Hollowed Out - Part 2

The Meaningful And Meaningless Deaths

Count me as one of the people having an existential crises of sorts in the wake of the executions in Indonesia. Here were lives that were building meaning after committing crimes and being sentenced to death by shooting squad. I can remember when they are originally arrested in 2006 and seeing them on the news report thinking, "well, there you go a bunch of idiots and they'll face the death squad". Nine years on I have to admit I was the one that had not entertained the emotional ramification of the sentence.

To be honest, Chan looked like a shifty little con man, while Sukumaran hardly registered as and entity. The rest of the Bali 9 looked like kids from the outer 'burbs, short on education, civics, and common sense, and long on daring. It was easy to look down on these people - especially if you were from anywhere middle-class. These kids looked like the off-spring of the hopeless welfare class, trying to win a break through crime. They were - and I'm ashamed to say it - easy to dismiss.

In the decade since, we saw Chan and Sukumaran became the focus of just why we believe capital punishment is wrong. They grew into men we could respect and in the process made us confront the reason why Australia did away with capital punishment, anew. These were not meaningless lives; they were as meaningful as any life you might witness in this world, if not more so than your average joe or joan. Being a nihilist of sorts, I'm pretty sensitive to things that are meaningful in a simple secular (i.e as in a non-metaphysical) way. Meaningful in a way that you could ask yourself "Would Jean-Paul Sartre think that was meaningful?" - and if the answer was yes, you'd be delighted. It doesn't come by a lot on a personal level and universal ones are even harder to find.

I've no doubt Jean-Paul Sartre would have found the pair of reformed drug smugglers, more than meaningful. Had Joko Widodo granted clemency, he too would have burnished his reputation and found himself in the constellation of meaning forming around these two men. Instead he chose to have them killed and all that remains is this utter sense that yes, capital punishment is still wrong and that there is something very wrong with the state institutions of Indonesia.

Which brings me to the other, equally disturbing experience as that of the meaningfulness of Chan and Sukumaran's lives being cut short. I'm reminded of Katrina Dawson who perished in the Lindt Cafe siege last December. She did just about everything ins life and was doing good work for society. You couldn't have asked for a more meaningful life than hers, and then one day a crazed idiot takes her hostage and they wind up dead. I haven't really processed that either, but it was enough to put me in a despairing funk for weeks. The nihilist inside of me was screaming "it's all fucking meaningless!!"
It took weeks to shut it up; and maybe it shut up because it eventually lost breath and lost the appetite to humiliate.

And it just might still be meaningless as a fart in the wind. Most people would insert a bit of metaphysics to get by, but I'm just not wired that way. I'm seriously struggling to see the point of existential meaning that could emerge from actions - as advocated by JP Sartre - that would transcend this morass of idiocy. Chan and Sukumaran came close, I'll give them that. Yet coming an inch within and missing by a mile offer no qualitative difference. And if we are seeking the qualia of experience, it is overwhelmingly tinged with the futility of human existence.

I'm telling you, it's seriously debilitating.  But then, you read news like this. There are all thee states out there that keep justifying they need to kill people. It's really too bizarre for words.

One Nation In Trauma, One Nation In Denial

Everybody's Feeling it

Perhaps nothing brings us together like tragedy. On the day of execution for Andrew Chan and Myuran Sukumaran, our nation is gripped by this strange hopeless grief for these people they hardly know but count as their country men. We are distraught that nothing will sway Joko Widodo, or the Indonesian justice system from the course of executing people. The Sydney Morning Herald's page  of headlines alone is like a live coverage of the execution that will come tonight. People are grieving.

Peter Hatcher wrote something rather harsh today. It was an angry article.
John Birmingham tried to put it into perspective.
Mark Kenny thinks Indonesia's credibility is somehow at stake.

It looks like President Joko Widodo is boxed in to a position where he cannot exercise clemency. His party wants the execution, his party leaders have practically ordered him to execute him; political reality in Indonesia seems to prohibit his clemency and he himself has a reason to push ahead. The protestations of other nations apart from Australia - from France, Switzerland, Philippines and Brazil have carried no weight with a government that is intent on proceeding with the executions.

Try as we might, it is hard not to see the shadow of somebody's malice. The executions will hurt us all, and this dark malice is taking joy in it.

Meanwhile, the Indonesian government has appointed two Indonesian spiritual counsellors to be with Sukumaran and Andrew Chan in their final hours. 

In what Chan's brother Michael described as "the last bit of dignity denied," the Attorney-General's office denied the men their choice of religious guide. 

This is despite reassuring the Australian embassy two days earlier that they would be permitted to choose who would witness their deaths.

Talk about cheap shots. The Indonesian government seems to know no act too low to be included in its procession of low acts. It's sort of pathetic we treat this neighbouring nation with the respect we afford them. Everything about their institutions reek of being a sham. All I can say is that I hope to never visit Indonesia - I've lost hope in the country; I would never feel safe or welcome or respected. Such contempt shown by Indonesia can only be returned with contempt. Really, Joke Widodo can go get fucked by an Orangutan, and it would be too good a thing to happen to him.

Avengers: Age of Ultron

Here We Go Again

Every time I watch one of these comic book movies I get overwhelmed with this sense of whether I should be watching something so ostentatious as a hundred million dollar movie dedicated to bringing comic book characters to life. I like action movies but there’s something very decadent about a civilisation that expends so much capital on its fantasies. Then again, you could argue the pyramids built by pharaohs were equally fanciful and decadent as the contemporary Hollywood dream factory. We’re drowning in this kind of product.

As usual here’s the spoiler alert just in case I let something out of the bag and you complain afterwards.

What’s Good About It

The best aspects of this film is the way it follows on from the previous film seamlessly. There is no jarring reorientation, no twist in the plot or revision of character that requires jettisoning information gained from the first film.  Captain America remains consistent with the Cappy we know from the Captain America movies as well as the first Avengers movie.  The same goes for Thor and Black Widow, while we learn a good deal more about Hawkeye.  Even Tony Stark with his increasing PTSD remains the same Tony Stark we love and hold dear.

The tone of the film is remarkably like the previous film, which owes a great deal to the guiding hand of Joss Whedon, who has clearly exercised a great deal of auteur-ish control over the last two films. I say “-ish” because he inherited the characters an authorship does not reside with him completely, but given the constraints, he has put together a remarkably consistent vision that reflects a deep reading of this comic book material.

It’s colourful, light in tone and very good-natured, fun entertainment. It’s the movie equivalent of getting a second puppy for Christmas.

What’s Bad About It

I must be getting cranky because the recent spate of movies where the good guys slay large quantities of bad guys is beginning to grate on me. I get it that it’s an action movie so it’s more exciting when there’s more action on screen; and this leads to lots of blows against lots of foes, but at some point you simply wonder why the bad guys can’t muster better tactics given their numbers. The good guys start looking like bullies, and I’m not sure that’s the desired effect.

It goes to the core of the comic book hero thing – I know it’s one kind of pleasure seeing bad guys being beaten, but if the match is not remotely even, then you’re sort of rooting for the bully. I’m pretty sure that’s not how it’s intended. Ultron doesn’t really have a chance, and no matter how the script couches it, it doesn’t really get all that tense. It’s bad drama when a bunch of really super-duper good guys gang up on a mal-formed AI robot. It’s actually not a fair fight, even if the AI looks for a little while like it’s a scary Frankemstein monster. 

It’s like the Beatles – where everybody has a favourite Beatle – everybody has a favourite Avenger; however unlike with the Beatles, everybody in the audience gets their need serviced sequentially. While all this is going on, the story essentially stops and drops tension.

