Former Australia PM Paul Keating: Geopolitical Consequences of a Super Boom That Blows Out

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If you can spare ten minutes, this interview with former Australia Prime Minister Paul Keating offers some of the smartest commentary on the consequences of the global financial crisis. It is from February 2009 but it’s still relevant today.
George Soros calls what Alan Greenspan, Robert Rubin, Lawrence Summers and others built economically “a super bubble.” Keating calls it a “Super Boom” and says it has blown out.
He said that there will be an entire restructuring of global power ahead.
Thoughtful, sobering commentary that I wanted to bring to your attention.
— Steve Clemons

Comments

14 comments on “Former Australia PM Paul Keating: Geopolitical Consequences of a Super Boom That Blows Out

  1. ... says:

    in the bubble news – reflating aig’s stock is running into some headwinds at the moment… should be back to normal pretty soon but maybe some want to fasten their seat belts for the time being…

    Reply

  2. Silver Slipper says:

    The government has created a new bubble by the stimulus package. With the spending going into full effect, people are going to forget the true trouble we are in. At the end of two years when the states have to continue the unemployment benefits required by the stimulus and at the same time, the true magnitude of the amount of debt our government has sinks in, we are going to get squashed by unbelievable taxes. I say let’s face our problems now and get it over with without all the debt. Freeze all government spending (especially the stimulus package) until our representatives can balance the budget.
    I only listened to the first video, but his comments of China and India are telling. He states that China is set to grow. Yes, they are and without the prohibitions of cap and trade.

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  3. ... says:

    yy – you get that impression of the man from watching the videos… very smart articulate dude and he knows what he is talking about, unlike a lot of politicians.. on the other hand as another commenter mentioned, the person doing the interview was out of his league and wasn’t nearly as helpful as he could have been..

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  4. YY says:

    There’s nothing wrong with his track record in Australia, other than being prescient and also unlucky. He was just too damn clever and never talked down to the voters so was drummed out of office by those that feared competence. Result was 10 years of reactionary idiot-cracy followed by what must be the most boring antidote possible.
    Paul Keating is sorely missed for his sense of humor which skewered and impaled the victims for display.

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  5. JohnH says:

    “sobering interview.. i am sure next to no one is listening.” Yes, indeed. And I agree with …, we we be “revisiting this issue a lot sooner than many people think.” Now that the Cash for Clunkers program has pulled auto sales forward by 6-9 months, who will buy 2010 model cars now that the program is over? And Cash for Clunkers is just one example of the US government’s bandaid approach to the problem. It would have been a great time to buy J&J stock–they must be selling lots of bandaids.

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  6. Zathras says:

    A very creditable presentation by Paul Keating, whose understanding of the need for a financial “settlement,” as he calls it, may obscure his understanding of the obstacles to such a settlement, not all of which are in New York and Washington.
    I agree with other commenters here that we’ll be revisiting this subject often in the future.

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  7. Outraged American says:

    Cindy’s on. Call in! 800 259 9231

    Reply

  8. Outraged American says:

    Cindy Sheehan, on in 30 minutes. Here’s your chance to rant at
    her.
    11:30 AM Central, 12:30 PM Eastern, 9:30 AM Pacific.
    WhatReallyHappened.com, click to listen to streaming audio on
    the right side of the site.
    Three other words, relevant to this topic:
    Shanghai Cooperation Organization.
    Look it up if you want to see how global power is being
    restructured.

    Reply

  9. ... says:

    i am going to hang myself out to dry on this one… i venture to say i think we will be revisiting this issue a lot sooner then many people think and we aren’t over what has happened in the past year by a long shot..

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  10. brigid says:

    With Keating’s track record in Australia I see little reason to give him much credibility on global economics. And I see little reason to turn the world over to the People’s Republic of China, since they can’t govern their own country with any degree of humanity or sustained stability. The value of the dollar is based on much more than banks. Political stability, military power, international “soft” power, all have much to do with the value of the dollar. It has been and will continue to be a sanctuary currency for years to come.
    It is also true that the American economy is resilient and has the ability to turn quickly, and will demonstrate that capacity in the months and years to come, especially if we can put a credible regulatory system in place over the financial markets, and if we can enact some reasonable health care reform that keeps us from draining all of our national wealth into the hands of corporate insurers.

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  11. Dan Kervick says:

    Well, Keating’s interview was recorded in February, and it already seems quite dated. I’m cautiously optimistic that the worst is over, and much more hopeful that the US and China under Wen and Obama are working their way toward a more sustainable economic relationship based on an enlightened understanding of their mutual interdependence. For one thing, the Chinese are increasing their domestic consumption, as many have long called for them to do, shifting that burden away from the debt-strapped US consumer. And the stimulus packages enacted by both governments appear, for now, to be working. Chinese retail sales rose 15% in the first half of 2009.
    Obama is slated to make a visit to China in November, and is said to be planning a major trade speech for later this year.

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  12. ... says:

    steve, i think this is a really good 3 part video. i just watched the other 2 and he hits it home clearly in the 3rd part.. these videos were posted in february of 2009.. the market has gone up quite a bit since then, but then again it hasn’t recovered to the levels of last sept 08 just yet… i continue to believe that the issues around money are of great significance to all people and it is an area that is largely ignored by most.. meanwhile the media tends to broadcast a very different view on this topic as well… the usa can’t continue to manipulate things to it’s liking indefinitely and it is largely responsible for many of the comments he makes in part 2 of this video series… thanks for focusing on this.. i think you and others here will be focusing on this MUCH MORE in the coming months…

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  13. PrahaPartizan says:

    Good insights. Keating’s comment about the US being able to re-inflate a depressed world economy was noteworthy. Few people talk about how the US Treasury, government and banking system essentially acted as the global central bank for the last thirty years, often to the detriment of major sectors of the US economy. I can understand Keating’s push to confer greater economic standing on India, China and the other surplus countries, but a quid pro quo also needs to be exacted if such were to occur. China can’t manipulate its currency the way it has for the last twenty years. The Middle East OPEC countries can’t participate in a cartel. If we’re all supposed to operate under free market rules, then we all operate under free market rules. We don’t allow some to operate under special rules while some of us get screwed.

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  14. ... says:

    sobering interview.. i am sure next to no one is listening.. how much press is this getting verses ben bernanke saying everything is on the mend? of course greenspan said the same thing..everything is always on the mend until it isn’t of course at which point you find out when it is way too late and every major financial guru has walked away with your investment looking like rat shit.. that is what these bozos are paid to do – lie professionally..
    the question i always ask is ‘when is the air going to come out this bubble market?’ the financial industry has a special bubble machine that has been given the green light by the same politicians who want dearly to keep everything running along, but appear to rarely say or do anything of substance while in office… kudos for former pres paul ketting and the present one – rudd for saying it somewhat like it is.. of course they are in a critical and pivotal position between a rock and a hard place, or china and the usa at present…

    Reply

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