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Leithner Letter Nos. 148-150
26 April 2012 - 26 June 2012

Is lying considered an appropriate mode of communication for euro-zone leaders?

Asked whether deliberate misinformation would undermine the market’s confidence in future euro-zone pronouncements, [Guy Schuller, the spokesman for Luxembourg Prime Minister Jean-Claude Juncker, the man who is the head of the Eurogroup council of euro-zone finance ministers], lamenting that the market had practically no confidence in pronouncements already, said “not at all.” When Mr Juncker, or European Central Bank President Jean-Claude Trichet, or French Finance Minister Christine Lagarde say something to the markets, Mr Schuller said, “nobody seems to believe it.”

Mr Juncker has voiced support for the practice of lying before. The website EUobserver has video of Mr Juncker, at a conference on economic governance in April, expounding on the practice and reasons for lying in financial and economic communications. On the tape, Mr Juncker says he has “had to lie” and, speaking about touchy economic topics, “When it becomes serious, you have to lie.” EUobserver’s full account is here.

Luxembourg Lies on Secret Meeting
(The Wall Street Journal (9 May 2011)

The Australian economy could withstand a downturn in China or the break-up of the Eurozone, Reserve Bank governor Glenn Stevens has declared, in a call for greater public confidence in our economic strength. Mr Stevens said concern about a slowdown in China had been exaggerated, while Australia's house prices were the most affordable in a decade. Banks were also in good shape, and were paying back their foreign debts.

Even if China were to suffer a serious slump, the Australian economy would be supported by a fall in the dollar. “More importantly, we could expect the Chinese authorities to respond with stimulatory policy measures,” he said.

Mr Stevens said that in the event of a major financial crisis, possibly caused by the break-up of the Eurozone, which caused the freezing of global capital markets, the Reserve Bank could step in to provide liquidity to domestic financial markets. “The vulnerability to this possibility is less than it was four years ago; our capacity to respond is undiminished,” he said. Australia retained the ability to use budget spending and interest rate cuts to support the economy if there were a serious deterioration in the international economy.

We’ll Beat Euro, China Crises: RBA
(The Australian, 25 July 2012)

Reserve Bank governor Glenn Stevens … has declared the economy is in as good shape now as at any time in his 40-year career. … “We have an unemployment rate a bit over 5 per cent, core inflation of 2 per cent, our government is AAA-rated, our banks are strong and we’ve been given by the global economy a huge gift by the terms of trade rise. In the history of the Australian economy in the time I’ve been working as an economist, that’s a pretty good outcome … We’ve come through this without a breakout of inflation and I think we’ll come through it without a slump at the end,” he said.

I’ve Never Seen It So Good, Says Stevens
( The Weekend Australian, 25-26 August 2012)

Today’s Banks Are Inherently Bankrupt:
Let Them Fail Because They Inevitably Will Fail

Talk Delivered at the Festival of Dangerous Ideas
Sydney Opera House
19.00, 29 September 2012

Let me begin my case with a modest, unremarkable and indisputable observation: John Howard is, in one fundamental respect, a Marxist. Margaret Thatcher is also a fellow-traveller with the Marxists, and Milton Friedman was a quasi-Marxist. You think I exaggerate? On what possible basis do I assert such a seemingly absurd thing? Because Howard, Thatcher, Friedman – and these days, to be fair to these three, virtually everybody else – is an ardent, vocal and even fanatical proponent of a key tenet of The Communist Manifesto

To read the entire Newsletter (PDF) click here.

Chris Leithner


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