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April 30, 2006
Bush administration under seige
Tony Walker, writing from Washington for the Australian Financial Review, says that Americans are deserting president Bush in droves, as the 'President's approval rating continues its downward spiral'. So it is highly unlikely that bringing in Tony Snow, a conservative Fox News commentator, as the new press secretary will turn around the public perceptions of the wheels coming off the Bush Administration:
Walker goes to say that:
The situation will become bloodier still, if the Democrats regain control of the House of Representatives and/or the Senate, since this would prompt a deluge of subpoena-driven inquiries into the administrations many questionable activities: from its management of a deeply corrupted reconstruction process in Iraq to its decision to authorize the National Security Agency to engage in secret spying on American citizens ..... Then there is the whole issue of how the US decided to go to war in the first place---on the basis of, now as it seems clear, cherry-picked intelligence.
And there are the secret CIA prisons established outside the US to incareate terrorists supects without trial and to interrogate them using torture.
Hell, even Rolling Stone, the old liberal music magazine that switched to supporting President Reagan,is now running articles that say Bush may well be the worst ever President.
So I cannot see why the Bush people is getting excited about the appointment of a new White House Press Secretary. Maybe Snow will improve media relations. So what? The administration is now dysfunctional. It is the 'Mission Accomplished in Iraq' of three years ago that stands as the symbol of the Bush administration.
Posted by Gary Sauer-Thompson at 4:51 PM | Comments (3) | TrackBack
April 29, 2006
US v Iran
The negative report from the International Atomic Energy Agency (IAEA), the UN nuclear watchdog, saying that Tehran had ignored demands to suspend uranium enrichment puts the ball squarely in the UN Security Council 's Court. It will discuss the possible imposition of sanctions against Iran, even though it is not in breach of any international treaty or law. Iran's exercise of its right under the Non-Proliferation Treaty to acquire full nuclear technology under the IAEA's inspection regime can hardly be called "aggression" or "defiance".
Although the Bush administration talks diplomacy, it is evident that the US is planning some kind of military strike against known, and suspected nuclear sites in Iran, with some kind of covert operation to overthrow President Mahmoud Ahmadinejad. Though sanctions would hurt the Iranian regime the chances of diplomacy succeeding are little, given the resistance of Russia and China to the imposition of economic sanctions.
Though Iran has yet to achieve technological sophistication as regards uranium enrichment--it is understood that the Isfahan and Natanz facilities are rudimentary---Iran is definitely gaining strategic power in the region. As Martin Woollacot observes in the Guardian:
Iran is a threat to is the unusual degree of power and influence possessed by the United States and Israel in the region. But has that preponderant influence been all that good for the people concerned, including the Israelis? Iran is a case of what happens when rising powers bump into established powers.
The US strategy of containing Iran is part of its superpower hegemony that involves building several large military bases in Iraq, and beefing up its military presence in various southern Persian Gulf states that are members of the Gulf Cooperation Council (GCC).
William Kristol at the Weekly Standard reckons the US is already in retreat. Gerard Baker of the Times doesn't hear the US drumbeat or a pre-emptive strike.
Posted by Gary Sauer-Thompson at 9:31 AM | Comments (0) | TrackBack
April 28, 2006
health insurance
This week's announcement of the sale of Medibank Private by Nick Minchin, the Finance Minister, did not tell us much that we didn't already know. It will be a trade sale or a public float, most likely a trade sale. The sale was bound to happen, given the anomaly of the government owning a private health insurer and being a regulator of the health industry.
However, it does not represent much of a reform step to a healthier Australia, does it? Is that why it was dressed up with the expansion of hospital cover to cover outpatient and out-of-hospital services, chronic care management for conditions such as diabetes and asthma, and insurers being able to cover disease prevention measures.
Contrary to the claims by Tony Abbott, the Health Minister, I cannot see that this sale will prevent health insurance premiums continuing to rise by more than inflation. Whilst inflation is around 3% per annum, health insurance premiums increases range from 5.7--7.4%. How does the sale represent increased consumer choice?
What is not generally mentioned in this is that for every additional dollar of premium that health funds collect 30cents is paid by the government in the form of private health insurance rebate. That rebate is designed to encourage the trend to private health insurance cover.
In an entry for 2004 in the Latham Diaries Mark Latham states the ALP's opposition to the private health insurance rebate:
A good meeting this morning with Gillard's health experts, Stephen Duckett and Hal Swerissen. We have worked out a way of dealing with the despised private health insurance rebate. We need to kill it slowly; adopt the strategy Howard and Woolridge used for their attack on Medicare, dismantling it slice by slice. (p. 267)
Why would you slice it bit by bit?
Well, since the rebate applies to everyone it works to favour those who can afford to take private health insurance--those high income households who would have taken out private health insurance anyway, if there was no rebate. The other side of the picture is that the uninsured on low incomes are disadvantaged: they have to pay taxes from which the rebate is paid, face a reduced level of services at underfunded public hospitals.
Posted by Gary Sauer-Thompson at 5:13 PM | Comments (4) | TrackBack
April 27, 2006
learning from Indonesia
We in Australia commonly view Indonesia through fear of it being an Islamic nation. The lens through which we view Indonesia is also constructed from a history of Indonesia's occupation of East Timor after 1975, the rough handling of internal conflicts in Aceh and the ongoing repression in Papua. All three have involved tough military crackdowns on irredentism and widespread human-rights abuses by the Indonesian military (TNI) for which no one in the military or the government has really been held responsible.
Although Washington and Canberra have recently restored military-to-military ties, US officials are still waiting for Jakarta to prosecute the military officers culpable for the horrific violence that attended East Timor's separation from Indonesia in 1999.Is Australia?
Do we see a newly democratic Indonesia forming out of the totalitarian (fascist) past? Do we recognize that Indonesia has a more independent foreign policy than Australia?
It has. Michael Vatikiotis says that the Indonesian Foreign Minister Hassan Wirajuda recently stated that:
Indonesia is a party to the nuclear Non-Proliferation Treaty... The treaty supports the rights of NPT parties to develop nuclear technology for peaceful uses he added... Then he reminded Rice that he had recently visited Tehran and that the Iranian foreign minister had just visited Jakarta. On both occasions he had told the Iranians that Indonesia "would be among the first to tell Iran not to put their peaceful nuclear uses to developing nuclear weapons".
