I wish someone like Lenore Taylor would have written earlier, and I'm glad has been. While there is some analysis to be done about the merits of these proposals, finally we have a sound article to work with. Congratulations Ms Taylor, congratulations SMH and congratulations to you too, Crabbometer.


  1. Good points, Mr Elder.

    ' Lenore Taylor: "As policy goes, that's all fine."
    That attitude shows that journalists aren't equipped to tell us what public policy developments mean, and how we might evaluate them.'

    I agree (obvious exceptions). In fact I interpret Taylor's remark as "I don't have the ability or the inclination to analyse that." Taylor makes clear by her facetious "nine-point plan" quotation marks that in her view it goes without saying that anything politicians say is simply tactics, and that no politician actually puts forward policy because they believe in it.

    The limit of understanding for Taylor, as for many other press gallery journos, is that it's "populist bank-bashing" and "anti- free market". This is now something of an axiom, from which "strategy" is discussed.

    And this journo wrote a book about the GFC. Remarkable.

  2. I'd thought she was one of the better ones, with a bit of perspective. If I thought she was just like Dennis Shanahan or Katharine Murphy I wouldn't have bothered.

  3. After updates.

    Ok, my last comment was a little too harsh, and Ms Taylor can produce decent articles if she chooses. Her 6/11 article provides more detail, and is much better for dropping the snarky, savvy attitude. I still believe it could be improved by providing independent expert views on the policies - for example Prof King has expressed in the AFR recently that the narrow focus on competition is "completely missing the point" of the GFC: Here
    Bernard Keane has been discussing stability and government guarantee issues further - one of only a few.

    On the friendly Twitter exchange: So Ms Taylor objected to the "sat on" statement. Well, yes, an article did appear, but as you say "there is no basis to sneer at Hockey's [plan]". The argument of the original bizarre rant, that there wasn't enough meaning or perspective, was still valid. :)

  4. I spent a whole year being 16, as did you and as did Lenore Taylor: but we've all got grown-up jobs to do and I'm glad we're doing them. Journos should rise to the challenges of public policy of their own accord, and their Professional Standards.