No TPP Deal Please

They Keep It A Secret Because They Know It Will Piss Us Off

Pleaides sent in this article couple of days ago.

A key section of the secret Trans-Pacific Partnership (TPP) trade agreement has been leaked to the public. The New York Times has a major story on the contents of the leaked chapter and it’s as bad as many of us feared. 

Now we know why the corporations and the Obama administration want TPP, a huge “trade” agreement being negotiated between the United States and 11 other countries, kept secret from the public until it’s too late to stop it.

And so it begins. This TPP Business has been lurking fora while and in most part it's been able to lurk because it's shrouded in secrecy. Making things worse, it's the roll-over-for-the-USA Abbott government doing the negotiations, headed up by Andrew Robb, who is probably going to give everything America wants and not even come back with magic beans from the trade.

The New York Times is taking a leaf out of the Wikileaks article, and running with the story (as it should!).

The Trans-Pacific Partnership — a cornerstone of Mr. Obama’s remaining economic agenda — would grant broad powers to multinational companies operating in North America, South America and Asia. Under the accord, still under negotiation but nearing completion, companies and investors would be empowered to challenge regulations, rules, government actions and court rulings — federal, state or local — before tribunals organized under the World Bank or the United Nations. 

Backers of the emerging trade accord, which is supported by a wide variety of business groups and favored by most Republicans, say that it is in line with previous agreements that contain similar provisions. But critics, including many Democrats in Congress, argue that the planned deal widens the opening for multinationals to sue in the United States and elsewhere, giving greater priority to protecting corporate interests than promoting free trade and competition that benefits consumers.

If they don't like it in America, you can count on the fact that we won't like it any one bit when corporations can sue governments. 

Basically, it's a crap deal for everybody except the corporations. It's an agreement to suspend whatever laws we might have in our country or their country favour what the corporations want. That might mean outing minimum wage to overtime penalty rates to Medicare to WH&S regulations or environmental protections. In short, it seems like an agreement for all the signatory governments to give up their sovereignty and short change their citizens for a few dollars more so that corporations can have legal framework to get by with murder. 

The most disturbing thing about the TPP from our end in Australia is that the ALP isn't kicking up a stink; it's largely been collusive with the Abbott government in ushering this stuff through. Otherwise we would be hearing about this every day. It seems entirely out of character that the party that fought so hard against Work Choices would be allowing this crappy deal to go through without public scrutiny. Just what the hell is going on there? 

Everybody's Talking House Prices

One Step Beyond The Piketty-Fence

One of the more curious aspects of the burgeoning inequality is that it is more generational than class oriented. As society ages, you see that there are gobs of elderly people with assets and lots of young people in debt. The older generation says, "we had it tough when we were young,"ignoring how distorted the maths has become to the point that the young will not get a shot at the same sort of asset accumulation without inheriting it. In the past, this sort of thing was great impetus to go on a colonial exodus but there are no more frontiers on a globalised world. We are now so deep into the consolidation of the world that average wealth in the formerly advanced nation is deflating down to the emerging markets where their average wealth is rising.

All of this is to say that in a country like Australia, its unlikely the younger generation will be accusing the kinds of a sets accrued by the older generation today.

Which brings us to this interesting article today.

Piketty reckons we're on our way back to the drastic inequality of earlier centuries and recommends a global wealth tax be imposed to prevent it. 

In the current edition of The Economist, young Matthew Rognlie says he thinks Piketty missed some important points.

In a new paper presented at the Brookings Papers on Economic Activity in March, Rognlie fingers what may be the major flaw in Piketty's influential book: It's not the return on capital per se that has been soaring beyond economic growth since 1970, but just surging house prices. 

Rognlie says the return on non-housing wealth has actually been remarkably stable.
He has other arguments with Piketty but the housing insight is the hot and challenging one.

This is interesting because if all other asset classes remain stable in their returns over a long period of time and it is real estate that is somehow skewed to be higher, then it stands to reason that people would enter the real estate market over other asset classes. Kind of explains the moral hazard inherent in the Property Bubble that has been blown into existence by the central bankers - and they did this through faulty CPI calculations. Still, we have what we have, and the solution to the problem is not palatable to those who have.

But that's only part of the solution to the housing problem. If any government took that problem seriously and could ignore the rent seekers, medium density should be the default option for cities like Sydney. Anyone with a suitably sized block of land or any group of willing neighbours should be able to build a fashionable row of terraces instead of their isolated boxes, if they so wish. 

Those who prefer their own quarter acre would, of course, be welcome to it, and the land tax that it would incur in a rational nation interested in sensible tax reform.
So put your hand up if you're genuinely interested in a fairer society, in preventing increasing inequality, in making housing more affordable for your children, in living in a more efficient, greener city with better infrastructure, and, effectively, freezing housing prices and restoring individual property rights? 

I think I just lost the owner-occupier and NIMBY vote.

Such is life. Yet the working definition of inflation is too much money chasing too few assets. The  fact that the rise in property prices haven't shown up in CPI calculations tells you something about Central bankers and which side their bread is buttered.
Anyway, people are still incredulous that there is a Bubble going on.

Despite almost 30 per cent price growth in Sydney over the past two years and strong 15 per cent growth, too, in Melbourne, Dr Wilson doesn't believe there is a bubble in Australian house prices, nor does he anticipate any sort of collapse. 

Responding to the Reserve Bank's latest jawboning about the high level of investors in the Sydney and Melbourne property markets, he said: "There's no prospect in the foreseeable future for a sharp fall in prices without a sharp rise in interest rates, which is the main catalyst for a housing correction." 

While interest rates will eventually rise, he points out: "Clearly, the environment is for flat or falling rates to stimulate a weak economy." 

Then, there's the housing shortage.

That reads like the perfect denial: There is no Bubble and it won't pop. The black swan says hello.

Let's imagine a scenario for a moment that something catastrophic happens in China and the property market pops because the leveraged banks call in all the debts at once. Everybody panic sells and prices crash. The RBA would cut rates further from the historic lows where they sit. If the plunge is bad enough, the RBA will go to ZIRP to shore up the banks. Worse still, if there's not enough liquidity to cover the whole system, the RBA will print money by unleashing its own QE programme. A rise in interest rates would be the farthest from anybody's minds in that context. And there may even be people who think, "we should borrow money now with this record low interest rate and buy a house..."

So even in the most catastrophic situation, you can see that somebody is going to be in there buying up on ZIRP money and borrowing from banks propped up with QE money. Which is exactly where America is at right now.  The market's broken because the interest rate is sitting at zero. Nobody is making sensible decisions about money because at zero interest rate, you can't. You'd be a mug not to borrow as much as you can, right up to the edge, and over the edge and down by the river; seasons will pass you by the rates go up, you go down... but until that day, you're under no threat so you make hay by borrowing everything at zero capital cost.

That scenario suggests the Property Bubble can't pop because the central banks won't let it pop - which is kind of a crazy-scary notion. We're saying that the central banks will indefinitely put off the endgame. If the endgame never arrives, the status quo can be kept and rack up as much debt as it likes - at zero interest - and you just keep on going doing what you're doing.
How is that not a moral hazard?

The flip-side to all of this is that the RBA is most unwilling to raise interest rates in fear of the bubble bursting. If it's worried about the overheated housing price, there's really only one medicine: jack the interest rates up to historical norms. Let deflation set in if it must, but tame the damn Property Bubble. The fact that they haven't (and won't) indicates the people who set the policies themselves are so deeply in with the Property Bubble they couldn't possibly do it. Nobody wants to die, but nobody wants to take the medicine. The rest of it is trying to stretch out the limbo as long as possible.

Somehow, somewhere along the line, we really screwed the pooch.

'Marco Polo' - Season 1 on Netflix

Game of Khans

One of the side effects of the success of 'Game of Thrones' and 'Vikings' has been the return of big budget medieval shows. I don't thinkI've seen any rendition of the Marco Polo story since the 1980s with Kenneth Marshall in shelled role. All those 80s Miniseries (which ought to have been pronounced to rhyme with 'miseries') made for some tedious viewing as they stretched stories out to fill screen time and they just don't bear watching today.

But that's all a long time ago. TV is now a lot more hip to the narrative needs of the public. better writers are working better craft with bigger budgets. At least, that's the theory.

The success of 'Game of Thrones' and 'Vikings' has opened the way for a new shot at the old story. The unshaven grimy leather-clad mud-stomping sword-wielding, shield clanging, siege-engine-mounting, arrow firing, horse-riding thing just got a whole lot more currency. Who did the most damage with this stuff in real life (yes, without summoning dragons)? Mongols!

