The post-Michael West Dumbfax is going great guns today, where the only response to any kind of challenge, problem or opportunity for the nation is for its commentators to swing into soporific tones of prozac jounalism. I’ve already caned Jonathon Shapiro for praising Australia’s looming sovereign downgrade today, now we can add Jessica Irvine:
Worst case scenario, a downgrade may lead to a sell-off, or maybe just less demand for, Australian government bonds. Australia is not the United States or Britain, so investors may be less sanguine about our declining creditworthiness.
Because our commercial banks are perceived as defacto backed by the government, it may also make some investors less willing to lend to our banks, forcing them to pay higher interest on their offshore wholesale borrowings. This may be passed on to bank customers through higher mortgage rates.
But any sell off in Australian dollar denominated assets would have the upside of relieving upward pressure on the Aussie dollar – perhaps causing an outright fall.
…The Reserve Bank has made it well known that it would like to see a lower dollar to relieve pressure on it to keep slashing interest rates further. Lower borrowing rates risk inflating house prices too much.
…Is that credit downgrade starting to sound a little less scary to you?
It should.
A sovereign downgrade raises the possibility of rate cuts not lowers them owing to higher bank funding costs than otherwise. To read more on the impacts you read my other post.
My point here is to ask why would anyone celebrate their “declining credit worthiness”? Are we so desperate to support short term sentiment at the price of long term damage? Evidently.
The perpetually awful Michael Pascoe chimes in with similar:
The result is that we are absolute champions, members of an elite little group of nations that are the best places on earth to live, the most socially progressive and with the best economies to boot. I’d go a step further and argue without much difficulty that we’re actually the best of the best.
So why exactly are we self-flagellating over a close election?
AdvertisementSaturday’s “cliff-hanger, too-close-to-call, line-ball, down-to-the-wire” cliché-ridden poll just continued our remarkably even-handed scepticism/enthusiasm about Labor and the coalition. Neither has proven a disaster for the nation. Neither is likely to.
On it drones, a parochial paean to mediocrity.
I can only ask these two at what point are we supposed to question what’s going wrong? Now, when we can fix things before they get too bad or later when things are so bad that crisis fixes it for us?
I, too, watched Greg Hywood tell the world a few years ago that it was Fairfax’s job to tell a positive story about the world but he is wrong. It is Fairfax’s job to tell it how it is.
