Contrary to what you might read in the AFR or Murdoch press, Treasurer Jim Chalmers has been doing a solid enough job, writes Michael Pascoe, but he’s suddenly looking desperate.
Jim Chalmers has been one of the steady hands as the good ship Albo began to drift over 2024. He has stayed steady despite being the target of a constant and consistently inane campaign by the two national dailies and their fellow travellers as they try to blame this year’s little budget deficit for inflation.
This is the doctrinaire and/or cynical mob that would like to have a full-blown recession, which they could then blame on Labor after blaming Labor for not having a recession.
Damned if you do: Jim Chalmers cops the blame for no recession
I’ll come back to the shallowness of the Labor’s-deficit-is-causing-intolerable-inflation argument, but first is the problem of Treasurer Jim losing it on an inconsequential hill at the behest of a lobby as richly self-interested as any to be found this side of Big Tobacco. It could be symptomatic of a government suddenly desperate to appease minor-but-rich interest groups instead of concentrating on the main game.
In the peak silly season between Christmas and New Year silly, Chalmers blew it by declaring designing and playing poker machines could be an important part in modernising “and innovating” Australia’s financial system, that if Donald Trump thinks it’s a good idea, we need to as well, and that, while there’s plenty of crime involved, it’s growing and legitimate a fair bit of the time, so try to look on the bright side of life, da-dum, da-dum, da-dum da-dum da-dum.
OK, he didn’t actually say “poker machines”. (Labor at Federal and State level is already owned by that industry anyway.) But he may as well have. In fact, it might have been better than endorsing the crypto bros as the future of Australia’s financial system.
Thumbs up for crypto
As the SMAge reported it over the weekend:
“Cryptocurrencies such as bitcoin will help drive modernisation of Australia’s financial system, Treasurer Jim Chalmers has declared while revealing the re-election of Donald Trump has already forced a rethink of the emerging sector’s importance.
“Chalmers said while there were legitimate concerns such as the use of crypto by criminal elements, the possible advantages from the creation of new investment opportunities should not be curtailed by overzealous regulation.”
I have no idea whether Chalmers allowed himself to be spun into a SMAge reheat of a four-week-old press release or whether his handlers placed it through ill-thought attention seeking. In either case, it is faith destroying.
FFS, Jim, crypto only has three purposes: criminal payments, unproductive speculation, and undermining the financial system. OK, maybe four uses, if you think feeding anarchist conspiracy theories is a use.
RBA not so keen
It’s why the RBA doesn’t want a bar of it, having investigated the possibilities of central bank crypto currencies in particular and crypto in general, and realising the danger of opening that Pandora’s Box. It might sound good after snorting a few lines to cut banks out of the game, but it also would totally stuff the economy.
The weekend story added a dash of Trump to reheat a December 4 press release that passed without much notice.
The Treasury release was a jumble of words to appeal to the crypto bros around not much, just that the government “takes the crypto industry seriously and we know that blockchain and digital assets present big opportunities for our economy, our financial sector and innovation”.
It boiled down to the Australian Securities and Investments Commission working with “stakeholders” i.e. the crypto lobby “to update its advice on digital assets, including cryptocurrency”.
Little harm done, the lobby thrown a bone that won’t amount to anything before the election and giving Labor’s biggest crypto fanboy, Andrew Charlton, something with which to compete with the Liberals’ Andrew Bragg in duchessing the interests of potential industry donors.
But now Trump has gone crypto bananas, richly rewarding his crypto backers with the promise of creating a “strategic bitcoin reserve”. This is a policy with no purpose beyond further boosting the price of bitcoin for the bros who already own it.
To restate the obvious, bitcoin and its many cousins have no purpose beyond a means of making secret payments and gambling that there will always be a greater fool willing to pay more for something that has no intrinsic value.
That there is an effectively limited number of bitcoins is the only thing going for them, aside from usefulness for criminals to be able to receive payment for ransom, blackmail, terrorism, drug and arms shipments.
Chose your friends wisely, Jim
Of the many looming cases of crony capitalism in the Trump administration, the bitcoin payoff has been the quickest and crudest. The crypto bros have the cash to splash and are doing it, overtaking the usual oil, Koch and finance suspects to become the biggest US corporate buyer of politicians, or political donors, as they like to call it.
And the money is used to punish as well as promote.