So it's of to medieval Mongolia we go.


What's Good About It

Benedict Wong plays Kublai Khan. Central to the mythos of the Mongol Empire in Marco Polo's telling of it, is Kublai Khan, Khan of Khans as chosen by the Khanate. Khan he Khonquer China? That's the question. Benedict Wong's diction is quite Hong Kong, with clipped gutturals and throaty vowels, but he fills the costume very well. You go look up pictures of Kublai Khan and yes, Benedict Wong really is well cast. The other Mongols are not as well cast as Kublai, and really, Benedict Wong carries the show.

He's like a big Chinese Charles Laughton, magnificent and grand with a touch childish petulance. You don't see the chubby Asian guy get such prominent role in American TV so perhaps this is a show that is possible only because it's on Netflix.

What's Bad About It

You can take some amount of historical inaccuracies. This show takes gobs liberties with history to the point that it's simply nonsensical. I'm sure they tried to have things somewhat accurate because they shot the great steppeland exteriors in Kazakhstan and it looks amazing. The wardrobe and production design look authentic and well researched. The siege of Xiangyang is a lot more interesting than they portrayed it in this series.

It also falls into the trap where the romantic interest has to rewoven in so they can get the requisite sex scenes going. And these all slow down the interesting parts of the story.

Some the acting is not as good. The guy playing Jingim, son of Kublai is not great. He's asian in looks but his body language is wrong. The guy playing Byamba is also dodgy. They're on much better terrain with Chinese people playing the Chinese, but that is to be expected. Even so, they really screw up Jia Sidao into a rather dislikable villain. I'm not so sure that was a good move.

For all my complaints, it is however a far cry from this sort of travesty. Or this kind of puffery.

What's Interesting About It

The snippets of Mongol culture that get introduced to the screen are interesting. The politics is much less interesting. There's really not a whole lot to the depth in the casting. The level of acting is really uneven. You feel like the world of Mongols and the Chinese cuts out about 1m from the edge the frame. It's very precarious in a way that a TV series about Americana is never this vulnerable to the suspension of disbelief being blown.

The problem really is that the really interesting sweeping historic stuff can only be told from the Mongol point of view. As long as it is told through the eyes of Marco Polo, we're effectively getting the keyhole view of the culture. It's basically 'Dances With (blue) Wolves' with the same cultural politics. It's amazing how the American view of itself keeps retranslating into this kind of colonialist fodder.

All of the results in the story of the Mongol ascent and conquest being told in a ham-fisted way and told around the person of Marco Polo as if he were more important in these events than he was in real life.

Colonising The Body

Of course, it's about a white male going deep into uncharted terrain. He meets lots of exotic women an gets told he's a barbarian but ends up shagging them. The classic colonial trope on the race and gender totem pole. Don't know about you but the identity politics in this one is as garbled as it can be. Maybe this is kind of what it takes to mount a series around the Mongols.

The Mongols of course come over like Klingons from the Star Trek universe, what with their studded leather armour and the interesting hairdos. You could almost intercut some of these scenes from 'Star Trek: The Next Generation' and not miss a beat. It kind of goes to show that the settings and costumes change but the ideological operation is the same behind most of this TV product. That much is the same old disappointment.

What is abundantly clear is that at least in television, America is still much better at examining itself than its context in the world. The kind of finesse and nuance expressed in things like 'House of Cards' or 'Mad Men' is totally absent in this series. It's more like a floundering tour through a reimagined Mongol Empire with a haphazard tour guide. I'm pretty sure if real Mongolians watched this series, they'll spew. It will probably look like medieval Mongolia, but not on this planet.

Will They Make More Of These?

I don't know about the future longevity of this show. The cries are bad, the ratings only so-so, and they're bad signs. They've already compressed the campaigns into a season. I'd be interested in seeing if they push this out to the two attempts to invade Japan. That would be kind of cool. I don't think anybody has brought that to the screen with any credibility. But then I don't know that there's much to go on with this whole series.

The thing probably needs to have a bigger budget to look better but it might be pushing shit up hill. Truth be told I just want to watch more of Benedict Wong's Kublai Khan. I'd take it even if it were a sitcom. He is in some ways, the most interesting alpha male since Don Draper, and it's like hardly anybody's noticed.

Besides which, there's no sign of Xanadu yet. Kublai Khan's capital is Khanbaliq which is now modern day Beijing. There's a lot left untouched, unsaid, but you keep thinking you may never get to see it because this series is going to get axed. They need something better going; better writing, better direction better performances. It's a shame because there's enough there to really push this out in to something special.

NSW Goes To The Polls And The Incumbent Wins

Less Polemical, More Brouhaha

Oh well. You know how it goes, you get up early in the morning after a rough night and trudge down to the booth to cast your vote. The Lower House is a short ballot with like 6 names on it while the Upper House is like a beach towel. The good thing about the NSW electoral process is you just have to put in a 1 for  1 box forth your voting. Given that this is an era of micro-parties trading preferences, the Upper House places demands upon you to either go through the whole damn ballot or pick a rough guesstimate and just vote '1' there.

Anyway... this being NSW politics, nobody was sending Tony Abbott any messages that I could tell. Stark was the contrast where most people just didn't talk about policy - not even the privatisation infer - and simply obliged to their electoral duty of simply voting. No polemical voices, no argy-bargy in the waiting lines like the 2005 Federal election when Mark Latham was running with actual policies. No, this was a snoozer despite the dramatic termination of the one-term coalition governments in Victoria and Queensland.

The local booths at the infants school had 10 people handing out leaflets for our local incumbent MP John Sidoti, with just 1 ALP dude sheepishly handing out his how-to-vote leaflet. The Greens weren't even there. It's tough in NSW where we are still reeling from the days of Eddie's "Morbid Obeidity". It's hard to go back and vote for the ALP as you wonder, have they really reformed enough to not let that crap happen again? Well, the ballot was too awful contemplate reading so I simply put my number 1 on both ballots and shoved them in the boxes as quickly as I could.

Even though Mike Baird is as clean as cleanskins come, the Liberals are still this bunch of conservative prats. He's going to win and he will proceed with the electricity privatisation. Then he'll hand over the proceeds from the sale to a bunch of Nick Greiner cronies to build WasteCONnex.

In the absence of a fundamental difference in what they will do with the WasteCONnex proposal, you have to surmise that the ALP would be doing this by going into debt some more while WasteCONnex is the central reason for privatising electricity in NSW for the Coalition. You sort of wonder if you could have any hope with either major party of junking WasteCONnex and building a metro instead, but no. In this light, it seems incredibly futile to claim democracies solve anything. It's certainly screwing things up in NSW, and it's not even polarised like American politics.

The true shame of this election is that there is no real, pragmatic way to oppose the building of this monster tollway. Even the ALP says it will build the thing (to appease the construction workers and their union) but it won't put the interchange under St Peters - which is like saying he'll put a different shades lipstick on the same pig. But there's really no wiggle room for the ALP. I feel a little for Luke Foley who is now cleaning up the mess left behind John Robertson who mostly exacerbated the mess left behind Kristina Keneally. If you were in his shoes, getting out of the doghouse with the electorate is about as good as you can wing it.

They Keep Warning Us About This Bubble Now

Rich People Problems

The one consolation for not being in the property market and thus not sitting on skyrocketing valuations or skyrocketing debt commitments, is that when it busts, you won't be hurt as badly as those in debt up to their eyeballs. When the downturn comes and the banks come knocking to foreclose and businesses are forced to close as much as private residences are sold out en masse - the sort of scenario you dread because unemployment will be up, economic growth will be negligible and banks too big to fail will be living up for government largesse at the public purse, - the non-owning, non-mortgaged will be the relatively lucky ones to escape the downside of all this risk building up.

Even so, it's kind of scary just how much private debt has been racked up in Australia. A lot of that is in mortgages, rather than credit cards. The build up is so epic, the RBA was in denial about it for the last decade until the last 12months or so where they've started to bleat about the private sector debt, and more recently, specifically the "overheated property market".

And so we come to this entry today:

While our society lacks a meaningful and open debate on the toxic and rising levels of household debt, new home buyers in Sydney and Melbourne are entering the market and taking upon the most illogical sums of debt, courtesy of our over-leveraged banking system. 

Based on median multiples, new home buyers in Sydney will spend the better part of 6.54 years savings (using 30 per cent of their income) for a 20 per cent deposit to buy a median-priced home. 

