View From The Couch - 24/Dec/2016

People Who Look Better In Hindsight

The leader of that list - with a bullet - would be Dr. John Hewson, he of the losing end of the 'the sweetest victory of them all" election in 1993. That's now a long time ago and seems like a galaxy far, far away. If you had Paul Keating and John Hewson as the respective leaders running for office, then you have an embarrassment of riches compared to what we've had lately, which includes Abbott versus Gillard, Abbott versus Rudd, Turnbull versus Shorten. I guess it's Abbott who is single-handedly lowering the intellectual stakes with his much CTE damaged brain.

All the same, Gillard couldn't sell a big picture if it came with a price tag, Rudd's second go was like a facetious after-thought, and Turnbull who replaced the CTE-affected one, remains beholden to the interests of those who seek to prolong fossil fuel profits. When you think about that, the significance of the 1993 election looms large. The defeat of John Hewson brought about a turmoil in the Liberal party ranks that helped it shed its liberal framing of its policies and settled in with the Thatcherite conservative politics, which to this day hampers any sense of social progress. What the Liberals lost that day election in 1993 is not going back in a hurry.

As such, it might be worth checking in with what Dr. Hewson has to say about this intellectually stunted philosophical bankrupt government:

Just how is our economy to not only recover from the 0.5 per cent fall in growth in the September quarter, but actually produce a "growth spurt" as assumed through to the end of the decade – which industries, which jobs? None of this can simply be "assumed". 

It is most sobering to realise that the accumulated budget deficits (relative to GDP) since the GFC already dwarf those that followed each of the previous two recessions, and we haven't had a recession, rather we are now in our 26th year of continuous growth. 

Moreover, even on the optimistic forecasts/predictions of MYEFO, we will have at least four more budget deficits, totalling some $95 billion through the budget period. Using more realistic forecasts – and recognising the some $14 billion of measures still stuck in the Parliament (that still exceed the net savings achieved since the last budget) – the budget repair task is a very significant challenge that will require both more expenditure restraint and tax increases overall. It is most telling that the government won't "commit" to the small projected surplus in 2020/21. 

While we may have dodged the ratings downgrade bullet for now, the possibility of a downgrade is still very real. We certainly can't be complacent, especially as our economy is now probably more vulnerable than it has been since the GFC, certainly recognising the limited policy capacity and flexibility to handle another "shock".

It sounds like he's exasperated with this government. I imagine his own party is exasperated with their former leader, but then in that sense he might be to the Liberals what Mark Latham is to the ALP: Failed leader, thought bubble monster.
Yet, there's more:

Monetary policy has already reached the limit of its capacity to stimulate – except by jawboning our dollar down – and rising borrowing costs, and associated bond market corrections globally, could further work to restrain growth. Similarly, the magnitude of the budget repair task, and the threat of a ratings downgrade, leaves us with very little budgetary capacity to stimulate as well. 

Our vulnerability is the result of at least 10-12 years of poor economic management, under governments of both persuasions. The benefits of the resources boom were squandered – failing to put some away for a rainy day – and then we failed to move early, and more decisively, in budget repair, even allowing for the GFC. 

We now face the toughest and most unpredictable global economic environment in memory, where our fate is most heavily dependent on China, where their growth is slowing much faster than they will admit. Add to this the need to achieve "compromise" with a very short-term focused, opportunistic, Senate.

All this is to say, it's enough to induce a bit of nostalgia for a time when our political leaders were actually very good to excellent, and the contest of ideas was real and rewarding. It's weird how politics hasn't really de-polemicised itself but lowered the intellectual power to a dim, dark glow of a dying bulb. All we get are empty polemics about things like gay marriage or fake news, while we ignore the biggest picture of them all, global warming.

I really didn't think we'd sink to this level where the last two Treasurers seem to be people with very little intellectual capacity to deal with ideas more intricate or nuanced than rhetoric. I never would have guessed if you had told me back in 1993, that what I was witnessing was the last great contest of ideas at the ballot box; that it would be shits and giggles ever onwards, ever after.

