The Tyranny Of Stupid

Age Of Entitlement Is In Full Swing

We kind of knew way back in 2010 that the current crop of Liberal and National Party MPs running for government were intellectually deficient. If that seems like a big claim, then you really need to go back and reread the headline after the same mob got into office after 2013, because it's been gaffe city and the outer-suburbs of loonyville ever since. The most symbolic bit of rhetoric might have been WTE - that's Worst Treasurer Ever! - Joe Hockey made the remark that the age of entitlement was over, and proceeded to cut welfare. In an era when wealth inequality was increasing at an ever accelerating rate and when the well-heeled scions - the most entitled people with the most entitlements society confers upon them - start cutting at welfare in the name of ending entitlement, no amount of double-think is going to get you over the line of acceptability. Accept that, and you may as we'll get a lobotomy.

On the whole, it is unsurprising then that Tony Abbott's time in the Lodge was shorter even than Julia Gillard or Kevin Rudd, and that Joe Hockey would be dispatched right out of Parliament in the dumpster fire purge that followed. We should pay attention to The Hon. WTE Joe Hockey because now, he's the ambassador to Washington as well as pulling down his MP superannuation. Entitlements and double-dipping much Joe? This mentality of sticking their hands deep into the public purse for personal gain seems to be ingrained in the Coalition MPs.

Now, it appears it is all coming to light. Susan Ley this month is the first casualty of the war in Turnbull's cabinet. Bronwyn Bishop - she of helicopter-gate notoriety - blamed to socialists, which garnered her a new round of ridicule, and today Julie Bishop is being scrutinised for her polo trip on the public purse.

The thing that is striking about all this is that they really don't care how this looks to the world. Whether it is Susan Ley or Bronwyn Bishop, they put up a front saying they're allowed to be spending public money on expensive personal jaunts, and as such the scrutiny itself is unwarranted. It's staggering how they can't put the two together and see how bad they look. You wonder how we got to this point, but maybe it was simply always thus. But it doesn't help to have such stupid people fronting for the government.

The Dearth Of Thinking Talent

I know I keep writing about this, but not a week goes by without making itself apparent in the public discourse, so here I go again...

One of the problems with any long running group is that it get sclerotic. The most notable feature of the current LNP Coalition government lineup is just how lacking in intellectual firepower they are. There is not a single one of them who won't come out with some neo-liberal ideological cant as their substitute for actual thinking. It used to serve them well until the GFC happened, but the GFC has opened up a problem for the neo-liberal ideology that it has proven itself to be entirely self-serving for the wealthy investor classes. Worse still, many of the current problems arise out of the long pursuit of neo-liberalism since John Hewson's manifesto Fightback. Doing more of the same is clearly not going to solve those very same problems.

As I pointed out a couple days ago, the verdict is in and this government isn't very good at managing anything. If Tony Abbott's time did anything, it was to put the Australian economy in full reverse. When you add up all the information out there, you get the picture that this government actually hasn't got the faintest clue as to what to do. Worse still, they don't exactly have the next John Hewson to give them a blueprint. What they have is more of the same guff being generated from the IPA, which in turn is just reciting article of the neo-liberal faith.

There's simply nobody doing proper thinking worth spit on the conservative side of politics. Worse still, because they don't do any thinking, they enter the arena without much thought, and are incapable of creating the kind of solutions to problems that don't first kowtow to ideology. We are at the point in history where whatever worked for Reagan and Thatcher and by extension Howard, Blair and Clinton are not going to work any more. Yet there is simply a dearth of thinking that actually is going to serve the greater good, coming form the right. Instead it's the usual user-pay, trickle-down, privatise-the-lot, tax less, cut-welfare, - see how it has become a self-parody? - policies they trot out as if that is some kind of panacea. As if the problem with the ALP government under Rudd and Gillard was that they couldn't do neo-liberalist economics properly.

You wish politics hadn't become so idiotic, and surely the Left have made their own contributions to the general stupidity going around, but it is surely the intellectual failings of the Right that have turned our economy around from surprising success to doldrum failures. And there's only more of the same to come from whence that came.

I Didn't Expect This

This is utter hearsay but here goes...
Years ago, somebody told me they once had dealings with Malcolm Turnbull, and they came to the conclusion that he was a crook. I don't know on what basis this was said to me, or what Malcolm Turnbull might have done to earn such scorn, but basically, the advice being offered was, "if you have a choice to vote for Malcolm Turnbull to be Prime Minister, don't".

He lamented on the day Malcolm Turnbull became opposition leader the first time and said, if Australia ever elected Malcolm Turnbull, it would rue the day. And then the Godwin Grech thing happened and  this person was relieved that Malcolm Turnbull would leave politics. Of course subsequent events have gone entirely in the opposite direction and he is now our Prime Minster, has been for a year and we still don't know what the hell he stands for.

We think he stands for Malcolm Turnbull being Prime Minister and not much else. I know it's hard having a Parliament with a 1 seat majority, but it's not like the Turnbull Government is setting the place on fire, getting stuff done, or for that matter passing sensible legislation. It's not as if he's doing anything that he hinted he might want to do, should he ever become Prime Minister; it's more like he just sits around basking in the warm glow of the office of Prime Minister, swanning around going to the cricket or whatever. It sure doesn't look like a government with a solid agenda, certainly no more than the "Jobs & Growth" slogan it took to the election, and even allowing for the alarming banality of that slogan which it is underperforming immensely, his government doesn't even seem to be even about that. (Judging by his cabinet ministers it seems to be about shoving public monies into their purses as quickly as possible)

I think Turnbull is just going to try to ride out as long as possible, and then when they do finally oust him, he's going to enjoy the reckoning that the Liberals have nobody with a brain with whom they will replace him. If people had high expectations for Malcolm Turnbull, he's sure not living up to them, but more to the point, he's incredibly pleased and satisfied that he does't have to live up to expectations. He is Prime Minister. He will always have been a Prime Minister, an exclusive club that he can forever flaunt to his dying day. He will be in the history books forever, his name is immortal.

