Kevin Rudd Reminiscent of Depression-era PM James Scullin

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Hey does Kevin Rudd remind you of James Henry Scullin? Reading up on our Australian History we learned that Scullin, Australia’s 9th prime minister, swept Labor into a victory in 1929. Two days after he was sworn in as PM, Wall Street crashed and the Great Depression began.

Incidentally, the crash in 1929 kicked off the Great Depression. But the stock market itself didn’t bottom until 1932, when it reached the lowly level of 41 (after a high of nearly 400.) The Dow climbed down painfully, making lower lows and lower highs every step of the way.

Looking back, we see 1929 as the first panic of one long, continuous crisis. But at the time, most investors assumed it was just a correction. Many made that assumption all the way to the bottom in 1932. The Dow, by the way, did not close about its 1929 high until 1954. Bear markets in an asset class last at least a generation, just ask Japanese real estate investors.

Are we too dreary to start the week? You wouldn’t have guessed anything bad was happening in the world from reading the Australian press. And really, it’s a fair question. Sure, Australia and John Howard have had a good run the last 11 years. But most marriages don’t even last that long these days. Only sitcoms last more than a decade anymore. Life goes on.

Besides, is anything really different today except the names and faces staring out from the front pages of the paper? The markets got the result they expected. You can expect the stock market’s reaction to Saturday’s Labor landslide to be muted. And truthfully, it’s hard to see how Labor and the Liberals are all that different on the economy.

Australia’s economic fate is tied up with China. Love it or loathe it, the government in Beijing has as much to do with Australia’s prosperity as the government in Canberra. If the boom keeps booming, Kevin Rudd and company should have enough money to pay for that AU$59 billion in promised spending. And maybe the surpluses will keep rolling in.

Or maybe not.

Dan Denning
The Daily Reckoning Australia

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.
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4 Comments on "Kevin Rudd Reminiscent of Depression-era PM James Scullin"

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William Pix
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I was thinking exactly this yesterday. Prediction: Australia will suffer an economic slowdown due to a US recession and the majority of Australians will not be able to put this into proper context and Mr Rudd will become the scapegoat. After all were taught (or indoctrinated) that the govt RUNS the economy!.

kayle
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I hope for better from the Aussie population, now that the internet is more readily available. The mainstream media may be muzzled by corporate interests but the blogosphere is lit up with the truth: the bubble economy is bursting all over the world and no-one can stop it. I think Main Street has been noticing more and more the discrepancy between what they owe (and make payments on), how long they now have to work to pay for fuel food and home, and pollie/media “prosperity” rhetoric. Which is the reason John Howard’s “workers have never had it so good” line… Read more »
watcher7
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For well over 2 years, on my website, I was suggesting that John Howard may suffer the same fate as Stanley Bruce in 1929 when he lost his seat over his industrial relations laws – cp. 1926 and 2006 Not only is the Scullin Labor Party win reminiscent for Rudd so is Whitlam’s. Below is an extract from my website in this regard: The Hawke boom is the primary rhyme for viewing the Howard boom, but the Labor bust associated with the world recession of 1990-91, becomes the tertiary rhyme behind the primary Labor bust associated with the world recession… Read more »
Tim C
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Dans story reminds me of one of my favourite biblical scriptures from the book of Eccesiastes

“That which has been is what will be,
That which is done is what will be done,
And there is nothing new under the sun.
Is there anything of which it may be said,
“See, this is new”?
It has already been in ancient times before us.
There is no remembrance of former things,
Nor will there be any remembrance of things that are to come
By those who will come after.

Bottom Line – History invariably repeats, but do we ever learn….

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