Thursday, 30 April 2009

Talking a good recovery

The politicians of the world seem to be having some success in talking up  recovery from the world financial crisis. Britain is the latest country where pollsters are finding an improvement in consumer confidence. The Guardian this morning reports voters are more upbeat about the state of the economy than at any time since the financial crisis began in August 2007.  The Gfk NOP consumer confidence index carried out on behalf of the European commission rose three points this month to -27 points, and, says The Guardian, while still low by historic standards has posted a 10-point improvement since January. The big change over the past month was the public's view of the overall state of the economy, which rose from -31 to -15, but voters were also less gloomy about the state of their own personal finances, where the reading rose from -6 to -3.
In Australia the Morgan consumer confidence findings are not dissimilar with the latest reading published last week 102.6 being 1.8 points higher than in April last year. People it seems are of a mind to think that historically low interest rates will do the trick and send things back on the road to growth.
That is the general message of political leaders but I note that a pair of distinguished economic historians have presented evidence that the way the world economy is going still has some frightening similarities to the years of the Great Depression back in the 1930s. Barry Eichengreen, Professor of Economics and Political Science at the University of California, Berkeley and formerly Senior Policy Advisor at the International Monetary Fund. CEPR Research Fellow, and Kevin H. O’Rourke, Professor of Economics at Trinity College Dublin and CEPR Research Fellow, take a global view rather than comparing then and now through looking just at the United States. They believe that the world economy is now plummeting in a Great-Depression-like manner. Indeed, world industrial production, trade, and stock markets are diving faster now than during 1929-30.
They point first to the decline in industrial production in the last nine months that has been at least as severe as in the nine months following the 1929 peak in world industrial production, which occurred in June 1929.
Similarly, while the fall in US stock market has tracked 1929, global stock markets are falling even faster now than in the Great Depression. 
Again this is contrary to the impression left by those who, basing their comparison on the US market alone, suggest that the current crash is no more serious than that of 1929-30.
There is no joy in world trade either. It is falling much faster now than in 1929-30. This is highly alarming, the pair of economists argue, given the prominence attached in the historical literature to trade destruction as a factor compounding the Great Depression.

Under the heading "It's a Depression Alright" they conclude:
To sum up, globally we are tracking or doing even worse than the Great Depression, whether the metric is industrial production, exports or equity valuations. Focusing on the US causes one to minimise this alarming fact. The “Great Recession” label may turn out to be too optimistic. This is a Depression-sized event.That said, we are only one year into the current crisis, whereas after 1929 the world economy continued to shrink for three successive years. What matters now is that policy makers arrest the decline.
Here the historical comparisons are not so gloomy. A GDP-weighted average of central bank discount rates for 7 countries shows, in both crises there was a lag of five or six months before discount rates responded to the passing of the peak, although in the present crisis rates have been cut more rapidly and from a lower level. 
Money supply for a GDP-weighted average of 19 countries accounting for more than half of world GDP shows monetary expansion was more rapid in the run-up to the 2008 crisis than during 1925-29, which is a reminder that the stage-setting events were not the same in the two cases. Moreover, the global money supply continued to grow rapidly in 2008, unlike in 1929 when it levelled off and then underwent a catastrophic decline.

In picture for fiscal policy, in this case for 24 countries, the 1920s measure is the fiscal surplus as a percentage of GDP. The current data include the IMF’s World Economic Outlook Update forecasts for 2009 and 2010. As can be seen, fiscal deficits expanded after 1929 but only modestly. Clearly, willingness to run deficits today is considerably greater.
And the conclusion? "The world is currently undergoing an economic shock every bit as big as the Great Depression shock of 1929-30. Looking just at the US leads one to overlook how alarming the current situation is even in comparison with 1929-30.

The good news, of course, is that the policy response is very different." 

Brighter than your average submission

Submissions to the Australian Electoral Commission on changes to electoral boundaries are normally very boring affairs full of figures and thinly disguised arguments of self-interest from political parties trying to gain an advantage. I hope, therefore, that the panel considering changes that will result in Queensland gaining an extra seat take note of Public Submission No 15 by Claudia Marckx. Not for her all that dull and boring stuff. Ms Marckx conocentrates on the important question of who the seat should be named after and makes the case for Coulter, in recognition of Queensland entertainer Ricki-Lee Coulter. 