It's a pity the rest of us are the ones who have to pay for such indulgences. 

Maybe we should take solace in the fact that he's not completely fucking up the very institutions our country while he swans about being Prime Minister of Malcolm-ness. Maybe this is all there is to the man, and the most important thing about him is still, that he is not Tony Abbott. 

Grumpy Again

But That Trick Never Works

That old rapscallion and former Howard Government chief of staff, Cabinet SecretaryArthur Sinodinos was on television today, pitching a corporate tax cut. He was saying yes, an income tax might stimulate the economy but a corporate tax cut would stimulate investment and that would stimulate the economy more. This seems to be the mantra of the big end of town which is thirsting for the corporate tax rate cut.

"At least 50 per cent of the impact of cutting company taxes goes in higher wages for workers and higher employment," Senator Sinodinos said. 

"Putting money into the hands of consumers obviously encourages more spending and disposable income and has good incentive effects. But cutting company taxes also has good effects.

"It can encourage investment, it can encourage higher productivity, it can encourage more investment from overseas."

Would that if it were so, Mr. Sinodinos. Earlier in the month there was a report about that sort of thinking which, in a nutshell claimed that it was tried in Canada already and had no such desired effect. 

The Canadian federal government implemented three successive federal corporate tax reductions over the last generation. (Provincial governments also levy their own corporate taxes, averaging around 10 per cent, added to federal levies.) The first stage occurred in the late 1980s: the statutory rate was reduced from 36 per cent to 28 per cent, but various loopholes and deductions were closed in the process. The second reform occurred early this century: the general rate fell to 21 per cent, and preferences for manufacturing and resources were eliminated. The latest cuts were implemented beginning in 2007 by former Conservative Prime Minister Stephen Harper (defeated in last year’s election): he cut the base rate to 15 per cent, and eliminated a 1.1 per cent CIT surtax. Those last reductions alone still cost the federal government over $15 billion (Canadian Dollars) in foregone revenue each year. 

Together, these successive cuts reduced combined Canadian corporate taxes (including provincial rates, which also fell in several provinces) from near 50 per cent of pre-tax income in the early 1980s, to 26 per cent today. In theory, the resulting boost to profits should have stimulated a strong response in business investment. Unfortunately, hopes for this “jobs and growth” dividend have been repeatedly dashed.

Hence, for all this talk about how cutting taxes for businesses would spur investment, I think we need to take that with a dump truck load of salt. The big end of town is simply going to pocket that difference and probably won't even pass it on as a dividend. In the absence of things to invest in, investments tend not to be made. Given that the Australian economy post-Commodity Supercycle is distinctly looking like a services-based economy, there really isn't a whole lot of places investments can be made. There's a great deal of non-incentive (as opposed to an active disincentive) for capital investment to take place. This is why the government ought to be pushing for infrastructure investment and not trying to run back to surplus by cutting budgets for everything. 

As for the claim that would make wages go higher, that's a bit fanciful too because the big end of town has spent the post-GFC years pocketing all the productivity gains and not let wages rise. It's hard to see how money saved on top by these companies would translate into a burst of higher wages, or for those imaginary higher wages to go into the economy as spending when the most likely scenario is for that money to be spent on paying down mortgages - and then the bank sits on that money not investing it in things. I understand the Coalition government wants to help the big end of town but really, this is not going to have any effect. Arthur Sinodinos is simply wrong, working off ideologically driven bad advice. 

Why The Government Fighting For A Surplus Now Is A Bad Idea

This one's a few weeks old, but worth dredging up because of Arthur Sinodinos above. 

Here’s a little thought experiment to check the familiar argument that Abbott gave for the need to get to surplus: “Governments, like households and businesses, have to live within their means.”

Imagine that there is an economy where the money supply consists of a single dollar, which is exchanged 100 times per year among this economy’s inhabitants — thus generating a GDP of $100 per year. Then imagine that the government in this economy sets itself the target of running a surplus equivalent to 1 per cent of GDP. If the government achieves its objective, what will GDP be the following year?
Zero. And, if the government debt ratio was more than 1 per cent beforehand, it will be infinite afterwards. 

Why? Because the economy had only one dollar of money in existence, and the government’s surplus took that $1 out of circulation, leaving the economy with precisely zero dollars for commerce the following year. The government budget affects GDP by changing the amount of money in circulation in the economy, and a government surplus effectively destroys money. 

This is utterly unlike a household. Household saving does not destroy money, nor does it materially affect the household’s own income, since a single household is such a small part of the national economy (even if we’re talking James Packer’s household).

Got it? 

If, - like Worst-Treasuerer-Ever Joe Hockey did, - you go around telling important people from around the globe at things like the Brisbane G-20 that what the world needs now is economic growth and lots of it, the last thing you should be doing is busily taking money out of the economy - i.e. don't go around cutting the budget in the hopes of getting back to a surplus. It's akin to saying you want your car to go farther because that's what is needed, and then busily syphoning out fuel from the tank. It's self-defeating and self-contradictory. 

I bring this up, just in case you were wondering why WTE Joe really was WTE, and why Tony Abbott really deserved the tag 'Stupidity' in every post I made about his government. You can lie your way into office, but you can't work out of the office without facing up to facts. And logic. 

You wonder about the education these men failed to get in their fancy-pants private school.

The Devil And Hillary Clinton

Here's something from Pleiades that you might find interesting. 