Oh No Carrie Fisher? 

2016 is proving to be a real shit. This morning's breaking news was the Carrie Fisherhad a heart attack on board a plane from London to LAX. She's in a critical condition and hospitalised, as of this writing. Apparently she is in ICU but her condition is stable.

Fisher, 60, was rushed to UCLA Medical Center by Los Angeles Fire Departmentparamedics shortly after noon, after her 11-hour flight touched down at LAX.

A source who was not authorized to discuss the incident said the actress was “in a lot of distress on the flight.” 

A statement released by United Airlines said that medical personnel met Flight 935 from London on arrival after the crew reported a passenger was unresponsive.

60 is much too young in this day an age for this to be befalling her. Our thoughts are with our favourite princess. May the Force be with her.

Equal Opportunity Rhetoric Is A Bit Rich

 Anything To Make Themselves Look Good To Thesmelves

One of the more illogical things from this Abbott Government - and there are many illogical things about this government, but bear with me a little - is this notion that it wants equal opportunity but it's not interested in equal outcomes. The apparent reasoning goes equal opportunity is good because everybody is different and everybody is talented to different levels so if the opportunity is equal then the outcome would be different in proportion to the talents and efforts of the participants. This in turn justifies the notion that outcomes from equal opportunity may still be unequal, but that's okay because the government delivered the front end of the process. If there's a bit of inequality around, that's because some are more hard-working than others and some are more talented than others and so the rhetoric goes.

Equal outcomes on the other hand are evil because it takes the incentive away from the talented or hardworking or the talented-and-hardworking (often they insert their narcissistic self-image here) and holds them back to put them at the same outcome as the lazy dole-bludging scumbucket commie youth (and this is where they insert a an old image of the Paxton brothers). This rhetorical flourish has been going on for some time now and nobody in the ALP ranks has actually gotten up to say "if you want equal opportunity by that account, there should be 100% death duties" because that would be the ultimate in a level playing field.

Or they should abolish Private Schools. Or they should abolish family trusts. All these things would bring things much closer to equal opportunity. As it is, the rich get to have so many ways to make opportunities unequal, and the Coalition is in favour of all those things. Yet, there's no logical way this coalition government can truly be standing by its own rhetoric covering equal opportunity. Furthermore, because nobody on either side of politics is willing to pursue the reductio ad absurdum of creching all the children born in our society like say, the ancient Spartans did,  we can safely say that the Coalition don't (and won't and can't) even believe in equal opportunity the way they describe it, any more than the ALP is pushing communism. That is to say equality of anything is not really on the agenda for the Coalition. Everything they say about equality is a flat out lie to cover up what they want to do which is to entrench privilege. Let's not forget George Orwell called this rhetorical double-cross Doublespeak.

Inequality in our society is rising quickly partly because we keep going back to these same tired, illogical rhetorical cliches about equality in our society. If John Hewson is willing to say the gap is too big to be papered over by the rhetoric of equality of opportunity and not outcomes, then we can safely say there's something pretty unequal going on.

But the former Treasury economist, IMF adviser and investment banker does find the Abbott government guilty of serious unfairness: “They raised expectations that the budget would be fair, but it it’s very inequitable. They said everyone would share the burden, but they clearly didn’t except for the cosmetic 2 per cent levy” on people earning more than $180,000 a year.

“That’s 1 per cent of the income for a higher earner, but they’ve made sizeable cuts of 10 per cent to 15 per cent for people on low incomes” through welfare changes. “It’s a significant hit to people on low incomes,'' he says.

About two-thirds of the adult population agrees with Hewson’s charge of unfairness, according to the polls. But what of Joe Hockey’s rejoinder to the complaint that the budget is unfair? He’s said that government isn’t supposed to deliver equality of outcomes, but should aim for fairness of opportunities.

“There’s too big a gap between equality of opportunity and equality of outcomes,” replies Hewson.

