EYE-BALL’s Herman on – 2012 Overture – The Northern Fall (Autumn) –
|Links to Previous ‘Herman’ Posts:
17th Aug: – A Political Alternative – Australian Community Party –
Aug 6th: – Shang Yang’s good governance – or is it good faith?
July 21st: – Micro Economics – Thoughts and opinions on the Energy Debate!!!
July 18th: A Chronology of Farce – and of a Government who Wonders Why Their Opinion Polls are so low.
July 4th: 2012 Overture – The Northern Summer Arrives –
June 16th: 2012 Overture – The Greek Elections
June 2nd: Creative Destruction …
May 26th: White Collar Crime – Craig Thomson and Peter Slipper … or just Federal Parliament?
May 17th: The 2012 Overture Act III
Apr 21st: A Philosophical Appraisal of Social Economic Index… to Capture Wider Social Well Being.
Mar 26th: The 2012 Overture – A Crappy New Year – Part III.
Feb 14th: Democrazy Part XV – Clinging to Power.
To see more EYE-BALL ‘Herman’ posts:
– 2012 Overture –
– The Northern Fall (Autumn) –
| Author: EYE-BALL’s Herman | 28th Aug 2012 |
now firmly believe that Barack Obama will be voted out of the Oval office this November, and the transition period that occurs between election-day and the inauguration of the Mitt Romney and Paul Ryan team, will be critical. Around about the end of the Mayan calendar, the Northern winter solstice.
That is not only a bold call but a grandiose one; given opinion polls still favour the incumbent marginally. In November I feel the Republican nominees will carry about 300 of the college votes compared to Democrats 220. That also implies that the Republicans will control the lower house and senate, but in the States, that does not carry the implication we Australian see in our mandate system. Party line voting.
As you attempt to digest all of this, the first reason Obama will join this list of presidents defeated at the polls is the United States lack of presence on the international stage. Similar to the fate of former Democratic Presidents Harry Truman and Jimmy Carter. The votes attracted on economic issues or racial lines remain finely divided. It is somewhat the opposite reason to the fall of George F Bush after his apparent success in the Kuwaiti War.
Obama’s recent posturing towards Syria was virtually missed because of the support of Damascus by the Kremlin, and the momentum of America’s contraction on military spending. Not for one moment do I attempt to advocate a return to massive military spending, the game has simply changed through the position of Beijing.
A defeat of an incumbent Democratic president is also history repeating itself, in that in the 20th century the Whigs dominated the control of the oval office approx 60% of time, compared to the Democrats enjoying closer to 40%. Quite similar to the stats of Australia, therefore right wing policy is perceived to produce better economic management. Economic policy also means that balancing the fiscal budget faster will result in further economic contraction. That remains the big issue on the Eastern Front, i.e. Europe.
Republican ideology is totally based on smaller government with less red tape, and that is implicit in anything discussed as we now enter the convention stage of the election cycle. After this convention stage we move into the public debate stage, where Obama is perceived to be the superior orator. But that counts for little should the economy now again trend down. No president has ever been re elected with such dire economic stats against them. The unemployment statistic of 1984 when Ronald Reagan was re elected is different. He had momentum on his side.
You might also rightfully ask should Obama carry the can for the fiscal deficit issue, when 4 years ago as the GFC unfolded the States destiny was cast in stone. Well yes, but he lost his mandate by only really focusing on Obama care, when he should have been highlighting the low taxes paid by the upper percentiles of income distribution at that stage, and use some of those government revenues to stimulate middle-America before November 2010. At least programs of government action rather than rather hollow rhetoric. Obama’s victory on Medic-aid in the Supreme Court will be nothing in history but sand through the hour glass. Therefore what is his legacy?
Reverting to Europe since the election of Francois Hollande there has been no real development. The Berlin Axis has successfully taken the plight of the unemployed in Greece, Spain and Portugal off the front page. The markets were soothed by simple words of the ECB that they will do what it takes to save the Euro. The other side of all of this, the yang, is the loss of faith. Not only is it dangerous to speculate on where this might culminate, but it is simply too frightening to imagine. There are rumblings in Northern Ireland that idle hands and minds is seeing fresh regional issues arise where provincial government blames Downing St for lack of funding to social stimulus initiatives. Conversely you may have noted Spain’s rise in team sport. It is claimed that the disequilibrium in funding the elite soccer teams, Real Madrid and Barcelona has the minor teams owing 700 million Euros in back taxes and any politician daring to enforce payment being soundly defeated at ensuing polls.
