5 September 2004

the week that was

Rod Cameron on Lateline:

Yeah, but the impact will be less and less.

What's it's done, it's forced a number of expert commentators and economists to question the validity of Howard's statement that interest rates are always higher under Labor - not so.

The market itself has judged it to be fallacious, because the people who put their real money in are not factoring in higher interest rates other than the expected small increase no matter who wins, and in fact it gave Mark Latham the chance to respond in values terms and I think his best performance so far was his response to the interest rates scare.

He was able to deflect it in terms of aspirationalism and the battler versus the big end of town and he was able to be reasonably convincing at his biggest vulnerability, so I think Labor would be well pleased that it came in the first week of a long campaign.

All in all, I think the government is sounding a little tired. The Costello never, ever thing took up Monday. Tuesday and Wednesday were dominated by the interest rate claims and the magic documents from the prime minister's staff which disproved the Scrafton evidence but can't be be seen by the select committee on the Scrafton evidence. Friday of course, was the sad news that the safe seat of Wentworth had suddenly gone marginal with the sitting member running against the Liberal candidate.

In the background the crepuscular Ruddock managed to relate the Beslan atrocity to the ALP and the deputy prime minister (the Mini Me of Steel, perhaps) suddenly discovered that the ALP are haters. Perhaps if the Man of Steel is re-elected he could hire Zell Miller as governor-general. Better, he might like to think about the Kennet election that used negatives from the outset and managed to convert a sizeable majority in the Victorian parliament into an election loss in one easy hit. Nick Greiner almost achieved the same unhappy result in NSW in 1991.

Both parties have been guilty of high interest rates in the past. It's a pity no-one's mentioned that the low interest rate regime is a major factor driving the housing bubble. The market is not factoring high interest rates under Labor. Running on a furphy is not quite as easy in Australia as it is is elsewhere.

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