And so we sit while we wait for the scene to go through the bit where Thor smashes a bunch of baddies and Hulk smashes a bunch of baddies and Captain America smashes a bunch of baddies and Iron Man does his gizmo thing and then dispatches some baddies with missiles, and Black Widow stabs a bunch of baddies and Hawkeye shoots some arrows and slays some baddies and… You want me to just get on with this right? 

That’s what I’m talking about.

What’s Interesting About It

The more interesting aspect of this instalment comes from how the villain comes into being – it does so because Scarlet Witch screws with Tony Stark’s mind and this makes him confront his deepest fear, and this manifests itself with the urgent need to create an ultimate AI to protect Earth but it all goes wrong and instead we get Ultron.

Ultron, unlike other villains who are metaphorical shadow projections, is in fact Tony Stark’s shadow set loose upon the world. All of which goes to show that Scarlet Witch’s ability to truly fuck with your mind might be a lot more powerful than being the God of Thunder or the Incredible Hulk. James Spader gives voice to Ultron and turns in his current-stock-in-trade ‘Black List’ creepy guy performance. In doing so he introduces a strange vulnerability to this figure that betrays the colossal threat he is meant to represent.

It’s even weirder that had not Stark unleashed the Frankenstein in Ultron, there would not be a plot to this film at all. Joss Whedon might have given in to his deeper impulse towards melodrama, which was the hallmark of the TV series ’Buffy the Vampire Slayer’, but in this film, it’s making the problem worse. This film is about the externalised character fault of Tony Stark, without actually getting to couch it with Tony Stark. Instead, everybody sort of glosses over the central character problem and busies themselves smashing robot drones in action sequences.  It’s not the best drama to follow a good setup.

Self-Loathing As The Enemy

Ultron being the manifestation of Tony Stark’s shadow is strangely filled with Self-loathing and a genocidally destructive impulse. It’s really hard to see Ultron as character, and more as a runaway subsidiary mental aspect of Tony Stark, wreaking havoc on a largely unsuspecting world – although after 3 iron man movies AND the first Avengers, why the world might not suspect Tony Stark of these destructive qualities is a quandary.

Basically, the plot can be boiled down to Tony Stark’s self-loathing has gone on a rampage and his friends have to stick it back in the genie bottle. It is in some ways very Joss Whedon in it s whimsy, but it’s a little too literal for my tastes.

Besides which Tony Stark is so smug, he could do with the self-loathing. It’s not for nothing Dr Banner thinks an AI defence machine a crappy idea when Tony Stark brings it up. That character understands self-loathing really well.

The Hulk & Black Widow Romance

Really? You gotta be kidding me. And the bit where Cappy offers romantic advice to Dr. Banner? I just don't’ think so, somehow.

All these fully-grown adult characters tussling with their own sexual lives with the clumsiness of teenagers, feels really odd. It’s probably a sign I’m getting too old for this genre. I want to stay emotionally retarded and enjoy the whole ride, but somehow life just isn’t letting me.

Captain America Tragedy In Motion

One of the most depressing things hanging over any of the characters is that Captain America is going to die. We know this from the comic books, and Marvel being bloody-minded as well as bloodthirsty, is that they will kill off Steve Rogers, and he’ll be replaced. More than anybody else on screen, you’re struck with a morbid sort of “what does this matter? He’s going to die anyway” feeling.

Worse still, Chris Evans keeps making noises about wanting out of the Marvel deal. This adds to the sense of inevitability that Steve Rogers is going to die, and everything he is doing now on screen is going to be somehow rendered trivial by that death. I don’t know how Marvel can undo that problem, because it’s going to go right into the next movie and the next movie and the next until Captain America finally dies. 

It’s depressing viewing.

Eastern Europe Gets A Bad Rap

Hollywood was possibly traumatised by the fall of the Berlin Wall and suddenly it had to deal with writing about the post-communist world in Eastern Europe. Maybe the trauma comes form the Bosnian conflict followed by the Kosovo conflict; neither of which endeared us to the Serbs – who after all can lay claim to starting World War I. It might have been in some other movie where somebody exclaims, “you come from these nowhere places and press your claims!”

And so, in setting part of the action in fictional Eastern European country, they’ve tried not to offend anybody by insulting the whole region. It’s as if every cliché about the random stereotyping of East Europeans is compressed into the generic East European accents of Quicksilver and Scarlet Witch. In an attempt to be diverse, the film sort of blackfaces East Europe into a bunch of tropes, and the result is a bit like Borat’s Kazakhstan village where he proudly hails some random woman, “this is my sister, number 4 prostitute in whole village!”.

Because Dracula comes from East Europe and Frankenstein from central Europe, and Black Widow comes from Russia, we get the interest from Joss Whedon’s part. But because New York and South Africa and Seoul get a modicum of realism as locales, the invention of a totally fictional country where all the East European stereotypes are true, stands out as rather yucky comic book mimesis.  It probably works better in comic books. On the screen, it comes across as terrible. And I’m not particularly sympathetic to Eastern European sensitivities as such.

The Retirements And New Guys

Tony Stark has been heavily PTSD since Iron Man 2. Iron Man 3 showed him as pretty close to the edge while Avengers lumped him with some heavy fresh trauma. I’m not surprised the character is retiring from the Avengers team. What was more surprising is Clint Barton whose Hawkeye has a complete private life with wife and 2.5 kids (wife is pregnant). 

Given the everyman sort of status Hawkeye has in the group, it becomes abundantly clear that he too just can’t continue doing the hairy action sequences when he has a family where he must return. All of which suggests all this action stuff is something you have to grow out of. Thor's gone without really explaining a lot, so I guess that's 4 who won't be there from the first bunch.

Stepping into their place are Falcon and War Machine, while also adding the Scarlet Witch and the Vision. There’s talk of bringing in Spiderman to boot. It’s a crowded future, which means the problem of having to cater to all the characters' action needs is going to make things even more long-winded than this film. 

On a side note, I think it’s great that Marvel has got back the Spiderman character rights they had to sell way back when. It’s a real shame that in the process Andrew Garfield is getting shunted out of the picture. At least he wanted to be ‘in’. The rumour is that it's going to be a young Spiderman next.
I guess I'll keep watching these because it's sort of an event each time they come out. It's like they've pushed the marketing model out to the limits and they've found a new horizon of cashflow. We're all stuck in the vortex. How can we not watch the next installation?

Quick Shots - 25/Apr/2015

'Avengers: Age of Ultron'

Went to the movies and watched the new release. Haven't one that in a while. God these tickets are expensive these days. (Thanks real estate bubble, you're killing one of my few joys).

Anyway... I've seen some complain-y reviews of the film but it's not that bad. cCan't say it's good that grown ups are so excited over comic book content, but it is the way of the post-modern, the way of the 21st century. I shouldn't get embarrassed, but by the fifth smashed robot, I started to feel this bleakness inside.

It's a fun movie if you want to channel your inner seven year old.
It's not great if you're expecting Joss Whedon to channel... oh I don't know Stanley Kubrick. No, it's not that kind of film. But you know that going in when you buy the tickets. The friggin' expensive tickets!

ANZAC Day

I used to stay home on ANZAC Day. It's too much. It's one of the integral pillars to the identity politics of this nation but you know what I think about identity politics. It's a public holiday built on a grievance of sorts. It's not as edifying as politicians make it out to be - and I mean that with the utmost respect to the fallen. It's simply not going to help this country unless we can go from 'Lest We Forget' to something bit more positive. I know it doesn't make me popular writing that, but as the years wear on, and on the very Centenary of the sad landing, it seems ever more obvious that the flag waving is going to hurt this society more than it helps.