 It's a weird moment in history when you find yourself agreeing with John Hewson, having vehemently voted against him back in 1993.

 

Fear Of The Known Unknowns

Our Own Bloody Fault John Hewson?

Good Grief Charlie Brown part II is how Tony Abbott's Liberals are not releasing their costings until Thursday before the election. I keep thinking this is fraudulent on the part of Abbott, but John Hewson was on radio defending this bit of 'strategy' (it hardly seems worthy of the word, but  there you go). Hewson, who was badly burnt in the 1993 un-losable election because he released his policy details sees that as a watershed moment when politicians realised that the electorate is easily scared and if you have policies, you're better off not telling the electorate during election campaigns. We only have our selves to blame, reasoned Hewson.

You gotta hand it to old John Hewson. He did lose in 1993 well and good and thank bloody goodness for that. Aah, memories of Paul Keating's "greatest victory of them all".

I'd have to say while it sounds like some kind of causal link to the state of affairs today, I don't think Hewson is right in drawing universals from his failed campaign. And all the same, it's still unprincipled for Tony Abbott to be withholding his costings given that he's been banging on about government debt and waste for the better part of 3 years and 9 months. Sure it didn't work for John Hewson, but nobody remembers Hewson as a fraudulent politician. He's accorded that much respect, which is why he gets asked by the media to commentate.

Tony Abbott on the other hand is firmly working with this notion that he won't let us know what he's going to cut to make his dumb figures fit. It's game, it's got chutzpah, but it's an utter lie to suggest that this is anything but deceitful. And you know, this is the same simpleton that spent the last 3years banging on about the Carbon tax being some kind of deception by the ALP when in fact anybody with a brain understood that it was the price the ALP had to pay to form Government with the Greens. characterising at as a deception as Tony Abbott has done for the last 3 years must be one of the biggest con jobs in Australian political history - what little of it there is. So as it is with the completely cockamamie 'Abbonomics' or 'Hockeynomics' or whatever austerity-tinged idiocy they plan on bringing in, you have this layer of Orwellian lies to keep it all greasy so it goes down easy with the gullible electorate.

If this man wins this Saturday, I guess Australia has got everything that's coming to it. Good Grief.

Then There's Gay Marriage

While I'm on this wicket of calling out Tony Abbott and his indecent sense of politics, I want to point out that his defiant "people know where I stand" remark gave me the shits today. I know he's a social convservative, a Catholic, an ethical midget and a moral munchkin from long ago but really Tony Abbott is copping out from answering why he holds to these socially conservative, Catholic views (views contradicted by the current Pope no less), and why there's anything good with keeping gay people from having the marriage rights.

I'm not the biggest advocate of Gay Marriage rights. I just quietly support it from the side. Mainly because on a personal moral scale, I'm a libertarian at heart. I don't think it's the business of the state to dictate who can form marriage unions with other human beings given what we know of humanity and sexuality and psychology and history. If Tony Abbott is really going to be a standard bearer for these 'conservative values', he really ought to man up and spell out why exactly he thinks it's in the state's interest to say no to Gay Marriage. Just something that shows his moral reasoning on this is something beyond "because God says it's wrong according to the Pope."

What's Really Going To Piss Me Off About An Abbott Government

I'll be honest here. What's really going to piss me off about an Abbott government is how he's going to sell us this crappy substitute for the NBN. His promise is that the people who've already got it can keep it, but the roll out will stop. So if you wanted the NBN, but if it hasn't rolled out to your area, then stiff shit you're not going to get it.

I just don't see how this is even remotely fair or as politicians like to say equitable. To use the Liberal Party's own logic on this, quite frankly, I paid my taxes, I expect to be treated equally under the law. I don't see how it is going to be equal for some part of Australia to have 100mbps bandwidth and other parts 10mbps bandwidth just because Tony Abbott says 10mbps should be enough.