The Indonesians are standing up to the Americans on Iran. Australia should take note. Maybe it is the Indonesiasn who will mediate between India and Pakistan as they step onto on an arms-escalation trajectory as a result of the US -India nuclear deal. Maybe it will be the Indonesians who endeavour to prevent a scenario of more bombs being added to the inventory every year, and more intermediate-range ballistic missiles steadily roll off the production lines.
It won't be Australia wil lit? We will be to busy selling unanium to India to help the US contain China, won't we?
Posted by Gary Sauer-Thompson at 5:47 PM | Comments (6) | TrackBack
Jakarta Lobby
I don't see a problem with the idea of a Jakarta lobby--an overly pro-Jakarta group of internationally respected, Indonesia specialists working at the Australian National University in Canberra, senior levels of government and bureaucracy, especially the Department's of Defence, Foreign Affairs and Trade, Office of National Assessments (ONA) and the Prime Minister's department.
It need not involve ideas of conspiracy, as it is about the way the Jakarta Lobby shapes or influences policy and the complex relationship with Indonesia and the way that atrocities and systematic violence committed by the TNI, the Indonesian army, are consistently downplayed. The TNI is corrupt and deeply opposed to democratic practices.
No doubt we will see the Jakarata lobby's continuing influence in the downplaying of the TNI' s abuse of human rights in West Papua. Currently, this influence is expressed in the Howard Government buying goodwill in Jakarta by toughening its approach to asylum-seekers from West Papua reaching the Australian mainland by boat. Papuans and others who seek Australia's protection will now be transported to offshore detention centres in third countries for refugee processing outside the bounds of Australian law.
'Buying goodwill ' in this context means seeking to placate Indonesia's "nationalist" and pro-army (TNI) hardliners. They maintain the fiction that the Australian Government's policy is to ensure the secession of West Papua from Indonesia.
More West Papuan refugees can be expected and these will undermine Jakarta Lobby's view that Australia's interests in good relations with Indonesia require us to acquiesce in the serious oppression of the Melanesian people in West Papua.
As Bruce Haigh observes that the Indonesian army administers the archipelago of West Papua with an iron fist. He says that:
It does not tolerate dissent and has an economic imperative for maintaining tight control. If John Howard wants to bring about change in West Papua he must address himself to the Indonesian army, not the Indonesian Government. The politics of Indonesia are that the civilian politicians of Jakarta can't change or influence a thing in West Papua. It is a military-controlled province. The government of Indonesia exercises little power or authority outside Jakarta. Whatever authority or power it enjoys in the provinces is at the discretion and interpretation of the army.
So why not support President Susilo Bambang Yudhoyono's attempts to isbring the TNI under genuine civilian control by making the TNI's position in West Papua a test case.
Presumably, the 'Pacific solution' policy is that asylum-seekers intercepted by Australia, by a navy or customs vessel encountering a boat carrying asylum-seekers on the open water, will be turned back. As Peter Mares argues in The Canberra Times, the aim of the deterrence strategy is to prevent West Papuan asylum-seekers from attempting to reach Australia, and to redirect the flow to PNG. PNG already cares for some 8000 Papuans from previous flights from TNI oppression and persecution across the border.
What we have then is Australia's relationship with Indonesia being based on a denial of the past persecution, the present repression, and state sanctioned terrorism against a people.
Posted by Gary Sauer-Thompson at 8:39 AM | Comments (4) | TrackBack
April 26, 2006
privatizing the internet
I mentioned The Wealth of Networks: How Social Production Transforms Markets and Freedom. I'm much impressed by the idea of a non market mode of production and the way this is linked to individual autonomy and the public sphere.
I reckon this only gets off the ground if the internet---the information superhighway--- is public owned, free and accessible to all. The Americans call it net neutrality, by which they mean keeping the Internet a level playing field for all businesses and individuals. Net neutrality prevents telephone and cable companies from deciding which Web sites work best for you -- based on what site pays them the most. Apparently the US Congress is getting ready to the privatize the Internet by making American's pay for the services they now for free. It's sort of legalizing the payment of protection money to ensure easy access to the backbone and other tier providers.
Josh Marshall at Talking Points Memo describes the scenario thus:
The Internet could have evolved very, very differently. It could have turned in to one or two big proprietary networks — maybe AOL and Compuserve, or AOL and MSN, each closed, each controlled by one company, without the dynamism, freedom and entrepreneurial magic we associate with the web. The big media offerings would be easy to get to and easy to download while the blogs and other moderately funded alternatives, right and left, had to make do with second or third tier access....Think of it like Cable TV. Anybody can start a cable channel. But if you can’t get on TimeWarner Cable here in Manhattan, for me you might as well not even exist. The Internet could work like that.
Exchange AOL for Telstra ad Optus for Australia and t you can see the temptation for them to create a internet where subscribers, content providers could be charged for access to and delivery of premium content that at one time was paid for by broadband subscriber fees alone.
The New Matilda submission to the Department of Communications, in response to Meeting the digital challenge, Minister Helen Coonan’s discussion paper on media reform, addresses this issue by stating that Telstra should be required to provide the necessary broadband and other digital service provisions to all Australian households, regardless of establishment costs, as a part of its public service charter, whether fully privatised or not.
Posted by Gary Sauer-Thompson at 7:20 PM | Comments (0) | TrackBack
globalization, inequality, protectionism
Stephen Roach in this article in Morgan Stanley's Global Economic Forum states a thesis that I hold, namely
Inequalities of the distribution of income have long been the Achilles' heel of economic growth and development. In an era of IT-enabled globalization, that seems more the case than ever. History tells us that the pressures of widening income disparities are often vented in the political arena. The steady drumbeat of protectionism is a very worrisome manifestation of that lesson.
Roach argues this in terms of the relationship between the US and China. He says that as different as the problems are in the US and China, there is no economic issue in either country that hits the political hot button like income disparities. With both countries suffering from relatively high degrees of inequality, neither can be expected to backtrack insofar as the political response is concerned. Given the mounting bilateral trade tensions between the two nations, this poses a worrisome problem.