The crypto industry spent $US40 million to defeat Ohio Democratic Senator Sherrod Brown in November. Brown was the Senate Banking Committee chair and no fan of crypto. Crypto replaced him with Bernie Moreno, a former luxury car dealer and “blockchain entrepreneur”.
The crypto lobby, Stand With Crypto, which launched in Australia last month, targeted Brown for making such statements as looking at cracking down on cryptocurrency to cut off the sources of terrorism finance. (https://www.standwithcrypto.org/politicians/person/sherrod—brown ) How dare he.
The Public Citizen think tank counted crypto as contributing 44 per cent of all US corporate federal election donations this year. For their US$119 million (that Public Citizen knows of and not counting Elon Musk as a crypto donor), Donald Trump was turned from a crypto critic into a grateful fan.
You pays your money, you gets your monkey. Trump has nominated crypto-friendly Paul Atkins to be head of the Securities and Exchange Commission, replacing Gary Gensler who attempted to clamp down on the wild west crypto market.
Stand With Crypto is no doubt delighted with Jim Chalmers so soon after going public here. The SMAge’s David Swan reported on the launch event:
Pro-crypto lobby group Stand With Crypto is hoping to capitalise on a wave of momentum from Donald Trump’s decisive US election win, launching in Australia to push for crypto-friendly legislation and fight the technology’s “crypto bro” image problem.
Using a flashy drinks event at Melbourne’s National Tech Summit to mark its launch Down Under, the advocacy group has met with MPs and senators over the past week to push for what it says is “sensible” legislation to regulate crypto firms operating in Australia.
The group has been launched by Coinbase, the United States’ largest cryptocurrency exchange, and is hoping that Australian politicians will be spurred into action after witnessing crypto’s role in the recent US poll. The cryptocurrency sector won big in the elections: Trump promised the US would become the bitcoin superpower of the world, and the sector raised more than $245 million from a mix of corporations and individual contributors to elect pro-crypto candidates.
The crypto sector outspent oil companies, banks and Elon Musk on the election. Stand With Crypto developed a grading system for candidates across the country, rating them from F to A on their stances.
“Our goal is to shift the narrative from crypto being viewed solely as a speculative investment to recognising it as the future of finance and the internet,” Tom Duff Gordon, vice president of international policy at Coinbase, told this masthead.
Right …
Australians proverbially will bet on two flies crawling up a wall. As the world’s biggest gambling losers, plenty have added the opaque crypto game to their choice of casino. It would be nice if this racket is at least tightly regulated to make it a little harder for the scammers and fraudsters such games attract, but that’s not what the industry wants.
As in the US, the industry has money to spend on friendly politicians and punish those who are not.
Along the way, we can expect plenty of bullshit, such as crypto being “the future of finance”. Spinners gotta spin, but the Treasurer regurgitating such crap is a worry. He is supposed to be better than that. He needs to be better than that.
Bigger fish to fry … pundit fish
Besides, Chalmers should have much more important things to do. He has been unable to counter the constant “your deficit is keeping interest rates high” chant.
A little perspective. The latest estimate of this year’s deficit – after a couple of surpluses – is $26.9 billion, a bit less than one per cent of GDP and just 3.7 per cent of total federal spending.
At the theoretical margin at which the lightest-weight economists operate, yes, that is a sliver of fiscal stimulus, as opposed to fiscal tightening to further throttle a weak economy, but it’s only a sliver.
By comparison, the latest ABS count of household spending is $879 billion in the year to the end of October. This year’s deficit is a wee fraction of that, a fraction that is nevertheless helping keep unemployment low. To use a technical term, it’s bugger all to all but the most useless economic pedants.
If the national dailies wanted credibility instead of political points, they should be more interested in running a campaign attacking our ramshackle tax system, but not from the point of view of rich people wanting to pay less tax.
Instead, they would underline that we are relatively lightly taxed and the biggest lurks and failures in our system outrageously favour the top 10 per cent – the capital gains tax discount, overly generous superannuation concessions, trusts, negative gearing et al. I know, because I am one.
And too bad Jim Chalmers is talking bullshit about crypto instead of taking the ball up on real reform. A sign of desperation.
Michael Pascoe is an independent journalist and commentator with five decades of experience here and abroad in print, broadcast and online journalism. His book, The Summertime of Our Dreams, is published by Ultimo Press.