She argues:

I submit that this choice of name would leverage synergies between reality television and electoral process, progress the cause of youth electoral engagement and help project a contemporary understanding of Queensland as a vibrant place in which young Australians, and in particular young women, are valued and recognised for their contributions to nation-building. Further, given the understanding of the lives of working Australian families that is demonstrated in Coulter’s catalogue of songs, such a choice would also accord with modern Australian values. I further submit that the redistribution committee embrace youth-driven technology and make the announcement of the name of this new electoral division by way of a

Wednesday, 29 April 2009

If in doubt increase the penalty

Whenever there is a particularly nasty crime we expect politicians to immediately react with a promise to introduce heavier penalties. Acting tough after the event seems to be at the very core of every political party's law-and-order policy. And now the approach of increasing the deterrent whenever something goes wrong is spreading.
The New South Wales Premier Nathan Rees now has ditch diggers in his sights after one of them yesterday cut through a cable causing a blackout in Sydney's central business district. The solution to stopping this kind of inconvenience occurring again, Mr Rees would have us believe, is to increase the penalties for such accidents As it was the third occasion in a month that cut off electricity in much of the CBD it might be more appropriate to upgrade the infrastructure to stop Australia's commercial heartland being vulnerable to such incidents. 

Who was that fuzzy wuzzy with our PM?

There he was on the ABC television. A short little black bloke standing alongside Kevin Rudd outside Parliament House as the artillery fired some kind of salute. Goodness knows what all that pageantry was about. Last night's 7pm news did not give an explanation as political correspondent Chris Uhlmann gave his report on swine flu and other political events of the day. The same bloke bobbed up in the picture towards the end of the Uhlmann report too when the Prime Minister said a few words about fuzzy wuzzy angels and a special medal that was struck to thank those PNG citizens who served as civilians helping the war effort, or to their widows or widowers. No mention again of who the right hand man was.

All very rude really when the national broadcaster chooses not to acknowledge the visiting Prime Minister of Papua New Guinea. Sir Michael Somare was in Canberra to chat about the future of the Australia-PNG relationship but his presence was not deemed worthy of a mention. Perhaps the only way he can get a mention on the ABC is to have an airport security guard make him take his shoes off.

Tuesday, 28 April 2009

No change fancied

The Crikey Interest Rate Indicator points to the Reserve Bank leaving rates on hold when it meets on the first Tuesday in May.

No surprise to Australians

With our history of voting "No" in referendums, Australians would not be surprised to learn that the citizens of Berlin on Sunday came out against a proposal to allow school students to take religion instead of compulsory ethics classes. The "Yes" vote supported by most church groups gained 48.5% of the votes. What was a surprise was that only 29.2 percent of Berlin's 2.45 million eligible voters bothered to cast a ballot at all.

Tasmania shows the gambling way again

When it comes to legalising gambling Tasmania has normally been the pace maker among State Governments. Back in 1895 Premier Sir Edward Braddon welcomed George Adams to Hobart with his Tattersalls lotteries after governments in New South Wales and Queensland had legislated against them. New South Wales might have shown the way with poker machines in clubs but it was down south in 1973 that Australia got its first legal casino. More recently the Tasmanians allowed the first betting exchange with Betfair and now the state is moving to get back its leadership in the bookmaking industry from the Northern Territory by abolishing completely betting turnover tax as part of its plan to privatise the Tasmanian TAB.

State Treasurer Michael Aird currently has legislation before the state upper house that would leave the government with no regular tax payments from the privatised business and without the ability it enjoys now to extract special cash dividends from the government enterprise.The only income to the state from the new owner will be a flat annual fee, set at about $4 million. 

It is just a budget

During these couple of weeks leading up the Federal budget, and on Budget night itself, it pays to keep in mind that all the words written and all the talk uttered are about things that are planned to happen not things that actually have happened or things that are likely to happen. If there is one certainty about the estimates and forecasts Wayne Swan will make it is that in important respects they will prove to be spectacularly wrong. 

Now that is not a criticism of the Federal Treasurer. It just happens to be the nature of things. Sure the financial boffins have their magical models of the economy that make sure all the numbers add up but they are the very same models that at this time a year ago were predicting a continuing surplus between receipts and expenditure. Just keep in mind when the Wednesday morning the newspapers headline rising unemployment and a whopping budget deficit that 12 months ago inflation was the fear.

A truthful government would be telling us in this year's budget that just as last year they were unable to predict the course of forthcoming events, so it is this year. Things might turn out to be far worse than we are expecting and they might even turn out to be better. All we can promise is to keep doing the best that we can while we hope for the best.

Monday, 27 April 2009

Anzac hoons

Another little hoons update. The Sydney Morning Herald this morning has the police declaring that because of drunken hoons Anzac Day has become a day of shame at the hands of young binge drinkers who are using it as an excuse to drink to excess rather than commemorate war veterans. And silly old me thought that that young drinkers were simply following the example of the old fellows who have been getting well and truly pxssed ever since there has been an Anzac Day.

New properties only

If the aim of the bonus payments version of the first home buyers grant is to stimulate the building industry then it will make sense for the May budget to limit any extension of the bonus to people buying newly constructed housing. The evidence I get from within the real estate industry is that the major beneficiaries of allowing existing properties to be eligible have been investors able to get a higher return from sales than they otherwise would have.