Donald Trump is as frightening as his opinions are poorly considered. His life has been lived around people whose livelihoods depend on not telling him to shut the fuck up. His nominal constituency by-and-large has no context for this— what to them appears as ‘speaking truth to power’ is in fact a privileged bully enamored with the sound of his own voice. Mr. Trump was born into the class that establishment Democrats and Republicans have spent the last four decades making so wealthy that it separates them from the consequences of their socially destructive actions. Donald Trump is an inheritance-baby insider who plays an outsider on television. It is hardly an accident then that Mr. Trump and Hillary Clinton have been friends for over twenty years.

The Democratic establishment is in the process of shoving Bernie Sanders out of the way to put Hillary Clinton forward as the candidate to beat Donald Trump. The term too-clever-by-half comes to mind. The ‘missed opportunities’ of the last seven years are in the process of asserting themselves. Mrs. Clinton is a war-monger, free-trade-agreement loving friend of Wall Street at a time when a fair portion of the conscious public would just as soon burn the whole mess to the ground with Mr. Trump. The question for those who would vote for Mrs. Clinton to ‘stop’ Donald trump is: who are you going to vote for to stop Hillary Clinton?

It's not like it's even a surprising call. 

As the years go by, the Bill Clinton presidency seems more and more like one big wasted opportunity. The number of things they botched up in the process has been a parade of negative consequences both intended and unintended. For all the popularity he had, Bill Clinton never really did the things for his constituents that made their lives better. He and his wife Hillary did things for their Wall Street friends first and foremost. The America we see today that puts Donald Trump as the Republican frontrunner is a result of the Clinton Presidency as much as both Bushes. It's hard to understand why the Black leadership really want to go around the block again with the Clinton election machine. After 24 years, you'd think it was obvious that they don't get out of it nearly as much as the Clintons do. 

News That's Fit To Punt - 08/Dec/2015

The Nile Runs Deep Here

That's the thing about Tony Abbott - reality has no bearing on his thinking. This led to many a comedic moment. One certainly does not wish him back as Prime Minister, but he was always good for a gag. And so today we learn that he thinks that he would've beaten Bill Shorten's ALP at the next election.

Tony Abbott has fired a broadside at the plotters who brought him down, defiantly declaring he would have led the Coalition to a victory at the next election. 

The comments came in an interview in which he flagged an intention to stay around in Parliament; called on Malcolm Turnbull to spend a week in an Indigenous community each year; advocated a more robust defence of "superior" Western values in the struggle with Islamic extremism; and said his first budget was fine.

As they say, pigs may pilot A-380s into Heathrow high on acid.
Uh... no.

Yet, that's not the most crazy thing in the SMH today. It's Lord Monckton, king of the climate change denialists who thinks Abbott's Prime Ministership was cut short thanks to the UN.

Former prime minister Tony Abbott was brought down because of his anti-global-warming views and would have pushed back against plans to form a world government at the Paris climate summit if still in the job. 

These are the views of leading sceptic Christopher Monckton who, in an interview with Fairfax Media, also said Australian institutions such as the Bureau of Meteorology and CSIRO were being examined by "a formidable team of scientists and lawyers" for possible fraud over manipulating their climate data.

There's stupid, and then there's utterly retarded, and then you have Lord Monckton who thinks there is a global conspiracy surrounding climate science. And of course, he likes Tony Abbott, anode course he thinks it's a big plot with Malcolm Turnbull colluding with the UN - led by Ban-Ki Moon - who rolled Abbott to bring in a world Government when the easier explanation is that the UN had absolutely nothing to do with it. Malcolm didn't need Ban-Ki Moon's bidding to roll Tony Abbott, he just needed Tony Abbott's outlandish incompetence to open the door. 

Seriously, this wasn't the Dismissal. It was a routine party room coup. Abbott & Credlin were nutty-stupid. They had to go. Any suggestion that it went deeper than the 30 losing polls in a row needs to come forward with documented evidence. 

The Point Is To Fuck Upwards

An old bit of advice I heard in LA had it that the point of working your way up in life is to fuck upwards. If you can do that, you'll find your career on the rise. 

I don't know, it's harder to do than it sounds. But then there's Joe Hockey who clearly fucked up, and for his troubles is going to America as Australia's Ambassador. Hockey says had he stuck around in politics, he would have been consumed with thoughts of vengeance. 

If he's saying politics beat him, then he's saying he fucked up; and now he's getting a golden handshake. That sure sounds like a form of fucking upwards to me. 

This Is Not My Beautiful House

Ah, tax reform. Music to the ears if you're a certain kind of bureaucrat. Martin Parkinson, our top mandarin thinks this is a 'Once In A Lifetime' opportunity to enact tax reform.

Former treasury secretary Martin Parkinson has warned that Australia's living standards have started to fall and the country has a "once-in-a-generation" opportunity to pursue serious tax reform, which must touch all levels of government. 

Dr Parkinson, who was recently hired as the secretary of the Department of Prime Minister and Cabinet, says he likes the leadership styles of British Prime Minister David Cameron, New Zealand Prime Minister John Key and NSW Premier Mike Baird because they treat the public like "adults" when explaining the need for tax reform. 

He says Malcolm Turnbull has a similar style to those leaders, and we have a good chance of getting serious tax reform in Australia with him as leader.

At a certain level you'd think that Malcolm Turnbull has a cult of personality going. 

Of course, what he's proposing to do is to raise the GST. 

At least they are considering widening the GST base, which would actually be preferable to raising what's in place. People get snarky about education being included in such a package but really, if people are willing to pay $28,000 p.a. for a private school education for their kid, that looks like something that should be hit with a GST to make things fairer. Especially in the context where the Federal Government does dole out money to private educational institutions, and won't stop this inequality-increasing policy. I'm sure all the politicians who send their kids to private schools would put the kibosh on such a move, so it's not likely, but yes, tax those private schools properly.

And tax the churches. And the businesses owned by the churches... 