Let me put this to you all another way. As good as it sounds, 100mbps only gets us to the level playing field of average around the globe. Google recently trialled 1000mbps =1 Giga-bits-per-second  in Kansas city. 1 Giga Bits Per Second is 100 times faster than what Tony Abbott thinks is 'enough'. One Hundred Times!!!!

Google put in this network for free, and suddenly all these companies were starting up in Kansas City, trying to take advantage of this speed. Even if Australia got the NBN at 100mbps, it's still only 1/10th the speed of Google's 1Ggbps network in Kansas City; and clearly, there's a well-established correlation between high tech industry growth and internet speed. There's a tech boom in Kansas City just because Google put in this network. As the ghosts whispered to Kevin Costner in 'Field of Dreams', "build it and they will come".

This is a huge issue if Australia wants to become the financial hub in the Pacific rim. This is a huge issue if Australia wants to move on into the post-mining boom period, looking for next areas of growth. This is a huge issue if we want to have technological relevance and industries that can deliver in a post-industrial economy. We can't just be mediocre at this stuff, we have to be good to great. And all these things are challenges the RBA and the current ALP Federal Government understand. Does Tony? (Rhetorical. Obviously the answer is 'no'. *facepalm*)

Thus I find it incredibly hard to stomach the fact that Tony Abbott's Liberal Party claims to be pro-business but is in fact 3 buckets of Luddite and a sack of stupid when it comes to its internet policy. It's not surprising given their idiotic stance on climate change, but that is another issue. Yes, I'm pissed off about this more than just about any other aspect of their idiotic, as-yet-un-costed policy platform, and by extension I'm very angry at a middle Australia who want to vote in this lot. As Homer Simpson once asked the Guru on top of the mountains, "I mean, really? Really, really? Really, really, really?"

Seriously folks, if there's one - and only one - point of differentiation that matters to the future of the Australian industrial landscape, it's the NBN. Not the Carbon Tax, not Gay Marriage, not Industrial relations and not even the possible hiking of the GST. It's the NBN.

So save the NBN: Don't vote for the Libs. Everything else is either slamming the gate after the horse has bolted or fighting the tide of history. The NBN. Remember that when you go to the poll booths.

News That's Fit To Punt - 26/Oct/2012

The Currency War

The Australian currency has been stuck above parity for some time and not even the lowering of interest rates has provided any 'relief' for the export industries of Australia.Except there's no relief in sight.

Pleiades sent in this link today as a kind of heads-up.

According to (ANZ boss Mike) Smith, the Reserve Bank criteria for interest rate decisions should be dominated by the dollar. I pointed out yesterday that the currency wars and the money printing taking place in Europe and the US could send the Australian dollar much higher. Smith says that the huge liquidity in the system is going to start speculation on commodities and with the consequent higher prices will come an Australian dollar that goes even higher.

Interest rates become the only weapon the Reserve Bank has to prevent the further damage that is in store for our employment creating industries like tourism, education and manufacturing.

Mike Smith adds that central bankers are far wiser than he on these matters. I think Smith is absolutely right about everything except that last point. Smith is mixing in global markets every day and he is hearing concern around the regions about the repercussions of the US and European money printing and the currency war.

The contention there is that the Reserve Bank should probably cut interest rates in order not to  attract foreign interest in our currency. Forget the housing bubble, just go to near zero interest rates.

I've been pondering that on this afternoon, and I think this is a crock. The cost of living in Australia is so far out of line with the CPI that nobody believes the inflation figures any more - they think it's much higher. This suggests that the interest rates should be sitting much higher than where they've been for at least a good decade. Mike Smith asking for the interest rates to be lowered is effective asking for there to be so much cheap money, it should inflate the value of property once again. In other words, the ANZ Bank chief is asking for a Price Keeping Operation to be staged out of the RBA.

One imagines the hope there is that if there's so much cheap money around, surely it will get sucked into the property market and reignite those big gains in the banks' balance sheets. You have to wonder if this isn't just another vested interest mouthing off, because it sure sounds like it.