Bali Nine Leader Executions

One of the weirder things about human civilisations is that we commit to the law being absolute. Without it, we reason, civilisation itself won't work. Then we complain when it functions in a manner that hurts our feelings. The Indonesians are about to execute Andrew Chan and Myuran Sukumaran. The story can be simplified down to they did the crime, now they're losing their lives because it's the law in Indonesia. All the pleading we have done as a nation to spare their lives have been laughed off as signs of our moral weakness in not being able to take the justness of law in Indonesia.

And so we can expect the final orders to be issued soon. I'm extremely uncomfortable about capital punishment but it is a long ad hard battle to turn such laws over. It will best in Indonesia, and it was so, once upon a time in Australia. Nevertheless, the words that remain with me are those of Socrates who took the hemlock saying that even bad laws are laws and must be obeyed. My heart goes out to the family and friends of the Andrew Chan and Myuran Sukumaran. It is right down to the end awful, awful business.

The TPP Really Sucks

More on the TPP. It's worth reading at least the first half of that one.

The conflict between intellectual property protection and cheap medicine has lasted for decades. Should the Trans-Pacific Partnership be passed, it's an issue that will suddenly come into sharp focus for Australians. 

The TPP is a trade treaty involving 12 Pacific Rim countries, including Australia and the United States. 

What the pharmaceutical industry is proposing as part of the TPP is 12 years of monopoly after the release of a new treatment. During this time, companies will be able to charge whatever the market will bear for the new drug. 

That period is seven years longer than the current data protection period in Australia, after which competitors can develop and sell cheap generic alternatives. And for someone suffering a serious illness who needs affordable medicine, that seven years literally could be a life-and-death difference. 

Yes, many life-saving drugs are subsidised by the Australian government's Pharmaceutical Benefits Scheme and the PBS could choose to subsidise the costs of these expensive new drugs. Of course, that merely shifts the problem around. Each year of extra monopoly protection could cost the PBS hundreds of millions of dollars, in a very tough budgetary environment.   

Not only it bad for consumers, it's even bad for the government - and by extension bad for the rest of the citizens. It's a terrible treaty and we simply shouldn't be signing up for any of it.

GST Problem? We Don't Think So

Colin Barnett Should STFU

Pleiades set me a heads up about something in the AFR about Colin Barnett and theLNPmanagement of Western Australia. but before i get to that I need to set the stage a little.

At the recent COAG meeting, the premiers of states not called 'Western' were hostile to Colin Barnett's suggestion the GST distribution rules should be rewritten. It turns out the abrupt end to the mining boom has put a huge dent in the WA government's revenues. Worse still, the GST take for WA is going towrope from 38cents for every GST dollar collected, to less than 30cents. Which sounds rough, but here's the thing - WA was the chief beneficiary of an once-in-a-century commodity boom as it sat on top of one the great mining booms. And the other premiers lined up to let him know whether thought:

Premiers arriving in Canberra on Friday morning called for WA to accept the decision of the Commonwealth Grants Commission, which allocates GST revenue. 

"The Grants Commission made their ruling, not everybody's happy with that, but the notion that you would change the rules, that you'd get rid of of the umpire because you didn't like the decision and politicians are going to sit around a table and carve up the GST state by state, territory by territory, that's not going to happen," Mr Andrews said. 

NSW Premier Mike Baird said there should not be any "knee jerk" changes to the GST and said the most pressing issue was future health and education funding shortfalls.

"You shouldn't change the whole system for those single issues and certainly they have got the capacity to deal with it," Mr Baird said. 

"The biggest issue here is the health funding, the health and education funding. That quite frankly makes the GST debate that we are talking about right now look like a pimple to the size of a pumpkin." 

Queensland Premier Annastacia Palaszczuk said Mr Barnett's Black Saturday comments were "offensive" and that he should move on. 

"I just say to Colin Barnett, accept the independent umpire," she said.
"This is what the decision has been, no-one has gone against it for 30 years and there is absolutely no reason whatsoever to go against it. There's no way I'm going to cop Queensland losing $556 million."

That's pretty black and white. But here's the bit Pleiades sent from the AFR that's pretty damning:

So, how could WA manage to make it through a once in a century commodity price spike and still not manage to deliver a surplus? Easy. They spent a fortune subsidising the mining industry. 

Just last year the WA Treasury wrote to the commonwealth to explain how expensive it was to host the mining industry. Among other gems they wrote that "the cost of Western Australia's assistance to the North West Shelf project – e.g. payment of subsidies to the state's power utility to help cover the losses it initially incurred under crucial 'take or pay' gas contracts – is estimated to be around $8 billion." 

The WA Treasury goes on to criticise the Commonwealth Grants Commission for dividing up the GST revenues between states on the basis that "it fails to equalise many state expenditures that support resource development, particularly provision of infrastructure". They openly describe government decisions to pay for much of the mining industry's infrastructure as "a significant subsidy cost". 

The WA government has spent a fortune subsidising some of the world's biggest companies in the middle of a mining boom. Their own state budget papers show the cost to be around $6.2 billion over the past six years and their own Treasury calls such payments a subsidy. 

WA's tantrum at COAG, combined with Tony Abbott's tenuous grip on power, has reportedly delivered a $600 million windfall to Western Australia. Just imagine if Jay Wetherill or Daniel Andrews spent a few billion dollars subsidising the car industry. Would their industry policy decisions be cross-subsidised by the other states, or by the Commonwealth?

Ouch. Kind of shows how badly 'managed' (and I use the term very loosely) the whole mining boom was in WA. Basically, Colin Barnett took the mining revenues and gave it right back to the mining industry even though there was no reason to subsidise a booming industry. Instead of subsidising something that needed support during a time of a high dollar an over-dominant mining industry, Colin Barnett and his WA government went and doubled-down on the mining industry and effectively doubled-down on the Dutch Disease. Now that the moment has arrived, he's complaining his state has no income stream other than mining. You sort of wonder how he lives with himself.

The other state premiers are no saints either - they're simply talking along their lines of interests as is their prerogative; which is also true of Colin Barnett. But if you're an outsider of the process looking in, it's pretty obvious that Colin Barnett contributed greatly to his own states' predicament.

View From The Couch - 19/Apr/2015

The Grown Ups Are Gone

I don't really know what politics became so daft as it has this decade. When I was growing up, politics seemed a distant rarefied thing that happened elsewhere from one's sphere of existence; and if you are a pre-teen or a teenager, you are mostly right.  It is with gaining the right to vote that suddenly it becomes our intellectual burden to consider things we would rather not. After all, who in their right mind wants to think about the GST when they can think about - oh I don't know - whether England will recall KP to the test side. One has very little control over either those things, but at least with cricket you get some entertainment value. Nobody is entertained by the GST or the very topic of tax policy, let alone taxation itself.

Yet, it used to be that our political leaders were genuine leaders. Whether that was Gough and Malcolm or Bob Hawke with Paul Keating, or even John Hewson for that matter, politicians could be seen to be men trying to do better by the common man and trying to improve the country. They were so clearly adults, and we as citizens would be guided by their wise counsel. Somewhere along the way we got a different measure of politicians. Perhaps it was the internet that made the world go much faster than the dignity of politicians could cope. The first decade of this century really eroded the gravitas and dignity of politicians.