When it comes to servicing the first 12 months of a 25-year/80 per cent LVR mortgage, it will cost roughly 65 per cent to 70 per cent of household income to service that debt at current record-low mortgage rates. Melbourne is not too far behind. 

So what have our leading economists, regulators, public executives and politicians done to stop this debt-induced folly? Nothing. In fact, they have bent over backwards to inflate prices via stimulants such as housing grants and allowing retirees to tap into their life savings. 

These powerful stimulants have been implemented, not to improve home ownership rates, but to boost prices for the benefit of existing owners, bankers' profits and government balance sheets.

Now, just on the point of 'existing owners', the SMH also had this entry right here about politicians who own investment properties, and there fore are beneficiaries of negative gearing. 

Mr Daley said if the government was unwilling to remove the capital gains tax discount it should get rid of negative gearing altogether. 

"The most important argument against negative gearing is that it drives up house pricesbecause it increases the after-tax returns to housing investors, and so prices are higher than they would be otherwise," Mr Daley argued last week. 

Mr David, Mr Egan and Mr Soos last year warned that, with such high rates of property ownership among Australia's senators and ministers, it was "difficult to believe that politicians will address the real causes of housing unaffordability, despite the recommendations from government reports".

It's hard to see the vested interest, collectively acting against itself.

All of this is not new, there are no new wrinkles. The property market has been artificially inflated to pay for the retirement of the Baby Boomers. They're in power, they are invested, but at this point in history, they're not selling up and so the price stays up. They then go and get loans against their assets and invest in property even more, using favourable tax concessions. Given the shortage in relevant housing being built, you can see prices spiral ever upwards. Worse still, there's money coming in from China - some of which used to go to Canada until they shut the doors - and they're bidding up prices just to get in because the very point for them, is to get in.
Thus the ground is laid for one-way bets. 

With all these complicating factors loading the system so it only goes one way, we can only ask when it will pop, and how bad would it be when it pops. The latter demands that we know more about the circumstance of the former's condition. If you had to guess it would be 'soon', but this 'soon' has been going on for a few years now and not even the GFC killed it, thanks in part to Kevin Rudd's big spend and China's amazing 7+% p.a. GDP growth (scepticism of that figure aside).

If China tanks overnight, one can't be surprised if these prices fall back down to global norms. So until things head back down towards normal, people are going to keep asking, "will it pop? when will it pop?"

Miscalculating Inflation

For quite some time we've seen the debate about how CPI is calculated. The most glaring problem with CPI is that whinnied up against Cost of Living, it under-reports inflation. This is because the CPI system changes the basket of goods and substitutes things based on the assumption that if you can't afford something, you'll substitute it with something else similar. The strange discrepancy can in part be explained by the fact that cost of living has been following the same goods for the twenty-odd years it has been diverging with CPI.

If you looked at cost of living, it is clear that there is a significant amount of inflation going on with staple foods and accommodation. There is of course severe deflation as well, as the global glut for manufactured goods has commodified just about every possible manufactured item. If you parse through the changes, you can make out this horrifying fact that the less elastic a good or service is, the more it has inflated, while the more elastic it is, the more it has deflated. Or put more simply, the stuff that's undergoing steep inflation are things we need like food and shelter. The things that are deflating are things like mp3 players and tennis racquets and electric guitars. CPI says you've never hd it soggy with your mp3 players, tennis racquets and electric guitars being cheap, so you should be happy. Cost of living says inflation is killing you.

And so you wonder how far out this trend can last before something simply breaks. Indeed, the Arab spring that brought down North African military juntas can be sheeted home to the point at which the staple foods trebled, rents doubled and those regimes tried to buy out the difference and failed. The fact that the AK-47 became so cheap was ironically part of that equation.

But let's get back to the first world. The RBA has set interest rates according to the CPI, and has done so ever since it became independent. Back in the 1980s when stagflation was the big enemy, the US Federal Reserve Bank  chief Paul Volcker opted to fight the rampant inflation by raising rates; And so interest rates went up quite high in the mid to late 1980s in America as well as over here. Yet since those days, if they have been under-reporting inflation through CPI, then it means the successive FRB and RBA regimes have been setting the interest rates too low. If the private debt we've racked up in the last 20years is anything to go by, we've simply bought the economic growth we've had on the back of mounting debts.

When you think about it, the people who benefit the most from all this under-reporting of inflation are bankers themselves. They stand to make a mint, the more people borrow money. Going back to that article before:

So what have our leading economists, regulators, public executives and politicians done to stop this debt-induced folly? Nothing. In fact, they have bent over backwards to inflate prices via stimulants such as housing grants and allowing retirees to tap into their life savings. 

These powerful stimulants have been implemented, not to improve home ownership rates, but to boost prices for the benefit of existing owners, bankers' profits and government balance sheets.

Which just about sums it up. The point is, the bubble is built not on one thing, but many things, including miscounting things that ought to be counted consistently and properly.

No Land Tax, He Says

There's a party contesting the NSW election on one platform - no Land Tax. It's one of those rearguard actions by people with vested interests. Ken Henry's tax review under Kevin Rudd pointed out that Stamp Duty should be thrown out in favour of a Land Tax. The logic of this is quite simple - if you owned a house and never moved or sold it, you'd never pay the Stamp duty and this is the only tax that goes to he State Government coffers based on Land. It would be more efficient and representative of the demographic if they put in a Land Tax instead uncollected something from everybody who owns land instead.

It would go some way towards fair valuations of property, and it would encourage the Baby Boomers to cash out. Given the percentage of people who who own outright and are in mortgages outnumber the renters two to one, you can see there would be a great appeal in putting in a Land Tax, and therefore a great incentive in the electorate to resist it. If you count the fact that the political class is overly landed, there probably is no chance it happens anyway. 

It may even be redundant having a single issue party around not introducing a Land Tax, when you consider that it would paint all the other politicians as those who might be in favour. The numbers simply belie the sense of crisis that this bunch of elected officials would be interested in doing anything so fair or rational as implementing a Land Tax. 

Renewing Australia

Malcolm Fraser's Common Sense Manifesto

It's bewildering to see just exactly where Malcolm Fraser's political vision ended up. We guessed that he stayed essentially where he was in his mind while the polity collectively drifted to the right, and yet we also get the feeling he moved substantially to the left in the wake of his own experience as Prime Minister, following on from Gough Whitlam's time as Prime Minister.

Just reading the titles of sections is quite fascinating. He wants to talk about a 'modern progressive democracy'; social justice; renewal and independence; democratic reform; ethical politics; status of women (Presumably towards gender equality); sustainable economy; and probably most un-Howardian and un-Abbottian of them all, a secular Australian Republic.There's more and it goes into some detail, but perhaps the most notable thing might be that this document is being described as a 'manifesto'.

Manifestos of course belong to a long tradition on the left side of politics, the most famous one being the communist manifesto; but of course there was a Surrealist manifesto penned by Andres Breton in the early part of the 20th century and there was the Situationalist International Manifesto going around Paris in the 1968 student movement. When you think back, Malcolm Fraser would have been on the side of politics where they would have viewed any kind of political tract labeled as a 'manifesto' with a great deal of suspicion. It is deeply moving to find that Malcolm Fraser found himself working on this project in the latter part of his life, and without self-reflexiveness, was sending it out to canvas support.

Of course, Malcolm Fraser didn't table the document as a manifesto, but as "a Statement of Values and Purposes", but everybody with half a brain knows what this is, even the Sydney Morning Herald, - a manifesto.

"We do not take this step lightly or impulsively," the statement reads. "Our party has been created in the belief that the major political parties ... have repeatedly failed Australians on the big issues". 

"When over long duration the foundations of political parties become eroded and their purposes fall out of touch with the nation's basic values and beliefs, and when government and opposition join in advocating policies ever more corrosive of our national spirit of fairness and justice, there arises the need for new political groupings to better express the voice of the people," says the statement, which is dated January 20. 

The document says the party accepts "the overwhelming scientific evidence of climate change" and recognises that "nothing short of a profoundly different way of structuring the global economy will avert the catastrophic effects of a warming planet." 

"Despite the un-extracted riches in Australia's coal reserves, the imperative of moving to a post-carbon economy is clear, and the urgency of government intervention to achieve it is compelling," it reads. 

Rejecting arguments that Australia was already fully populated, it argues the nation needed to be prepared to increase its population, arguing a larger population would contribute to the nation's "long term vitality and security" as well as its influence on global affairs.

