Wednesday, 30 June 2010

Down a tried and true path


Julia Gillard earlier this week was straight onto the streets of Queanbeyan across the border from Canberra which Kevin Rudd had made his photo opportunity territory. And today it was into the studios of an FM radio station where Julia showed she can be as with it as Kevin in appealing to a youthful audience.
Kyle and Jackie were the chosen ones as she subjected herself to an introductory song Gettin’ Over You by David Guetta featuring Fergie before admitting that the song was not really to her taste as she was really an 80s kind of dag.
And as for the content of the in depth interview, well, we now know that red headed jokes will be allowed but that questioners can “expect to get a response when you do.”

No Christian but still the same view as Kevin


Our Prime Minister might have frankly told the people she is not a Christian but anyone hoping for a new courageousness on social matters is clearly going to be disappointed. There will be no federal Labor Party support for same s-x marriages while she is the boss.
The policy will remain the same as under the Christian man she deposed when the Government refused to allow the Governor General to approve legislation on same s-x relationships passed by the ACT Territory parliament.
We believe the marriage act is appropriate in its current form, that is recognising that marriage is between a man and a woman, but we have as a government taken steps to equalise treatment for gay couples,” Ms Gillard said this morning.
Meanwhile in Iceland that country’s female Prime Minister Johanna Sigurdardottir on Sunday, the day a new law took effect defining marriage as a union between two consenting adults regardless of s-x, married her long term partner, the writer Jonina Leosdottir, and became the world’s first national leader with a same-sex spouse.

The infection of nonsense is spreading

The Seven Network last night, so I am told, has joined in the opinion poll nonsense with a report of a Morgan phone poll showing the Coalition in a winning position. Thank goodness I made that decision after the outing of that NSW Minister for visiting a gay club of some kind not to watch the Seven News. It saved me upsetting some guests with an undignified burst of laughter.

Putting trust in the indicator


In these pre-election weeks I will put my faith in the Crikey election indicator rather than try and work out what the increasingly different messages from pollsters mean. What the wisdom of the market is telling us is that there has been a relatively minor increase in support for Labor.
30-06-2010 electionindicator

A timely reminder


It is not only polls that should be treated with a great deal of suspicion during pre-election madness. What politicians say should largely be ignored as well.
There’s a wonderful example of the lies that voters get told in the United Kingdom at this very moment that should serve as a timely reminder to us all.
During the recent UK campaign the Liberal-Democrats came out with a very effective poster:
30-06-2010 toryvtbombshell
The Conservative then shadow and now actual Chancellor of the Exchequer George Osborne was quick to deny any such plan. “The plans we set out” he explained to voters, “involved around 80 per cent of the work coming from spending restraint and about 20 per cent from tax increases … The tax increases are already in place; the plans do not include an increase in VAT.”
Last week Chancellor Osborne announced an increase in the VAT from 17.5% to 20%. Not really a surprise but made all the more outrageous by the fact that the Liberal Democrats now as a Coalition partner in the Government supported it as well. But not to worry.
The Lib Dem spokesman Vince Cable explained yesterday that his lot had only warned voters that Prime Minister David Cameron planned to raise VAT to score political points against the Conservatives. It had not promised to do anything about it.

Tuesday, 29 June 2010

Good sense prevails

There was only one thing that would have been stupider than Kevin Rudd wanting to immediately get a job in the first Julia Gillard ministry and that would have been her giving him one. The absolute minimum of reshuffling was what was needed and what the new Prime Minister sensibly delivered. There is no doubt that there will be a minimum of delay before an election is called. Opposition Treasury spokesman Joe Hockey might even have got it right this morning when he predicted the election would be called this weekend.

A little election date form guide.


As a little guide here is the Crikey Election Date Indicator with probabilities for each date based on what the markets are currently indicating:
29-06-2010 electiondateindicator
The favoured date of 28 August is a little later than what would be chosen if the Hockey prediction about the election being called this weekend comes true.

Paul Krugman on “The Third Depression”.