And so we now live in a time when politicians are much less adult-like. It doesn't offer much confidence. Worse still, they are making a hash of it and nobody seems to be able to bring them to account properly. I know I sound whinge-y when I write this, but the political class has long ago decided to cynically exploit the trust of the electorate; the downside of this decision is that it leads to truly stupid policy positions - Like Wasteconnex.

The current Federal government finds itself in a time of dwindling resource income and so must make cuts and consider raising taxes. Instead of coming out and saying "we need raise taxes", this government is hoping to let everybody bracket creep into higher tax brackets. This is partly because they have no political courage (and worse still, have all the reasons in the world not to have political courage) it's in their political credo that the only good thing to do with taxes is cut them.

Things get little weird when the people who are espousing "an end to entitlements" doggedly refuse to surrender entitlements for the rich like negative gearing and cuts to Capital Gains on residential properties or for that matter monies going to private schools. What they should be saying is "an end to poor people's entitlements" and be more honest about it, but of course that doesn't win you votes, so it's the rather confusing "an end to entitlements" as if it is some kind of universal position. They strike this posture because the universal makes them look more statesman-like but also the confusion sewn by this posturing is exactly the space into which they insert their nasty little class-politics, thereby doing the exact opposite implied by the universal posture - at the same time accusing us of misunderstanding their universal posture. As you can see, it's a complicated shuffle step of lying and dissembling - and we in the electorate have to wear this enforced double-think gobbledygook as if it is actually intelligent.

Yet this is the kind political discourse we're left with, and it just seems to get worse each week. By rights, the conservatives should be having a field day in setting the agenda but the way it is playing out suggests that none of them have coherent train of thought as to what to do about the future. Because they cannot fathom the future they sub-contract out the thinking to advisory bodies that come back with things like the Inter-Generation Report that prognosticates a certain kind of economic future but without climate change incorporated into its calculations. These are clearly not the most mature or smartest people in the room; they're the people who have convinced themselves that they are the smartest and most mature people without any supporting evidence. And again, we as the electorate have to bear with this kind of haphazard pseudo-think as the basis for policy conceited on the wishful notion that somehow global warming isn't happening.

And so as we approach the Budget in a few weeks, I can't help but wonder where all the adults have gone. It's been 20 months since the Coalition won office and it can't be coincide that both Gough Whitlam and Malcolm Fraser shuffled off their mortal coil in this time frame. As Paul Keating once warned us, "God help us all, God help us all."

More On That Point About The Unemployed

I'm not unemployed, but it's not like I don't live with the fear that one day I might have to join the unemployed throng. At a certain age, it's just going to be dismal an experience as you can have. It's not like you can inductively reason your way to never falling out of the employment loop.

It's an odd phenomenon but nobody gets less respect than the able bodied unemployed. It's just the way it goes. Being a dole bludger isn't really a lifestyle choice any more than remote communities of Indigenous people living where they do. Centrelink hound people harder than the old DSS and CES, and there are plenty of conditions whereby the government cuts payments to people and then they're not even classified as unemployed. They're something else, but they no longer show up as unemployed in the ABS stats. The Centrelink people are given the incentive to kick as many people off, because this suits the government agenda of "lowering unemployment". That was a Howard government thing.

In the last years of the Howard government, unemployment figures fell. They fell because many people got hounded off unemployment benefits and then glommed on to disability pensions. When you have no work prospects, any excuse to get government money helps, and so Australia found itself with a growing epidemic of disable-bodied people that weren't there a decade before. In the last year of the Howard government, they decided the thing to do was to make the disabled work a few hours a week, depending on the (un)severity of their disability.

Should you find yourself on the wrong side of say, 50, or end up as the long term unemployed who got placed on the dole queue thanks to a shift in the industry they were in, then the stigmatism attached to being unemployed can be unwarranted aggravation. The strange thing is that more and more industries are closing down without necessarily giving rise to new industries to absorb them. Specifically, in the case South Australia where the car manufacturing business is going to stop operating, there are going to be a lot of people with non-transferrable skills. What industries are they supposed to head towards? It's a mystery because not even the Federal Government that precipitated the big end to car manufacturing in Australia knows where the next growth industry is going to be, or if it can absorb these workers.

I mention all this because where the next growth is going to emerge, has been a bit of a mystery for a good decade. The Dutch Disease as the downturn was known in the wake of the Dutch petrochemical boom, has settled down on to Australia leaving a property bubble and record private debt. The Gillard government decidedly took the tack that it was going to be housing, based on the fact that construction constituted 25% of our GDP, and that there is a lot of union membership in the sector. The folly of trusting in such a recovery in the face of the property bubble and high private sector debt seemed worse than foolhardy, more like bind to reality.

The Abbott Government that followed has been worse as it has set out to dismantle the renewable energy sector, pushed out the automotive manufacturing; hobbled the NBN and cut science spending (bye-bye High Tech) and generally laid waste to the non-mining sector while repealing the ming tax. All of this goes to show the considerable confusion in the political leadership operating down in Canberra - but you expect that with the sort of rampant crony-capitalism that this government has adopted as its main agenda. What is good for their mates is all that counts, may the rest be buggered by the next GFC.

Realistically speaking, there is going to have to be a pretty big effort in re-training people and placing them into growth industries. The government is trying to dis-incentivise people getting re-trained by slapping a price tag on the education and refusing to foot the bill itself. Worse still, it seems to have no vision of from where the new growth is going to come. If indeed re-training is what is going to be needed for the ageing long-term unemployed, the government is doing a terrible job of letting people know where the new employment is going to be.
But then lack of vision is nothing new with this government.

IMF Says Cut Rates To RBA

Doesn't Low Interest Mean It's Not Interesting?

This is news of sorts. The IMF wants the RBA to cut rates. If you ever wanted an indication that the global trend towards ZIRP in the first world, this is pretty much it.

Reserve Bank governor Glenn Stevens said last month that more rate cuts "may be appropriate" to encourage growth in demand and inflation, despite also previously warning that his power to boost economic growth by lowering interest rates is diminishing with every cut. 

But now the IMF has issued a clear warning to Australia, saying the economy has much spare capacity and the RBA may have to keep cutting rates to prevent "inflation expectations" from dropping permanently. 

Its latest World Economic Outlook also predicts unemployment will rise to 6.4 per cent this year, and remain at 6.2 per cent in 2016. Australian unemployment is currently 6.3 per cent. 

"In economies in which output gaps are currently negative [Australia, Japan, Korean, Thailand], policymakers may need to act to prevent a persistent decline in inflation expectations," the IMF has warned. 

Economists say the IMF's point about "inflation expectations" is serious because once consumers and employers believe inflation will be much lower in the future they will start behaving accordingly, with consequences for wages growth and spending.

So the IMF wants the Australian economy to continue to expect inflation as it has done for the last 40years. I don't think that's hard given the persistent gap between CPI and costive living as measured by the ABS. If the cost of living stays high, people will continue to have "inflation expectation", despite the artificially lowered CPI governments and the RBA use to claim inflation has dropped.

Be that as it may, the IMF is essentially saying that Australia is currently lining up with economies like Japan, South Korea and Thailand where there is deflationary pressures. You sort of wonder at the faith of people who keep pushing Sydney property prices ever upward. Gravity is pulling pretty hard if we're really lining up with Japan and South Korea.

It's also interesting that the IMF seems to think we're at the doorstep of a deflationary spiral without having had the property bubble pop. In Japan, the deflationary cycle started as a result of the property bubble bursting. The IMF is essentially saying the property bubble is not relevant, Australia is on the brink of a deflationary spiral based on the raw numbers. I have to confess there's a bit of cognitive dissonance there. Something's not computing.