That sure sounds like a manifesto. Manifestos always start with rejecting the status quo and arguing for a radical progression with prescriptions. Conservatives don't write manifestos because their thinking progresses from the lukewarm enthusiasm that the status quo with all its injustices and failings is pretty jolly good.

A quarter of a century ago in what can only be described as another intellectual epoch, I was with a writers' group and proposed we write a manifesto. The notion was laughed out of the Harold Park Hotel. I look back on it now and I think the Sydney University writing set was a lot more bourgeois, complacent, un-radical and largely un-aspirational than I was. I wanted a manifesto because without one, you can't rally a call to change. To proceed with a method or madness or method in one's madness. The truth is, those people didn't want any kind of change - and that sort of drifts off into consumerism and naive materialism and blind acceptance of stupid political rhetoric which is at the heart of conservatism in this country. In that sense, I find it greatly edifying to know that up until the moment died Malcolm Fraser cared about this country enough to be working on a manifesto.

The most important takeaway might be that the tract represents a comprehensive critique of what is wrong with the two major parties in Australia, and that policy-wise, Malcolm Fraser essentially ended up as a kind of Australian Democrat in the sense of the party made by Don Chip (and made defunct by the lamentable Natasha Stott-Despoja and miserable Meg Lees), long after the said party became defunct. I don't know if there is a future in this project, but it is certainly interesting to see where Malcolm Fraser ended up on the political spectrum and it speaks volumes to the distance traveled to the idiotic right by Australian politics in the 21st Century.

On Blogging Politics

Whither The Common Sense?

You might find this hard to believe but I don't much like politics. I don't like reading about it or arguing about it or even blogging about it. The fact that I do is an indication of how irritated I am with just what is being reported as going on.

And in most part when I do blog about politics here I'm not arguing a point so much as pointing out the abject stupidity of politicians. In that sense conservative politicians are a gift to bloggers like me because there's no shortage of fodder for ridicule. The problem of course is that there is no avoiding politics and that difficulty extends from the extent of policies enacted through to the hyperactive news cycle which keeps pumping headlines at you.

I am, however, an information junky and quite possibly a text junky so I can't resist reading the new thing as the headlines appear; and when conservative politicians are true-to-form, well, I'll find something to blog about here. Yes, I did blog a lot about politics in the Rudd-Gillard years and there was much stupidity and mayhem in that era so maybe it's not fair to just beat up on conservatives in this country. It has to be said, there are plenty of nice people in the conservative camp.
But in most part, politics gives me the shits, and the worst of the lot is the deficient mentation that passes as conservatism.

This feeling of resentment and irritation extends quite a way through many areas and subjects. The two party system in the Westminster system does offer a great deal of institutional stability but is also a great instrument for reducing issues to their crudest talking points. Maybe this is a feature of democracy that cannot be bypassed. The fact that the Weimar Republic could give rise to Nazism through sheer electoral fatigue doesn't bode well for a sophisticated political discussion. Maybe it is better to reduce any complicated argument down to the simplest, idiotic sloganeering although that is tremendously difficult to embrace. It's a bit like arguing that in order to avoid the big stupidity of totalitarianism, we must commit to a daily dose of endless, minor stupidities, and even there is no guarantee we won't be visited upon by the "big stupid" such as Nazism, Stalinism, Maoism, Pol-Pot-ism, Ayatollah-sim, Islamism, or any radical crackpot ideology that would rob us of the joys of sex, alcohol and satire.

Republics with Presidents fare worse than the Westminster system. Many of the military juntas of the last 100 years (up to and including the fictional Star Wars one) are in effect failed Republics. If anything is learnt in modern history, it is how frequently democracy fails and gives rise to crappy juntas, dictators and chairmen of the secretariat who control from behind the scenes. Nobody plays by the rules for long, so the calls for eternal vigilance are certainly true. We can put forth cultural and temporal explanations to explain it post factum but ultimately power is its own logic.

Up until recently, and by this I would say the last 5 years, politics was enacted by those who exercised as much gravitas and respect for institutions. It was operated by people who knew full well that precedents were problematic things and that devising the new to be fair, was the utmost difficult thing. Institutions had to be respected, convention had to be applied, tradition had to be carried forth and thus the apparatus of government was protected from the kinds of change that give rise to senseless radicalism.

Suddenly, around the world we see that there are these figures who want to play hard fast with the very things they should be protecting and nurturing in a democracy. US Republican congressmen inviting Netanyahu to deliver a speech to the House of Representatives; 47 US Republican Senators writing a letter to Iran; Tony Abbott denouncing the Human Rights commissioner an then the United Nations; Shinzo Abe trying to rewrite the constitution in Japan; there's a lot of weird stuff going around. This is against the context where the global economy has been in uncharted waters since the GFC and economic growth is hard to come by and various central banks are in currency wars.
It hasn't been normal for a long time. Worse still, what can you do about it?

About the only thing you can do is to keep track of it and fight the rise of stupidity at every turn. In Australia, we're already at the point where we've allowed some kind of stupid to enter the centre of power, to be elected and enact stupidity. It's rabid, feral and unwholesome - and relies upon the electorate being seduced by the simplicity of being anti-intellectual. Otherwise, how does one explain the wilful blindness towards facts and science by this government?

And so believe it or not, it really isn't my thing to be blogging about politics so much; but in some subtle, digital, internet-era way, the fight has arrived at my doorstep. There's just too much stupidity to tolerate out there. That is why I've been blogging about politics so much recently. Believe me when I say I want to go back to movies and records and baseball. We are living in interesting times. The side effect is that we end up doing things we don't want to do.

The Passing Of Malcolm Fraser

The Missing Memory

I arrived back in Australia the month Azaria Chamberlain went missing. Previous to that, I was out of the country in the second half of the 70s, living in New York City. I was 14 and not terribly political. In short, I totally missed the high drama of 1975. The place where my family lived for short while was deepest darkest St. Ives; I went to St. Ives High School when the 1980 election took place, not long after. Malcolm Fraser's incumbent Coalition government defeated the ALP led by Bill Hayden.

The next day there was a schoolyard post-mortem of sorts and not knowing what was what, I was able to see most of the kids leaned towards the Liberals except one lanky thin kid with Buddy Holly glasses whose parents voted Labor, who was hounded across the schoolyard by muscular bullies. It was memorable; and when I think of why I dislike Tories in this country, I think of those bullying kids. But St. Ives High School was simply like that: Conservative politics, racism and bullying were just ingrained social graces where for all I knew there was widespread domestic violence, prescription drug abuse and alcoholism.

To a kid who grew up in New York City, the deep Sydney Northshore looked like a cultural wasteland. It was a beautiful tree-lined place with the ugliest of attitudes. And Malcolm Fraser was their man. That left an impression.

All of this is to say, I really didn't feel political until I was 14 and living in Sydney, and I totally missed out on the Dismissal thing so I'm effectively with the people who were too young to remember the Dismissal. So my dislike of Malcolm Fraser was more of a general rejection of the kind of backward - more like redneck - St. Ives self-image of Australia. If they liked it up in St. Ives, surely it was deeply thoroughly flawed, vulgar and detestable. In some ways, this still holds true.

St. Ives was a place where meanness was a virtue in the way that a Jeff Thompson bouncer was mean, but good. Giggles and beer. If the bouncer hit Gordon Greenidge in the head, it was cool because well, that's how you played hard and doubly pleasurable because Greenidge was a black man. More giggles and beer.  Their kids thought this was normal.

There was a graffiti on railway bridge on the lower Northshore, where it read 'Fraser', with the 's' substituted with a swastika. It was already there in 1981 when our family move down to Chatswood - an altogether more progressive area with a rather cosmopolitan school - and I recall the graffiti still being there when I was a operation personnel at the ABC in 1989. By then it was utterly anachronistic, and it wasn't long before we would see Gough Whitlam and Malcolm Fraser make peace.

In between, Fraser lost to Hawke in '83 and shed a tear on the way out. Australia grew up a little bit out of being a parochial post-colonial backwater, although that might have felt that way simply because I was in Chatswood and not St. Ives. I've been assured St. Ives most certainly didn't change.
And that was mostly it.

All of which is to say, for a person whose political consciousness leans to the progressive, I've never been all that angry at Malcolm Fraser the person. In his years after politics, he would often step up to say the decent thing. The Liberal Party on the other hand continued to drift to the right and mostly towards the unintelligent and unintelligible.

Alan Ramsay pretty much nails it.