It was reading the latest op-ed piece in The New York Times by the Nobel prize winning economist Paul Krugman, The Third Depression, that has sent me back to delving into the kind of economic texts I have hardly glanced at for 50 years. I had, quite unthinkingly really, mentally discarded all that Keynesian stuff that still was taught when I went to university and accepted the new orthodoxies of fighting inflation first and foremost, pandering to the markets and balancing government budgets. Then this Professor Krugman bloke, who someone or other somewhere had thought worthy of a major gong and who wrote with an understandable simplicity about the most complex of subjects, came on my internet reading radar and I was right back to Economic History I with Lord Keynes at my side.
My complacent acceptance that stern and punishing economic matters were good for us in the long run has taken a more worrying turn as I read comments like this on the Krugman blog last week:
We’ve suffered the worst cyclical downturn since the Great Depression; in terms of unemployment and output gaps, we have recovered almost none of the lost ground. Millions of willing workers are idle because of lack of demand; let them stay idle, and we can turn this into a long-term structural problem, but right now it is precisely a short-term, cyclical problem.
So saying that we need to focus on the long term, and not worry our little heads about trivial short-term issues like the highest long-term unemployment rate since the Great Depression, may sound like wisdom — but it’s actually folly.
Oh, and one more point … about quite a few policymakers and economists: the attempt to shift the discussion away from the short run is not, as often portrayed, an act of vision of courage. On the contrary, it’s an act of cowardice, an attempt to evade responsibility for a disastrous state of affairs that we could fix, but choose not to. Keynes had it right: But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.
That is a depressingly thought provoking commentary when you read it after looking at the communique from the world leaders at the G20 Conference just concluded in Canada. There was very little concern for the rising number of unemployed in Europe and the continuing 10% level in the United States in those formal words. Which is what provoked yesterday’s melancholy Prof. Krugman judgement:
We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression [the panic of 1873 with the years of deflation and instability that followed it] than the much more severe Great Depression [of 1929-31and the years of mass unemployment that followed them]. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.”
So off I am scampering to swat up on this deflation business while all the time hoping that my concerns are simply the result of being influenced by a good writer rather than a man who is actually right. A long period of a proper Depression is just too depressing to contemplate.

Something for frequent flyers


Just a little news for frequent flyers to contemplate from USA Today overnight:
29-06-2010 airlinefood
Enjoy your dinner.

Monday, 28 June 2010

Paul Krugman on "The Third Depression"

It was reading the latest op-ed piece in The New York Times by the Nobel prize winning economist Paul Krugman, The Third Depression - NYTimes.com, that has sent me back to delving into the kind of economic texts I have hardly glanced at for 50 years. I had, quite unthinkingly really, mentally discarded all that Keynesian stuff that still was taught when I went to university and accepted the new orthodoxies of fighting inflation first and foremost, pandering to the markets and balancing government budgets. Then this Professor Krugman bloke, who someone or other somewhere had thought worthy of a major gong and who wrote with an understandable simplicity about the most complex of subjects, came on my internet reading radar and I was right back to Economic History I with Lord Keynes at my side.
My complacent acceptance that stern and punishing economic matters were good for us in the long run has taken a more worrying turn as I read comments like this on the Krugman blog last week:
We’ve suffered the worst cyclical downturn since the Great Depression; in terms of unemployment and output gaps, we have recovered almost none of the lost ground. Millions of willing workers are idle because of lack of demand; let them stay idle, and we can turn this into a long-term structural problem, but right now it is precisely a short-term, cyclical problem.
So saying that we need to focus on the long term, and not worry our little heads about trivial short-term issues like the highest long-term unemployment rate since the Great Depression, may sound like wisdom — but it’s actually folly.
Oh, and one more point ... about quite a few policymakers and economists: the attempt to shift the discussion away from the short run is not, as often portrayed, an act of vision of courage. On the contrary, it’s an act of cowardice, an attempt to evade responsibility for a disastrous state of affairs that we could fix, but choose not to. Keynes had it right: But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.
That is a depressingly thought provoking commentary when you read it after looking at the communique from the world leaders at the G20 Conference just concluded in Canada. There was very little concern for the rising number of unemployed in Europe and the continuing 10% level in the United States in those formal words. Which is what provoked yesterday's melancholy Prof. Krugman judgement:
"We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression [the panic of 1873 with the years of deflation and instability that followed it] than the much more severe Great Depression [of 1929-31and the years of mass unemployment that followed them]. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending."
 So off I am scampering to swat up on this deflation business while all the time hoping that my concerns are simply the result of being influenced by a good writer rather than a man who is actually right. A long period of  a proper Depression is just too depressing to contemplate.