News That's Fit To Punt - 12/Jul/2015

Are They Petty? Or Are They Just Bog Stupid?
It turns out all that weird attacking of wind farms calling them ugly, was covering fire to cut investment into wind power in this country.

Treasurer Joe Hockey and Finance Minister Mathias Cormann​ have issued the so-called green bank with a directive to change its investment mandate, prohibiting new wind funding. It's understood the directive was issued without the approval or knowledge of Environment Minister Greg Hunt, angering the minister.  

The decision is another blow for the multibillion-dollar wind industry, which has just started to recover from the uncertainty created by the government's Renewable Energy Target review. Analysts say $8.7 billion is expected to be invested in wind power in the next five years, while the corporation has invested about $300 million in wind projects to date.

And international investors are warning the government's move sends a bad message about how safe it is to do business in Australia.
The directive is just the latest salvo in the government's attacks on the wind industry.

Good grief. So much for "Open for Business". We know they're fighting a rearguard action against the eventual move from fossil fuel to renewables that must inevitably take place so it's not that difficult to see that the top level of this government is deliberately mismanaging an issue to suit their crony-capitalist friends. But then there seems to be a belief in this government that Tony Abbott's own unpopularity gives him carte-blanche to just do what his cronies want because he's never going to be popular for ever doing the right things. If the electorate is not going to reward you for doing the right things, then it seems they're willing to damn the electorate and do their corporate masters' bidding and secure themselves a lucrative after-political-life. 

Which is to say, under Tony Abbott, Australia's polity has become no better than Indonesia. At this point in time, we're Indonesia-without-the executions. This place only looks respectable to people because it's white middle-aged men in suits running these crappy policies up the flagpole. You'd think this was the 1950s - which is exactly what Tony Abbott wants. Tony Abbott only needs look to his own faith to see how far off base he is on the issue, in this day and age when the Pope issues encyclicals about protecting the environment and curbing carbon emissions, slamming corporate greed as the Devil's own Droppings. You sort of wonder how he can sustain his opposition to things like Renewable Energy and kinder treatment of asylum seekers on the basis of his religion and not listen to his Pope. Evidently, it has nothing to do with his faith, it's all to to do with uncompromising cultural prejudices.

Using Federal Money To Tar The Opposition

This lousy circus that is the Royal Commission into union corruption keeps rolling like an unwanted circus caravan, waiting to find its miserable end. Earlier in the piece it was Julia Gillard who fronted the commission to explain her time at Slater and Gordon working as an IR lawyer, wherein she might have been a little irregular with some paperwork. Now it is Bill Shorten in the dock, being asked whether he short-changed his union members to cut a deal with the business sector. It's kind of weird that the Abbott government is asking these questions, seemingly-suddenly-amazingly interested in the welfare of the rank and file union members. We'll put that bizarre irony aside for a moment and ask the simple rhetorical question, what does this look like?

It looks like one of those show trials seen in military juntas and theocratic councils when they put the opposition on trial for being the Opposition. The Kim Dynasty did this a lot (now they just shoot them). Malaysia keeps doing it to Anwar. The Gang of Four in Communist China did this sort of thing to purge the enemies of Maoism and ended up in their own show trial. It goes on in Iran to this day and heck, even South Korea does this to presidents who leave office at the end of term. What all those countries have in common is that they don't have democratically functioning states. Even the ones that purport to be democratic and have elections can't be said to be functioning properly if they're doing show trials of the opposition. 

However, "a loyal opposition" is a difficult concept for a lot of countries that simply don't understand the adversarial system of law that developed in the English speaking world. Its underpinnings are culturally alien to them and so they concoct these kinds of show trials. It's a dead giveaway that they don't get democracy. 

Imagine my grievance and dismay then to see the Opposition Leader of this land, sitting in the dock over this stupid political show trial in Australia; Australia, the once most progressive nation in the English speaking world, reduced to the spectacle of a political show trial. You'd think we were Indonesia-without-the-executions; but no, we're even worse than that because they've stopped doing these for now in a sign that they've begun to get democracy. Clearly, our own political leadership has lost the plot. The exasperation in that photo says it all. 

What Yanis Varoufakis Has To Say About The Debt Deal For Greece

Pleiades sent in this nugget. Yanis Varoufakis has a piece in the Guardian. 

In 2010, the Greek state became insolvent. Two options consistent with continuing membership of the eurozone presented themselves: the sensible one, that any decent banker would recommend – restructuring the debt and reforming the economy; and the toxic option – extending new loans to a bankrupt entity while pretending that it remains solvent. 

Official Europe chose the second option, putting the bailing out of French and German banks exposed to Greek public debt above Greece’s socioeconomic viability. A debt restructure would have implied losses for the bankers on their Greek debt holdings.Keen to avoid confessing to parliaments that taxpayers would have to pay again for the banks by means of unsustainable new loans, EU officials presented the Greek state’s insolvency as a problem of illiquidity, and justified the “bailout” as a case of “solidarity” with the Greeks. 

To frame the cynical transfer of irretrievable private losses on to the shoulders of taxpayers as an exercise in “tough love”, record austerity was imposed on Greece, whose national income, in turn – from which new and old debts had to be repaid – diminished by more than a quarter. It takes the mathematical expertise of a smart eight-year-old to know that this process could not end well. 

Once the sordid operation was complete, Europe had automatically acquired another reason for refusing to discuss debt restructuring: it would now hit the pockets of European citizens! And so increasing doses of austerity were administered while the debt grew larger, forcing creditors to extend more loans in exchange for even more austerity.

And that's about as succinct as it can be put. In the 9 years since the GFC broke, I've had to think a fair bit about what the bail outs and Quantitative Easing meant. The best explanationI can give you is that it is an attempt to freeze the clock so that the participants in the world's greatest casinos have time to take their chips of the table and walk away without cashing in the losses, while the bill is sent to Joe Q Public. In the aftermath governments ran out of money do their normal government-y things, and so they committed to 'austerity' which further shrunk the economy and made things worse. Iceland, which refused to give the bankers a pass, has recovered nicely, which tells you something about all this glorious QE I II and 4Eva we've seen. 