An absolutely fabulous campaign

They used to say that the British were prepared to defend Hong Kong to the very last Gurkha but the colony finally ended with a whimper not the bang from a Gurkha's gun. With the retreat from the Far East the Gurkhas then serving were allowed entry to Britain but those who served the British Crown before then were confined to Nepal to fend for themselves. Britain might be overrun with Pakistanis but there was no place for most Gurkhas in the land they fought for; which annoyed at least some representatives of the Raj, the actress Joanna Lumley among them. Ms Lumley was born in Srinagar, Kashmir, India, the daughter of Major James Rutherford Lumley of the 6th Gurkha Rifles, and she took up the Gurkha cause with a passion. 
In 2008 the Gurkha Justice Campaign seemed to have a victory in when the High Court ruled in favour of six claimants arguing against the British policy that Gurkhas who retired before mid-1997, the date that the brigade moved its base from Hong Kong to the UK, did not have strong enough ties to the UK to be allowed to stay. Justice Blake ruled that the British government immigration policy in this matter was unlawful. Justice Blake quoted from the military covenant that soldiers are expected to make personal sacrifices and put the needs of the nation above their own and in return should always expect fair treatment and be valued and respected. He said rewarding long and distinguished service by the grant of residence in the country for which the service was performed would be a vindication and an enhancement of this covenant.
In light of the court's ruling, the ABC at the time, the UK's home secretary Jacqui Smith said the government would revise and publish new guidance. That guidance was finally issued last week with the new Home Office rules saying a Gurkha will be allowed in if he had 20 years' service. That seemed to pay scant regard to Justice Blake's finding because Gurkhas could only serve for a maximum of 15 years unless they became an officer. The only alternative was of entering is to have a gallantry medal, family ties in Britain, have lived in Britain for three years or have an illness due to military service.
A defiant Ms Lumley described the new rules as "shocking" and vowed to help launch a new court battle for justice after the Government was accused of tearing up a legal ruling that they should be allowed to settle in Britain. The angry Joanna said: "It is far worse than we expected and has made me ashamed of our administration. It is absolutely shocking."

A good time to stay home

Those federal politicians even now planning an overseas trip when Canberra's Parliament House shuts down for the winter towards the end of June should have a good think about the treatment given this morning to Peter Lindsay, the Liberal Member for Herbert in Queensland. Above is how his local paper the Townsville Bulletin reports his current 35 day overseas study tour.
If MPs think they are harshly treated at the moment over their pay and perks, just wait until they see what things are like after the budget next month starts taking benefits away from voters. Then the perks will really come under scrutiny.

An existential threat

Now I am the first to concede that a pass in Philosophy One at the University of Tasmania back all those years ago when Professor Sydney Sparkes Orr was sidelined over allegations of a relationship with a female student does not make me an expert on Soren Kierkagaard and existentialism. For students like me it was the soft option where the solitary lecturer was so grateful to have any students that nobody failed. But refreshing my hazy memory on the subject this morning still leaves me puzzled as to what Hillary Clinton is actually talking about: Pakistan's fragile government is facing an "existential threat", she said last week, from Islamic militants who are now operating within a few hours of the capital. Just what is an "existential threat" supposed to be? 
To we students of the late 1950s and early 60s mention existential and thoughts turn, as Jan Freeman put it so nicely writing in the Boston Globe last year, to "Sartre in a Left Bank cafe or Woody Allen on a psychiatrist's couch, pondering (or suffering) the struggle to create an authentic self in an indifferent and purposeless universe." Clearly that is not what the American Secretary of State has in mind nor is it what former Vice President Dick Cheney meant when he declared of the war on terror that "this is an existential conflict" that must be won.
The philosophy Kierkegaard founded has been reduced by politicians like these - Britain's Tony Blair and Hillary Clinton's predecessor Condoleezza Rice were also worriers about existential threats - to shorthand for "threats to the existence of". 

Friday, 24 April 2009

An unfortunate consequence of a blinkered view

It sounds very sensible if you say it without thinking about it: directors must always act in the best interests of the shareholders who elect them. But when that doctrine is put into practice without any overriding ethical consideration of a broader public good we end up with some tragic consequences. The decision in the trial of James Hardie directors well illustrates the point.

Miracle worker wanted

There are hard jobs, very difficult jobs and now a near impossible job. Joe Hockey is looking for someone to make him economically literate.

A slow move north and west

The centre of population is one way in which the Australian Bureau of Statistics describes the spatial distribution of Australia's population This centre point marks the average latitude and longitude around which the Australian people are distributed and figures released this week show it is moving north-west.
At June 2008, Australia's centre of population was located around 50 kilometres east of the town of Ivanhoe in the western NSW LGA of Central Darling (A). This reflects the concentration of people in south-eastern Australia, particularly in Sydney and Melbourne. Since June 2003, the centre of population in Australia has moved approximately 11 kilometres north-west as a result of the relatively large population growth occurring in northern NSW, Queensland and Western Australia.