On the one hand:
America’s increasingly populist politicians have responded to the income distribution problem by turning protectionist -- portraying China as the culprit for the pressures bearing down on middle-income US workers. Even if this view is dead wrong, as I continue to believe is the case, for China, there seems to be no immediate escape from the growing political wrath of Washington
On the other hand China:
continues to cling to an export- and investment-led growth dynamic that not only fuels political resentment in the US but also seems to have a natural bias toward widening disparities in its income distribution. Yet this same approach drives the vigorous employment growth that is absolutely vital in order to provide China with the scope to keep dismantling its inefficient state-owned economy. The Chinese leadership knows full well that this is not a sustainable growth formula.... In response, the Chinese leadership is turning to the micro management techniques of market-based socialism for answers -- namely, a gradual shift in its currency policy to diffuse external pressures and targeted income support measures to counter internal pressures.
We have a political standoff on this account.
Yet the same pressures apply to Australia: the effects of globalization are brutal wage compression. The rich are, indeed, getting richer but the rest of the workforce is not. The mounting disparities in the income distribution lead to political pressure for protectionist measures.
Posted by Gary Sauer-Thompson at 1:44 PM | Comments (0) | TrackBack
April 25, 2006
Anzac quibbles
What continues to suprise me about the Anzac Day celebrations is the way the patriotism surrounding Anzac Cove displaces or forgets the insanity of Winston Churchill's military strategy of naval attack through the Dardanelles and a land assault on the Gallipoli peninsulas to seize the Turkish capital Constantinople; the military incompetence of the British generals; and Gallipoli representing an invasion of Turkey by Australians, who confronted well-defended trench lines. The patriotism built upon Anzac Cove 1915 is more about the birthplace of the nation, heroic sacrifice and the flower of our county's youth being cut down in their prime, than it is about love for country.
Don't you think that national pride constructed on slaughter is somewhat odd? Or constructed from a failed campaign covered over by deceit?
Sure we need mythmaking. All nations do. We shoudn't forget that Gallipoli had nothing to do with diggers defending the liberty of Australia, did it? Nor did Turkey ever threaten Australia. So why not remember Turkish heroism? Was not the flower of Turkey's youth also cut down in their prime defending their country from the British invasion? Why not remember the awful tragedy of that part of the WW1 in the tradition of Sidney Nolan?
Bruce Petty
The deeper significance of Anzac Cove is a long way way from the cliched speeches and flag waving within a kitschy spectacle organized by the cultural industry, isn't it.
What should be remembered are the words of Kemil Ataturk carved in stone by the sea :
"You, the mothers, who sent their sons from far away countries, wipe away your tears; your sons are now lying in our bosom and are in peace. After having lost their lives on our land they have become our sons as well."
Surely Australian patriotism, if it is to be celebrated on Anzac Day is better served with Kokoda-----this was a frontline defence of the Australian homeland against an enemy intent on attacking, and possibly invading, Australia. Should not Australians make that journey into our history?
Love of country, as distinct from kitschy nationalism, involves citizens defending the country and its way of life from invasion, and to prevent an occupation of our homeland by an enemy. 1942 symbolized the separation of British imperial and Australian interests. They were no longer one and the same. The Australian-Briton fused identity had fractured beyond repair.
Posted by Gary Sauer-Thompson at 12:34 PM | Comments (12) | TrackBack
April 24, 2006
Globalization round 2---offshoring
In the 1990s globalization meant that developed-country economies, such as Australia's, faced threats to their manufacturing base with disappearing blue-collar jobs (factory workers). The political reaction fractured into left-wing antiglobalization advocates and right-wing isolationist/protectionist advocates.
The policy solution--and it made great sense at the time--- was for Australia to make the transition from the old economy based on manufacturing to a new economy with its service or IT base and its white-collar jobs that required higher skills and educational qualifications.
Globalization today means that the service or IT economy with its white-collar jobs is under fire.The Australians performing them will be in competition with people in Bangalore or Bangladesh who will do the same work for a whole lot less. As Joergen Oerstroem Moeller argues at Asia Times online:
Education, skills and even performance do not protect jobs from outsourcing....White-collar workers used to be the elite troops of globalization. For them it was almost entirely beneficial: no risk of losing jobs, but considerable gains from lower consumer prices. Now, these professional workers suddenly realize that their jobs may also be in danger.
White collar jobs ranging from call centers to software engineers to medical technicians are being "offshored" to say India. Suddenly, the programmers share the fate of millions of industrial workers, in textiles, autos, and steel, whose jobs have gone offshore.
No doubt we will begin to hear the high-tech horror stories -- the pink slips and falling wages--- in the corporate media and the prospects for Australian, the computer graduates prospects narrow as they peer into the future, the academics start talking about the disappearing middle class and many middle-class Australians, instead of looking ahead to a brighter future for the next generation, will worry about slipping down the economic ladder.
The solution. Retraining at great expense to become real estate agents and divorce lawyers. Or go work offshore.
Posted by Gary Sauer-Thompson at 4:33 PM | Comments (7) | TrackBack
Solomon Islands: what's going on?
I interpret Petty's cartoon to be referring to the Solomon Islands and not to West Papua and Indonesia. I have to admit that I do not understand what is happening in the Solomon Islands.
The media, repeating the government line, says that it is poor governance--corruption, lack of accountibility etc--and inefficient management of the economy that is the root cause of conflict in the islands. Australia has promoted good governance as part its aid package and it argues that this is the key to sustainable economic development and long-term peace building. The riots and the looting were all about dirty politics (corruption of politicians) and they undermined the legitimacy of formal political institutions The obvious answer is clean politics.
Is this interpretation plausible? Or is something else going on?
Bruce Petty
This suggests a cycle of poverty, political collapse and violence connected to Australia as the region's major power and aid donor. So what is going on?
Shahar Hamieri, writing in The Age, questions the "bad", dirty politics over "good", clean politics scenario in the media.
His argument is twofold economic and political. He argues that:
What we see in the Solomon Islands are not anti-corruption protests but something quite different. The rioters expressed discontent not with corruption as such, but with their increasing marginalisation from economic and political processes, a development to which RAMSI [Regional Assistance Mission to the Solomon Islands] has contributed.
He argues that it is the unravelling of the personalised networks of patronage and loyalty that functioned to maintain a modicum of cohesion in a geographically and ethnically fragmented country that has exacerbated violent conflict.
His economic argument about the effects of the market is this:
The development model RAMSI and other donors promote relies on the supposed "trickle-down" effect of private sector-led economic growth through export-oriented, market-driven reform. However, the measures pursued to attract investors actually increase poverty, at least in the short to medium term, because they stipulate severe cuts in government spending and public sector redundancies, as well as apply pressure on the customary land ownership system. .... political and economic power is gradually shifting from the public sector to the Chinese-dominated private sector, partly as a result of RAMSI's governance reforms.