David Cameron of course did have one standup moment where he declared he would not balance the books of the United Kingdom on the backs of the poor and needy. It's a great line, whether he actually followed through on it or not. It perfectly describes what Germany is doing- balancing its own books on the backs of the poor and needy in Greece. Whether 'Grexit' happens or not, the world's sympathies are with the Greeks on this fact alone. If Grexit should happen, the Greeks at least would have a fighting chance. As for Deutsche Bank that has trillions in derivatives tied to Greek bonds, I don't think we'll give them much sympathy when it all blows up, and Angela Merkel has to clean up that mess. 

Budget Fallout 2015

When The SMH Calls You Stupid, You Just Might Be

The Wow-Just-Wow moment arrived in the Herald this evening, and it goes like this:

You would have thought Tony Abbott and Joe Hockey had learnt their lesson – after all, it had very nearly cost them their political lives.
But no. 

The paid parental leave debacle now consuming an otherwise soft and friction-free budget, is testament to the stubbornness of ageing white men and to the durability of their ideas, even really bad ones.

When the all-male Expenditure Review Committee members huffed their scornful reproach and conspired to nail greedy mothers involved in welfare "fraud", as Hockey readily agreed it was, it eluded their lofty wisdom that (a) this was egregious nonsense (b) their policy shift contradicted a core value to which the Prime Minister - no less - was thoroughly welded, and (c) some of their own wives had taken maternity leave from their employers, and the basic federal government scheme of $11,500 over 18 weeks. Oops. 

The stupidity of Abbott and Hockey now paring back entitlements are too numerous to list, but include that right up until months ago, they had wanted to pay $75,000 for six months to wealthier mothers – non means-tested. It was Abbott's "signature" policy remember – specifically confected to fix his "women problem". How's that looking now? Hockey had been its next most enthusiastic proponent. Both had argued it was an employment entitlement akin to annual leave and thus an inalienable right. Once a bitter opponent of paid parental leave (over my dead body) Abbott became unstoppable - a born-again zealot intent on staring down colleagues after foisting it on them without consultation.

Look, there are days where I think I might be the only person banging on about just how stupid WTE Joe and Phoney Rabbit can be, but amazingly, this is not the case. The mainstream journalists picked up on this thing and are writing it. I can't recall Peter Smark ever writing Bob Hawke was stupid, or Alan Ramsay writing Paul Keating was stupid, or for that matter John Howard who might have deserved it more than Hawke or Keating.

I mean, the logic is without flaw; these guys went out and shot themselves in the foot, in broad daylight. What are we to make of this? That it's a part of a some greater cunning plan? Words escape me. And so we're here today with the spectacle of a journalist of a major newspaper in Australia calling out our Prime Minister and WTE as stupid people. And here I was thinking that day would never come!

UPDATE: It's Idiot Season, Open For The Hunt

Today it's Peter Martin starting out with "Idiot":

What kind of idiot labels mothers "rorters"? 

It's the same kind of idiot who thinks it's a good idea to draw a line in the sand between the Coalition and Labor over super. Tony Abbott told Parliament last week there would be "no changes to super, no adverse changes to super in this term of Parliament, and we have no plans to make adverse changes to super in the future".
It was remarkable coming from a government whose Treasurer only six weeks ago reached out to Labor for a "bipartisan" approach on super, saying he had measures "under very active consideration". 

Labor took him at his word, announced its own very mild position, and had the door slammed in its face. 

Everyone knows something will have to be done soon about super tax concessions. The Henry tax review said so, the Murray financial system inquiry said so, and the government's tax discussion paper as good as said so. The cost of the concessions rivals that of the pension, and it is growing more quickly. To say that isn't so, after saying it was so, is to redefine reality. 

On mothers, Abbott took to the election a proposal for six months' paid maternity leave. He picked the period of 26 weeks rather than Labor's 18 weeks "to support women to have the best chance to breastfeed and bond with their infant for the six-month period recommended by international and Australian health experts". The Coalition's policy still available on its website cites the National Health and Medical Research Council and the World Health Organisation as experts finding that the minimum recommended period of exclusive care and breastfeeding is six months. 

In the meantime, Labor's paid parental leave scheme was ensuring that some women had more than 18 weeks. That was its aim. Its explanatory memorandum said the scheme would "complement" existing entitlements, being paid "before, after, or at the same time". Never intended as a substitute for employer-provided leave, it was an add-on that would bring some women close to six months. 

The Fair Work Ombudsman puts the intention beyond doubt. "Employer-funded paid parental leave doesn't affect an employee's eligibility for the Australian government's paid parental leave scheme," it says on its website. "An employee can be paid both."
So it's hard to know what to make of the sudden quasi-criminalisation of mothers who do as the law intended to get paid leave approaching the six months that Abbott insisted was the minimum needed for breastfeeding and exclusive care. 

Labelling them "double dippers" on Mother's Day and announcing that from next year they would be denied access to the government's scheme, Joe Hockey was invited by Laurie Oakes to agree that accessing both was "basically fraud". He replied: "Well, it is.

An object lesson in how to win enemies and influence nobody. I'm glad the press is finally seeing what I saw a long time ago. All it takes is track record of contradictory statements and obvious lack of reasoning by this government to demonstrate just how stupid are these people.

They Cut Screen Australia! What Sadistic Joy It Gives Me!