A nasty subjective business

What's news and what's not is very much in the hands of the media. News is what is chosen to be printed or broadcast. So what should we make of this morning's decision by the 11am Sky News to decide that what some residents of the Christmas Island detention centre had for Christmas Dinner should be reported? Well, whatever the motive of the reporter and her editor, one consequence is clear enough: telling of a lunch with oysters and lobster for detainees while ordinary, proper residents of the Island went without such luxuries will feed xenophobic sentiments. As best I could judge the gratuitous menu reference followed the Sky reporter being peeved because a young internee chose not to answer when a microphone was thrust in to his face. It was not a pretty sight. Perhaps the influence of Fox News is spreading!

Voting on ethics versus religion

A truly intriguing election takes place tomorrow. The citizens of Berlin are going to the polls to vote in a referendum which we could best describe as a contest between ethics and religion. At issue is a decision made in 2006 whereby ethics became a compulsory subject for all high school students in Germany's capital city and religion an an optional one. A "Yes" vote advocated by the "Pro Reli" campaign would see those rules changed so that pupils would have to choose between ethics and a faith-based religion class divided along religious lines, with Protestants, Catholics and Muslims being taught separately. The "Pro Ethik" campaign, advocating a "No" vote, wants  to keep ethics compulsory and religion optional.

Der Spiegel reports that with a few days to go until the referendum, opinion polls show that Berliners are split nearly exactly down the middle, with polls showing a 51 percent to 49 percent divide, sometimes for one side, sometimes for the other.

Thursday, 23 April 2009

Looking for the green shoots

It is the nature of politicians in government to be optimists. When you are pretending to run a country it is hard to admit that you have very little idea of what is actually going to happen in the months ahead. And so it is that a feature of this global economic crisis has been that the predictions of the world's leaders as to the likely course of events have invariably been wrong. Thus I find myself treating rather sceptically the sightings of the green shoots of economic recovery. For me when I hear President Barack Obama spying "glimmers of hope" and US Federal Reserve Chairman Ben Bernanke saying “recently we have seen tentative signs that the sharp decline in economic activity may be slowing" I just think that they would say that wouldn't they. 
Wading through the latest output of analysis and predictions from the International Monetary Fund certainly has kept me in the camp of those expecting things to get worse before they get better. To give but one example from the mass of material released overnight. In response to difficulties banks have had in gaining access to funds authorities have responded by
introducing new liquidity facilities, asset purchase schemes, and guarantees for bank debt issuance to prevent fire sales of assets and bank failures. According to the IMF the measures announced so far provide up to $8.9 trillion of financing, but this amounts to less than one-third of the ongoing wholesale financing needs of banks. Government guarantees are new and still mostly undrawn, so most actual financing support has come through new central bank liquidity provision of $2 trillion. Banks have rapidly built up guaranteed issuance since the facilities were introduced in late 2008, totaling $460 billion in 10 countries through January—$130 billion in the United States alone. 

The IMF comments:
Despite these efforts, private bank funding markets are mostly closed—banks rely on central banks and the government (for guaranteed unsecuritized funding), raising the question of how large this financing might conceivably need to be. For an order-of-magnitude estimate, we project the maximum refinancing gap for the 22 largest global banks that would arise if no private wholesale funding were available. The gap rises from $20.7 trillion in late 2008 to $25.6 trillion in late 2011, despite bank assets remaining roughly constant on average over the period and customer deposits growing in parallel with nominal GDP. The rise reflects the large volume of existing long-term debt that will mature and need to be refinanced.

Give Wayne his due

Wayne Swan has been as wrong as the rest of them when it comes to issuing an optimistic forecast or two but at least he was twigged to the extent of this banking liquidity problem. While his political opponents have hopped into the bank bashing with alacrity, Australia's Treasurer has grasped the seriousness of the bank funding problem and has curbed the language of his criticism of bankers for not passing on all of the cuts in official interest rates. Every dollar they can squirrel away now reduces the size of the problem to come when the competition to raise that $25.6 trillion short fall gets under way.

The genius of a cartoonist

Matt in the London Daily Telegraph summed up the views not just of Britons on their budget overnight but of plenty of people about plenty of budgets in many places around the world. 

Just as well Hawkie was not a Polish politician

Those extra rooms added to the Bob Hawke Melbourne home all those years ago as one successful defamation verdict followed another would not have happened if Warsaw had been the home town. Last week Jarosław Kaczyński, the head of the Law and Justice (PiS) Party and a former Prime Minister, lost a civil case brought by Ludwik Dorn, a former political ally and interior minister. Dorn sued Kaczyński for publicly alleging that he had not been paying alimony. The PiS leader was ordered to pay a symbolic złoty as compensation to Dorn and to contribute zł.5,000 to a charity. 

