Wednesday, October 08, 2008

605 - alert and alarmed

Twice today in the lift at work, while smiling hello at people I only have a nodding acquaintance with, I’ve been accosted with predictions of doom and gloom. Sure these people are all small business owners, mostly artisans or technicians in their trade but when someone whose voice is still thick with a family history that likely lost members in European pogroms tells you these are grim times, it makes me wonder.

I have clients now mentioning the “economic downturn” on a daily basis. The state of Wall Street is only tangentially linked to why they consult me. It sits on the far outskirts of our professional solar system and technically speaking, should not have any impact on the here and now.

But we are being taught to be afraid, be very afraid, and so we are.

Prior to this week’s Reserve Bank interest rate cut, our glorious leader already gave the banks a get out of jail free card. He signalled that it would be ok for them to not pass on any reduction in rate in full to their customers. Right on cue, most lenders are holding back 20-25 basis points of our whopping 1% drop.

We have effectively been dumbed down and instead of being outraged, feel gratitude about paying out a little less on the mortgage.

At home, discussions about the economy have segued from “recession” to “depression” citing various definitions of the “d” word. We consider ourselves fortunate for so many reasons and even with a limited income between us, our individual little piles of debt are quite manageable. However, even if I can get out of debt before the storm hits, my business is based on people having spare cash to take care of themselves and the Not Boyfriend, well he is an emerging artist. Enough said.

The thing that makes me maddest about all this is that we are being manipulated. Naomi Klein’s primer in disaster capitalism sets the scene so brilliantly for the recession or depression that we had to have. If you aren’t up to reading “The Shock Doctrine”, search for her on YouTube (or the likes) or spare 17 minutes to watch this interview with John Cusack (now that’s a dynamic duo, talk about thinking people’s crumpets!)

The take home message is this crash is predictable but there is much worse to come – further privatisation of resources, lower expectations of government and reduction in political accountability.

Only a revolution is going to save us all now. Or can we all jump ship and sail for Venezuela?

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Blogger Ed said...

Or learn to forage..

6:29 pm  
Blogger Another Outspoken Female said...

True. But its a bit like the last two federal election campaigns all over again - think only of your family/yourself and bugger everyone else. Yet another great way to divide and conquer and not look at the bigger picture.

7:53 am  
Blogger Ann O'Dyne said...

Yes - Venuzuela:
"Fueled by high oil prices, record government spending helped to boost GDP in 2006 by about 9% and in 2007 by about 8%. This spending, combined with recent minimum wage hikes and improved access to domestic credit, has created a consumption boom but has come at the cost of higher inflation-roughly 20 percent in 2007. Imports also have jumped significantly. Embolden by his December 2006 reelection, President Hugo CHAVEZ in 2007 nationalized firms in the petroleum, communications, and electricity sectors, which reduced foreign influence in the economy. Although voters in December 2007 rejected CHAVEZ's proposed constitutional changes, CHAVEZ still has significant control of the economy and has indicated he intends to continue to consolidate and centralize authority over the economy by implementing "21st Century Socialism."

... from my favorite place the CIA world factbook, endorsed by Oz pollies for writing up their junkets reports.

yes senor chavez: 21stC socialism - all week I have been recalling the old days when the Crommonwealth was the people's bank instead of the Shareholders money bin it is now.

12:04 am  
Blogger Another Outspoken Female said...

Interesting, what the English are doing with some of the banks is akin to nationalising them but I bet that (what is the nonentity prime minister's name?) won't go down in the CIA factbook coloured by the Chavez brush.

11:22 am  

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