Sent: 02-08-2011 10:21:53
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Murdoch, US Debt and Carbon Pricing
One of the most enlightening aspects of Rupert Murdoch's travails in the UK has been the conduct of the parliamentarians investigating the misdeeds of News Corporation.
Rupert Murdoch, his son James, sundry News Corporation executives and senior London Metropolitan police officers were hauled before two British parliamentary committees on 19 July - the House of Commons Home Affairs Committee and the Culture, Media and Sport Committee - to help explain the shenanigans that had replaced honest journalism at the News of the World over several years.
Unable to resist the political theatre, your correspondent viewed the televised and online proceedings with some interest. In the end, after listening and watching for several hours, the most intriguing aspect of the hearings had nothing to do with what the members of parliament were investigating.
Part way through, I realised I was none the wiser about the political affiliations of any of the members of parliament participating on the committees and questioning the Murdochs and the remaining cast of characters. It was not obvious who was Labour, who was Liberal Democrat and who was Conservative.
Mr Murdoch might have done the hitherto impossible. He might have so enraged everyone that the normal political barricades had been dismantled.
Even so, a similar display in Australia or the USA, where partisan rancour is increasingly overwhelming day to day politics, would be unimaginable.
Think of a question time in Australia's House of Representatives, for example. Is there even the slightest chance that a minister answers a question without an attack on the leader of the opposition? Meanwhile, US politicians are prepared to risk another global depression rather than bridge the ideological cleavage which is dominating the current debate about whether to extend the government's debt ceiling.
After the House of Commons committee hearings, parliament resumed having been brought back by Prime Minister David Cameron who had cut short a trip to Africa to participate in the debate. He had himself been caught in the eye of the News Corporation storm after befriending and employing some of the main characters. It was not going to be an easy sitting for him.
The Prime Minister made his statement to parliament trying to deal with the criticisms of his own judgement that had been made by those in the Labour Party. The Opposition leader responded in much the same way one would expect.
Subsequently, the difference emerged. The Prime Minister took 138 questions from members of Parliament over the following two hours during which he rebutted some of the claims by the opposition members about his own involvement and commended the accusations from his own side about Labour Party hypocrisy.
One hundred and thirty eight questions and their respective prime ministerial responses in two hours is an average of one question and answer every 69 seconds. Kevin Rudd would be spinning in his political grave. Could this possibly be any further away from the Australian parliamentary model?
Some of the differences across the systems can probably be put down to the different rules which prevail in the UK, Australia and the USA rather than the people.
From a financial market viewpoint, however, the difference in outcomes is startlingly significant. In recent months, we can see the difference on one issue alone: carbon pricing.
The UK Chancellor announced in the March budget that a carbon price would apply from 2013 after having put out a discussion document in December 2010 with a view to getting responses by February 2011.
Compared to Australia's volatile and protracted decision making on the same subject, the UK outcome was swift and determined permitting business to commence planning its responses.
Meanwhile, in the USA, the political managers have recognised that the possibility of pricing carbon will be so unlikely to attract any form of consensus that the whole issue has been shunted aside indefinitely.
The professionals in the USA know that if they cannot arrive at a solution for a problem on which there is universal agreement - cutting the government deficit - there is no chance of reaching an agreement on a subject many on the right think has simply been conjured by the left of the political spectrum to further its political ends. Meanwhile, some on the left think carbon trading is simply another way to line Wall Street wallets.
Across carbon pricing, corporate governance, media power and government debt, we have seen in the past few weeks how parliaments can make a substantial difference to the business and investment climate.
Perhaps investment strategists should consider entering the debate about parliamentary rules as the single most important way to maximise their impact on investment conditions.
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