Consequently, a dangerous disparity has thus appeared between the expectations and interests of ordinary islanders that their representatives in Honiara look after, and the needs of a market-driven economy, which tend to concentrate wealth in the hands of few.
Posted by Gary Sauer-Thompson at 9:40 AM | Comments (0) | TrackBack
April 23, 2006
fairness hollowed out?
Maybe, just maybe, this article in the London Sunday Times captures part of the tectonic shift that is happening liberal democracies. The key bit is this:
There is a problem with the white working class in this country [Britain], or more accurately, there is a problem with the liberal establishment’s attitude to the white working class. The multiculturalism preached by Mrs Hodge and her friends has honoured alien cultures and disowned traditional British values. The white working class has been seen as the chief threat to this faith, although Labour has still needed its votes. Found guilty of racism, the working class has been banished to new towns, high-rise flats and then policed with anti-racist legislation.
Okay, that multiculturalism versus traditional values is working in Australia too. Does it explain why the white working classes has shift to conservatism and become a Tory working class? It does fit this account.
This holds that the inner city professional electorate of the multicultural orientation in Australia is hostile to the traditional moral and cultural values of the old Left's working class electorate, with its conservative social attitudes (i.e., almost Victorian social and moral behaviour of their blue-collar suburban voters). The latter are marked by their opposition to multiculturalism and their defense of a conservative national cultural identity.
So why this conflict? Is it due to the liberal establishment’s attitude to the white working class?
The Times article has a go at answering in terms of the relationship between fairness and the welfare state.
It argues that the 'welfare state has been corrupted. It began on the contributory principle. You paid something in, therefore you were entitled to take something out. Today it has been changed into a series of entitlements.' How so? The argument is along the lines of the fracture of a tight-knit neighbourhood under pressure from immigration and the collapse of the traditional family.
After the second world war, locals found themselves in competition with newcomers for council housing. They resented seeing their children forced to move out of neighbourhoods to get a home when they had expected the state to honour a promise to house them after the blitz. But they had to watch as immigrants jumped to the head of the queue and got the most desirable residences. Fairness is an established and honourable tradition in this country. People had waited their turn and they wanted their fair share. The benefits of immigration to the economy are always clearer to affluent people in need of nannies and cleaners than to those at the bottom of the heap.
Has fairness been hollowed out in this way?
Isn't this development in capitalist modernity--the fracturing of a tight-knit neighbourhood and the collapse of the traditional family--not just been caused by the effects of immigration in our capital cities? Hasn't the increased mobility to obtain good jobs, the rise of individualism , and the emergence of feminism also helped to facture close knit communities and traditional families?
Posted by Gary Sauer-Thompson at 3:19 PM | Comments (0) | TrackBack
April 22, 2006
an American tragedy
Despite the imperial might of the US, its influence in the Middle East is rapidly being reduced to the ability to wage war.
This harsh, take-no-prisoners cartoon about the US nationalists and warrior boys of the Bush Administration expresses a situation of real men confronting a tragedy of their making in Iraq---an Iraq in flames---whilst continuing to live in their White House bubble:
Dick Cheny, the Vice President, is missing from Bell's image. He, even more than the other two, embodies an arrogance of power that confuses power wth virtue.
For contrast, read this very complex and honest post by Michael Yon about the complexities of the Iraq war that goes way beyond both the conservative' fog of war' commentary and the White House's line of 'staying the course' .
Posted by Gary Sauer-Thompson at 2:35 PM | Comments (2) | TrackBack
April 20, 2006
governing water issues
John Quiggin had an important op. ed. in yesterday's Australian Financial Review on water governance and policy. Governance of water supply by the states has been marked poor planning, poor funding, and ignoring problems.
Quiggin says that as water supplies fall short of demand in many Australian cities state governments have responded by imposing a range of restrictions on restrictions on water use whilst exploring a range of options to increase supply. Quiggin's op.ed. questions the widespread use of permanent water restrictions as a policy tool by the states.
His argument is that:
to use price based measures as a relatively modest but sustained increase in prices can be effective in matching long-term supply and demand....If prices are allowed to do the job of matching long-run supply and demand, restrictions are still available as an option to manage short-run shocks, such as droughts. By contrast, if permament restrictions are used to hold down long-run demand, there is little flexibility left to handle unexpected shocks like droughts or climate change. The only options are large price increases or more draconian restrictions on water use, neither of which are likeky to be very cost-effective.
That's good policy advice isn't it? Restrictions are the tools for short term disruptions to water supply, whilst the instrument of prices is to address the long term.
Will the states take heed?
Posted by Gary Sauer-Thompson at 11:11 PM | Comments (8) | TrackBack
gloomy reading
Reading the Australian Financial Review on the early morning plane to Canberra this morning was a bit of shock. One headline was about 30,000 jobs going as manufacturing moves off shore in the next 12 months. Currently 15% of Australian manufacturing is sourced from overseas, and that will rise to 25% over the next five years. That shift overseas is the response to the competitiive pressures frrom China. Australia hasn't even signed a free trade agreement with China yet. The jobs are low skilled ones.
Another AFR story was about the Howard Government saying no to tax reform and yes to minor adjustments of personal tax thresholds to deliver tax cuts. It will continue to increase the family benefit system (more welfare) to families with children by reducing the rate at which benefits are withdrawn. The Howard Government is saying no to increasing the $6000 tax free threshold for all taxpayers earning $10,000 or less; or reducing the rate at which benefits are withdrawn; or indexing the thresholds. So another hit for the low skilled as the Government starts to use the budget surplus to buy its next election.
And, buried in another report about increasing petrol costs, was the OECD's judgement that Australia's economic growth would be in the 2.9--- 3.2% band over the next two years, compared to the 4.7--4.9% band for the world economy. Presumably that lower growth rate for Australia is with a resources boom in WA, Queensland and the Northern Territory factored in. Australia's growth for the past 2 years has been under 3% and there's a global recession on the 3-5 year horizon.
And the Howard Government continues to pride itself on being good economic managers on those results? And I haven't even mentioned the current account deficit.
Posted by Gary Sauer-Thompson at 11:11 AM | Comments (2) | TrackBack
April 19, 2006
the new economy is.....?