Whatever you thought of his politics and his seminal role in the vice regal dismissal of the Whitlam Labor government almost 40 years ago, John Malcolm Fraser was, above all else, a genuine liberal in the best sense of the word. Thus he goes to his grave appalled, surely, by the oafs, boofheads and lesser ninnies that not only control the Liberal Party and conservative politics in this country these days, but take their disgrace to the summit of running Australia too. 

How could it have come to this, J.M. Fraser must have wondered, constantly, in more recent years, as political behaviour, state and federal, from top to bottom, in our parliaments and out, and right across the three major parties in our democracy, became uglier, greedier, less inclusive, less civil, less caring, more irresponsible, more ill-mannered, more shrill, more ratbag, and wholly more venal, indeed blighted in any and every way you care to look at what is happening to national political life in this country?

Malcolm Fraser might have well wondered why and how his party became the party of illiberal, intolerant, racist, cultural imbeciles who deny scientific facts and have no eye for the future or the environment. He would have been correct to do so. If I had the opportunity to meet the man and a time machine to do some time travel, I would have shown him the schoolyard of St. Ives 1980 - the Australia in which presided over where the dastardly future was being incubated. The seeds of the eldritch horrors of an Abbott-Government Australia were all there to be seen.

The man, after leaving office was much more influential as an opinion leader. The multi-cultural Australia he espoused and gave life to with the inception of SBS stood in stark contrast to the racially tinged, accented-with-xenophobia, bigot-friendly drift to the right that the Liberal Party executed under John Howard. After the 1993 election loss the Liberal Party embarked on a lot of soul-searching and decided upon a course of lurching to the right, most precipitously.  If Fraser had been damned in 1975 of the potential for Australia to turn into some kind of Latin American military junta, then Howard tacitly pushed Australia towards the lukewarm 1984-parody in which we now reside with much praise from the big end of town. After all, there's nothing like a party you pay for, doing your bidding. All kinds of prejudices found a legitimising home in the Liberal Party of the late 90s and early 2000s. Bullies, conks, monarchists, climate change denialists, male chauvinists, xenophobes, homophobes, and the plain old rude congregated under the big tent of stupidity erected by John Howard.

For, it has to be said, those bullying xenophobic, homophobic, sexist, anti-intellectual, culturally backward bullying kids amassed on that St. Ives schoolyard are now the paid up members of the Liberal Party of Australia. Racist and proud of it, mean and proud of it, clinging to the glories of a White Australia. Stop the boats. Stop the witch. Stop the mining tax. Repeal the Carbon Tax! Stop the science funding, stop the education, stop making sense. They never grew up they just confirmed and hardened in their entirely idiotic world view. Malcolm Fraser might not have understood it, but I would have been able to show him from whence came all that crassness, avarice, and intolerance.

And so with his sad passing, well may we say God Save Malcolm Fraser for nothing will ... oh, no, let's not; let's just forget about the punchline for once.
Instead we say, vale Malcolm Fraser.

Editorialising Failure

"He's Your Mate", Part 1004

God help us all, God help us all.
Darren Goodsir, the idiot editor of the SMH endorsed Tony Abbott on the eve of the 2013 Federal election. This is something I cannot ever let him live down. Any person with a functioning frontal lobe of the brain could see that Tony Abbott was not a fit candidate to be Prime Minister. There were the gaffes, the track record of dubious distinction, the 4 years as opposition leader whereby he provided nothing positive to the political discourse of this nation, let alone a skirt of viable policy. Instead Tony Abbott rode on the sentiment that middle Australia had enough of the ALP because ... well, these things he was screaming at the top of his lungs that had to be stopped - like asylum seekers on boats and instituting an Emissions Trading Scheme.

If you added it all up, there was no picture whereby you could deem Tony Abbott had any idea what or how he was going to go about actually governing. And Darren Goodsir, as editor of the Sydney Morning Herald no less, backed this man as leader of a party that frankly ignores science or evidence or facts, as a better choice because it would provide stability.

That's right, stability!

Thus it is my job here to point at at every turn that the SMH editorial complains about Tony Abbott's prime ministership, that I point out that the editor of the SMH was the one who thought this was going to be such a winning idea. As in, "Darren, he's your mate." 18months into this debacle of a government led by one of the most disastrously accident prone Prime Ministers in Tony Abbott, it occurs to Darren Goodsir that perhaps this is a "government by shambles". His words, not mine. You think so, Darren?

And the truly pathetic part is that anybody with half a brain would have told you that Tony Abbott as Prime Minister was going to be a spectacular failure. I wish I could say,to each their own poison, but in this instance I cannot, for Tony Abbott is ruining my day as surely he is ruining Darren Goodsir's day.

Double Disillusion And Other Follies

Could Be Good To Tip Over The Table

Some months ago when it became clear that even the Liberal Party had grown a little browned off with an Abbott Prime Ministership, I had this wicked idea that maybe Tony Abbott might forestall his own backbench rebellion and call for a Double Dissolution election, just to spite his disloyal minions and get a jump on the situation. Of course I was 1) joking 2) speculating wildly 3) guessing he was crazy enough to cut off his own balls topside his dick.

Turns out, Tony Abbott is thinking of a Double Dissolution as an option.

Tony Abbott and some of his cabinet ministers have canvassed the prospect of an early double dissolution election to be held in the next few months. 

A minister who was present at the discussion over a private dinner on Monday night said that the idea was talked about but "not under serious contemplation".

And the Prime Minister told Fairfax Media that "the government intends to serve a full term". 

But the mere fact that it was mooted has had an unsettling effect inside an anxious government. 

"The concern is that Tony might consider it to forestall any move against his leadership," said a minister. 

"Given his increasing desperation, there could be a rush to the Governor-General," with the implication that Mr Abbott would gamble government to preserve his position.
The scenario canvassed at dinner was that the government would bring down its second budget in May and then quickly call a double dissolution election, ostensibly to clear an obstructionist Senate.

... and thereby forestall another possible spill. From this we can gather that Tony Abbott is indeed 1) a joke 2) Wildly speculative and 3) crazy enough to cut off his own balls to spite his dick.

Like I say, this stuff writes itself.

Stop The Lies, Please

I've been following this GFC thing and its aftermath as closely as I can here and I have to say that Greece is the canary in the coal mine of the post-capitalist world. If Greece goes, then Portugal, Italy, Ireland Spain are not far behind and this is all because these countries rebound up in the Euro, owing too much to German and French banks. If Greece 'goes', so do the other PIIGS countries, the Euro is finished, and so are some of the biggest banks in Europe. Financial Market hell will be unleashed upon a long-suspecting (and suspect) world, resulting in "scenes from 'Rise of the Planet of the Apes' but without the apes".

So far, the world has managed stave off this spectre. The neck of the question has been what it means for Greece to 'go', in the sense that it is enough to unravel the Euro. Greece has many reasons to quit the Euro, but the best reason of them all is so that it can issue its own currency, and devalue it against the Euro so that it can get some breathing space. Without this 'Grexit', Greece has no option but to listen to what the Germans tell them and this is no longer viable because what the Germans are telling them is wrecking the Greek economy and society.

The three big points to remember about Greece is that it is a member the Euro and therefore cannot set its own currency policy; it is a member of the Euro in such a way that it has no control over the greater economic policy and conditions; and its government is in debt to the tune of 164% of its GDP.

It is then, mighty insulting when the Prime Minister of Australia says that Australia was somehow a likely candidate in becoming like Greece.

"Under the former Labor government we were heading to a Greek-style economic future," the Prime Minister told 2SM host Grant Goldman. The Greek economy has been notorious in recent years for high levels of spending and debt, culminating in the Greek government-debt crisis.

I mean, how? How on Earth is Australia going to get remotely close to where Greece now finds itself? It's like saying I am in danger of driving off The Gap in my Range Rover wearing a Chelsea FC jersey when all I own is a Mazda 2 and I commute to the South from the Inner West, and I hate Football. I mean, yeah, I might, but a lot of ducks would have to line up before that happened.

To be like Greece, Australia would have to give up its own RBA to a body like the European Central Bank (doubtful and unlikely), give up its own currency and start trading with a shared currency with much larger economic bodies (possible but not any time soon), and then proceed to rack up debt in that shared currency to 4 times the debt we currently have - and that's an overly generous estimate. If you look at the OECD chart, it thinks the Greek debt is 147% of GDP while the Australian  government debt is 11% of GDP, making the different more like 14 times than 4. Our economy - with all its faults and problems - is as close to Greece's economy as Bondi Beach is to the Acropolis.