Of course, should the property bubble pop, then we can contain there being a massive deflationary spiral simply because the heights the bubble has risen are so damn high. We can be guaranteed of ZIRP when the bubble pops, and then maybe even Australia's very own QE program after bail out of banks - but of course that would be the mark of a very advanced, mature, and uninteresting economy.

History's Big Losers

"Legitimate Grievances"? Ha. Get In Line.

Any time I see some idiot wrapping themselves in a flag or burning one on the streets, I'm overcome with the sort of grief at the number of stupid people on the planet for whom a bit of graphic design means so much in their identity politics. Really, a bit of flag both with some patterns and colours is not some kind of magic talisman that empowers you with greater moral authority or privileged position in the world. Nor is burning the other guy's flag going to do anything but symbolic damage - yet the important thing about symbolic damage is that it makes you feel good and the our guy feel offended, and that's the idiotic be-all and end-all.

Let me be blunt. If you identify with any group, you have to accept that identity is a construct and has no real bearing in reality; and that your commitment to such abstractions is fundamentally stupid as abstractions go. If you're a sporting fan and you're a die hard fan of a team, that's one thing. Everybody accepts sports is not an issue to kill and die over. Nationalism and religion on the other hand have no greater actuality than identifying with a sports team but asks you to commit murder on its behalf. It feels stupid having to point out the distinction but yes, it's true. Your patriotism or religious fervour is no better than my fandom of the New York Yankees as abstractions go. It may be much worse if it asks you to go do violent shit on their imaginary behest. I might hate the Red Sox, but I don't hate them enough to to kill or hurt them or their fans. However, if you wave enough flags or bibles or Korans, you're liable to eventually kill somebody at their behest - and that's a problem.

This is one of the reasons why identity politics is at its heart, Stupid with a capital 'S'.

Which brings me to this article about how Muslims in Australia feel.

In a scathing assessment of Australia's efforts to create a harmonious society, he said constant persecution, hypocritical Australian laws, vitriolic media and repeated invasions in the Middle East were pushing young Muslims "to the margins of society" and driving them to radicalisation.

"Denying the root causes is like applying a Band-Aid to an open wound before cleaning and disinfecting it," he told an anti-radicalisation forum at the University of Western Sydney on Wednesday night. 

Mr Trad, a controversial figure who described himself as a "roving imam", said he could understand why young Australians were driven to join Islamic State but he tried to convince them it was not the solution. 

His comments were reflected in a recent study that found one in five Australian Muslims think terrorists have legitimate grievances. 

The nation-wide survey of 800 Muslims, conducted last year by the University of Queensland, found that counter-terrorism policy in Australia was breeding anger, backlash, distrust and a siege mentality. 

Mr Trad listed the Iraq invasions, the war in Afghanistan and the torture of Muslim prisoners at Guantanamo Bay as grievances for young Muslims. 

He cited the case of Northern Territory unionist Matthew Gardiner, who recently returned to the Northern Territory after reportedly fighting with the Kurdish forces against IS , as an example of hypocrisy in Australia.

Yes, good grief and grievances. How do you account for this stupidity? Identity politics. It's one of those illusory abstractions that allow Australian muslim youths to identify with Iraq or Afghanistan or those tortured in Guantanamo Bay. In this case the illusory abstraction emanates from one of the great religions on the planet and so they feel solidarity with the Iraqis and Afghans and those tortured in Guantanamo Bay (not that you see this crowd rally around the detestable David Hicks, but hey, what's a little chauvinism on their part?).

They live in Australia and benefit from living in Australia materially, but no, identity politics puts them in the corner where the Iraqis and Afghanis and G'itmo Detainees are their spiritual brethren. I'm sorry, but it should make you bloody wonder in cognitive dissonance rather than feel like you have "legitimate grievances".

*Ugh*.

That's the essential problem with identity politics: it always seems to gravitate around the dirty sinkhole of bad ideas that is argued from grievances. That somehow you are being hard done by because somebody with the same faith is being actually physically hard done by in Iraq, Afghanistan or Guantanamo Bay, and you - in the comforts of living in Australia - make the conscious choice that you will align yourself with that idea against the people and things around you. I understand alienation - I've felt it all my bloody life. Living in Australia and not being 'anglo' is truly a Gorillas In The Mist experience. But if you live amongst the metaphorical gorillas, you should show understanding and empathy for the gorillas. Not, go around siding with spiritual brethren over an idea as feeble and idiotic as religion. Because that way lies the truly stupid phenomenon to grace this planet ISIL and you dying in a suicide bombing attack for them.

I write this with a fairly clear head about identity politics and the pitfalls of stupidity in which it can fall. It won't make me popular with the religious or flag-wearing or flag-burning, but it's still manifestly true all the same. From where I see it, those people are far better off taking a real appraisal of their lives and stopped identifying with stupid abstractions. It would do them a lot of good.
I'm sorry to shit upon your identity politics, but if your identity politics is about identifying with Iraqis and Afghanis and Git'mo Detainees, it's a shitty, shitty thing that is stunting your intellectual growth. There's just no two ways about it. You can grow up just a little bit by disowning that stuff.

News That's Fit To Punt - 07/Apr/2015

RBA Doesn't Cut Interest Rates

It's amazing how a non-news makes the news. The RBA did not cut official interest rates and so the share market went into a bit of a spin. You can read the statement they issued but a non-change should mean no news, but here we are.

Fear of fuelling the Sydney and Melbourne real estate markets appears to have trumped hope for job-seekers and borrowers across the nation with the Reserve Bank leaving the official cash rate on hold in April rather than opting for cheaper credit to spark a new round of hiring. 

But a rate cut has now become almost certain in May - just before the federal budget - after the RBA listed the pre-conditions and backed specific efforts through tougher regulation designed to "contain" house price growth being inflated by prospective landlords. 

"Growth in lending to investors in housing assets is stronger than to owner-occupiers," RBA governor Glenn Steven said in his monthly statement. 

"Dwelling prices continue to rise strongly in Sydney, though trends have been more varied in a number of other cities. The bank is working with other regulators to assess and contain risks that may arise from the housing market."

The unemployed go a mention in there. It's this traditional thing where if unemployment is too high, they cut rates in the opes that it promotes businesses to hiring people. You get the feeling that they're not hiring at 2.25%, would they necessarily hire more if the rates gets down to 2.00%? And keep in mind, at such historic lows, what kind of fragile business would it be to need 2.00% interest rates to decide, "hey, we'll hire more peeps!"?

On the other hand, the correlation between lowering interest rates and more investors entering the market is more direct; I mean, there is no cushion of business sentiment, it's straight up maths. So the equally blunt question is, what kind of investor gets into property on the basis that interest rates are at 2.00% but it's too hard at 2.25%? Equally weird as the business that can only hire at when interest rates are at 2.00% - but not necessarily symmetrical. I would dare say the investor balking at the border of 2.25% is far dogdier than the employer balking at the borderline of 2.00% and 2.25%.   

Either way, the unemployed person is like the garni du jour next to the sandwich. They can't get a job because god only knows why and until they do, they can't get into property and even then it's doubtful that they can without shouldering greater risk or higher interest rates. It simply doesn't help them in the near-, mid-, or long-term that interest rates are cut, and it can hurt them when they go up. That's a tough spot. I was thinking as I was reading the article that the CPI under-reporting has doubly hurt the unemployed because they get less dollar value from the dole than they used to, and they're further away from ever owning any assets so they're locked into being poor in the medium term if not right out to the end of their lives. 