The new economy--what is it? Is it the digital revolution (ie., fax machines, cellular phones, personal computers, modems, the Internet?) The new class of knowledge workers? The information economy? E-commerce? The dot-com boom, or successful stand-alone Internet businesses such as Amazon.com? Google or eBay? Network connections?
map courtesy of Brad DeLong
Is it the spread of capitalism around the world-with the introduction of global market forces into national economies, freer trade, and widespread deregulation? Or the way that digital technology is creating new companies and new industries before our eyes? Or both together?
I begin to have a go here by starting to engage with Yochai Benkler's recently published The Wealth of Networks: How Social Production Transforms Markets and Freedom (Yale University Press). It's an interesting book.
Posted by Gary Sauer-Thompson at 12:58 PM | Comments (2) | TrackBack
global financial imbalances
Gerard Barker's latest op.ed in The Times is about global financial imbalances, and more particularly the relationship between China and to the US. He says that China’s current account surplus exactly mirrors the US deficit --- at 7 per cent of GDP---and that this imbalance is an economic wedge between China and the US.
Barker's judgement is that:
This situation is untenable. The US cannot go on accumulating debt at its current rate. Yet China, too, in this rapid development stage, is in the odd position of exporting capital on the back of a large domestic savings surplus. That makes no sense, either. And so rebalancing the US-China economic relationship is not only desirable but inevitable, sooner or later.The only question is how. The United States can increase its savings relative to its investment or let the dollar fall. China can reduce its savings or let the renminbi rise.
Baker adds that there appears to be a shift in the US to address this long term unsustainable position. As the beleaguered Bush Administration is making no serious effort to reduce the fiscal deficit, which would help to increase savings, so it it may actually be starting to think in terms of reducing the dollar.
The case for America needing a competitive dollar is made by Martin Feldstein. A sharply lower dollar means higher US interest rates, lower equity prices and, possibly, an inflationary surge.
What about China? What options does it have?
It’s clear that Beijing prefers the export-led, cheap-currency growth that served Japan so well before that has enabled it to keep its shaky financial system afloat. Though the Chinese government is trying to rebalance the economy by encouraging domestic consumption, foreign direct investment seems to keep outpacing these effort. China has more reserves than it needs.
The protectionists in the US, led by Senators Lindsey Graham and Charles Schumer, continue to try to force Beijing to revalue the yuan. Theyir brief is to protect manufacturing jobs, and they argue that China's flooding the US with cheap imports devastates American manufacturing. This problem, they say is exacerbated by China's undervalued currency and trade surplus, Graham and Schumer have threatened a 27.5% across-the-board tariff on Chinese goods if the yuan is not allowed to appreciate. In July 2005 China allowed its currency to appreciate by just over 2%, but the senators have argued that this is not enough.
Maybe the US will bite the bullet and dump the old policy of a strong dollar. The US can no longer continue to able to borrow the costs simultaneously to maintain both its new empire and its middle-class consumerist lifestyle as the flows of foreign-capital into the US is beginning to reduce.
Posted by Gary Sauer-Thompson at 8:17 AM | Comments (0) | TrackBack
higher education in a globalised world
In comments to this post on free trade and protectionism Cameron Riley commented that Australia's 'education system needs to be updated for the global realities of the labor market. That means faster education, less time to credential, and cheaper retraining of skills.'
An example that illustrates his point is the UK proposals that would enable students to gain an honours degree in only two years as part of a “study anytime” revolution for higher education.The Times reports that:
Long summer holidays will end for undergraduates on “compressed” degrees as they complete their studies a year early so that they can get on with their careers with reduced levels of debt. Others will take courses entirely at work and through online study in an effort to raise the proportion of adults with degree qualifications. They will be given credit towards their degrees for skills learnt on training courses. A common system of American-style credit accumulation will also allow students to take study breaks and complete degrees later, possibly at different institutions.
The justification? Radical reform was crucial if Britain was to compete with the rising economic power of China and India. What is Australia going to do? As the old saying goes, there there is no protection from the change of globalisation — no stopping the world, unless you are prepared to pay the heavy price of getting off.
Posted by Gary Sauer-Thompson at 12:10 AM | Comments (2) | TrackBack
April 18, 2006
US v.Iran
Informed foreboding about the US wanting to hit Iran. What was once previously dismissed as posturing and sabre rattling is now being interpreted as a coordinated campaign to prepare for a military strike on Iran.
An interpretation of President Bush's March foreign policy speech at The George Washington University in the light of Iran.
William Kirstol over at the Weekly Standard argues for the US to use more stick, greater clarity and resolution in dealing with Iran. The diplomacy appears to be exhausted. It's time to bomb with a preventive strike. The Weekly Standard is talking in terms of a military strike plus regime change. The hawkish neocons pundits -- Bill Kristol, Victor Davis Hanson, Charles Krauthammer, Mark Steyn, etc. etc. -- are now in full-on war mode with their "swift, massive, devastating force".
Decoding the White House spin. Billmon has a theory about the flight forward strategy to deal with crisis. He argues that regime change in Iran may well be the only way of out of an increasingly intolerable situation created by the failure of the neocons' Iraq gambit.
Posted by Gary Sauer-Thompson at 2:38 PM | Comments (0) | TrackBack
April 17, 2006
US strategy in the Middle East
This article makes something explicit about the Middle East that needs to be said. It talks about the three concentric circles that have been forming for the past six years of the Bush presidency around the "Iran question". The key concern for me is that at the:
...center, at its very core, is the US agenda of dominating the region. Put another way, it is about securing Israel's dominant position in a New Middle East......Beyond these regional equations in the Middle East lies the inner core, the first circle, of the Bush administration's strategy toward Iran. It is, and has always been, securing Israel's regional dominance. Here any unfinished business is simply impermissible since it can have catastrophic effects on Israel's security.
That overlaps with the argument by John Mearsheimer and Stephen Walt about the effects of the Israeli lobby on US' Middle Eastern policy.
They say that:
For the past several decades, and especially since the Six-Day War in 1967, the centrepiece of US Middle Eastern policy has been its relationship with Israel. The combination of unwavering support for Israel and the related effort to spread ‘democracy’ throughout the region has inflamed Arab and Islamic opinion and jeopardised not only US security but that of much of the rest of the world. Why has the US been willing to set aside its own security and that of many of its allies in order to advance the interests of another state..... the thrust of US policy in the region derives almost entirely from domestic politics, and especially the activities of the ‘Israel Lobby’. Other special-interest groups have managed to skew foreign policy, but no lobby has managed to divert it as far from what the national interest would suggest, while simultaneously convincing Americans that US interests and those of the other country – in this case, Israel – are essentially identical.