I don't know how to put this nicely, but the film bureaucrats of this land give me the shits. As a class of citizens intent upon improving our lives though propagandistic (and bad) entertainment, they are all George Brandises of the movie biz without the actual "I-got-elected-you-mofos" bit going for them. They are what you might call unrepresentative swill who have spent decades keeping the pool small, the water shallow, and mostly poisonous. So oddly enough, when their budget gets cut, I have no choice but to rejoice. So hooray motherfuckers, they fucked over the other motherfuckers. Really, I hope somebody loses their fucking job. I don't know who exactly that's going to be, or how it will be broached - I don't give a flying-fuckety-fuck - I hope it's somebody whose career in film-bureaucracy is brought to a fucking miserable end.

The cuts to Screen Australia have been denounced by Screen Producers Australia, which claimed they "will seriously impact the industry", and the Media Entertainment and Arts Alliance, which said "the cuts will undoubtedly impact the thousands of MEAA members who rely on these arts and cultural programs for work, training and development". 

The production designer of Mad Max: Fury Road, Colin Gibson, said though the cut was almost expected, he was sure it would have an impact on the industry.
"It's not really a government we were expecting too much largesse in the way of art or beauty to be coming from anyway," he said at the movie's vehicle show at the Sydney Opera House, ahead of the Australian premiere on Wednesday. 

However, Gibson added that he was "not necessarily convinced" that Screen Australia has the best system for supporting the industry anyway.
"So let's see if we can use the agony to our advantage," he said.

Cut it all, I say. Cut the fucking lot of them and throw them in the harbour to be eaten by sharks.

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.

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. 

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.

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.

Intergenerational Report

Turning Japanese, Then Embracing A Grim Future

It's here. We're headed for a ZRIP future for sure now. The Intergenerational report being waved around by Joe Jockey in his ever diminishing quest to lump all the problems on to the poor essentially outlines a future of diminishing population growth as well as economic growth.

It predicts marginally slower economic growth to 2054-55 (2.8 per cent) than has been the case in the past four decades (3.1 per cent) coupled with a massive spike in the number of people living past 100, and a doubling of the number of people in the over 65 category. 

While the government has not committed to a further hike in the age pension eligibility age – often erroneously called the retirement age – the report's projections of a shrinking workforce, as a proportion of the wider population it supports, means there will continue to be pressure to lift the age from 67 set by Labor, to 70 and perhaps beyond, if it can get it through the Senate.

"The number of centenarians is an extraordinary story," Mr Hockey said in releasing the report. 

"There are only 100 in 1971, there's going to be 40,000 in 2050. 

"There will be fewer people aged between 15 and 64 relative to each person aged over 65.

"Sixty-five is the traditional working age, obviously that is changing, but in 1970 there were the equivalent of 7.5 people for everyone aged over 65. It's currently 4.5 and it's dropping to nearly three." 

He said older workers had remained in the workforce even through the GFC because their income from investments had been hit, helping to achieve high levels of older workers still. 

"This is the grey army that is going to deliver prosperity in Australia's future and we need older Australians, we want older Australians if they choose to do so to remain in the workforce and to come back into the work force," he said.

That last paragraph sounds painfully like the catch cry in Japan where older workers are expected to stoically stay in their jobs. The intergenerational report is painting a picture where the population is ageing, and economic growth diminishing over time, and the future prosperity being dependent on the participation of women and the elderly - and probably mostly just elderly women.

Seeing that this is the Gen-X blog after all I may as well point it out: the newsflash here is that the Intergenerational Reports highlighting the rather grim outlook that Gen-X won't able to retire.
That being the case, the only hope is that there are significant rejuvenation remedies in the future so that working into old age ceases to be a problem. Indeed, if those technologies come online as predicted by Ray Kurzweil and his Singularity scenario, then old age won't matter. It would remain appropriate that we continue to work and only when we take ourselves off rejuvenation and prepare for senescence and embrace death would we be allowed a pension.

The trickier problem is that the delimiting economic growth is going to come from the lack of room in which to grow as well as the ageing population. We're not that far into the process but in the post-GFC New Normal, we're already butting up against the limitations of not only our economy, but that of China which is straggling if not falling off its perch. If China's growth has been our growth engine, we'll have to be dragged down by the fact that China's workers have peaked and are now rapidly growing old. The space for economic growth to take place on this planet isn't as big as it has been in history.

Dare I say, it is going to make space look a lot more likely as a colonial destination.

News That's Fit To Punt - 02/Mar/2015

No Interest Rate Cut From RBA

After the hoopla leading into this week, the RBA opted not to cut rates today. Here is a list of my random thoughts in no particular order:

No.1, I'm amazed that I'm blogging about it. If you told me as a teen that I'd be interested in this topic, you could've knocked me over with a feather. I'd quit on Commerce and flunked Economics. Mr, Kramer was a cavalier sort of teacher who gave me the shits. And Liza-the-teacher's-pet was pretty insufferable so I dropped economics going into my senior years at high school. But here I am blogging about friggin' interest rates - I do surprise myself, yes, I do.

No. 2 is "I guess they're keeping their powder dry". They've been using that phrase a lot since the GFC and what they seem to mean is that things could always get worse, so when it really gets worse, they'll unleash the even-lower-interest-rates. And on to ZIRP we go, eventually... but for now, no cuts. Which is also interesting because nobody has been suggesting they should go up, and that means the economy really is worse than when it was much higher.

No. 3 is "Wow, they were spooked by the Sydney Real Estate market". What can one say? The indiscriminate rise of the property bubble souffle in Sydney does seem like a kind of moral hazard writ large, so it does make some sort of sense that they might want to rein in the excess even if it means not lowering the rates. The corollary of that is that Sydney's property excess is weighted exactly the same as the immediate needs of the rest of the economy. Think about that for a moment and then think through whether that's sustainable. No? Didn't think so.