Sunday, 27 June 2010

A bit stiff with the timing

The Liberal Party were a bit stiff with the timing of their Federal Liberal Party Council meeting. The machine clearly had gone to a lot of trouble to make the weekend Canberra gathering a springboard for the coming election campaign.

The advertising and PR men had spent many hours and undoubtedly many dollars in preparing material for their leader's "Our Action Contract".
It all came to very little for the simple reason that the nation's new Prime Minister made red, not blue, the colour of the weekend. Julia Gillard was the Saturday and Sunday politician of the moment not Tony Abbott.
Had Kevin Rudd still been the opponent then things would have been different because the "12 realistic, modest and prudent election commitments that are achievable and deliverable over the next three years" are a well thought out foundation for the Opposition's campaign. Most definitely they address, with their signed contract pledge, the concern some people might have that Tony Abbott is not a politician who can be believed.
Here's a sample of the dozen Contract pledges:

Naming the mystery spokesman

Kerry O'Brien nearly broke some news on Friday night. Not news of the normal kind that flows from one of his 7.30 Report interviews where one of his guests says something interesting. No. This time he nearly blurted out a real fair dinkum scoop where a journalist tells his national audience a secret.
The scoop that almost was came when the old red headed one had finished with the commentary on the new red head and was interrogating Opposition Leader Tony Abbott. "Well, let's come to back to your credibility then if you're happy to test it," intoned Kerry in his most serious voice. "There's confusion about what you really told your party room on Tuesday. According to the official Liberal Party room briefer to journalists, a senior lawyer who one might expect to be pretty good with the facts on detail, you said, according to him, 'Victory is within our grasp. We are within reach of a famous victory.' "
The mysterious official Liberal Party Room briefer! The man I wrote about last Wednesday when I noted "isn’t it cute how the parliamentary press gallery continues to play the game of not telling us the name of the senior coalition figure who gives the formal briefing to journalists after the party room meetings." Normally journalists don't even report that they have been spoon fed a version of what went on but the truth slipped out last week as the gallery members tried to defend themselves from accusations that they got their victory quotes wrong. Tony Abbott tried to pretend that he had spoken to his colleagues not about the prospect of "a famous victory" but rather made the more mundane assertion that the next election was “certainly winnable, but there’s an enormous long way to go.” The lads and lasses of the gallery were indignant that their honour was being attacked in such a fashion but such are the rules of the Canberra game they were not prepared to name the name of their key defence witness.
And nor was Kerry O'Brien when push came to actually informing his public. Instead he just teased us further with his "senior lawyer who one might expect to be pretty good with the facts on detail" reference and left it at that. Kerry too is clearly still a member of the comfy little political club on the Canberra hill but at least he had narrowed the field; narrowed it in a way that made the Opposition Leader decide he had better admit that his earlier denial of the "famous victory" quote was not one of those truths he had written down but one of the spur of the moment variety of comments which was in the "kind-of-a-lie" category. 
Thus this little interview interchange:

TONY ABBOTT: Yeah, yeah. That wasn't all I said. That wasn't all I said.
KERRY O'BRIEN: So you did say that?
TONY ABBOTT: But that wasn't all I said. And the fact of the matter is no election is unwinnable. No election is unlosable. I've always been the underdog and I expect to continue to be the underdog, but I've gotta say this: we will put up a very good fight.
KERRY O'BRIEN: But you did say that. So you're confirming that you did say those words: "Victory is within our grasp. We are within reach of a famous victory."
TONY ABBOTT: There is no doubt we must have been within reach of a famous victory, otherwise the Labor Party would not have dumped their leader in a fit of panic about its prospects.
KERRY O'BRIEN: But do you accept that right through the campaign these words are going to come back to haunt you about what is gospel truth, something that you will read from a prepared text and whenever you're shooting from the hip, as we are in this interview?
TONY ABBOTT: Look, Kerry, Kerry, you had a good night with me a few weeks ago.
KERRY O'BRIEN: This isn't about me having good nights with you, Mr Abbott; this is about your credibility.
TONY ABBOTT: But the point is, Kerry, I will let the Australian public make a judgment about me. That's what happens in politics. But I tell you what: the Labor Party made a judgment about me this week. They made a judgment that if they stayed with Kevin Rudd, they were gonna lose.
 There are many conclusions that might be drawn from this amusing little political sideshow but I will just conclude with one. George Brandis SC, Shadow Attorney General and Deputy Leader of the Opposition in the Senate, is not a man who Tony Abbott wanted to provoke by suggesting for a second time that he had got his words wrong when briefing the press after a Liberal Party party meeting.