The inner core of the geopolitics of the US in the Middle East is to ensure the hegemony of Israel as a regional power. So Iran's power and influence needs to be curtailed and rolled back as it is seen as a major threat to Israel.
Posted by Gary Sauer-Thompson at 11:20 AM | Comments (5) | TrackBack
April 16, 2006
back to the past
As we know the Howard Government's 'new workplace relations system' is designed to bring fundamental change to the way in which Australian wages and conditions of work are negotiated. It radically alters the institutional framework within which Australia has sought to provide for economic security, and it seeks to redefine the kinds of values and social goals that are given concrete expression in our industrial relations structures.
What sort of change is this? A little story about the effects of the IR legislation, courtesy of Richard Glover in the Sydney Morning Herald, which shows how the employers are able to use their power.
Glover mentions the case of the 70 coalminers in Queensland.
They arrived at a new job, only to find the accommodation was infested with fleas and feral cats, and built atop an overflowing septic tank which had contaminated the site.They refused to work until the fleas and cats were removed and the flow of raw sewage staunched - a process which took three days. For this act of unreasonable self-regard and luxury-seeking, the Government's Office of Workplace Services has been suing these 70 workers for $20,000 each in fines for unlawful industrial action; with their union fined $100,000. The Government agency backed off this week, no doubt disliking the glare of bad publicity.
The point is that this is legal under Workchoices. It shows how just far the power in the labour market has shifted to the employers. Workchoices is designed to permit, or even to encourage, a reduction in the terms and conditions of employment, and it provides legal cover for employer to exploit these possibilities.
As Greg Combet observes:
WorkChoices is very nasty legislation. It is the wrong economic strategy for Australia. It encourages exploitation, not enterprise. It will undermine the security of working families. The government has failed to make the case that the laws will create jobs, lift productivity or improve living standards....[This law delivers] extraordinary workplace power to business and diminish the rights of every Australian employee. The essential aim of the new workplace laws is to allow businesses to unilaterally determine the pay and employment conditions of employees - free of interference from unions, collective bargaining, awards, industrial tribunals and workers themselves. By this, it is intended that the market will more efficiently price labour.
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Fallout from the SA election
A wry observation about the after shocks of the recent SA state election:
Bateman
Poor Demcrats. They cut their own throat.
I read the other day that Kevin Foley, the Treasurer in the Rann SA Labour Government, is complaining about the hard task of being Treasurer in a state government. He said that he has to implement the Government's election promises without slashing services whilst maintaining the state's precious AAA credit rating.
He has delayed the state Budget from May to September and is complaining around Adelaide town that state governments are great big monsters with an insatiable appetites for spending.
Wasn't it the Rann Government that got itself into this position? Guess what. Foley will slash services and go to the media about it cuts his social democrat heart to do so. Rann will become more open about the economic benefits of uranium mining to supply the energy needs of the China and India markets delivering the social democratic project.
Posted by Gary Sauer-Thompson at 8:42 AM | Comments (1) | TrackBack
April 15, 2006
keeping politics and commerce separate
I concur with Paul Kelly's judgement in the Weekend Australian when he says:
Forget the claptrap about ministers not reading cables and failing to recollect meetings they would never be expected to recollect; the evidence of John Howard, Alexander Downer and Mark Vaile shows not the stupidity of the Government but its determination to have both its guns and wheat. This was the policy and these were deliberate objectives.
Doing business for Australia means selling wheat and mutton to tyrants and the Howard Governemnt continue keeping politics and commerce separate even though Australia went to war with the Saddam Hussein's regime because of the alliance with the US.
Alan Moir
Contrary to what Kelly says we did not have an unresolved policy dispute between chasing and holding the Iraqi wheat market on the one hand and upholding the sanctions system on the other. The former took priority over the latter. When the Department of Foreign Affairs and Trade (DFAT) did nothing apart from being a post box it was just following the policy set by its masters: to give a very high priority to defending and protecting the interests of Australian wheat growers.
But it was not business-as usual in the form of inflated contracts.
As David Marr and Marian Wilkinson point out in the Sydney Morning Herald:
Under UN Security Council Resolution 661, Australia was responsible for seeing that no cargo left its shores in breach of sanctions. Regulations introduced in Australia during the first Gulf war banned all shipments to Iraq unless the foreign minister was "satisfied that permitting the exportation will not infringe the international obligations of Australia". Under the oil-for-food program, no wheat could leave without a tick from Alexander Downer. He and his officers would sign off on 292 ships carrying 12 million tonnes of wheat to Iraq worth more than $2 billion. And almost every cargo breached sanctions.
AWB knew its kickbacks were outside the sanctions and tha the inflated contracts were a means for Saddam Hussein to siphon off money for guns from the UN's escrow account, which had been set up to help provide butter for the Iraqi people. Australia's wheat farmers didn't pay a cent as the money was all coming out of the UN's escrow account.
And the Howard Government? Well, they saw nothing, heard nothing, knew nothing, asked nothing, were never shown the cables, couldn't recall anything, thought that AWB was run by good blokes etc They understand this to be be managerial competence.
Posted by Gary Sauer-Thompson at 3:54 PM | Comments (2) | TrackBack
April 14, 2006
moving towards monopoly
Fred Benchley, in yesterdays Australian Financial Review, reports on a development that addresses the issue of Australia's broadband in the slow lane. He says that Helen Coonan, the Communications Minister, and Telstra have made a significant breakthough in negotiations for the planned roll-out of Telstra's $3 billion fibre network, its broadband pricing and the sale of the government's $20 billion stake. Things may be all signed, sealed and delivered in early May.
If installed,Telstra's planned $3 billion fibre network fibre-to-the-node (FTTN) network to service 80% of the population would extend fibre-optic cable beyond the telephone exchanges — where it now terminates — to nodes within 1.5 kilometres of houses to ensure faster ADSL broadband connections. The last section between the nodes and houses would still use the copper wire used in the existing fixed-line network. This network would by pass the current copper network exchanges, and deliver around 16-32 megabits per second of high speed internet that would allow users to download films and music as well as use ordinary telephony.
