After only a couple of days in lockdown with the eggheads at meetings of the G20 Finance Ministers and the International Monetary Fund, Wayne Swan last week became aware that the economic crisis was worse than he’d thought.
On Ten’s Meet the Press, Swan told the assembled financial journalists that after talking to the finance ministers of the world, it had become "pretty clear that this recession is deep and it will probably go for longer than many had anticipated only a short time ago".
The question is, why does our Treasurer have to travel to the other side of the world to get a reality check? And why are Australian broadsheets playing catch up on the economic crisis?
Until he left our shores, Swan was trumpeting the same delusions to which we’ve all been subjected recently. Swan’s impression of the global financial crisis might well have been based on the same IMF reports given uncritical coverage by the Sydney Morning Herald last week. Quoting the IMF as an oracle, Jacob Saulwick and Phillip Coorey’s front page article read as follows:
"Australia’s economy is set to contract by 1.4 per cent in 2009, the IMF said, before growing just 0.6 per cent next year. The IMF’s forecast is markedly worse than the 1 per cent growth for 2008-09 predicted by the Government in February, and is likely to be matched when revised figures are released in next month’s budget."
That 0.6 per cent over the hill is an important figure. We just need to be patient, we all need to wait just a little longer and everything will work out nice as pie.
Me, I very much doubt this twitch of growth is coming at all. Why? Because the IMF has no idea what’s going to happen next. Their analyses and outlooks are consistently wrong — which is to say that they are perpetually upgraded, revised, downgraded and overhauled.
Phillip Coorey certainly knows the IMF’s track record on economic forecasting — he reported it on 20 April. Except according to Coorey the IMF weren’t wrong, they were just "revising" again. In fact, Coorey has reported every revision since 20 October 2008 when the IMF predicted our economy would continue to grow through 2009, albeit at only 2 per cent. Those were good times. Since then they’ve revised the forecast three times. Now, the IMF is calling a 1.4 per cent contraction in the economy for 2009, a figure which indicates we’ll have a very serious recession. A depression, even? And yet Coorey has again handed us the latest round of projections as if they were facts.
Last month when Kevin Rudd was in Washington en route to the G20 in London, Coorey’s economic reporting grabbed my attention. "Rudd Reveals Plan To Save World From New Depression", screamed the headline. Breaths had been bated the world over in anticipation of the long rumoured plan and finally, the Prime Minister had chosen to reveal it.
Back in Sydney, whoever thought that title was appropriate for the emptiness that followed should’ve been dismissed as a lunatic out of hand. Or was it one of the outsourced sub-editors in Brisbane who came up with it? At any rate, the SMH apparently believes that repetitive platitudes constitute not only a "plan" but one that is going to save the world economy. Kevin’s first proposition: "No nation can deal with this crisis on its own." And the second? Nations must instead work together. Brilliant!
Coorey went on to relate that, "earlier this week Mr Rudd described protectionism as an insidious evil and he rallied against it in his speech", and that nations must work with the World Bank and IMF to solve their problems. Coorey himself loves to quote important sounding economic reports, so it was odd that he didn’t pick Rudd up on the fact that the very same day, the WTO had named and shamed Australia as one of the countries which had turned to protectionism to rescue its economy.
Not only that, but didn’t this whole anti-protectionism, pro-unremitting capitalism stance contradict the essay that Rudd’s least imaginative advisors had written for The Monthly? It seemed like Rudd hadn’t even read the piece, but rather was reciting lines from cue cards written in Washington: IMF funds should be tripled, and every other tired goal that the real leaders of the world had already decided on.
But according to the SMH, Rudd was not only the saviour of the world economy, he was important globally — a myth every Australian prime minister has attempted to perpetuate since Billy Hughes.
What’s so bad about all that, you may ask?
Banks have been overrun with mortgage applications in the last couple of weeks, encouraged by falling interest rates and the rosy promises of a recovering economy that have been concocted out of thin air by incompetent hack economists. What happens if, as Access Economics predicts, more than one million Australians find themselves out of work next year?
House repossession rates are already rising steeply in NSW according to the NSW Attorney-General’s Department. There are fathers and mothers who don’t have enough money to feed their children anymore. We aren’t yet in the maw of the recession: the real job losses will hit in the next three to nine months. People will lose their homes, their families, their possessions and their health because they thought this was all going to get better.
Sharp-eyed readers will note that I’ve just quoted two sets of financial statistics, sourced, no less, from the SMH. Having just lambasted Coorey for treating IMF predictions like gospel, isn’t it a bit rich casually to drop in numbers from another "reputable source"? The thing is, financial journalists, like any other breed, must rely on expert opinion and information to put together their stories. Without as much, reporting becomes less a matter of investigation and more one of surmise. What’s important is that this information is treated critically, scrutinised carefully and situated in its proper context.
Writers like Coorey who puff false economic optimism have their hands soaked in the red ink of bank statements arriving at more and more homes all over Australia. They continue to peddle total bollocks, creating a vision of prosperity over the hill which will not come — not in time, anyway.
Phil, every time you’ve told us all it’s getting better, it’s gotten worse. Every month the losses get bigger, the economy is going to keep contracting, and more of us are going to lose our jobs. Do the honourable thing and be the first of your kind to admit that you’re wrong, that the lenses through which you view politics and the economy do not work anymore, that you’re as helpless in this storm as the rest of us. At the very least tell us the experts and pollies you’re quoting don’t know what they’re talking about, or, for Christ’s sake, find someone else to ask. There are hundreds of economists who’ve actually been right when the government and IMF have been wrong that no one seems to be consulting.
I don’t want to pick on Phillip Coorey, because there are many others doing the same thing. The overwhelmingly positive responses to Jon Stewart’s roasting of Jim Cramer, stock market pundit and host of CNBC’s Mad Money, in the
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