Forgive the preponderance of meta-commentary today but it’s a bit slow on the hustings.
For those that don’t know, the MB office has a red strobe light on the ceiling that we call the Pascometer. It is an impeccably reliable buy and sell indicator that relies upon doing the opposite of any Michael Pascoe column. The Pascometer has been in spectacular form of late (marked with red arrows) with a ‘buy banks you idiots‘ warning:
A ‘don’t sell stocks you lemmings‘ warning:
And a ‘the dollar is strong you dunces‘ warning:
This afternoon the Pascometer is wailing again! Sadly for the nation, it is Australian GDP that is in the cross-hairs:
Sometimes what is not reported is more amazing than what is. In commentary after commentary, broadcast and in print, the biggest single factor in weakening the March quarter GDP has been ignored. Yes, that is extraordinary.
Taking 0.9 per cent off GDP in the latest national accounts was public investment – the reduction in government capital expenditure. When the bottom-line GDP growth for the quarter was 0.6 per cent, a movement equal to 150 per cent of that might be considered important.
…Much of the pet shop is given over to chanting for yet-lower interest rates and a cheap currency, apparently in the expectation that that would solve all our problems. All we seem to be entitled to hope for is the return of the Pacific Peso to resuscitate the sort of average-to-reasonable manufacturing and visa-based education industry we had become used to, plus more dwelling construction and a bit of a lift in consumer spending.
We could do worse, but we could also do better. We could as a nation decide to invest in our future and behave with some maturity about the borrowing required. We could also accept that travelling up the value chain, building a more productive and wealthier nation is painful. It requires leadership that combines genuine integrity and determination – and that’s not evident.
You fools, lowering the dollar and letting the private sector trade and grow is a much worse option than borrowing money by the government. It’s not the private sector’s job to create jobs, dunderheads!
Anyway, the import of today’s siren is straight forward: short Australian GDP:
Weeeoooo, weeeoooo, weeeoooo.