The "significant breakthough" on the planned roll-out is ensuring Telstra's domination as the proposal is designed to make the local copper loop redudant in a few years. That leaves the smaller communications carriers who have installed ADSL equipment in Telstra exchanges to deliver their own local loop services stranded. It is this snvestment by the smaller communications companies that have allowed me to access broadband from the shack in Victor Harbor and high speed broadband in the apartment in Adelaide.
What we have is a monopoly.
Telstra is proposing to build the fibre network itself with no competer ability to add services as in current exchanges, and so competitors would be forced to simply resell Telstra's fibre services. The simple resale of Telstra fibre is not competition in the telecommunications market.
So what's going on? Devising a wholesale-only arrangment to boost the value of Telstra to prevent in decline in Telstra's wholesale revenues? That means more money for the Government in selling Telstra, doesn't it. Where does the ACCC stand in this? Well there have been talks between the ACCC and Telstra over a new fibre cable network, the release of the proposal has been pencilled in for May 5, and ACCC chairman Graeme Samuel has said public comment on the fibre network proposal could be sought as early as May.
Telstra is about Telstra.What is good for Telstra is not necessarily good for Australia. It is time to bust Telstra into network, wholesale and retail. Another possibility is to to encourage Telstra's competitors to build a wireless network, as is happening Sydney with Unwired. An even better possiblity is for the Howard Government to use the proceeds of the sale of its remaining slice of Telstra to build a new fibre network which all telcos can use. Is that even on the policy agenda?
Posted by Gary Sauer-Thompson at 10:57 AM | Comments (0) | TrackBack
April 13, 2006
ministerial tall tales
Jack Waterford in the Canberra Times makes some interesting comments that bear on the Cole Inquiry's disclosing the incompetence of the federal bureaucracy in preventing the kickbacks by AWB. Mark Vaile says he didn't know. Alexander Downer says the cables weren't read but DFAT did a good job. The effect was to allow an Australian company to pay nearly $300 million in bribes over several years to the Iraqi regime that we sent our troops to fight.
Waterford addresses the ministerial staffers who sit between the minister and the bureaucracy and are a reason why no evidence has emerged that he or other ministers were told definitively that AWB was paying kickbacks. Waterford says:
...there has been a major shift of power from the bureaucracy to the ministerial office over recent decades. It may have partly insulated the public service from politicisation pressures - given that staffers can be as political as they like. But it does not produce more transparent administration, and certainly not more accountable administration, as evidenced by the way in which ministers, from the Prime Minister down, have refused to accept responsibility for what these staff do in their name.
Rightly said. The ministerial office has become a significant but non-transparent part of government administration. It is the minders who are in a position to shed light on what a minister really knows, they know the political considerations that inform the decision-making process and the wheeling and dealing going on between ministers, and their minders before important decisions are made.
Allan Moir
The tall tale being told is that key documents weren't brought to the attention of the ministers, Australia had no responsibility for vetting contracts, and all those warnings slipped past the radar screen because AWB deceived the government. The strategy is to avoid all ministerial responsibility and collective accountability and to dump all the blame on AWB or, where that was not possible, on the UN. Gee they've forgotten to blame Saddam Hussein for the accountability deficit.
What seems to be forgotten in all of this is that it was the pressure from the UN that opened up the AWB can of worms and that it was the Howard Government who prevented public servants from supplying any information to the Senate estimates committees. The political judgement is that the energies of Vaile, Downer and Howard have been directed at minimizing or evading any responsibility for failing to ensure that AWB complied with UN sanctions against Iraq. There has been a whole of government effort to hollow-out the concept of a collective responsibility and individual ministerial responsibility.MInisters accept no responsibility for the conduct and administration of their departments.
Posted by Gary Sauer-Thompson at 7:47 AM | Comments (2) | TrackBack
April 12, 2006
Governance & a spooked Whitehouse
The Republican administration in the Whitehouse is not doing that well in terms of governace is it? It increasingly looks to be a dysfunctional form of governance and to be spooked politically:
Sebastian Mallaby's op ed in the Washington Post, talks in terms of political crackup:
Today the signs of a political crackup are all over Washington. Within the administration, the White House chief of staff is going, the Treasury secretary is rumored to be going, and the defense secretary argues publicly with the secretary of state about whether he made "tactical errors" in Iraq. The president's domestic policy has shriveled to pleas for expanded health savings accounts, whose shockingly muddled design speaks volumes about the administration's lack of economic talent. In a mark of desperation, Bush has gone off script to take questions from journalists and citizens. At a forum in North Carolina on Thursday, he confessed that the torture revelations from Abu Ghraib had been "disgraceful."
Tis time to sound the drums of war:---- to beat up the Iranian threat to America, continue to build a very public PR campaign in favor of a military strike against Iran, and to put in place the instruments for regime change in Iran.
Is this just sabre rattling from a Republican administration that has a preference, and a track record, for war over diplomacy. Josh Marshall at Talking Points Memo acutely observes:
It is also not too early to point out that the evidence is there for the confluence of two destructive and disastrous forces -- hawks in the administration's Cheney faction whose instinctive bellicosity is only matched by their actual incompetence (a fatal mixture if there ever was one), and the president's chief political aides who see the build up to an Iran confrontation as the most promising way to contest the mid-term elections. Both those groups are strongly motivated for war. And who is naive enough to imagine a contrary force within the administration strong enough to put on the brakes?
Don't the necons in the US hold that those who are not of their Amercian values are to be subject to pre-emptive attack? Does not the US see itself as the world's policeman?
Posted by Gary Sauer-Thompson at 1:22 PM | Comments (8) | TrackBack
free trade & protectionism
Niall Ferguson has an op ed in the Los Angeles Times about free trade and protectionism in the US. But his comments could equally apply to Australia.
He asks 'Are we witnessing the beginning of the end of globalization? And should we be cheering or chafing at the prospect of its demise?' And he answers thus:
So global flows of labor, capital and goods are all under attack — and this in a country that has been enjoying robust growth for the better part of five years. I shudder to think what would be coming out of Congress if the country was in recession. Presumably a bill for total autarky, mandating the construction of a vast, impermeable dome from sea to shining sea
The stark duality is reminiscent of the Australian debates about Hansonism in the 1990s isn't it. Ferguson adds:
Proponents of a new generation of anti-global measures claim to want to protect vulnerable native groups from the ravages of competition. They point to studies that show the biggest losers from immigration to be high school dropouts. Other evidence shows that it's unskilled blue-collar workers who are most likely to lose out from free trade with China.