"Can an alcoholic commander in chief of the armed forces be?"

It was because I had our own former Oxford University drinking champion of a politician on my mind that I noticed in the German newspaper Die Welt what appeared to be an intriguing dispute over alcohol consumption between the Polish President and and Polish Prime Minister. I say "appeared" because my knowledge of German does not extend much beyond Volkswagen and sauerkraut but the version that appeared with the aid of the instant Google translator confirmed that the presidential drinking habits are being questioned.
There was no mention of toasts in vodka or anything else when President Lech visited Lithuania to be with the Order of Vytautas the Great with the Golden Collar, for his personal contribution to the development of relations between the two states and to the strengthening of political, cultural and people-to-people cooperation.

A little provincial cash for comment

John Laws has retired but cash for comment lives on. Up in Cairns John McKenzie has a talkback show on 4CA 846AM and The Cairns Post reports this morning that Cairns Regional Council pays $26,000 a year so Mayor Val Schier can have a chat with John on air every Friday morning. 4CA boss Steve Hirst said the council had entered into an agreement with the station and the mayor had been speaking on air for the past four to five weeks. But he said he could not comment further on the agreement. 

Wednesday, 22 April 2009

Coming back to the comfort zone

At least inflation is behaving as economic theory suggests it should in the face of a slowing economy in which unemployment is rising and interest rates falling. The Australian Bureau of Statistics figures this morning have put the published headline rate for the year at 2.5 per cent. While the adjusted CPI measures that the Reserve Bank uses as its guide at 4.4% (the weighted mean) and 3.9% (the trimmed mean) are still above the upper target of 3%, both are lower than they were in the December quarter. That leaves the way open for the Bank to again reduce official interest rates.

Hoons on dunes!

And you thought hoons had to use cars to practice their loutish behaviour. Not so. The Melbourne Herald Sun reports senseless hoons on pushbikes recently smashed a window of TV legend Bert Newton's car as his terrified wife Patti sat inside. And over on South Australia's Yorke Peninisula it is not hoons with pedal power causing problems but hoons in dunesCockle Beach resident Jo. Peters wants to see Premier Mike Rann’s proposed ‘seize and crush’ hoon legislation cover trail and quad bikes after another horrific Easter when bikes again ripped up primary dunes along sections of the coast.

$US4 trillion of losses- is that good or bad?

If you needed evidence that the losses caused by this world financial crisis are so large that normal people cannot comprehend them, then the BBC World Service presenter provided it when asking the BBC economics correspondent last night whether the $4 trillion estimate of bank losses was good news or bad.

And still we wait for a US Senate result

It is nearer six months than five that the United States went to the polls to elect a new President, all the members of its House of Representatives and one third of its Senators yet the final results are still not in with the Senate ballot for the state of Minnesota being disputed in the courts. After many counts and recounts, the Democrat candidate, Al Franken, beat the Republican Norm Coleman by 312 votes but Coleman, not surprisingly given the closeness of the result, appealed to the State Supreme Court. A decision is expected shortly but a further appeal to a Federal Court seems likely whatever the result. 

The gander caught

This President Obama bloke is made of sterner stuff than many of us realised as he really does appear to be practising what he preached. As a candidate, Barack Obama made quite a big thing of abandoning the common Washington practice of letting lobbyists for interest groups slip in to the top jobs of the administration in charge of the areas they had long tried to influence. The Democrats who in general applauded the new Obama principle, thought only about the justice of preventing big business interests getting their hands on the levers of power. It did not occur to those on the left that those who were paid advocates for public interests would be disqualified in the same fashion as those who lobbied for moneyed interests.
But under Barack Obama what is good for the goose is being extended to Democrat ganders. The New York Times reports  that a coalition of nonprofit groups has started a campaign to exempt lobbyists for charitable and social welfare organizations that have tax-free status from the "no lobbyist will be appointed" policy. So far they are making no progress. “It’s painful,” said the president’s senior adviser David Axelrod. “There are a lot of good people out there who are philosophically simpatico with us and are very skilled and would be very valuable to us.” But, he said, “you can’t have carve-outs for lobbyists you like and exclude those that you don’t. It would be very hard for people to understand that distinction. This is one of those cases where we’ve had to sacrifice the help of a lot of very valuable people.”
The Obama lobbying policy bans anyone who was a registered lobbyist from working for any executive agency they had lobbied in the past two years or in any other agency on an issue they had lobbied on in that time. As a practical matter, the Times says, the order meant that most registered lobbyists could not take jobs in their areas of expertise.