Well done RBA! 

Ideology Gives Rise To The Thought Police

I was doing the St. Johns ambulance First Aid course last week. Every time it came to dealing with the upper torso and the inner thigh, the male instructor would lay down the fact that it would be better to find a female person to do it than doing it as a male. I get it. It might be misconstrued. So, the First Aid instructor might have had a few brushes with the gender politic thing and came off second  best, or maybe he witnessed the results of being misconstrue, but it was made absolutely clear there's a gender divide. Personally, I'd do exactly as instructed. I sure as hell wouldn't do anything that could be misconstrued and that would mean I would go look for a woman to deal with a female injured person. Vital minutes could be lost, but - fuck that - I'd rather not be misconstrued either. 

The point is, you still have to think of gender in an emergency. Why the hell would sexism ever disappear? This led me to think that even when the final bastion of sexism is destroyed, it would just get reinvented as this kind double-think. On that note, I present to you this stupid article:

Labor's health spokeswoman Catherine King attacked Senator Leyonhjelm for another of his posts in which she said he trivialised the serious issue that is breast cancer.

Under a Catallaxy Files article titled "Feel a boob day", "DavidLeyonhjelm" wrote "It's not enough to perve. Detecting breast cancer requires palpation." 

"One of the best ways to do this is to bet a woman 20 cents you can make her tits wobble without touching them. After a minute or so of close up staring at them, you grab them with both hands and make them wobble. Of course you then give her the 20 cents. It's a small price to pay for reducing breast cancer." 

Senator Leyonhjelm admitted making the second comment, saying this was a "longstanding joke" between him and his wife as it had actually happened to her in real life and urged others to see the humour. 

"At the time a guy actually did it to her, she giggled but I think I found it more amusing than she did," he said.
"Have you ever heard of FTITCTAJ? F--- Them If They Can't Take A Joke," he said. But Ms King said it was no laughing matter.

"Breast cancer is a tragic disease which takes a terrible toll on Australian women," said Ms King. 

"Every day in Australia, on average, 40 women are diagnosed with breast cancer, and 8 women will die of this disease. 

"I cannot comprehend how anyone could make light of this in such a degrading, and juvenile fashion.

Argh. It gives me a headache that they're arguing this in the Senate. If there's one thing worse than the doublethink necessitated by the political correctness, it's the unreconstructed sexism of older men who make no attempt to re-examne their position. 

And wowsers. 

Go On Joe, Bite The Hand That Feeds You

Down in Eden-Monaro, a famously swinging electorate, the voters have been polled and they say they are angry with tax avoidance by big corporations and are anxious about penalty rates. 

Polling obtained by Fairfax Media found more than nine out of 10 people in the NSW bellwether federal seat of Eden Monaro believe the government is not doing enough to ensure large companies pay their fair share of tax. 

The issue will take centre stage this week with the first public hearings of the Senate inquiry into tax avoidance. Representatives of Google, Apple, Microsoft, News Corp and miner Glencore are due to appear in front of the committee.

Almost 75 per cent of 707 people polled in Eden Monaro said big companies paid too little tax, while just 3 per cent said they paid too much. In launching the tax white paper process, Treasurer Joe Hockey flagged the need for a corporate tax cut to make the Australian business environment more internationally competitive.

You wonder if this message is getting to WTE Joe. After all, given how much the international miners  donated to the Coalition, you'll never be sure that the Coalition isn't a puppet for these interests.  WTE Joe is allegedly trying to get more tax out of these companies through a 'Google Tax' but it wouldn't mean much unless it was getting everybody - and by that we include Rupert Murdoch, whose Australian operations shipped 4.5billion out of Australia before tax. Will WTE have the fortitude to tax the biggest media benefactor for the Coalition. Or will he do what he did last year and go after the small fry harder while letting the big fish swim away with billions? Because being even handed with this would mean going after the very hand that feeds him and his party. 

'House of Cards' Season 3 - Netflix

What's The Point of Getting Netflix?

Rhetorical. It's to binge watch the amazing 'House of Cards'. Netflix has finally arrived in Australia and you can get a hold of it through Fetch TV, which is just swell because it's like having 2 suppliers on the one box. I guess that's what it is.

So yay Netflix and yay Fetch TV. Spoiler alert! I might spill something.

What's Good About It

Now in its third season, Frank Underwood is the President, and we get to see just what kind of policy maven he actually is. The cut and thrust being a caretaker President makes for good viewing. As with the previous seasons the acting is superb an the directing remains stylistically consistent from episode to episode. The tension mounts ever so slowly, and there's quite a lot of intrigue unfolding before our eyes which makes for much brain-teasing fun.

Francis now has a nemesis in the Russian President Viktor Petrov, a character that is a flimsily-loosely based on Vladimir Putin but is much taller. He also has a domestic rival in Heather Dunbar who is running against him in the 2016 election, and she too presents well. Frank is doing this without Doug who is in a long B-plot of his own through the season. So Frank is doing a lot of stuff, even as his own trusty marriage to Claire begins to fray.

The dramatic tension is always high and the intrigues keep you wondering so they've stuck to the method of the earlier seasons, and it works very well.

What's Bad About It

There are limits to what Frank can do given his method in his rise to power. This gives rise to a lot of wheeling and dealing scenes that are subtle and expository, but it's too much like 'The West Wing' without a plan. Frank wings it a lot, and every time he does, you sort of wince. You hope Barack Obama doesn't just wing it like this. You know George W Bush must have winged it much like this - and his record speaks for itself.

The policies Frank pursues are also bad. They're not picaresque bad, they're just flat out disagreeably awful. I'll go into it a bit later but basically it's not much fun rooting for a bad guy to win if his plan is something that you think is not exactly great. After all it would be hard to root for a film about say, the Nazis in power because you'd inevitably have to discuss the Final Solution and that's just the worst of a government full of bad policies.

It's one thing to root for the bad guy to get to the top through dastardly tricks he winningly shares with the audience. It's another when he then goes off and becomes a President that's worse than Nixon. It was hard rooting for or sympathising with Nixon in Oliver Stone's 'Nixon' film. It's hard to feel much for Frank when he bangs on with crappy policy.

What's Interesting About It

The show seems to be straining at the seams. It wants to tell us so much more and go into politics itself much more but it can't without looking like other shows and films. Frank Underwood then does something drastic and crazy but in most part it comes across as hokey. What we seem to be finding out about Frank in Season 3 is that for all his ambition and gusto and conniving and scheming, the Presidency itself is his endpoint of the Peter Principle. He is good enough to rise to the office but having achieved it, he is not up to it.

In this we can sort of see echoes of 'Richard III' by Shakespeare where they got the device of the bad guy main character addressing the audience. Richard III himself came to power under cloudy circumstances and didn't really reign for long, and was brought down by a rebellion; from which you can draw a certain conclusion that he couldn't have been terribly good at the King-ing business. Frank Underwood does whole lot less of it in this season because... well, he looks awfully busy; too busy even to talk to us.

The end of Season 3 leaves you with a cliff hanger of sorts but having sat through this season, I thought the road ahead isn't terribly long for this show. The UK Version had 3 seasons and finished with Francis Urquhart getting assassinated and turned into some kind of martyr for politics. In the case of Urquhart, the character starts as a conniving conservative and ends up as a kind of full blown fascist so you don't mourn for him so much as feel relieved the whole damn show is over. Frank Underwood starts off as a Southern Democrat so you wonder just how far to the right he can go, and what exactly that means.