In short, the Prime Minister is lying.
He's not cherry picking stats or fudging numbers approximating or reducing arguments to talking points, or playing semantics, no. No benefit of the doubt goes to this one, he's lying to scare the ignorant, and scare them into not voting ALP, and thereby hope to pickup some loose votes from the stupid and ignorant. It truly is pathetic.

Thus I say bring on the Double Dissolution to end the Double Disillusion of this mendacious miscreant government. We've really had enough of this stupidity. Really, we have.

UPDATE: More Folly - Pyne Wants To Fine Universities

After I put this entry out, it turns out Christopher Pyne has been working on a diabolical plan whereby universities are punished if the graduates don't pay up with their student debt.

Universities churning out graduates who do not repay their student debts would face financial penalties under a proposal by Education Minister Christopher Pyne aimed at securing Senate support for fee deregulation. 

Despite a 34-30 Senate defeat on Tuesday, Mr Pyne vowed to reintroduce legislation this year to allow universities to set their own fees.
"We will not give up on ensuring that Australia has the higher education system it needs - the best in the world," he said. "Great reform takes time." 

Universities Australia chief executive Belinda Robinson warned that without increased revenues university vice-chancellors would consider increasing class sizes, shedding staff, closing campuses and discontinuing some courses.

-----------------

Mr Pyne proposes "a mechanism to make a proportion of each higher education provider's direct grant funding contingent on its performance against a key set of indicators" - including the debt not expected to be repaid (DNER) by their graduates.
"We are confident that the higher education sector will be responsive both to transparency of data in this area but also to a relatively modest amount of their annual grant funding being at risk in relation to their DNER performance," he said.
The government aims to have proposals ready for discussion by July. They would take into account repayment differences based on gender and rural and regional factors.

Graduates do not repay their debts if they are earning under $56,000, exit the workforce or move overseas.

The value of student debts not expected to be repaid is forecast to grow to $12 billion by 2017-18 - 23 per cent of all outstanding debt.

Which is all very plant-your-face-in-your-palms crazy. Education is an investment a society makes in its own people. There's just no two ways about it. You only have to look at the terrible third world nations where governments opt not to make these investments and how the lack of education perpetuates poverty and low economic growth. It's bizarre and ideological buffoonery for this government to cary on as if the money invested into education is somehow a terrible cost and impost on government. With that kind of illogic, nobody would do anything to get educated - which is clearly not what these conservative politicians have done for themselves. So this attempt to narrow the doorway to tertiary education is doubly pernicious as it contains within it a hostile streak that can only be described as class warfare, as well as this moronic obsession to off-load government investment into education.

If money spent on education really wasn't an investment but some kind of loss-leading loan, then surely students would have the option of bankrupting themselves out of this debt - a surely as some of the wealthy do in this country. The fact that they don't allow this to happen means the government agrees that the money spent on educating and training people is an investment from which the government hopes to benefit through higher earnings leading to higher taxes upon that individual.

If there ever were self-defeating, contradictory position, it would have to be the conservative impulse to cut taxes and sell off government assets that earn revenue and complain when government is always in deficit. Ignore for the moment the perennial problem of people carrying on like the national budget is some kind of private household ledger that needs balancing, minutely on a constant time scale.

Basically, Christopher Pyne wants to encumber students with student debt in such a way as to cut government investment in education, cut government support for people getting education, and somehow magically produce growth out of a population that either has too much student-debt to do any consumption, or produce a population that is so averse to getting an education thanks to the threat of the student debt they cannot produce the economic growth the government seeks. He's socialising the debt, but he's doing the debt-loading as a pre-condition of adulthood. And he thinks this is somehow a fantastic idea.

Its so stupid. But this stupid thing is exactly what these idiots want to implement. It's not even an issue of fairness (which it also is, but I'm putting it aside for a moment), but an issue of basic logic. It's like these people can't think through the ramification of their own stupid ideas.
This is what happens when you put an ideological idiot in charge of higher education.

Being An Aussie Blues

"I Fixed It!" - No You Didn't

Christopher Pyne declared he'd fixed the deregulation bill to get it through the senate. He was most chuffed about it and put in this performance, which earned him much derision and ridicule (as it should).

"I fixed it", he declared, visibly quite proud of himself.

...only to have his bill defeated in the Senate.

The Senate has rejected the Abbott government's proposed higher education changes - including the deregulation of university fees - for the second time within three months.
The government's bill, which would have allowed universities to set their own undergraduate fees, was defeated by 34 votes to 30 on Tuesday night. 

The government fell three votes short of the six crossbench votes it needed to pass the changes. 

Senators Bob Day, David Leyonhjelm and John Madigan voted in favour of the bill while senators Ricky Muir, Glenn Lazarus, Nick Xenophon, Zhenya Wang and Jacqui Lambie voted against it.

So much for that one. What can you say?

Off The Cuff Gratuitous Offence To Ireland

Maybe the Irish are sensitive about being Irish. But what can a people do being born in a certain place with a certain heritage? There are much worse things in the world, like being born intemperate like our Prime Minister.

Taoiseach Enda Kenny has told an Irish newspaper he had watched Mr Abbott's video and rejected the perception that Ireland was synonymous with alcohol. 

 (I confess, I don't know how to pronounce Taoiseach)

Mr Abbott prompted criticism last week for the video message, in which he awkwardly describes St Patrick's Day as the one day when "it's good to be green".

He proclaims Ireland's most famous day "a great day for the Irish, and the English, the Vietnamese, the Cambodians and everyone who cares to come to a party".
Mr Abbott signs off his message with an apology that "I can't be there to share a Guinness or two or maybe even three". 

Mr Kenny said he had heard Mr Abbott's comments and he didn't agree with them.
"I've heard the Prime Minister's comments. He made them. I don't agree with that," he was reported as saying in the Irish Independent. 

"I think that it is perfectly in order for so many Irish people in Australia to have an enjoyable celebration of St Patrick's Day and St Patrick's week, and to do so in a thoroughly responsible fashion. 

"There has been a long-term view of a stage Irish perception. I reject that. I think it's really important that we understand that we have a national day that can be celebrated worldwide, St Patrick's Day."

I think the word got out that Tony Abbott is now a free-to-all punching bag. Much as I hold Tony Abbott in low esteem, I don't think he was that offensive. Needless to point out that the Irish diaspora is huge. St Patrick's Day is all over the anglophone world. Nobody thinks it's exclusively a day for alcohol consumption, or that it is a day of alcohol consumption because it's an Irish holiday. I don't really get the objection. Is Mr. Kenny really that interested in responsible drinking in Australia? I can't imagine it.

I think Mr. Kenny is one of those people looking to take deep offence in the most innocuous of comments. Well sir, here's a bit of advice to you Mr. Kenny: leave the kicking of Tony Abbott to us Australians and stay the fuck out of things you don't understand.

WTE Joe Hockey Lives Up To His WTE Status

Worst Treasurer Ever Joe Hockey ran into serious flack on television. He was asked why he hadn't abolished Negative Gearing and reclaimed it would force up rents. That was a red rag to the bull - and a bull arms with facts at that:

It was absolutely true that rents went up fast in Sydney, "which might have been there wasn't a lot of housing being built in Sydney in the couple of years previously". 

"But look beyond Sydney and rents were dead - barely moved in Brisbane, didn't go up very far in Melbourne, didn't go up very far in Adelaide. They did go up very fast in Perth which makes you suspect very strongly that the race memory we have of abolish negative gearing, that rents will go up, is a race memory built on Sydney." 

Daley said rents shouldn't go up because "by definition what happens at the auction is that the investor doesn't win the auction but someone who wants to live in the house does. Net impact, there is one less renter and there is one less rental property. Net impact on the rental market, zero."

Yep. but even more damning than the Negative Gearing bit was this section:

Then Daley took on Hockey's claim that he was delivering the biggest infrastructure program in Australian history. 

"It certainly hasn't gone up," he said. "It's probably tailed off, at least in as a percentage of GDP." 

Hockey said Daley was wrong. "For a start we put $1.5 billion into WestConnex in Sydney," he said. 

Daley reminded him that the project predated the Abbott government. He said not a single new project approved in Hockey's first budget had received a green light from Infrastructure Australia. 

Hockey deflected the accusation by saying Melbourne's East West Link had at least been subject to a cost benefit analysis by the Victorian government. He was reminded that the former Victorian government refused to release it in part because the numbers didn't stack up. 