World inflation round-up

In Spain they are worrying about the dreaded deflation. As unemployment hits the 15.5 per cent mark, prices are going down. Last month's drop in retail prices might have been only 0.1 per cent but Spain is the first of the 16 nations using the Euro to record a negative inflation rate. It is the first negative figure since the country began collecting such figures in 1961 and there is an uneasiness that the downward trend might be the stast of a deflationary spiral.
In Britain the "d" for deflation is also being used after figures overnight showed the retail price index falling in March for the first time in nearly 50 years. Since reaching a peak of 5 per cent last September, the British RPI has fallen sharply with lower prices and lower interest rates driving down  mortgage payments while gas and heating fuel prices have added to the downward pressure on prices. The Financial Times of London reports that many economists expect RPI to remain negative for an extended period. However, economists and the Bank of England, the paper says, are more concerned about the slowing rate of the consumer price index – which excludes some variables including mortgage interest payments. The CPI is showing more resilience than many had expected and in March was at 2.9 per cent, down from 3.2 per cent in February but still well above the Bank’s 2 per cent target. Falling energy bills and food prices in the month helped pull inflation down.

The headline as modern poetry

 “Ezra Pounded By Andy Suit”
New York Times columnist Stanley Fish, the Davidson-Kahn Distinguished University Professor and a professor of law at Florida International University, in Miami, and dean emeritus of the College of Liberal Arts and Sciences at the University of Illinois at Chicago, has given that headline from the New York Post of 7 April his award as the best headline of the new year. It appeared above a story about Ezra Merkin, an associate of Bernie Madoff’s who has been charged with pocketing money he was supposed to have invested. The good professor's reasoning 
... the literal meaning is easily accessible: Ezra Merkin is being pounded by state Attorney General Andrew Cuomo. But the headline is a pun (obvious to some, hidden from many) on the name of a famous mid-20th- century poet, Ezra Pound.
And that’s not all. Pound is notorious for an anti-Semitism that is rooted in a hatred of usury, the practice of lending money often at unconscionable rates of interest. Usurers, Pound charged in his Canto XLV, don’t produce anything or engage in honest, redemptive work or create beauty: “With usura hath no man a house of good stone . . . no picture is made to endure nor to live with/but it is made to sell and sell quickly.” And then to sell again and again, in an endless sequence based on nothing but speculation; it is in essence a “mega-Ponzi scheme.” In usury and also in capitalism itself “corpses are set to banquet” and there is no “clear demarcation” between the real and the fictional. Things are not things, but “futures,” and derivatives and derivatives of derivatives. The practices of usury, Pound thunders, are “against nature” and make everything barren: “Usura slayeth the child in the womb.”
Are the headline writers bringing Pound in to indict the excesses of capitalism? Are they suggesting that Jews, in the person of Merkin and Madoff, are the villains? Or are Madoff and Merkin victims of the anti-Semitism Pound professed and others keep alive today? This headline keeps on giving, although exactly what it gives is a matter of debate — as is the case with all modern poetry.
So the next time you are inclined to sling off at your local tabloid, just remember Stanley Fish and the tangle of allusions that can lurk behind a simple headline.
For my part I still dip my lid to "HEADLESS BODY IN TOPLESS BAR: as perhaps the greatest headline of all time and I see it has been chosen by publisher HarperCollins as the title of a new book containing a selection of the best from The Post.

Tuesday, 21 April 2009

The deterrent joke

If the risk of being drowned at sea is not a deterrent to someone trying to reach Australia then it is hard to imagine that the promise of being presented with a different kind of visa on arrival actually will keep someone in Indonesia. Malcolm Turnbull has clearly succumbed yet again to the idea that an Opposition should oppose whatever the merits of what the Government is doing. And it is reassuring to see in this morning's Newspoll published in The Australian that the initial reaction of voters is to ignore the Liberal attempt at populism. Labor remains the clear people's choice and the standing of the Opposition Leader is going down rather than up. 
I expect that things will get even worse for Mr Turnbull now that some in his party are beginning to speak out and criticise him for playing the same unsavoury racial card as John Howard. Hopefully what we are seeing is another example of a politician fighting the last war after things have changed,

No cover up, just bad politics

Labor is clearly determined to make a contrast between its own handling of the latest boat people tragedy and the way the Howard Government sought to capitalise on the Tampa incident. That is fair enough as the distortions of then Defence Minister Peter Reith were quite scandalous. But the pretence that it is not proper to give any information about what actually happened that led to a wooden fishing boat catching fire until the Coroner completes an inquiry really is carrying caution too far. If something was done (or not done) by the navy that hindsight shows should not have been done (or should have been done) then changing procedures should hot be waiting the months it will take the Northern Territory Coroner to complete his task. And as soon as the navy has reviewed the evidence the Northern Territory police have collected there can be no harm in the government putting an end to the nonsense being peddled by the Opposition Leader Malcolm Turnbull that there is some kind of cover up going on.