Getting rid of negatives

A relaxed and confident captain Gillard in the first of what no doubt will be many Sunday morning Prime Ministerial chats. Describing her promotion from vice captain to captain she set about doing her best to rid her team of the major negatives that Labor research clearly threw up before the sacking of Kevin Rudd.

We are to have under Prime Minister Gillard a smaller population - or at least by saying she is not interested in a big Australia she wants us to think that under her administration population will be smaller.. Mark that up as a victory for Dick Smith and his sustainable Australia campaign.Mark it down as an example of the damage that can be done when a Prime Minister like Kevin Rudd gets a bit extravagant with his language on television and says things like “I actually believe in a big Australia. I make no apology for that. I actually think it’s good news that our population is growing. I think it is good for us, it’s good for our national security long term, it’s good in terms of what we can sustain as a nation.”


Julia Gillard with a friendly smile patted back every effort by the Nine Network's Laurie Oakes to get an explanation of what her definition of sustainable population actually means. The same thing happened when the talk turned to boat people - a very concerned leader who understands the fears and worries of people who keep seeing pictures on the tele of boats arriving up north did not attempt to say what, if anything, her Government will be doing differently.
Affable talk again when it came to emissions trading. There was no success at all in getting past the flashing smile to learn what a lasting and deep community consensus on climate change action with a price on carbon actually means You have to take the community with you when you make deep and lasting changes was the best we got.
Which was more than we learned about future plans for a re-negotiated mining super profits tax. Something will end up being different but goodness knows what.

Saturday, 26 June 2010

Troubling signals from Greece

Promising tough and painful economic action is the easy bit. Actually doing it is a good deal harder. The European Community and the International Monetary Fund might have demanded Greece act to reduce the budget deficit but there are clearly problems for Prime Minister George Papandreou in actually doing so.
The Greek daily Kathimerini reporting on Saturday on reluctance of some in the governing coalition to change pension arrangements to lower payments and increase the retiring age
No doubt the bomb explosion in the office of the Citizens' Protection Minister Michalis Chrysochoidis which killed one of his aides this week is making some politicians wary of upsetting too many of the people. A decision by the opposition New Democracy Party to promise to end the agreement with the EU and the IMF and for Greece to again become "master of its own economic destiny" just adds another complication as Parliament approaches a vote on the pensions issue.
Those lending Greece the money to pay its bills clearly are getting worried again as this chart from the US Atlanta Fed's weekly Financial Highlights makes clear:


Click to enlarge graph
Greek bond spreads (over German bonds) have risen recently, near the highs seen before the European policy package was announced in early May and they went higher still the day after the US Fed produced its report.
These are clearly still troubled times.

Woman in sumo wrestler suit assaulted her ex-girlfriend in gay pub after she waved at man dressed as a Snickers bar

Just another night out in Dublin really as reported in that city's Herald. Dublin District Court heard how Sandra Talbot (32) lashed out at victim Adrienne Martin in a row that started over a novelty sumo wrestler's suit that Talbot was wearing. The row developed as the victim tried to wave at a man dressed as a Snickers bar.

Transitioning from home ownership

In the United States the rise in the number of people unable to meet housing loan repayments continues to grow. And what do that nation's bankers now call the painful process of foreclosure?
In testimony prepared on 24 June for a congressional hearing Barbara Desoer, president of Bank of America’s home-loan and insurance unit said this: "Given the depth of the nation’s recessionary impacts on homeowners, a considerable number of customers will transition from homeownership over the next two years."
Transition from homeownership!

Friday, 25 June 2010

God to save us?

The gloomy view of Americans is that more than half of them think the next 40 years will see another world war and expect that there will be a major terrorist attack on the US with a nuclear weapon. The good news for 41% of Americans is that they believe Jesus Christ will return sometime during this period.
This and other intriguing insights into how Americans see the future are provided in a survey published this week by the Pew Research Center for the People & the Press.

Does anyone care?

Apparently an Australian cricket team is playing England at something or other. There once was a time when people would have been interested. When John Howard finally gets to head the international cricket organisation he will be presiding over a very minor sport indeed.