Hewson Slams Vested Interests

There's one thing about John Hewson we can all be certain about - he was Australia' Mitt Romney without the Mormonism but with Economic Rationalism as his religion instead. If nothing else he gave the Liberal Party some kind of ideological frame work from which to work, and some of it has worked out well for Australia.

It's interesting then when he pipes up and lobs a verbal grenade in the direction of the NSW government and its approval of Jamie Packer building a second casino for Sydney.

Dr Hewson said he wasn’t opposed to a hotel or a second casino license for Sydney.
However, the process had to be seen to be clean and above board, and the government shouldn’t give rise to concerns it was being compromised by vested interests.
‘‘This is sort of chipping away at the whole integrity of government process,’’ he said.

So, there's that phrase again: vested interest.

Small Arts Companies Get The Squeeze

Pleiades sent in this one as well, about how small arts companies are getting less money now that everybody is having to look for some austerity.

Exactly why these companies are called “small-to-medium”, by the way, is one of the mysteries of the sector. Most turn over less than $2 million a year, the threshold the Australian Taxation Office considers a “micro-business”. Organisations that the arts calls “medium-sized” are in fact small in any objective sense of the word. Nearly all of them are run on the proverbial smell of the oily rag, with perhaps three or four full-time administrative staff.

This diminutive scale makes many small arts companies vulnerable to the slings and arrows of artistic fortune. They have few assets and little in the way of cash reserves. If the funding disappears, most can’t survive in the long term. In recent weeks, we’ve seen Fremantle-based Deckhair Theatre wind up after 30 years of independent production, and Adelaide choreographer Leigh Warren “go freelance” to keep his dance studio afloat. Both companies have been defunded in recent years.

The problem for the small-to-medium sector is that the funding appears to be drying up. With the Australia Council getting squeezed by the federal government’s efficiency dividend, Commonwealth funding is actually falling in real terms. Nor is any extra pot of gold awaiting beneath an unexpected rainbow. Arts Minister Simon Crean appears to have conceded that he can’t get the National Cultural Policy up this year.

You feel for these arts companies. They have a tougher proposition than film producers for a start.

One of the things that the Liberal Party embraced gingerly toward the end of their time before the Ruddslide was the fact that a lot of people in the arts were small business as well; and that the conservatives' general disregard for the arts and arts funding had created a massive gulf between it and the arts community in Australia. Certainly, under most of John Howard's tenure as PM, the prevailing mood was that all arts participants were left-voting scumbag and deserved not one iota from the public purse. When you realise how many of these small arts companies are around, you wonder why and how a party in favour of small businesses could have treated them with neglect for so long.

In turn, you'd have to say that the ALP for its money has taken for granted that people in the arts are generally more socially progressive and have bred a variety of arts bureaucrats that form a crazy subculture of their own, and choke off the promise of the arts itself. You get the feeling that the ALP is a latter day Stalinist apparatus that seeks to ideologically constrain discourse through the arts by funding particular kinds of things that never makes any money.

So I guess it's not surprising they get slammed by the likes of John Roskam in the AFR:

The health of Australian democracy should not be measured by the number of students enrolled in gender studies.

In his An Enquiry Concerning Human Understanding  published in 1748, David Hume described the work of a certain species of philosopher. What he said could apply to the academics in the humanities in Australia in 2012.

“Though their speculations seem abstract, and even unintelligible to common readers, they aim at the approbation of the learned and the wise; and think themselves sufficiently compensated for the labour of their whole lives, if they can discover some hidden truths, which may contribute to the instruction of posterity.”

The pity is that the majority who teach humanities at Australian universities are a long way from discovering any hidden truths or making a contribution to the instruction of posterity.

That's a bit mean. earlier in the column is a castigation about French critics who forged a path to an unbridled kind of relativism in the late 20th Century that continues to appall moralists the world over; but that's not surprising that a conservative think tank would take offense to Derrida and Foucault. Derrida, of course being that 'Obscurantist Terror' - and there's a war going against terror to this day.

