This morning I made a decision that I have been wrestling with for a few weeks.
After five years of weekly commentary I am going to take a break from my regular blog.
The reasons are myriad but essentially it boils down to a need to focus on other projects for the next few months. I have two books scheduled for publication before Christmas and want to complete a third before the new year.
Combined with my Senate duties and family responsibilities, there is now precious little free time in which I can devote myself to the weekly missives and daily updates I share with you through my website.
Taking a break from my writing deadlines will also provide an opportunity to refresh the creative desire whilst allowing me to document my musings at a pace of my choosing.
At this stage, I expect to be back in the blogging saddle in early 2014.
Until then, I’ll keep you up to date with anything that I think may be of interest so, if you haven’t already done so please subscribe to my contact list.
In the meantime, I thought it timely to reflect on the very first blog post at CoryBernardi.com. It was published on 13 October 2008 and was entitled Crunchiness. It is reprinted below along with the original column that inspired me all those years ago.
Since then, the inspiration has been provided by my desire to give a voice to the innate common sense of the silent majority. If growth in subscriber numbers over the past five years is anything to go by, I have gone some way to achieving that goal.
Naturally there is a long way still to go but this blog’s journey will begin again in the new year.
With blessings and thanks to you all.
The first blog post at CoryBernardi.com
13 October 2008
Twenty years ago, as I was travelling through Europe with the Australian rowing team, I bought a copy of The Economist magazine. One article by then editor Nico Colchester made such an impression on me that I kept it – and still have it on display in my Adelaide office.
Colchester spoke of the need to keep things ‘crunchy’. The need to have winners and losers if the free market is to function effectively.
Unfortunately, as nations become wealthier they tend to become soggy, and sogginess inevitably leads to failure.
Colchester’s words have particular relevance today as successive governments rush to socialise losses, nationalise banks and stop people from losing money. The commentariat have proclaimed the death of capitalism and free markets whilst advocating for a new path that sounds distinctly like the socialism of old.
The problem with this thinking is that we are in this mess right now, not because of the free market but because of government. US monetary policy, under Alan Greenspan was the loosest in history, promoting successive asset bubbles without allowing the appropriate corrections to redress the imbalance. The result is the disaster that began in the USA and has spread across the globe.
Government pursues these absurd policies in an attempt to protect people from themselves and the decisions they have made. By providing a perpetual ‘get out of jail free’ card, government encourages a society that has diminished personal responsibility.
It is no coincidence that historically the epicentre of global economic power has always shifted away from the soggy empires to the nations that keep things ‘crunchy’. Accordingly, I believe that the next two decades will see the centre of global economic growth shift from the USA to Asia.
By Nico Colchester
This article first appeared in the The Economist on October 5, 1996 Crunchiness brings wealth. Wealth leads to sogginess. Sogginess brings poverty. Poverty creates crunchiness. From this immutable cycle we know that to hang on to wealth, you must keep things crunchy.
Crunchy systems are those in which small changes have big effects leaving those affected by them in no doubt whether they are up or down, rich or broke, winning or losing, dead or alive. The going was crunchy for Captain Scott as he plodded southwards across the sastrugi. He was either on top of the snow-crust and smiling, or floundering thigh-deep. The farther south he marched the crunchier his predicament became.
Sogginess is comfortable uncertainty. The modern Scott is unsure how deeply he is in it. He can radio for an airlift, or drop in on an American early-warning station for a hot toddy. The richer a society becomes, the soggier its systems get. Light-switches no longer turn on or off: they dim.
Intelligent questions replace the church’s absolute faith. Seat belts are worn. Words (like these) are not written down, but processed endlessly. Exam papers are no longer passed or failed but graded, with no one quite sure what grade is needed for what.
Some of these softnesses are the welcome accompaniments of wealth. But lurking beyond sogginess lies moral hazard and systemic drama. Take the world-wide move from fixed-rate money-lending to floating-rate loans. Fixed-rate lending is crunchy: borrower and lender commit themselves to a future view of inflation and interest rates. If interest rates rise, borrowers are heftily deterred, for no one wants to be saddled with a loan at a rotten rate. In a soggy, floating-rate system, no such commitment is needed: the borrower lives in hope that his interest charge will fall. He knows that it will be no higher than his neighbour’s and suspects that there is safety in numbers. The result is a need for puzzlingly high rates of interest to curb consumer borrowing.
The dangers of sogginess abound in a modern economy. “Portfolio insurance”, provided in a financial futures market that transfers crunchiness from hedgers to speculators, gave some American investors a soggy feeling of reassurance before 1987?s stockmarket crash. So share prices had to move horribly to undo their comfortable excesses. Soggy federal deposit insurance, coupled with the move towards a soggier interest-rate regime, has taken many of America’s thrifts and banks into the shadow of a systemic collapse. Dramatic bail-outs are now needed.
Liability insurance provided American industry with a soggy riposte to the highly unsatisfactory evolution of American tort law. Don’t fight the absurd lawsuit: let our insurers settle it out of court. Liability insurance cover has now become so expensive that whole areas of business are threatened. And the next soft-headed notion will be “no-fault insurance” no matter who is to blame, your insurers will pay up.
Crunchiness is not just a facet of right-wing politics. Much of the sogginess so far mentioned was served up by the free market: the comforts of sogginess are much in demand.
Stalin was crunchy in his own way. Gorbachev needs somehow to become a lot crunchier in his. Mrs Thatcher is certainly crunchy. Her policies towards the Falkland Islands, the British coalmining union and the dwindling worth of the pound were crunchiness writ large. Inflation is acutely soggy, leaching away the wealth of savers and the obligations of debtors, transferring national income from the uncomplaining to the militant. But after nine crunchy years fighting inflation Mrs Thatcher seems to be flirting with sogginess today. Her desire to keep sterling floating rather than link it firmly to the D-mark is uncrunchy too – the Bundesbank being the crunchiest institution in a country that is rapidly becoming Europe’s soggiest. President Reagan? Crunchy but with a sentimentally soft centre. Munchy perhaps.
A crunchy policy is not necessarily right, only more certain than a soggy one to deliver the results that it deserves. Run your country, or your company, or your life as you think fit. But whatever you decide, keep things crunchy.