Monday, 15 October 2012

When the obvious is over-stated I get suspicious

The Prime Minister promised a responsible Budget.   This gets me suspicious.  All budgets should be responsible and there should be no need for government to state the obvious.

When they do,  it is a damn signal that the Budget will not be at all responsible but that government is trying to give it a responsibility brand before it is even unfolded.

It reminds me of when a few days before Bear Stearns was going under and had to be rescued by a J P Morgan takeover organised by the Federal Reserve in March 2008, the CEO of Bear Stearns Alan Schwartz had to come on TV to deny the rumours that Bear Stearns was losing funding and had a liquidity problem.   When I heard it I said to myself that this is the end of Bear Stearns.   If it had no liquidity problem it should have continued with its business as usual  honouring all deposit withdrawals as that is the only way to prove it had no liquidity problem.

The fact that Schwartz had to come on TV to deny what was pretty obvious to all, that Bear Stearns was going under,  only made matters worse and if anything was a seal of confirmation that it truly had liquidity problems.

Similarly the Prime Minister re-assuring us what should really need no reassuring, what is pretty ordinary course of business, which is what governments should be doing all the time, re-inforces suspicion that the Budget will be anything but responsible.

Given the context of highly suspicious deals going through ( rent with option to buy St Philip's; purchasing right to use 100 car spaces at MCP at well above market price ) at the last minute with the same characteristics and with the intent to avoid parliamentary scrutiny by an executive operating without parliamentary cover, than it is very very unlikely that the PN can present a responsible budget.

Say a prayer for taxpayers who irrespective of who wins the elections, will still have to foot the bill for government's desperate efforts to cling to power.

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