Hoon watch

Hoon watch. The hoon driving Minister for Road Safety Tom Koutsantonis bid a speedy farewell to South Australia's Road Safety Ministry yesterday. The morning words of Premier Mike Rann giving him one last chance after his appallling driving record was exposed (see the Owl yesterday) had changed to a resignation statement by the afternoon. This morning it is Queensland's turnto have some hoon driving outrage with The Courier Mail reporting that reckless drivers are using the M1 as a race track and shocked police have recorded some of the highest-ever speeds in the state on the eight-lane motorway. Still, things have not yet got to the stage they reached in Phoenix Arizona at the weekend when a speed camera operator was shot dead by a passing motorist apparently angered by not being able to drive as he wanted. 

An obsession with minorities

Treasurer Wayne Swan clearly has plenty of dollars in his campaign war chest. One of our dedicated team of Crikey readers has sent me the following Easter card that arrived in the mail box of one of his Greek friends. My correspondent comments: "In these times of global economic melt down and the tightening of the public purse strings, I find it strange and then insulting that our Federal Treasurer – the keeper of the said purse strings is spending our money and sending Easter cards to minority groups. ... I bet you didn’t get one for English Easter? ... Then to ad insult to it – it is signed Wayne and Family as though they are personal friends. How is this cost justified??? " How indeed. 

Monday, 20 April 2009

Forecasters very wrong again

This is getting to be a habit: the economic forecasters were very wrong again with their predictions about what is happening to inflation. The regular Bloomberg survey of the predictions of 15 economists on what the quarterly producer price index would show had a median forecast of a 0.6 per cent rise. The actual Australian Bureau of Statistics figure for the March quarter released this morning was a fall of 0.4 per cent!
The decrease of 0.4% in the final (Stage 3) index reflected a fall of 1.0% in the price of domestically produced items, and a rise of 3.9% in the price of imported items. The domestic component decreased due to price falls in building construction (-1.6%), petroleum refining (-10.0%) and bakery product manufacturing (-7.2%). These decreases were partially offset by price rises in electricity, gas and water (+2.0%), and other agriculture (+4.3%). The imports component increased due to price rises for industrial machinery and equipment manufacturing (+6.9%), motor vehicle and part manufacturing (+4.4%), photographic and scientific equipment manufacturing (+13.5%) and tobacco product manufacturing (+23.2%). These increases were partially offset by price falls in dairy product manufacturing (-35.7%) and basic chemical manufacturing (-48.2%).

Hoons the current catch cry

Motoring hoons seem to be the current law-and-order pre-occupation of State Governments as if young people driving cars at high speeds and in a dangerous fashion was some kind of new development. The experience of the South Australian Minister for Road Safety Tom Koutsantonis is evidence enough that hoons have long been with us. 
Mr Koutsantonis, who was sworn in just over a month ago, is the youngest member of the SA Cabinet and the disclosure that he has been fined more than 30 times since 1994, mostly for speeding is proving more than a little embarrassing for Premier Mike Rann. Mr Rann says he will not stand Mr Koutsantonis down but has issued a warning. "He must never ever offend again," he said. "People make mistakes and I've told him that he cannot re-offend so that's not negotiable, but I think it's important to admit one's mistakes in the past in order to do the right thing in the future."
The Minister has been fined more than 30 times since 1994, mostly for speeding, He accumulated $10,000 in fines for speeding, running red lights and talking on his mobile phone while driving. He also lost his licence for three months.

Think tanks as lobbyists - put them on the list

When the Special Minister of State Senator John Falkiner gets around to reviewing the effectiveness of the federal lobbyists register he might like to consider these words:

Originally, think tanks were conceived as “universities without teaching,” But they also differ on other points: they have no students, and they are not subjected to the system of peer review that academia uses to promote diversity of thought and scientific rigor. "Normal" academic institutions are expected to conduct their research first and draw their conclusions second.

Some would argue that policy-driven US think tanks have reversed this process: "conclude, then justify." In the US, think tanks have dramatically grown in size and influence during the past 100 years. Their numbers increased from 8 in 1910 to over 1,000 today! Today, modern think tanks are tax-exempt, political idea factories, with huge budgets. In the US, the top 20 conservative think tanks now spend more money than all of the "soft money" contributions to the Republican Party.

In fact, by being outside the scope of US lobby regulation, US think tanks may be enjoying an unfair comparative advantage.

Mr Kallas was critical of the fact that while European think tanks were included in the EU's definition of lobbyists, only one had chosen to join the voluntary Brussels register of interest representatives. He argued that while most think tanks did no direct lobbying whatsoever, and would never accept to prepare a report on behalf of a corporate sponsor, the influence obtained through their indirect methods seemed to be a highly appreciated tool. "As a recent survey found,"he said, "75% of corporate interest representatives declares spending less than 25% of their "public affairs" budget on direct lobbying. Therefore, missing the indirect avenues would mean missing an important segment of the market."