The Third Pole

As dumb and stifling as the two party system is and the kind of politics it engenders, from time to time it throws up people who want to start a third pole. Some of these are well-meaning like the Australian Democrats of old or Malcolm Fraser who was trying to put something together in his dying days. But other instances they seem to be Trojan Horses for the Far Right and lunar Right. Like Ross Perot or the Golden Dawn in Greece. The point is, most instances of the third Pole seem to be far right insurrections, posing as centrists sitting between the two parties.

Frank's positioning of his policies are deeply, deeply suspect. He wants to get rid of welfare, raid the coffers for emergency relief and just employ people or pay employers to employ people. it's fanciful as the economics is crackpot. Frank wants 100% employment and there is no discussion of what that would mean. He is also against minimum wages because that would limit the number of people getting jobs. It's like the corporatist heaven where people can be fired at will, and be totally fungible. Naturally people resist the inanity of this vision, but somehow Frank Underwood is totally convinced this is the best policy direction.

The subsequent gyrations involved in craving for this crappy third-pole-fascist policy takes up a lot of screen time and he keeps telling us this is the legacy wants to leave behind. Dismantling the welfare state and replacing it with guaranteed 100% employment: The ultimate small-government fetishists' dream. When you consider such policies essentially drive labour out of its own negotiating table and sends them to the below-poverty-line wages of Walmart, you wonder how this could even be considered by the show runners.

In The Absence Of Marxism

Over the years - thanks to Facebook and such - I've come to realise just how distant Marxist theory is from American political thinking. What's even more interesting is how the US Democrats try to pose as the party of the broader Left without any actual theoretical framework except an old kind of small 'l' liberalism. As such, the US Democrats have rarely taken a policy framework that could alleviate the issues of the working poor which has existed since Reagan came to power.

Watching 'House of Cards' unfold in the US has been far more enlightening as to just how little framing goes into the thinking over policy. It's free, but it's un-moored so it is oblivious of its drift to the right. If nothing else, Marxist theory would give some of these policy makers a kind of sextant to know just how far off the middle they are drifting. But the ingrained fear of a Godless communism has made any consideration of Karl Marx, all but nought. In its place is an absurd kind of identity politics that allegedly starts with the individual, with a bloated sense self-importance typical of identity politics. If this is black rappers from Compton or the LGBTQ population in San Francisco, that's one thing. But white southerners bearing the Confederate flag trying to assert identity politics only serves to show how stupid identity politics is when pursued to the reductio ad absurdum.

Frank Underwood's position is that if everybody had jobs, they would have the freedom to exercise their identity politics to the full. In other words, he himself might not be a racist, but he supports the ideological framework that gives rise to racism in the absence of Marxist analysis. And he's supposed to be from the US Democrats. Honestly, that is so stupid, but he seems totally unaware of where that would all go. The problem right there is that when I watch the show, I'm smarter than the allegedly smart main character; and that makes it pretty boring.  The rest of it becomes a sort of choreographed sequence of political tactics, but his centrepiece policy really is fucked.

He really is like Shakespeare's 'Richard III' - truly deserving of a terrible end.

Cheering For Psychopaths

Frank Underwood is of course a psychopath so the picaresque essentially works on cheering on the psycho, in the same way we did that for 'Dexter', except he's not killing one or two people, he's killing swathes of people from the seat of power as President. Viktor, the re-imagined Putin is equally a psycho who only understands power through the prism of Machiavelli's 'The Prince' but with a further discount on scruples. Frank's wife Claire remains a psychopath as well. Heather Dunbar says all the right things but she has hints of psychopathy as well. After three seasons I'm a little fatigued with the constant cognitive dissonance of cheering or spending time observing these head cases. What used to be edgy is now grating. What used to be intriguing is now blatantly obnoxious.

Maybe this is the point the show is trying to make; that it takes a genuine psycho to rise to the top and get things done, and this is what is really rewarded in democracy. Plato thought so, so it's not a new idea, but you'd think there was something a bit more to go on than psychopathy. At this stage I'm longing and waiting for the moment Frank is assassinated, but I guess Season 4 is going to be about how he wins re-election and goes onto a second term.

It is however interesting in how it exposes the frailties of American political thought. They're a lot more interested in politics than policy.

"You're Entitled To Nothing."

If you thought TonyAbbott and WTE Joe Hockey saying this kind of stuff was going to lead to a more egalitarian society, you were wrong. Tony and WTE Joe proceeded to devise the least fair budget in the short history of Australia. Which gives rise to the notion that people who bang on about entitlements are those who are most motivated to hold on to their own entitlements while stamping out the entitlements of others. This is the basic nature of politics in a zero-sum game, and this rhetoric is true of both sides of politics. When Leftists talk about ending entitlements, they're talking about Private school funding and special tax rates for the rich and franking credits on dividends and so on, without giving up on any of the Left's favourite programs.

Rightists are of course, worse. Nobody seems to think about what Machiavelli wrote in his 'Discourses' but it's worth noting that the baseline clause of good government is stability, the second clause is building the benefits to maximum number of people in its constituency. Taking away benefits and replacing it with nothing isn't good government.

Of course it goes without any surprise that Frank Underwood kicks off his national address with "In this life you are entitled to nothing." It's true in a libertarian sense but a society run on libertarian sense is no society at all. Small Government is a myth concocted by people who think governments are run like corporations. Worse still, the psychopathic end of this crowd think that if you could cut government services altogether and privatise everything, government would be reduced to nothing. The purest of Libertarians would like government stop and simply disappear; the US Republicans seem to want to cut it so there's nothing but the military and the police and a perpetual war on drugs and terror. The Australian Coalition Government wants to cut the government in such a way that all tax dollars collected go to service their class only.
Frank Underwood wants to dismantle welfare and make everybody work for less than poverty wages.

While one isn't entitled to anything in particular, you'd think one's government would be doing better than sending us back to the 18th century. In the real world, this means we really should be sacking this Coalition government in Australia on grounds of lack of competence.

Just Briefly...

The Changeable Abbott

A few months back I made the pithy observation that Tony Abbott was not in fact any kind of ideologue but worse still, an opportunist of the worst who kind who has no conviction except for his won thirst for power.

As it turns out, others have also made this observation and have complied it into a video.You may be well surprised by the number of people who have pointed to his flip-flops. It is actually uncomfortable to sit through because the notion that he is not some kind of hard-and-fast, rusted on conservative ideologue, but rater a pathologically flexible opportunist in pursuit of power makes us realise that well, maybe we have a House of Cards (BBC Version) situation going on where the government has essentially been hijacked by a dare-we-say-out-loud psychopath.

You get the feeling this isn't going the way it's supposed to be going.

So Rognlie!

Riffing On The Piketty 

There's a bit more on this Matthew Rognlie who presented a paper that says Pikeyty's discourse on inequality is only correct if you include property prices. Here's a new article in the SMH about it:

A central thesis of Capital is that the share of income of those who own capital or are already wealthy is increasing. Those who have to work for their money by selling their labour aren't as lucky: their share is decreasing. 

This observation made Piketty's tome a cause celebre amongst leftist economists and sparked a great debate in the wider profession. 

But Rognlie reckons Piketty is only right if you count housing. See the stunning graph below that has set economists' tongues wagging.

Source: The Brookings Institution and Matthew Rognlie 

What the chart shows is that net capital income (income made from already-owned assets) has not increased as a share of total income if you don't include housing.
In other words, housing is playing a much more important role in income, wealth generation, and inequality than it once did.

