Never ending impeachment

What just happened in Washington, DC? The Democrat controlled House of Representatives passed articles of impeachment against President Trump and then failed to deliver the articles to the Senate. Why not? The US constitution specifies the process to impeach a President. Up until last week, the Democrats were arguing that impeachment was an urgent necessity, the security of the country was as stake. Why the delay?

I can make no sense of this. The Democrats are now making themselves look silly. Now that the Congress is in recess over Christmas, some legal opinions say that the impeachment articles will lapse. Has the President been impeached or not?

The only possible reason that I can come up with for this delaying tactic is that the Democrats know the Senate would acquit the President and the impeachment process would go out through the same exit that the Russian Collusion and Mueller report went. If the impeachment articles are never delivered to the Senate, then the threat and distraction of impeachment remains and perhaps the public will become more supportive of the move. But in case, as it appears, that the bulk of the American public either do not care about the virtual impeachment, or in fact are more likely to support Trump as a result of this blatant partisan attempt to overturn the democratic process, an exit strategy is needed. That strategy is to make the case that the Senate obstructed the impeachment by not playing by the rules. Can anyone else explain this bizarre behaviour?

Climate Change – business must act

It seems that every Government regulator fears missing the bus. The bus with the giant mantra painted on the side that says ‘Business must address climate change!’ ASIC is the latest. It is reported in today’s press that ASIC will target companies that fail to disclose climate change risks to their shareholders.

I agree with ASIC’s conclusion: business should address climate change risks. Not because I believe that the earth is on a catastrophic path to being uninhabitable (it isn’t) but because of the policies and regulations that I fear weak-kneed right-of-centre governments will introduce. The difference between right-of-centre governments and those of the left is measured in time, not policy. The policies of the left are eventually implemented by the right.

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In search of 5% pa

Are investment returns becoming more elusive? In nominal terms, yes. But in real terms, maybe not so much. Possibly the single largest consequence of the Australian grand social experiment that is compulsory superannuation is that nearly everyone now has to decide how to invest financial assets over a very long term. What was previously the domain of a few is now a national occupation. In the current investment environment, it is an occupation that has lost a lot of its charm.

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Banking governance; or maybe not

I’m an unhappy shareholder of Westpac. There will be a lot of shareholder wealth destroyed before this sorry tale is over.

By way of background, Westpac stands accused by the relevant regulator of failing in its obligations to identify and report suspicious transactions that could indicate money laundering or terrorism financing. In this case, it is alleged that millions of dollars and transactions have been made through the use of Westpac accounts and payments systems to launder money ultimately used to facilitate child exploitation. Further, it is alleged that Westpac has known of these transactions for several years and has not acted.

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Blackshirts, brownshirts and hair shirts

I listened to a BBC Hard Talk interview of Roger Hallam this weekend, he being the founder of Extinction Rebellion. The ER group comprises the type of people who glue themselves to streets and footpaths because of climate change. No, it’s not clear why being glued to the road will change the climate, but it takes all sorts.

It is worth listening to Roger to understand the depth of his paranoia. In his mind, human civilisation is about to collapse. Within 50 years, he says the planet’s population will have dropped to 1 billion. That is, 6 billion people (give or take a few) will die. Primarily, this will be due to starvation. Roger believes that ‘the elites’ and the politicians know this but have been lying to the people about efforts being made to combat climate change. In his view, a critical mass of ‘ordinary’ people have realised this and now it is time for mass civil disobedience. He has studied theories of establishing revolution. At least in this regard, he knows his stuff.

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Western Civilisation

It’s over 30 years since the beneficial partnership of Thatcher and Reagan. 40 years earlier, Churchill and Roosevelt formed a partnership in the face of a potentially catastrophic enemy, with a little spice added by Stalin clinging on. These great Atlanticist partnerships are few and far between. They seem to emerge only when times are truly difficult. They are rooted in the fundamentals of western civilisation, freedom and responsibility of the individual, they hold the family as the unit of society and deem constraints on the size of Government as essential. Well, times are difficult now. I wonder if there is a new partnership ready to form between Boris Johnson and Donald Trump. I’m hopeful.

Rainbow Lorikeets

Noisy little birds. They chew through the apples on my apple trees. But their pairing and concerns for each other are endearing. They witter away to each other as if discussing today’s letters to the editor. This chap was photographed in the Melbourne autumn on Kodak Ektachrome 100 film, 100mm lens.

How to get monetary policy completely wrong

There is a difference between the prevailing rates of interest in the money and credit markets and what can be loosely called the natural rate of interest. When the rates diverge, problems emerge.

The central bank in Australia (the RBA) conducts the management of monetary policy, independently of the Government of the day but to a stated aim of constraining inflation between 2% – 3%pa. It has just manipulated down market interest rates twice in two months. Prior to that, the official cash rate (the benchmark the RBA uses to influence all other rates) was held ‘at emergency low levels’ for 3 years. If the old rates were at emergency levels, then what are they now being lower still? The official cash rate is now 1%pa.

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Income tax cuts in Australia

There has been a lot of chatter in Australia this week about the cuts to income tax rates passed by Parliament. The cuts are phased in with immediate effect for lower income levels and deferred a number of years for the higher income levels.

While I’m in favour of income tax cuts, like anyone else who pays income tax, we ought to remember that the true tax burden is not represented by the rate of income tax, or any other tax, for that matter. The true tax burden is determined by the level of Government expenditure. The tax regime, the rates, the thresholds, the mix between consumption tax, income tax, royalties, stamp duties, corporate tax etc is the outcome of a political process that determines who will pay for the expenditure and in what time period they will pay. Cutting tax without cutting expenditure simply means someone else can pay for it, at some other time.

We are collectively better off when Government expenditure is cut first, and tax reductions can then follow. None of this is to deny the truism of the Laffer Curve.