I suppose she had to

Perhaps Julia Gillard would have been more circumspect if she had had time to read The Economist before chatting on the phone with US President Barack Obama. With a detailed review of the lack of progress in the nine year Afghan war, the weekly news and views magazine concludes "presidential decisiveness cannot conceal a deeper truth. America and its allies are losing in Afghanistan." Yet there was our new Prime Minister overnight assuring the president who decisively sacked the general in charge of the war effort that Australia's approach to the NATO-led coalition's campaign would be the same as it was under her predecessor, Kevin Rudd. A pity, really, that our leaders don't have some of that Dutch courage.

Most welcome a winner - one farewells a loser

The winner was welcomed with a smiling page one photo in almost every Australian daily this morning.New Prime Minister Julia Gillard's home town Melbourne Herald Sun did the double page one act with their girl on the four page wrap around and a farewell to her tearful predecessor inside. They're a cruel lot those people at the Hun!

Thursday, 24 June 2010

Wayne's skillful evasion - rewarded for government failures

Behind the downfall of Kevin Rudd there were clearly some issues about his style and technique of governing - his presidential, almost dictatorial, dominance of decision making with the concentration of power in his Prime Ministerial office; a fascination with playing as a world leader on an international stage; an almost pedantic concern at home about the process that led to innumerable reports and enquiries. Yet there were as well matters of policy substance behind his decline from being Labor's election winning leader to the man his colleagues decided could not win again and therefore needed to be replaced.
To me the one that stands out was the failure to convince Australians that the global financial crisis really was a crisis and that the actions the government took really were necessary. Labor thus suffered the downside of public concern about a growing budget deficit and the disapproval of waste and poor administration in stimulus projects without gaining the benefits of being among the world's most successful governments in avoiding an economic recession.
This poor salesmanship was not the fault of Kevin Rudd alone. Treasurer Wayne Swan must carry a large part of the blame which makes it somewhat surprising that he is one of this week's winners within the Labor Party. In Swan's defence it does have to be acknowledged that when the crisis struck there was a fear of frightening people into panic mode by telling them the truth. Nevertheless it is now clear that in electoral terms what should have been seen as a positive achievement became a negative.
Treasurer Swan must also share the blame for the extraordinary decision to make a review of the national taxation system a key first term goal. Changes to taxation can never be vote winners. Losers complain loudly and are likely to change their vote because of it while winners rarely express their gratitude by a similar action. Compounding this inherent problem was timing the review by Treasury Secretary Ken Henry so that a tax debate was ignited right at the beginning of an election year. To make matters even worse the government chose to cherry pick one major new tax proposal - an excess profits tax on mining ventures - and declare that all the other Henry recommendations were not even being considered.
Once again the salesmanship went badly wrong. With hindsight it is clear that the best approach to taking more money off miners was to say that reducing the budget deficit meant that money had to be raised from somewhere. Better for them to pay than you.Instead the decision was made to try and disguise this new tax by spelling out new things on which the money would be spent. The mining industry losers complained loudly and the masses were completely unimpressed by a compensating lowering of general company tax, increased infrastructure spending and talk of more money being compulsorily saved in superannuation accounts. Another Swan failure for which Rudd has paid the price.

Political promises are cheap

As Wayne Swan flies off to represent Australia at a meeting of the G20 group of countries being held in Ontario, Canada, it's an appropriate time for a reminder of how political promises are cheap when world leaders get together for such events. And it would be hard to illustrate it more clearly than in this page one offering on Thursday as Canada's national newspaper The Globe and Mail previewed the meeting of the so-called G8 group taking place before the larger G20 event where Australia gets a guernsey.