Jokes aside, the two articles give you the distinct feeling that the arts really are not valued or are important in our cultural life in Australia. More to the point, we're a nation of hardened, committed, willful, fully ideological, philistines. It's a shame the arts as a vested interest holds absolutely no sway over the conscience of this nation.

 

 

 

Springtime For GM & Chrysler

Obama Sends Them Back To Drawing Board

The best indication as predicted some itme ago is that the Obama administration will let General Motors and Chrysler go to bankruptcy.

President Barack Obama believes a quick, negotiated bankruptcy is the most likely way for General Motors Corp. to restructure and become a competitive automaker, people familiar with the matter said.

Obama also is prepared to let Chrysler LLC go bankrupt and be sold off piecemeal if the third-largest U.S. automaker can’t form an alliance with Fiat SpA, said members of Congress who were briefed on the GM and Chrysler situation before the president said two days ago that the automakers’ viability plans were insufficient.

The president gave GM 60 days to come up with deeper cost and debt reductions than the biggest U.S. automaker proposed in its plan submitted last month. The “quick and surgical” bankruptcy his administration said was also an option appears to be inevitable, said the members of Congress and two other people familiar with the matter. Obama personally signed off on asking GM Chief Executive Officer Rick Wagoner to step down, which he did on March 29, they said.

A GM bankruptcy would mark the fall of a corporate icon that as recently as 2004 posted a $2.8 billion profit and in 1962 controlled 51 percent of the domestic car market. A plunge in sales of sport-utility vehicles and pickups as gasoline prices soared, coupled with the seizing up of credit markets, caused GM to lose $82 billion in the last four years and seek government help to survive.

Kind of makes the eyeballs hurt, just reading that. There are erstwhile voices asking whether it really would be good to let GM, Chrysler and their investors go to the wall, but it is also the case that the US government can't continue to just keep on handing over money to keep them afloat, month by month.

The smart money seems to be that if and when GM goes into bankruptcy, it will have to be broken up into 2 companies in the restructuring process - the profitable parts of the business will be bundled together and emerge from bankruptcy quickly while, the problem children of the business will be shepherded through more slowly. GM Holden in Australia is most likely to be in the former group, but it maybe the case that sections of GM might simply be sold off to interests who can afford them. Chrysler seems to be headlong on its way to bankruptcy, "don't pass go, don't collect $200.00", as Monopoly would tell us.

Now, speaking of colossal failures in capitalism...

Back In Ostraya, Remember John Hewson?

Does humor belong in music? Or does the Pope live in the Vatican?

John Hewson has recently written some article on a pay- site that basically says there's no going back to the way it was before because it was all so screwed up to begin with - or words to that effect. He's been makin some noise lately, Dr. Hewson, so I also wanted to link to Gerard Henderson having a go at him here.

Hewson lost the "unlosable" election that year. After leaving for the corporate world, he created a resume littered with disputation. Last week there was more bad news about the collapse of Elderslie Finance Corporation, where Hewson was chairman before matters slid out of control, leaving 4000 investors behind.

Before that, Hewson departed from the board of Pulse Health Group in a shake-up. Before that, he quit as chairman of Natural Fuel amid a boardroom battle. Before that, he lost a bitter boardroom struggle for control of Sports & Entertainment Limited. Before that, he departed Belle Property amid a dispute. Before that, he resigned as chairman of Network Entertainment prior to the company's collapse. Before that, as dean of the Macquarie Graduate School of Management, he had a spectacular falling out with the university. Before that, he helped lead a Macquarie venture in Singapore, which collapsed. Before that, CBD Online, where Hewson had been chairman, failed.

When it comes to authority in the worlds of business and politics, Hewson is a dead man talking. Only one field would treat this resume as a qualification for authority - the media - and so it was that Hewson provided the most lurid example, thus far, of the self-generated, self-feeding media speculation around Costello for the past month.

Pretty funny. Nothing makes for such fine autumn reading as old politico-warhorses having a jab at one another.