Friday, 17 April 2009

Building work going down with worse to come

No joy about the economic outlook in the building activity figures out this morning from the Australian Bureau of Statistics. While the trend estimate of the value of total building work done rose 0.1% in the December 2008 quarter, the seasonally adjusted quarterly figure fell 1.6%, to $17,988.6m, following a rise of 0.7% in the September 2008 quarter. 
The really bad news came in the figures for new building work commenced during the quarter. In seasonally adjusted terms, the estimate of the total value of building work commenced in the December quarter fell 19.9% following a fall of 7.2% in September. Commencements of new residential buildings fell 15.5%, to $7,526.4m. New house commencements fell 4.8%, to $5,496.5m, while new other residential building fell 35.3%, to $2,029.9m. Alterations and additions fell 4.7%, to $1,432.8m. Non-residential work commenced fell 27.6%, to $5,813.5m.

Heavier penalties for Indonesian crew

Alexander Downer has become another of those retired parliamentarians suffering from no longer being part of the political action but that does not mean everything he says should be ignored. In the interview on ABC local radio in Canberra this morning that has brought him back to media attention, the former Liberal Foreign Minister had one piece of advice that the Labor Government would be wise to follow. Mr Downer recalled that an important part of the Howard Government's strategy to deter people smuggling was to mount a public information campaign in Indonesian fishing villages warning fishermen of the penalties that would apply to them if they transported illegal immigrants to Australia. Perhaps this time the same kind of information campaign should be backed up with even harsher penalties for the crew of boats doing the smuggling.

An Indonesian re-run

Counting in the Indonesian parliamentary elections seems to confirm that the forthcoming presidential contest will be between the same two candidates as last time - the incumbent President Susilo Bambang Yudhoyono and former President Megawati Soekarnoputri. Yudhoyono's Democratic Party did best in the parliamentary vote just concluded and he will likely be supported for president by the Golkar Party which came in third in the parliamentary poll.

The chatterati and the twitterati go out to vote

Voting is underway in India and while ballots will not be counted until after 13 May the journalist pundits have already noticed one trend: the middle class urban voter stepped out like never before. "Suddenly, the ink on the index finger seems to have replaced the tatoo as the latest fashion statement among the chatterati and the twitterati", the Times of India reports. The accepted wisdom in the world's largest democracy long has been that the poor vote, the rich don't. Yesterday, however, election observers at polling booths in in Hyderabad's upmarket residential areas dotted by spas and boutiques, such as Jubilee Hills and Banjara Hills, reported a 30% rise in voter turnout in these areas.
As to what this change in behaviour actually means, the newspapers are silent. Indian electoral law prohibits the publication of opinion polls from now until the final vote is cast. With voting spread out over such a long period, presumably the political parties themselves do some private exit polling so they can fine tune their election strategies. Given the prevalence of election betting in a land where bribing cricketers for information is a standard bookmaking practice, we will get an indication of what these show in the Crikey Indian Election Indicator which is based on activity at the Intrade prediction market. This morning the Indicator still has the probability of a Congress Party member ending up heading the government at 46% with the Bhartija Janti Party second pick on 26%.

Poor have less to lose?

Words of wisdom from this morning's Murdoch press:

Thursday, 16 April 2009

At last a trigger is coming

It has been a while coming but Labor will have its double dissolution trigger soon enough. The resubmitted alcopops tax legislation will be voted down in the Senate whenever the Government chooses to put it to the vote unless Family First Senator Steve Fielding has a surprising change of heart. Not that such a vote is likely to be early. The rather weird way these excise tax proposals work is that the extra tax is collected from the day legislation is introduced in to Parliament not from the day the legislation is passed. Between the introduction and the final vote there can be a gap of up to a year which is what happened to the initial tax increase on pre-mixed spirits contained in last year's budget. 
The hundreds of millions collected over the last 12 months, now safely in the Treasury coffers, in theory should be refunded to those that paid it given that the rise did not become law. The Government, however, will introduce a separate piece of legislation to enable it to be kept instead of being handed back to the spirits industry. This will present the Liberal-National coalition, and Senator Fielding, with an interesting dilemma. Passing this special bill will effectively mean they have supported the tax after all; voting against it will present the liquor industry with a substantial bonus because there is no practical way of directing the money back to those individual consumers who actually paid it. 
And while that is being sorted out there will be no price reduction in alcopops because the collection process will start over again. It has hardly been a victory for the Opposition and certainly not for the spirits industry.

When Smirnoff is not vodka

And while the government has the subject of sweet and fizzy alcoholic drinks on its agenda it should be changing the excise definition of what constitutes a beer to stop the substitution of brewed alcohol for distilled alcohol as a way of getting around the law. Already consumers are being conned by one variety of Smirnoff in an alcopop not containing vodka, with the alcohol content coming from a brewing process. When the spirits giants realise they will not be getting the price reduction they thought they had obtained from the Senate vote this practice will rapidly spread unless the loophole is closed Calling in the ACCC to take action against Smirnoff for misleading consumers would not be a bad idea either.