When Hockey said the tax discussion paper wouldn't consider tax increases, Daley said that was exactly what was needed. 

"We as a society have essentially decided to spend quite a lot more money on health. It's good news, it's keeping people alive for a lot longer. The bad news is someone's got to pay for it. We've agreed as a society to have an national disability insurance scheme scheme, that's terrific but somebody's got to pay for it." 

"So far we've had relatively little discussion about the fact that taxes will probably have to go up, and of course no politician wants to talk about that."

And Joe Hockey promptly stopped talking about it. Didn't mention having to raise taxes at all.
It must be great fun to be made to look like a complete dill in front of all those people in TeeVee-land. Of course, this being Q&A, it probably rated at best 8%. I sure as heck didn't watch it.

News That's Fit To Punt - 16/Mar/2015

We Said The Same Thing About Julia Gillard

The not so big news is that the Federal Liberal MPs are unhappy with their Prime Minister. Former Minister and prominent-blowhard columnist Amanda Vanstone was heard making this remark in a 'Four Corners' episode:

Speaking on the ABC's Four Corners program, Ms Vanstone said it would be a simple mathematical calculation in the end which would determine Mr Abbott's grip on his job. 

"Understand this, as you get closer, every marginal seat member is thinking 'I could lose my seat', every safe seat member is thinking 'we could lose government and I won't have a chance of being a minister and I might be too old next time', so they're gonna be looking at what the polling says and whether they can win and they will stick with a prime minister who can win and they'll cut one off who can't," she said.

They're not words you want to see spelt out if you're Tony Abbott, but I remember these moments on the ALP side when Julia Gillard's polls stayed at 27% approval rating for months on end. All kinds of arguments were mounted as to why she should be doing better but ultimately she never recovered, and the backbenchers removed her for Kevin Rudd in order to "save the furniture". Oh what fun times those weren't. 

So the rough locus of politics being what it is, it's unsurprising that Amanda Vanstone can see the writing on the wall for Tony Abbott's Prime Ministership. He might have gotten himself a 6month reprieve but if the next Budget dogs it like the last - and let's face it, the last one is still dogging it, - then he may not have that 6months grace that he thought he had won at the spill.

None of this is really new news. What's more interesting is that the electorate has moved on to a post-Tony-Abbott sort of brain-space and have essentially written him off. The SMH has pulled the article from its site but this morning it was reporting that the swinging voters Western Suburbs of Sydney had abandoned Tony Abbott and called him an embarrassment. It was so bad the article is now off the main page and has to be dredged up by Google. 

In the groups, Mr Abbott was described as "just very incompetent and an embarrassment internationally" by one participant. 

Another said Mr Abbott was "an embarrassment. He is an absolute embarrassment. Every time he opens his mouth he just says the wrong thing." 

Some participants viewed Mr Abbott as unreliable and untrustworthy.
"He doesn't present well," said one participant. "He doesn't give you ... no matter what he's talking about, you don't feel confident." 

One woman declared: "He could be talking about the weather and you'd still think, oh… I don't know." 

The latest Fairfax/Ipsos NSW poll revealed close to one in 10 voters who supported the Coalition at the 2011 state election intend to change their vote on March 28 due to the performance of the Abbott government.

You'd hate reading that if you were a Liberal MP, no? 

I Owe, I Owe, It's Off To Work We Go

It's not exactly news that Australia's private sector debt is a much bigger problem than the public sector (i.e. Government) debt. Here is an article outlining just how bad it is. 

Barclays chief economist for Australia Kieran Davies says private sector debt-to-income gearing is currently at an all-time high of 206 per cent, up from a pre-global financial crisis (GFC) level of 191 per cent. This put Australia just within the top 25 per cent of the world when it comes to leverage.

However, when it comes to household debt - which includes mortgages, credit cards, overdrafts and personal loans - Australia leads the global field, according to Mr Davies, with credit continuing to pile up while the rest of the developed world is paying it down.

Using nominal gross domestic product, the bank estimates household debt at 130 per cent of GDP, which is the highest level on record.

The ratio compares with 78 per cent globally, down from an all-time high of 81 per cent in 2010. However, Australia is not too far ahead of a range of European countries. 

"Examining the distribution of household debt, Australia has the highest gearing of our large sample of countries, although it was practically a tie with Denmark (129 per cent of GDP)," Mr Davies said. 

"Switzerland (120 per cent) [and] the Netherlands (115 per cent ) were the next closest countries."

And so there it is, in fairly easy to read charts. The problem of course is that the more government tries to cut its expenditure, the more the private sector takes on debt. So to some extent the private sector debt reflects the government cuts that have already taken place - except it's not businesses taking on the debt. 

Mr Davies also found that while consumers and mortgagors are busy racking up debts, Australian companies have become more thrifty.

It said that non-financial corporations reduced their gearing from 84 per cent of GDP in 2008, as the GFC began to bite, to 67 per cent in 2011. It was the first period in which outright debt levels fell since the early-1990s recession, said Mr Davies. 

Companies had since leveraged up again to where debt represents 76 per cent of GDP. Even still, corporate Australia was markedly more prudent than the country's individuals.
"Although Australian corporate leverage is high by past standards, it is surprisingly low compared with other industrialised countries," said Mr Davies. 

"That is, world leverage, calculated as the simple average of the sample of countries, is currently 106 per cent of GDP, down modestly from the all-time high of 111 per cent of GDP reached in 2009." 

The bank warns that risks continue to build in economy, particular as the Reserve Bank of Australia eases monetary policy.

So, to some extent the government is right in trying to contract and cut, given that the Private business sector can afford to take on more debt... but for the housing bubble. And so, the RBA can't exactly be cutting rates even more unless it wants the housing bubble to go even more ballistic. 

But back-tracking a bit, you wonder how the RBA might have found itself in this rather silly position. My best guess is that ever since they changed the way they calculate CPI, they've been under-reporting inflation; and this under-reporting of inflation has been going on for some time, which bolstered easier monetary policy in the last 20+years. We know this because the cost-of-living has been skyrocketing ahead of CPI for the duration. Which means households have been getting a sweeter deal on property in the last 20years which accounts for the great housing bubble we've managed to engender. It's easy to see in hindsight, but who's really counting? Nobody's owning up to it; they were denying it even existed as recently as last year. 

In a very real way, we can now see the interest rate should be sitting higher but for the GFC where every other central bank has embarked on easy-money and ZIRP and QE programs which has essentially dragged our own RBA towards a similar kind of easing. It really is a rock and a hard place. If they raise rates, it would cool down the housing market but it will discourage the already low business investment, smash confidence and raise unemployment. If they go towards ZIRP, the housing bubble will continue to expand, and when the next crisis hits, it would be time to print money so the banks that are too-big-to-fail, don't blow up. 

But, as the Demtel man used to say, there's more. If the AUD keeps falling past the US75c mark, the import prices will go up significantly enough that even the artificially suppressed CPI will register the inflation. In which case, interest rates would have to go up, and with it will go housing prices and consumer confidence. Inevitably we're going to hit a recession. The question is how deep it's going to be and for how long. If 20years of growth comes to a shuddering stop, then it might be a very long recession. 

And, as the Demtel man used to say, there's even more...

The Free Set Of Stake Knives In Our Backs

The engine for the 24year run of growth of the Australian economy, Communist China is - to not put too fine a point on it - pretty fucked up. 

So where does Shambaugh see evidence of imminent collapse? He lists five "telling indications of the regime's vulnerability". 

First is that "China's economic elites have one foot out the door, and they are ready to flee en masse if the system really begins to crumble". He cites a survey of 393 millionaires and billionaires by Shanghai's Hurun Research Institute; 64 per cent said that they were emigrating, or planning to do so. 

Second is Xi's harsh political repression: "A more secure and confident government would not institute such a severe crackdown. It is a symptom of the party leadership's deep anxiety and insecurity". 

Third is the hollowness of official belief in Xi's doctrines. Officials are only going through the motions, he says. He recalls sitting through a conference on Xi's call for a "China Dream" where it was "evident that the propaganda had lost its power". Demand for a pamphlet by Xi was so feeble at the Central Party School bookshop that the sales staff were giving it away. 

Fourth, Shambaugh says, corruption runs deep and will outlive Xi's anti-corruption purge, which will succeed only in enraging powerful interests. 

