The People vs. Goldman Sachs

Matt Taibbi, who once called Goldman Sachs “a great vampire squid wrapped around the face of humanity”, writing in Rolling Stone about the Levin report on the causes of the GFC:

Thus, while much of the Levin report describes past history, the Goldman section describes an ongoing? crime — a powerful, well-connected firm, with the ear of the president and the Treasury, that appears to have conquered the entire regulatory structure and stands now on the precipice of officially getting away with one of the biggest financial crimes in history.

Yikes. Well worth a read – and after this, have a read of The Big Short by Michael Lewis (the guy behind Liar’s Poker, the original expose of the banking industry).



Gerard Henderson contends today that Malcolm Turnbull has no hope of being Prime Minister after his appearance on Lateline last Wednesday:

Turnbull’s lack of political judgment has blinded him to the fact that his body of support is located outside the joint-party Coalition room in Canberra. Most Liberals and all Nationals parliamentarians who watched Lateline on Wednesday would not have regarded themselves as viewing the performance of a potential prime minister.

There’s something to be said for Henderson: he consistently writes for the insider’s point of view. Henderson’s main contention is that Turnbull stands alone in his view on Climate change, and so he has misjudged the politics of the party that he belongs to, and doesn’t have a hope of regaining leadership.

On December 1, 2009 Turnbull lost the leadership to Abbott by one vote. There is little doubt Turnbull would have survived the year if he had not decided to criticise his senior colleagues. This was widely regarded as poor judgment and mismanagement.

It certainly would be regarded by political hard-heads and those who lust for power at any cost to be poor judgement, but I would suggest that it rather won him many a moderate, centerist voter, myself included. Turnbull stood on principle, and staked his job to it – the result may have been for him to lose it, but it certainly showed him to be a different breed of politician, one rarely seen these days.

The Westminster system is geared towards party lines and groupthink, but occasionally it throws up oddities like our current government, holding on by a slim majority at the mercy of a small band of independents. Each independent truly is so, and their actions have demonstrated as much – they may have agreed to the common cause of the government, but that doesn’t stop each of them having their own agenda. Collectively, that is driving change in Australia (or, well, at least the discussion of it) more strongly than any time in the past 10 years.

Turnbull appeals to many voters who Labor is losing to the Greens – voters who would have once numbered the box for the Australian Democrats, disenfranchised by that party’s collapse as polarisation drove people out of the centre as quickly as the major parties themselves dove for it. Henderson appears to frame it as Abbott’s appeal:

Abbott’s political strength is his ability to appeal to traditional Labor voters in the outer suburbs and regional centres…

Without question, Turnbull’s approach to climate change enjoys considerable support within inner-city electorates, like his own, among well-educated voters in relatively secure financial circumstances. But this stance does not enjoy anything approaching majority support within the Coalition, which is looking to gain votes in the suburbs and regions.

The votes in the suburbs are bought through simple baiting: a tax break here, a government subsidy there, and soon enough the Coalition of “conservatives” resembles nothing so much as a hand-out and patronage machine. Ironic indeed that Labor is cutting hand-outs, where once they stood as proxy for the socialist agenda, while the Coalition argued for fiscal restraint. The heavyweights of the Liberals’ leadership are lightweights on the policy front.

Abbott’s appeal is in opposition, in declaiming the doubts that the government is doing a good job: repeating a thousand pub conversations that once meant nothing, but now appear to define political debate. Abbott does not show why he must be the alternative prime minister; the relentless demonization is to simply bring down the current government in a huff of anger.

Henderson also had a shot at Turnbull’s argument that a conservative British government introduced a cap-and-trade scheme, much as Howard once proposed, by arguing that “we’re not like them… we’re like someone else,”:

Turnbull overlooked the fact that the British economy is quite different to Australia’s. Britain has a large financial services industry, which benefits from trading in energy. Also, Britain does not export coal or iron ore and relies significantly on nuclear energy for power. The Australian economy is closest to Canada’s – where Stephen Harper has just led the Conservative Party to a significant victory with a promise not to proceed with a cap-and-trade scheme until the US does.

This overlooks the fact that we are different again from Canada. Canada too relies on nuclear energy for power – indeed, they are out there as innovators in the field. Canada’s economy is tied to the US in a way stronger even than our own economy is tied to China. And finally, the most cynical view, Canada potentially stands to gain from a marginal increase in temperature, whereas Australia only has reason to fear.

Canada’s northern expanses are vast and unused; warmer temperatures would make more of this accessible, though I can only imagine that is never going to be brought up as a reason to delay in any public or on-the-record discussion. Australia stands to lose – greater droughts, more uncertainty over rain, and destruction of fragile lands at the fringes – the semi-arid areas, the Great Barrier Reef, and the expanses of arable land in the interior turning slowly to salt plains.

I don’t contend for a minute that Australia imposing a carbon price will cause climate change to disappear, but without leaders who at least consider all the aspects of a solution, such as Turnbull has consistently been, we’re not going to be able to influence the outcome at all.

Turnbull might not be able to lead the Liberals and the Coalition as it stands today, but I’d much rather have someone who can think through and hold to a principled stance than an opportunist ready to jump on the latest bandwagon – and that goes for both sides of politics.