It's The Wrong Order, Tones

One of the phrases that Tony abbott is known for is 'Dead Buried and Cremated'. He famously uttered these words in reference to Work Choices which buried the Hoard government and John Howard's seat in his own electorate in 2007, and how theLiberal Party had abandoned the thought of trying to go back to it.

Today he's saying the GP Co-Payment is 'Dead Buried and Cremated'.

Now, you might not believe it from this blog but I am a stickler for some detail and it seems to me you don't cremate a body after it's been buried. Logically, he should be saying 'Dead Cremated and Buried'. That makes sense. The way he's been saying it makes no bloody sense, and so lends us the suspicion that perhaps he is not a very logical human being - and being a Prime Minister, this might present problems.

Anyway, just though I'd fire off that cheap shot because it's been bothering me for a long time.

Renewables On The Rise

The Denialist Abbott government has done a great deal of harm toinvestent in reneablesin this country but it's nice to see some comaniesgetting things done. Here's Carnegie Wave Energy doing their thing.

The world’s first grid-connected wave power station has been activated off the coast of Western Australia (WA).  

After more than a decade of testing and demonstrations, Australian company Carnegie Wave Energy has switched on a pilot project that has begun feeding wave-generated electricity into a local WA grid.

“This is the first array of wave power generators to be connected to an electricity grid in Australia and worldwide,” said Ivor Frischknecht, CEO of the Australian Renewable Energy Agency, in a statement. The Agency has provided $13 million of the $32 million project.
The company’s technology named CETO after a Greek goddess of the sea converts ocean swell into zero-emission renewable power and zero-emission desalinated freshwater.

The company says its system is “different from other wave energy devices as it operates under water where it is safer from large storms [and corrosion] and invisible from the shore”.

Which is pretty damn cool. We're not all totally drongo backward climate change denialists in this country.

Worst Treasurer Ever Joe Hockey Pushes On A Rope

This is kinda interesting. WTE Joe has ordered a forced sale of a mansion in Point Piper bought by an overseas (read Chinese) investor for 39million. The investor has 90 days to sell. Which will likely result in a lower price which would put some downward push on the wonderful property bubble in Sydney from the top end of the market. It might be irrelevant to the extent that everybody else still wants in on Sydney.

However, it might be the beginning of a process whereby Chinese investors trying to repatriate their money outside of mainland China - read 'capital flight' - might see Australia as not such a good destination. Especially if the place is sold for much less than the $39m that was originally paid for last year. That might send a signal to the Chinese-runaway-money sector that maybe Australia has just as much irrational risk as mainland China, with as little recourse as mainland China. If so, it might cool down the top end of the market significantly.If the FIRB and WTE Joe start doing a lot of these, then it might lead to a rout.

In other words, depending on WTE Joe Hockey's commitment to this course of action, it could indicate a political willingness to prick the Sydney property bubble. Of course, it's not clear what would happen should the Sydney property bubble get pricked - but it's something new coming from the WTE Joe Hockey.

Or he could be doing it just so one of his cronies can pick the property up for cheap. That wouldn't be surprising in the least bit.

The End Of The Road

Well, this is most likely it. Andrew Chan and Myuran Sukumaran are going to be transferred to be transferred to Nusakambangan where they run the executions. It's a drag.

I haven't given it a whole lot of thought over the years because I figure you have to respect the local laws. There's sufficient merit in the legalistic argument that the local laws should be obeyed. Socrates took the hemlock saying even bad laws are laws. It has been embarrassing to see just how much the Australian media has made of their plight in one sense that the more we argue for leniency, it looks like we're pleading a case of exceptionalism to apply tour citizens.

Be that as it may, there's also a fairly fundamental question what a prison sentence is supposed to be. If it is to punish, then that's the moral dimension we find ourselves in and no argument about mercy issuing to get us over the line with the punishers. But if the prison system genuinely about rehabilitation, then there is no place for capital punishment. And so with Andrew Chan and Myruan Sukumaran, we have prisoners who can prove the system correct. Executing them is contradictory.

The longer this has dragged on, I confess that I've grown more hostile towards Indonesian arguments that are bolstered on sovereignty and post-colonial retribution. Those issues have nothing to do with these men they are about to execute. The Australian position requesting mercy and leniency is that we object to the capital punishment, universally. That we would argue with the same vehemence for their citizens facing decapitation in Saudi Arabia seems totally lost on the Indonesian government. Contrary to the accusation that Australia is somehow hypocritical, it's simply not true. We would argue against all the death sentences being meted out on this planet, equally, with equal vigour.

Yet now we are down to the point of miserable acceptance and burgeoning insults. Indonesia is going to have a really hard time winning back the sympathy of the average Australian. It doesn't make any difference to them; but it probably should in the same way that we should hope to win their respect.

Quick Shot - 16/Feb/2015

Celebrating Freedom Of Expression

No, I'm not going to write about the poor person shot dead in Denmark. Instead I'm just going to point at the abject idiocy of finding in an audit that Sarah Ferguson was not respectful enough in her questioning the treasurer. It strains credulity but somehow, we have these things:

While acknowledging the Ferguson-Hockey interview was "compelling television", Ms Ryan finds: "I felt that the 'tone' of the questioning in this particular interview could have been interpreted by some viewers to be a potential breach of the ABC's impartiality guidelines." 

Ms Ryan singles out three points of the interview for criticism, starting with Ms Ferguson's first question to Mr Hockey. 

"Now, you've just delivered that budget," Ms Ferguson said. "It's a budget with a new tax, with levies, with co-payments. Is it liberating for a politician to decide election promises don't matter?

Ms Ryan found the question was factually correct but said its tone made the Treasurer seem "under attack".
"In my view, the language in Ferguson's first question was emotive," she found. "I also believe that the average viewer would consider that the Treasurer was not treated with sufficient respect by the interviewer." 