Advice to Julia: make the most of the honeymoon


If you see the chance, then take it. That’s the best advice I could give to Julia Gillard with my old election adviser’s hat on. When things are not going well for a government and an opportunity for victory arises there’s no point in waiting around. Politics is a game for the brave not the prevaricators as Kevin Rudd has now learned. He had his chance to be daring early this year before global warming went bad as an election issue but he squibbed it and then listened to those who advised him to forget his principles and scrap the whole idea of emissions trading. The new Prime Minister needs to learn from that weakness. Decide what you believe in and go for it.
If Ms Gillard needs persuading that political honeymoons — and she will surely have one — should be taken advantage of then she just needs to glance at what happened to Gordon Brown in the United Kingdom. When he took over from a largely discredited Tony Blair that was such relief that British Labour again looked a potential winner.
24-06-2010 british polls
Labour’s red line jumped back above the Tories blue but the opportunity was gone within a few months.
The good thing about a fresh face at the top of government is that people have an initial fascination with the new personality that pushes into the background the issues that might be troubling them. There is the opportunity, as it were, to change the subject. Instead of the complexities of a new form of taxation on miners Julia Gillard can return to her education revolution and the reform of the health system after quickly making a change or two to that tax plan to make it look like she has listened.
Nothing too substantial mind you. Wayne Swan is still the Treasurer and a full scale mea culpa from him is not desirable. Just get him to change the rhetoric a little along with the complexity so that it becomes clearly an issue of miners paying their fair share so that people can have the income tax reductions like those that will come into operation in July. Just keep it simple.
And start engaging in earnest conversation with Bob Brown and his Greens about alternative ways of tackling global warming. Put the talks into the context of understanding that, in the Australian political system where Labor does not have the numbers in the Senate and the Coalition are downright obstructionist, compromise is necessary.
Above all, bank on the honeymo0n occurring and be prepared to take advantage of it.

Steady as she goes


A new leader and the market reacted only ever so slightly this morning with a marginal improvement in the probability of Labor retaining office when the election is finally held.
24-06-2010 crikeyelectionindicator

A final back-flip

Quite appropriate really that his term ended with yet another back-flip. Last night Kevin Rudd was challenging his party to defy factional bosses and remember that the public had elected him Prime Minister not those bosses. This morning at the Caucus meeting he meekly changed his mind and did not even stand. So much for a man who lost because he did not have the courage of his convictions.

Boys on men’s errands

Finally the colleagues revolted. They had had enough of being treated as mere pawns in the political game by boys that the Prime Minister sent out from his office on men’s errands. The final indignity was having the unelected chief of staff sounding out elected MPs on whether the Deputy Prime Minister was loyal or not. When you show that kind of disloyalty you are repaid with disloyalty.

Back to Cabinet government

A step back from the concentration of power in the PM’s office is a certain consequence of the leadership change. Julia Gillard might have been a member of the Rudd gang of four but she has enough brains not to create an equivalent kitchen cabinet of her own. Nor will she allow her staff to project themselves as being more important in the scheme of things than those that elevated her to the leadership position. Proper Cabinet meetings where ministers have the opportunity of putting a point of view before decisions are made will surely avoid some of the mistakes that ended up destroying Kevin Rudd.

Credit where it’s due

I admit I was a bit dismissive when I read Dennis Shanahan in The Weekend Australian still going on about the prospect of a leadership challenge before Parliament rose for the winter recess. I was even more so when Monday’s Newspoll put Labor still in the lead but the veteran was right. Which I knew from the moment the talkers on Sky News last night told me that Laurie Oakes had come back from holidays to cover the goings on in Parliament House.

Heroin and cocaine decline while synthetics rise


The World Drug Report 2010, issued overnight by the United Nations Office on Drugs and Crime (UNODC), shows that drug use is shifting towards new drugs and new markets. Drug cultivation is declining in Afghanistan (for opium) and the Andean countries (coca), and drug use has stabilized in the developed world. However, there are signs of an increase in drug use in developing countries, and growing abuse of amphetamine-type stimulants (ATS) and prescription drugs around the world.
24-06-2010 worlddrugreport
The global number of people using amphetamine-type stimulants (ATS) - estimated at around 30-40 million - is soon likely to exceed the number of opiate and cocaine users combined. There is also evidence of increasing abuse of prescription drugs. The ATS market is harder to track because of short trafficking routes (manufacturing usually takes place close to main consumer markets), and the fact that many of the raw materials are both legal and readily available. Manufacturers are quick to market new products (like ketamine, piperazines, Mephedrone and Spice) and exploit new markets. “These new drugs cause a double problem. First, they are being developed at a much faster rate than regulatory norms and law enforcement can keep up. Second, their marketing is cunningly clever, as they are custom-manufactured so as to meet the specific preference in each situation,” the organisation said.
The number of ATS-related clandestine laboratories reported increased by 20 per cent in 2008, including in countries where such labs had never been detected in the past. Manufacture of ‘ecstasy’ has increased in North America (notably in Canada) and in several parts of Asia, and use seems to be increasing in Asia. In another demonstration of the fluidity of drug markets, ecstasy use in Europe has plummeted since 2006.
24-06-2010 problemdrugs
Cannabis remains the world’s (and Australia’s) most widely produced and used illicit substance: it is grown in almost all countries of the world, and is smoked by 130-190 million people at least once a year — though these parameters are not very telling in terms of addiction. The fact that cannabis use is declining in some of its highest value markets, namely North America and parts of Europe, is another indication of shifting patterns of drug abuse.
UNODC found evidence of indoor cultivation of cannabis for commercial purposes in 29 countries, particularly in Europe, Australia and North America. Indoor growing is a lucrative business and is increasingly a source of profit for criminal groups. Based on evidence gathered in 2009, Afghanistan is now the world’s leading producer of cannabis resin (as well as opium).