Yes. Which, in a roundabout way suggests the Federal Government, the State Government and the RBA all ought to be more concerned about the property bubble and not less. I imagine this is not welcome news to Baby Boomers. 

Source: Barclays Australia and New Zealand Economics Weekly 

The takeout from Rognlie's paper is that more expensive housing is a far bigger driver of income inequality than just about any other factor. 

As the above chart above shows, since the 1970s - and particularly the early 2000s - the proportion of income households must spend on their main method of saving, their home, has increased dramatically. 

The Brookings paper has some valid policy implications. As BusinessDay's Michael Pascoe recently argued there are too many self-interested NIMBYs (Not In My Back Yard) and BANANAs (Build Absolutely Nothing Anywhere Near Anyone) in Australia.
People who are older and own houses use current planning systems to block development which would allow cheaper housing for those who are younger and without equity. 

"Given the important role of housing, observers concerned about the distribution of income should keep an eye on housing costs—many urban economists ... have documented how restrictions on land use and residential construction inflate the cost of housing," Rognlie explains.

That chart looks pretty precarious. I doubt people feel they're sitting on over-priced property but they do feel like their mortgage is pretty heavy. The central message is still policy makers who are concerned with inequality should be looking at polices to do with the housing sector. It seems ever more true than at any time in the last quarter of a century. 

Of course, with things headed for ZIRP - the RBA is tipped to cut rates again on Tuesday - the RBA isn't exactly helping. It's busily pouring oil on the fire of inequality. If they had any fortitude,they'd give us the property bubble bust we had to have, and get on with cleaning up the mess from this bubble. But no, the best guess seems like it's 70% likely they'll be cutting on Tuesday.

Who Benefited?

I was of course pointing out that under-reporting the inflation through manipulating the CPI led to a historic bias towards easy lending which manifested itself in this property bubble, only a couple of days ago. But when you look at Rognlie's graphs, it's pretty clear that since 2000AD, we've had to pay much more for property than at previous moments in history.  

But if inflation was underreported, then anything indexed would have had an effect. Like HECS repayments would have been easier as a result of under-reporting inflation. But then the dole sure took a hit. So being unemployed and on the dole now would be much worse than it used to be, an therefore worse than it should be. Pensioners of course don't get their pensions indexed to CPI but to average wages, so they did much better than the unemployed.

People paying off a mortgage certainly did much better than they should have - and that's before we take into account the capital gains in housing prices. People who took out business loans did well too.  The bigger the loan, the better in a sense because there's a certain percentage that's being won back by under-reporting inflation in the CPI. The absolute value would be larger, the more money you borrow; which would sort of explain the emergence of moguls like Clive Palmer, Andrew Twiggy Forrest and even Nathan Tinkler . And of course the people with car loans and leases made out very well indeed. 

Oh, and banks. They made out like bandits. 

News That's Fit To Punt - 01/Apr/2015

If A Fool In April, Perhaps A Fool All Year Around

This isn't a prank. Our treasurer really is the Worst Treasurer Ever. He's only waking up to it in his second year at the helm.

With the budget reeling from that external shock, the latest NAB quarterly consumer anxiety index has, for the first time, put consumers' concerns over government policy higher than the usual pre-occupations with the cost of living and worries over job security.

"Government policy is now the single biggest cause of anxiety for consumers, just ahead of cost of living, while job security continues to cause the least stress," said NAB's group chief economist Alan Oster.
"What it basically says is that the consumer is still scared, that's basically the bottom line."

The bank has warned that the sense of anxiousness is prompting consumers to eschew "non-essential" spending in favour of either saving or paying off non-discretionary commitments such as utilities and medical bills. 

Asked what concerns consumers identified and what they intended to spend on, Mr Oster said: "It's very much a picture of consumer who is doing what they have to do and who is not feeling happy."

How dumb is that? They ran an election campaign on scares, and now that they're in power they've sunk the economy with the very same scares. People believed them. Then they cut the budget hard, and so the people believed them more. If you lie to the people enough, they believe your lies and do the things that come back to bite you.

The Customer Is Always The Patsy

During the GFC, all the banks were found out; by found out, I mean, the world found out that the banks didn't carry enough liquidity to cover all the extreme positions. In Australia, the government guaranteed the deposits and basically backed the 4 major banks and Macquarie Bank, declaring them "too big to fail" (Also known as TBTF). Since then there's been BASEL, I, II and III agreements demanding that banks carry more capital.

Here's the response to the rise in demand to raise and preserve capital:

Two of Australia's largest banks are warning that interest rates on loans could rise if they are made to carry more capital, suggesting they will favour shareholders over customers as global regulators consider creating larger equity buffers in banks to protect the financial system from future crises.

In a dialling-up of resistance to being forced to increase capital carried against mortgages, as recommended by David Murray's financial system inquiry, the Commonwealth Bank of Australia said higher mortgage risk weights, which determine the riskiness of a loan and how much capital must be set aside, would "restrict the cost-efficient provision of credit to consumers". A consequence would be "that costs for home loans increase on average across the economy", the bank said.

You gotta laugh. Of course they would argue that  - but they're taking the piss.
That's exactly how we got into trouble in the first place when big banks in America started handing out cheap loans to inappropriate people, and then divvied up the debt positions and turned them into mortgage bonds. When the inappropriate loans customers defaulted, the whole edifice came to a stop and the whole financial sector gagged on the shit sandwich that we have lovingly come to remember as the subprime loans crisis.

Yes, all those stupid 'subprime' loans all blowing up at once! The banks are misremembering the sequence of events that nearly destroyed them. If banks need to store more capital to be safe, then they should. If that means a couple of points higher on the interest rates, so be it. If this scares off some of the customers, well heck, you probably don't want those subprime-y customers. This is not a bad thing.

Iron Ore Hits Rock Bottom, Could Even Go Much Lower 

Yeah, let's see now. In the 6years we've been able to see the spot precision iron, it's never been so bad for iron ore prices.

Iron ore started the year at $US68 after losing half its value in 2014, but the fallout has accelerated with a fresh record low of almost $US51 a tonne hit on Wednesday.

The question has changed quickly from whether the price would have a five in front of it in 2015 to whether the price start would start with a four. 

A flood of new supply from the majors - BHP, Rio, Brazil's Vale and Fortescue Metals Group - and stalling Chinese steel demand growth have together crushed the price.
Despite the cries of protest from Fortescue, which is the highest cost producer of the majors, as well as smaller industry players, and the state and federal governments whose budgets have been smashed by the price collapse, Rio and BHP are sticking firmly to their expansion targets.

UBS mining analyst Glyn Lawcock said the iron ore price could soon fall into the $US40s but that would not push Rio and BHP to review their strategies.

"Having a four in front of the price is not far away and is entirely possible given what we've seen in the past few days," Mr Lawcock told Fairfax Media.

And yes, it could very well get there soon.
Here's a quick question. How is it possible for China to be growing its GDP at 8.7% in 2009, 10.1% in 2010  and 7.5% this year, while iron ore fluctuates this much in-between? If anything makes you suspicious of Chinese GDP numbers, it's the relative stability of the GDP figure sin thecae of such fluctuating costs of raw materials. It's basically more evidence that the GDP figures from China are made up 'aspirational targets' and not actually measured values.

The current drop in spot prices has been credited to the explosion in the supply side for iron ore, but it seems more pertinent to ask why the demand side for why iron ore is dropping so much.