Ms Ferguson later told Mr Hockey that she had asked a "yes or no question". She then said: "I don't need to teach you, Treasurer, what a tax is. You know that a co-payment, a levy and a tax are all taxes by any other name."

I mean, really? Naturally the finding has been rejected by the ABC. Well, of course it would it's so clearly stupid. Ms. Ryan felt the tone could be interpreted by some viewers to be a potential breach of the ABC's impartiality guidelines? I mean really? She feels (not thinks, perhaps vaguely or even strongly, show won't say which) that maybe some minority in the audience-land watching might be doing some interpreting in such a way that it's not impartial? And that makes it a breach? Just how stupid is this auditor? 

If I said I was impartial and made a statement 'X' (fill it in any way you like, It's hypothetical), of course I can expect somebody out there in the readership to maybe interpret that statement to be not as impartial as I say it is; but the onus is on that person to argue that case. Sarah Ferguson is right to ask the Treasurer whether election promises don't matter, after he delivers a budget that completely flies in the face of the election promises. It's a legitimate question that at least 50% of the population would like to know. 

It's not the ABC's or Sarah Ferguson's or Emma Alberici's fault or problem that the government finds itself trying to squeeze a budget through which contravenes their own election promises. If the folks in government can't handle the questions that come from such  budget, let alone consequences of their actions, maybe they're in the wrong profession. It is most certainly not the job of the press to let this kind of thing go by to the keeper. We all know this; we all know how this works; anybody watching the interview would be watching on the basis that they understand this as a fundamental tenet of the position the press holds in our democracy. So Colleen Ryan has invented a straw man, not to beat down, but to wave around and say, "this straw man right here might have missed the context! The ABC is biased". 

I mean, "hullo". 

Drawing the kind of conclusion that this Colleen Ryan has drawn is so stupid it blows my mind that she was one the editor of a newspaper. But of course she was the editor of a Murdoch rag. Surprise! Ms Ryan, try this advice for size: one might feel that the act of the ABC audit itself could be interpreted by some observers to be an abject failure at reasoning. But of course there is a lot of stupidity going around at the moment. 

The government wants to muzzle the ABC because it asks blunt questions. Yet it says Freedom of Expression is an important thing in a democracy when a terrorist shoots a cartoonist or film maker. If they hold both positions, there's a lottos cognitive dissonance going on in this government and it's not helping the electorate at all. 

The Death Penalty Thing Over In Indonesia

As the execution looms for Andrew Chan and Myuran Sukumuran, you get the feeling that Australia is inexorably being dragged into a weird orbit of Indonesian legalism. Indonesia for its part is arguing the death penalty as good deterrence and that the law is the law and if the punishment is not meted out, it discredits the whole legal system. Australia is trotting out all the emotional arguments about the death penalty and amazingly seems to have forgotten the reasoning behind its own end to capital punishment in Australia. 

Personally, I am against the death penalty so it goes without saying that I do not wish to see the two men executed. But it does embarrass me greatly when I watch the arguments put forward as reasons why mercy should be shown to these two men. Surely there is a deeper point of jurisprudence that is universal and appropriate to appeal to the Indonesian government. It strikes me as very odd that we only seem to have our own personal moral objections as something that should apply to Indonesia. It's a really bad argument, and is hardly likely to succeed. 

There's got to be a better argument to be mounted. 

Also, it seems rather ironic that the former lawyer  who fronted for big tobacco and James Hardie in the asbestos trials is now the foreign minister trying to stop the execution. 

Hostages To Their Own Bullshit

Chasing Unicorns

There's something fundamentally unhinged about the conservative agenda in this country. First off is the obsession with returning the budget to surplus, which is one of those notions that sound great but don't stand up to scrutiny. If a government returns to surplus, it essentially shifts debt to the private sector off the government's own books.

A very simple explanation can be found here.

There are only so many Australian dollars. If the government taxes more than it spends (a surplus), it is taking more dollars out of the private sector than it is putting in. Assuming exports equal imports those dollars can come from only one place – private domestic savings. Everyone’s surplus is somebody else’s deficit. 

-------- 

The arithmetic is very simple. Total net financial assets in Australian dollars is the sum of government assets, plus net private domestic assets (individuals and businesses), plus net foreign assets. If the federal government runs a surplus then the money has to come from one of the other two. Given the government has virtually no control over the foreign component, a surplus will usually be accompanied by a reduction in savings in the domestic private sector (households and businesses) as they pay more in tax than the government is spending into the private economy. 

When the federal government runs a surplus, private debt almost always increases. In other words, the banks create the money to fill the hole left by the government surplus. The much heralded surpluses of the Howard/Costello government were precisely matched by non-government deficits. These budget surpluses were partly supported by trade surpluses (foreign sector deficits) but even so, private debt increased dramatically.

So the call to cut the government deficit is in effect a call to increase private sector debt. At a time when private sector debt combined is at a record high, it seems incredibly abstruse for the Coalition Government to be putting so much emphasis on getting back to a surplus. Yet any time a Coalition member talks about the deficit, they don't say anything much more cogent than "Deficits = Bad".

The reason they say this is because they don't have the ability to communicate the may aspects of a deficit and so they decided long ago to treat the electorate with contempt and instead go with slogans. And the slogans seem to get dumber each election, so at some point we were going to have the kind of problem where we have to ask if the Prime Minister has any core competencies.

Worse still, the electorate eats up this simplified, un-intelligent patter and vote with their prejudices intact. It is then, entirely without surprise that this current government has foundered on the rocks of its own devising, as it tries to somehow put into place its self-destructive policies and wondering why the economy is failing to grow. The self-proclaimed proficiency with managing the economy is mere propaganda, a line of bullshit that they themselves believe. Now that they are hostages to their own bullshit, they are in effect doing a marvellous job of vandalising the economy.

Is it any wonder Tony Abbott is considered the least competent head of government in the western world?