Wednesday, 23 June 2010

Letting us know some truth

If you listened to Australia's political leaders yesterday expressing the nation's sorrow at the death of more Australian soldiers you would have thought that those deaths were but an unfortunate but inevitable consequence of actions that have to be taken to contain international terrorism. Read The Runaway General | Rolling Stone Politics and you will realise just what nonsense Kevin Rudd and Tony Abbott spoke during their House of Representative eulogies.
The comments of the US commander in Afghanistan Stanley McChrystal have received plenty of coverage elsewhere this morning as the world waits to see if supposed insubordination leads to his dismissal by President Barack Obama. Suffice it for me to say that the Rolling Stone piece provides a rare insight into the disagreements and confusion that lie behind the pretense of there being a unanimity of purpose in the allied efforts in Afghanistan.

General McChrystal and the handpicked "collection of killers, spies, geniuses, patriots, political operators and outright maniacs" that make up his staff, that jokingly refers to itself as "Team America", have done us all a favour by talking so frankly and on-the-record about how decisions are really made.
Perhaps the saddest insight by Michael Hastings, the writer of this must-read piece, is this:
"When it comes to Afghanistan, history is not on McChrystal's side. The only foreign invader to have any success here was Genghis Khan – and he wasn't hampered by things like human rights, economic development and press scrutiny. The COIN doctrine, bizarrely, draws inspiration from some of the biggest Western military embarrassments in recent memory: France's nasty war in Algeria (lost in 1962) and the American misadventure in Vietnam (lost in 1975). McChrystal, like other advocates of COIN, readily acknowledges that counterinsurgency campaigns are inherently messy, expensive and easy to lose. 'Even Afghans are confused by Afghanistan,' he says. But even if he somehow manages to succeed, after years of bloody fighting with Afghan kids who pose no threat to the U.S. homeland, the war will do little to shut down Al Qaeda, which has shifted its operations to Pakistan. Dispatching 150,000 troops to build new schools, roads, mosques and water-treatment facilities around Kandahar is like trying to stop the drug war in Mexico by occupying Arkansas and building Baptist churches in Little Rock. 'It's all very cynical, politically,' says Marc Sageman, a former CIA case officer who has extensive experience in the region. 'Afghanistan is not in our vital interest – there's nothing for us there.'"

Strange goings on in Queensland

That strange hybrid known as the Queensland Liberal National Party clearly still has its problems in trying to present a unified opposition to the Labor Party. There are breakaways and new parties and now the former federal Liberal Minister Mal Brough is hinting that he may run again for the House of Representatives but not under the banner of the LNP whose formation in 2008 he opposed.
The speculation about the Brough political future will be enhanced by a story in this morning's Sunshine Coast Daily where he is quoted making a stinging attack on former colleague Peter Slipper, describing him as someone for whom he has no respect, and calling for Fairfax MP Alex Somlyay to retire. 

Rudd's secret polling on his leadership

An extraordinary story in this morning's Herald: a Prime Minister so friendless in his own party that he sends a staffer to check that he still has the numbers to stay leader.
Rudd's secret polling on his leadership:
"The Herald has learnt from a number of MPs that the Prime Minister's most trusted lieutenant, his chief of staff, Alister Jordan, has been talking privately to almost half the caucus to gauge whether Mr Rudd has the support of his party.
Mr Jordan's soundings, conducted in the past month with Mr Rudd's knowledge, reveal three key aspects of the Prime Minister's position.
First, he is deeply concerned about the security of his grip on the prime ministership.
Second, he does not necessarily fully trust the public assurances of his deputy, Julia Gillard, that she is not interested in the leadership. And third, he does still enjoy solid support in the caucus."