Finally, the economy "for all the Western views of it as an unstoppable juggernaut is stuck in a series of systemic traps from which there is no easy exit," he says. Xi's attempt to break the traps, his economic reform plan, is encountering stiff internal resistance.
The exact manner and timing of collapse, says Shambaugh, is impossible to predict.
Predicting the demise of China's regime is not quite as startling as it might seem. In some ways it's entirely routine. 

The blindness of the West to the imminent collapse of the Soviet Union was a chastening experience. Analysts since have been hyperalert to a Chinese Communist downfall.

And there we have it. Peter Hatcher spends the rest of article making a case for why it might not be so fucked up, but the economic problems are starting to mount up - and they are remarkably like the problems faced by the rest of the developed world. Too much government debt, a housing bubble, capital flight, ageing population and stagnant growth. And generally speaking the case against a Chinese collapse are just as based on inductive reasoning as those who predict it on the basis of history. 

Plus, we know that the GDP reported by the Chinese is often party wish-casting and no reflection of reality. It may take a while yet for complete collapse but the collapse in commodity prices is telling us quite a lot about how bad things are in China. It was enough to prompt Gina Rinehart to hurriedly sell up her stake in Fairfax Publishing. 

Absence Of Sustained Leadership

Just a quick note about NSW politics which goes to the polls in a fortnight. In the last so many years since Bob Carr retied, it has gone: Iemma (37months), Rees (15months), Kenneally (27months), O'Farrell (37months), Baird (11months). It's pretty choppy no mater how you look at it. Iemma won an election but Rees didn't get to one, Kenneally was booted out for Morbid Obeidity, O'Farrell did himself in with the wine bottle gift thing and Baird is trying to keep government with just under 12 moths under his belt. 

This has run parallel to Rudd I (30months) Gillard (36months), Rudd II (3months), Abbott (18months and counting to the end). What we can discern from all this is that even if you're offering good government from a managerial point of view or policy aspiration point of view or operational point of view, 3years is about the grace you get from your own party, and this is so short because the party gets so little grace from the electorate. And apart from Rudd and most parts of O'Farrell, bits of Rees and start of Kenneally, and Baird where polls were good, extreme unpopularity in polls essentially drives change. 

I would posit that what has happened is that the electorate has chosen the polls as a means of sending a message when they cannot vote. With the ever tightening news cycle and the advent of social media, everything has to be immediate, and this is reflected in the fast an furious change of leaders on both sides. It is no accident that Tony Abbott is in strife. If he thinks the people vote in a Prime Minister, then he has to accept that the polls are telling him they made a mistake and want him gone.  

I am yet to decide if this is an improvement or a form of political decadence, but I do think Australia has hit some kind of new phase in democratic politics that is quite peculiar. It may not end if and when Turnbull or Julie Bishop take over, and when they lose, it won't change with Bill Shorten in the Lodge. 

Quick Shots - 12/Mar/2015

At Least He Won't Get Tortured

Contrary to my belief that he would end up in G'itms getting tortured by the US Marines, Jake Bilardi seems to have gone up in smoke with a suicide bombing squad.

The passport of a Melbourne schoolboy apparently killed carrying out a suicide bombing in Iraq overnight was cancelled in October last year, just months after the teenager left Australia to fight with Islamic State. 

Islamic State claims the schoolboy, who converted to Islam aged 16 after self-radicalising on the internet, died in a series of co-ordinated car bombs across the city of Ramadi.

Foreign Minister Julie Bishop says the government is trying to independently verify Mr Bilardi's death and has been aware of his presence in Iraq and Syria "for a number of months".

I guess that's that.

Lives Still In The Balance

It's strange that we're all worked up about Andrew Chan and Myuran Sukumuran as a nation, but... we are. We just are. But it still seems a little too soon for a post-mortem of the sequence of events. All the same, this bit caught my eye:

Regrettably, when we attempt to analyse the sequence of events leading up to this point, it seems Australian institutions are just as adept at sidestepping difficult questions and inconvenient truths. Last Thursday the head of the Australian Federal Police, Andrew Colvin, categorically denied the agency would have blood on its hands if the executions went ahead, pointing to judicial findings that vindicated the actions of the AFP. 

As it happens, the Federal Court of Australia did indeed rule that the AFP acted lawfully in providing information about the Bali Nine to the Indonesian National Police (INP). The issue of culpability, though, ought to go beyond what might be narrowly construed by the courts and also ask broader, doubtless more vexed, questions that encompass moral as well as legal imperatives. Did the AFP comply with specific national legislation and protocols relating to international police assistance? Yes, they did. Did they also act in a way that exposed Australian citizens to the death penalty? Yes, they most certainly did. 

Former Justice Minister Duncan Kerr was highly critical of the way the AFP ran the Bali Nine operation, noting that standard operating procedure at the time was understood to be "do not co-operate in capital punishment investigations". In particular, Kerr criticised the way the operation seemed to reflect the broader problem of Australia's equivocal approach to the death penalty. 

There's also no doubt the actions of the AFP went against the spirit of the Mutual Assistance Act but, perplexingly, protocols guiding informal police-to-police assistance differ from the Mutual Assistance Act and did, in fact, permit the AFP to assist in the investigation stages of offences that attract the death penalty.

Basically, they were sold out to a country that would execute people and the AFP is denying culpability on a bunch of legal technicality. They put people in harm's way. I'm sure they sleep well at night but it seems to me a form of self-preservation unbecoming of men who stand for the law.

The Same Old Shi-ite

Gina, If You Don't Like The Business, Get Out

Gina Rinehart is complaining mining projects cost too much in Australia.

"You know if Australia doesn't export, someone else will," Mrs Rinehart told Fairfax Media on the sidelines of the Global Iron Ore & Steel Forecast conference, in Perth, on Wednesday. 

Mrs Rinehart, who is estimated by BRW to have a $20 billion fortune, said it was high costs, rather than low iron ore prices that affected her Roy Hill project. 

"What affects the project is high costs," Mrs Rinehart said. "As I have said so many times it is really important government cost burdens are lowered. We have regulations; be it approval processes, be it permits, be it licences, be it the checks that have to go on after those compliances." 

She said governments needed to take regulatory costs seriously.
"They have to cut these government cost burdens because our costs are incredible," Mrs Rinehart said.

And there you have it. It costs money to do business in Australia and the governments at both State and Federal level want a piece of the action. This, from the woman who famously complained that African workers are willing to work for $2 a day, why couldn't Australian workers do the same? It was a stupid rhetorical question that completely ignored the absence of choice involved in people getting exploited at $2 a day. 

But of course, Australian workers want a lifestyle and this is not acceptable to Gina who on the same occasion opined the average Australian was bone lazy and undeserving of the opportunities on offer - completely oblivious to the $2-a-day condition she wanted to have here.

It strikes me that if all these things really are such dreadful things, she should get out. God knows she has enough money, she doesn't need to do more. If it's not going to make money, fit's not going to break even, then stop doing it. It's not like we're putting a gun to her head to do this stuff. 

Because Bog-Off Really Means Bog-Off

Tony Abbott's really in some kind of warped zone where logic disappears and strange chains of thoughts manifest as utterances and complaints. He's certainly not about winning friends at the international level. 

In the correspondence, Australia told the UN it "sincerely regrets" missing by almost a year the 180-day deadline to respond to the committee's July 2013 ruling, which called for the refugees to be released and compensated. 

But the government's eventual response, made in December last year but not public before now, gives no ground to the UN committee finding that Australia was "inflicting serious psychological harm" on the refugees in indefinite detention.
The government said prompt medical treatment is provided and "Australia is committed to minimising the factors that contribute to mental health deteriorations of individuals in immigration detention". 

The majority of the refugees with negative assessments are detained at a Broadmeadows detention centre in Melbourne's north, where a spate of suicide and self-harm attempts have taken place. 

Police were called to the centre as recently as December and laid mattresses on the ground after a Burmese man spent a night on the roof threatening to jump.
The government also disagreed with the committee's interpretation of "arbitrary" detention and "arrest" that Australia has accepted under the International Covenant on Civil and Political Rights. 

Professor Saul said the UN committee – an expert panel elected for four-year terms to act as independent legal experts – is the closest the world has to a human rights court.
In a written submission to the committee he described the government's response as "wholly unacceptable". 

"The key legal point is the government is completely rejecting the committee's authority to interpret and apply human rights standards in the convention, which Australia has agreed they should do," Professor Saul said. 

"It is really giving the two-fingered salute to the world."

Well, no surprises anywhere there. It's like he's going for broke in the Pan-Galactic Interstellar Dickhead Stakes. In his case, it really is a lifestyle choice.