I see that our Treasurer, the painfully smug Peter Costello, is proudly quoting Krugman's recent comment that there should be more Australias out there. What with world-record growth, all that transparency and a vibrant stock market. Australians don't know whether they're going well or badly until some foreign suit tells us, you see. Cultural cringe, some call it. We not only survived the Asian crisis, says Krugman, we benefited from it.
Bollocks.
I quote some passages from *The Age* newspaper by way of bringing Australia's recently upgraded economy into perspective:
"It is not that Asia has had no impact on us. This week's trade and current account figures showed its impact has been enormous - equivalent to wiping out 3 per cent of our output - but it has been offset by the world's growing willingness to lend to our banks and buy our shares ...
... the contrast between Asia's corruption and Australia's clean markets has made them all the keener to lend and invest here. They are lending us more than ever - our banks alone borrowed a net $22 billion from overseas last year - at lower interest rates, and ploughing more and more money into bidding up our share prices ...
... the Australian Bureau of Statistics says, we are buying 23 per cent more cars now than in 1997, 22per cent more phone calls, 16 per cent more alcohol, 15 per cent more clothes, 14 per cent more education, entertainment and non-car transport, 13 per cent more restaurant meals and 12 per cent more household energy ...
The bureau estimates that households are saving just 0.4per cent of their after-tax income, down from 5.6per cent two years ago. In annualised terms, that means a cut in household savings from $18 billion to $2 billion. In the latest half-year, housing mortgages grew at an annual rate of 12 per cent, personal loans at 20 per cent and credit card debt at 24per cent ...
And to finance all that, as we reported yesterday, the banks have borrowed almost a net $60 billion in 30 months from foreign lenders."
Oz and the US have clearly gone mad. If this is growth, we don't count it right. If this is an economy worth upgrading, we don't lend right. If the world market depend on ongoing debt-financed consumption like this, its future is to be measured in months.
We're gorn. Rob.