Tuesday, 22 June 2010

UK Budget 2010: VAT to rise to 20% and the risk of a double dip recession

Budget 2010: VAT to rise to 20% as Osborne seeks to balance books by 2015 
"• VAT to rise by 2.5 percentage points
• Public sector pay frozen for two years
• Child benefit frozen for three years
• Income tax personal allowance to rise by pounds 1,000
• State pension relinked to earnings from April"

The UK Government is taking the punt that growth will continue despite savage cuts to government spending and an increase in the value added tax from 17.5% to 20%. The Chancellor of the Exchequer told the House of Commons last night that his "tough but fair" emergency budget would deal decisively with Britain's record £149bn deficit. The Guardian gives this summary of the budget proposals:



• Growth is forecast to be 1.2% this year taking into account today's budget measures. It is forecast to be 2.3% next year, 2.8% in 2012, 2.9% in 2013 and 2.7% in both 2014 and 2015.
• Debt will be falling and structural current deficit should be balanced by 2014.
• Consumer price inflation is expected to reach 2.7% by the end of the year returning to target in the medium term
• Unemployment rate forecast to peak at 8.1% this year and then fall for each of the next four years to reach 6.1% in 2015.
• 77% of total consolidation to be achieved through spending reductions and 23% through tax increases.
• Public sector net borrowing will be £149bn this year, £116bn next year, £89bn in 2102-13, £60bn in 2013-14, £37bn in 2014-15, falling to £20bn in 2015-16.
• Public sector net debt as share of GDP will be 62% this year and will peak at 70% in 2013-14. It will then begin to fall reaching 67% in 2015-16.
• Additional current expenditure reductions of £30bn a year by 2014-15.
• No further reductions in capital spending totals.
The danger remains that the fiscal austerity will make the growth targets unachievable. That is certainly the view of the Fathom Consulting group which warned on the eve of the Budget speech that lifting VAT could cause a Japan-style fall back into stagnation.


Abbott denies 'famous victory' comments

It's a normal enough problem for politicians. They just love to be seen as winners. And then those dreaded political advisers remind them that the best place to be positioned at the start of an election campaign is as the underdog. Hence this story on the ABC news tonight:
Abbott denies 'famous victory' comments - ABC News (Australian Broadcasting Corporation): "A senior coalition figure said Mr Abbott told his partyroom today that a 'famous victory' was within reach.
But Mr Abbott has sought to clarify those victory comments.
'That's not what I said,' he said.
'What I said was the next election is certainly winnable, but there's an enormous long way to go.
'It's very, very difficult to beat a first-term government - it hasn't happened for almost 80 years.'"

Not wanting to appear disloyal to the troops


Another three Australian soldiers dead in an Afghanistan war that the majority of Australians don’t think is worth fighting. And still no dissenting voices within the two major political parties. You particularly have to wonder where all the peaceniks within the Labor Party have gone to.
No one it seems wants to appear disloyal to the troops putting their lives at risk so all the political talk outside of the Greens is about saying the course for the great cause of combating terrorism. Politicians like Bob Brown who are prepared to say we should not be there at all are in short supply and will be until one of our leaders has the courage to tell our military that we were wrong to send them in the first place and more wrong to keep them there so long.

Right sentiment, wrong people


With an election to be fought in presidential style by two major party leaders who are failing to inspire the nation, the time is certainly right for a third party plumped around the centre on the major issues to gain some support. So the Queensland pair of former State Labor MP Peter Pyke and Graham Higgins, a former-media advisor to a Liberal Federal Minister, have got something going for them in founding their new Republican Democrats Party.
What they lack, however, is that extra something necessary to crash through in the way Don Chipp was able to do when he set up the Australian Democrats. What a pity it is for those who would like to see a non-leftie alternative to Liberal and Labor that Malcolm Turnbull is not available!

Bringing back the tick


The accusation that the Federal Opposition is a policy free zone is not something that can be levelled at National Party Leader and prospective Deputy Prime Minister Warren Truss. The staff of this campaigning dynamo have confirmed that a big change is afoot if and when the Coalition replaces Labor.
Out will go this pride and joy of the equally dynamic Labor Minister for Infrastructure and Transport Anthony Albanese:
22-06-2010 nationbuilding
And back on road and rail projects around the country will come the Coalition’s very own creation that was replaced by the spoil-sport Albanese last year:
22-06-2010 auslink