What is most obvious is that Europe can prepare for the eventuality of Greece departing the Euro, but they are at 6’s and 7’s about longer term ramifications. With the flight of capital from the Mediterranean states, they scored very poorly. Moreover those challenges are still in flux. Australia is now finally starting to address or discuss its over-valued currency and life after the mining boom.
None of any of this is helping world stock indices. There is simply no calm water on the horizon. You have full scale depression in Southern Europe, massive drought in North America and Western Europe, ever increasing ethnic wars gripping the Middle East and Africa and insufficient GDP growth from China to sustain on the scale of 2 years ago.
Within Australia there are many domestic issues. For a start RBA governor Glenn Stevens is perfectly right when he highlights that the main momentum of the mining boom is moving from the construction stage to the export stage. Here he is largely referring to LNG developments but not totally in isolation. Those export gas infrastructure projects are developed on the back of long term export contracts. The collapse in spot coal and iron ore prices are far different. BHP’s decision to defer expansion of Olympic Dam is an immediate loss of jobs in Northern South Australia but I see greater good eventuating. I advocate that the issues underlying the MRRT should be widened to incorporate export licenses.
The WTO and all of its associated free trade logics have largely collapsed upon themselves. The Doha round of trade talks are now out to 11 years of negotiation with little chance of real impetus. I feel at some time soon there will be hoop la about resolution which will be totally sham. Underlying all of this is the industrial property laws. It has always been there, but in decades past without the voice of China involved the west has had their own way, and first world countries have dictated terms to 3rd world countries. With this amazing shift to emerging nations the antecedents of GATT has ended. We are now facing massive power shifts similar to both the early 19th and 20th centuries.
The very concept of export license is totally abhorrent under free trade, but when free trade has faltered, collapsed under its own weight, what then? Through GATT all technical barriers to trade were developed and defined through Western eyes. We have a model that has produced;
I could easily transfer that argument to oil or many other commodities.
In the oil markets you have a clear cartel. It is called OPEC. It also has renegades. In the cocoa market you also have a tacit cartel, an informal buyer’s cartel, so why wouldn’t Australia look to something similar to determine its economic sovereignty over minerals. I believe under the constructs of the Australian constitution the MRRT could well be overturned in the High Court. The eventual judgement ex tempore will be much more detailed than I can possibly write here. Essentially sovereignty of mines belongs to the states. Yet Australia needs to combine to address its lack of economic control over firstly the supra national miners and secondly other primary producers. Do we want the Chinese government to own or control vast tracts of Australia’s primary producing land?
Within what is recently set out herein, I have made some fairly massive predictions. The High Court will overturn the MRRT. Will the States allow it to get there? I can only await developments. It could well be addressed at COAG. At this time only the first volley of shots have been fired.
On other debates within Australia, the executive bonus issue has taken a good twist on the back of government initiative. I do have issue with the concept of 25% voting at AGM, but here again I advocate widening the debate to enquiring of the superannuation funds voting at company AGM’s in their agency capacity. It is the root of so much of what is happening in the Western world. Often termed a 2 speed economy. Cameron Klein of NAB wanted to say that there are more than 2 speeds, and that is an economic reality. It is creating these supra nationals, an entity above all sovereign border and oversight. One that is causing grief in the underclass.
This extends to;
A strong banking system in Australia is not more sacrosanct than greater economic good. A prudent, rigorous and dynamic banking system rather than a bloated and self serving banking system is the ideal. I was absolutely disgusted on hearing the ABA advocating to a parliamentary enquiry, that given the demands of meeting higher standards of transparency under American initiative, now is not the time for new oversight in Australia. Good governance cannot be compromised.
The apathy towards the Caltex announcement over the Kurnell refinery is not good. The fight is left to Paul Howes of the AWU. Next will be Lytton then one by one, they will all close. What happened to the concept of 3 super refineries strategically placed with higher economies of scale?
Before signing off – the example of cocoa above also is intriguing when you apply it to retail in Australia. Woolworths recent 14% drop in profits is the headline. The retail wars are certain to intensify. There are real threats from first Aldi and the likes of Costco, alternatives. Consider the fresh farm producer and their struggle with the retailers for distribution at a fair price (the cocoa producer), or possibly the smaller wine producers, and then consider the likes of Gillette, Johnson and Johnson, Simplot or Coke (the brands, Nestle etc). Do the same rules apply equally? Struggles on many theatres just appear to get more convoluted.
It is hard to see too much Christmas cheer as we approach the Northern Winter.
As always, Believing in sanity is itself, insanity.
EYE-BALL’s ‘Herman’ …