Well, the unskilled blue collar workers are surely going to carry the costs of the forthcoming free trade agreement betwen China and Australia.
Ferguson's call on this?
It makes no sense to jeopardize the benefits of globalization to protect the employment prospects of high school dropouts. So here's a modest counter-proposal for the House of Representatives. Instead of building an expensive, hideous and probably ineffective new Iron Curtain, why not use the money to get this simple message across to the kids in American high schools: If you flunk, you're sunk. Yes, boys and girls, academic achievement is the only route to decent employment in an economy at the top of the technological food chain. Drop out of education without qualifications, and you'll be lucky to get a job alongside the Mexicans picking fruit or stacking shelves.'Tis neo-liberal harshness is it not? There is nothing about programs to lift the skills of high schools kids so they can get jobs in a high tech economy. As things stand Australia is pining its hopes on quarrying minerals for China and India and importing the sskilled workforce.
Posted by Gary Sauer-Thompson at 12:23 PM | Comments (9) | TrackBack
April 11, 2006
the mask of failure
By all accounts Minister Vaile's performance at the Cole Inquiry was the same as that in Parliament--implausible to the point of incomptence. He didn't bother even trying to find out whether there might be something in the complaints about AWB kickbacks.
The transcript (scroll down) indicates that he relied on what he was told by his trusted department, which was depending on what the highly respected AWB said to it. He couldn't remember much and his department never showed him any of the 21 top-secret cables that referred to allegations of kickbacks and surcharges in oil-for-food contracts.
Bill Leak
It's sheer negiligence. Minister Vaile did not not exercise any real ministerial oversight as Australia's monopoly wheat exporter systematically and deliberately violated national and international law for four years. Nor did he have any interest in doing so. Anyhow, he did not have "ministerial responsibility" for the UN--that was the responsibility of Alexander Downer, the Foreign MInister. A buck-passing Vaile is all about selling wheat and trade.
The cleverly crafted terms of reference of the Cole Inquiry do not allow a judgement to be made about the Deputy Prime Minister's negligence. It is AWB in the dock not the Ministers. Consequently, the terms of reference need to be widened so that the Cole Inquiry can scrutinise the performance of ministers and the role of staff and public servants in carrying out their duties.
Vaile's performance at the Cole Inquiry reinforces Vaile's floundering performance in Question Time in Parliament. All he had to do was avoid implicating himself directly in the scandal. He succeeded in that, with his repetition of the " I don't know" and "I have no recollection" script. However, in being seen to failed to properly carry out his duties by turning a blind eye, Vaile is damaged --morally and politically--but he will continue to remain a Minister in Government.
Update
Tony Abbott poses the issue succinclty. He says:
I just find it utterly inconceivable that this Government would have connived at paying kickbacks to Saddam at the same time as we were planning to try to get rid of him. It is just an implausible proposition that we would be with the one hand giving him large amounts of money and with the other hand preparing the armed forces of the Commonwealth to invade his country.It just doesn't really stack up to me.
Well that's close to what happened. 'Connived' is the wrong word though. 'Allowed' would be more appropriate. So the first sentence would now read 'I just find it utterly inconceivable that this Government would have allowed the paying [of] kickbacks to Saddam at the same time as we were planning to try to get rid of him.' However, all the signs indicate that is what happened. The conniving comes with the defence.
Posted by Gary Sauer-Thompson at 8:20 AM | Comments (2) | TrackBack
April 10, 2006
destination Iran
In an article entitled Iran & the Bomb in the New York Review of Books Christopher de Bellaigue explores the possibility of members of the international community imposing sanctions on the Islamic Republic of Iran. He then spells out the consquences. If an embargo similar to the one imposed on Iraq were repeated, the result would be an increase in poverty in Iraq, an increase in oil prices, Iran blocking oil tanker traffic through the Strait of Hormuz and destablization of the world economy.
de Bellaigue states that these consequences would make China and Russia, as members of the the Security Council, reluctant to agree to the US/UK request to impose sanctions. This then increases the likelihood of an Israeli or US air strike against Iran's nuclear facilities.
The likelihood of the US bombing Iran to deprive it of its nuclear fuel cycle is increased by the Bush administration's division of the world into "friends" and "enemies"; those who are "with us" and those who are "against us". Buried beneath this division are double standards and a disregard for the nuclear Non-Proliferation Treaty (NPT). Thus Washington's "friends" - eg, India, Pakistan, Israel - are allowed to enrich uranium, and/or even to possess nuclear weapons, whether they are signatories to the treaty or not. But Iran is part of an "axis of evil", despite being an NPT signatory with a perfectly legal right to develop a uranium fuel cycle. Therefore Iran has to be forced to submit to Washington's will.
Posted by Gary Sauer-Thompson at 9:15 PM | Comments (0) | TrackBack
the no-nothing Ministers
The Government's response to the argument, that ministers in the Howard Government had a responsibility under international law to ensure Australia did not transfer funds to Saddam Hussein's regime in Iraq, is that the federal bureaucracy and relevant Ministers were merely a "postbox" for forwarding wheat contracts to the world body.
The Government's "we didn't know about it and therefore can't be held responsible" response is an implausible one. The Ministers in effect flicked the responsibility to the UN whilst they engaged in UN bashing in the run up to the war with Iraq.
Alan Moir
What we know from the work of the Cole Inquiry is that AWB is in the dock. So what of the ministers who turned a blind eye to the kickbacks in the UN oil-for-food scandal program? We know that their primary concern was trade, preventing the loss of wheat exports and protecting AWB. Hence they, and their departments, evaded all responsibility to ensure AWB was not paying bribes. Despite all the warnings they didn't act.Therein lies a problem.
Felicity Johnston, the UN's former chief customs officer who vetted oil-for-food contracts with Iraq, has said that:
"Every nation has a responsibility absolutely under (UN) Resolution 661 to ensure that nationals comply with that resolution. It states that all countries should ensure that its nationals do not provide transfers of funds to Iraq. Now I did not make that up. That's what it says in resolution 661 in black and white. Mr Vaile may try to wash his hands of it, but they do have a responsibility to ensure that their nationals abide by the rules and the regulations."
Australia's obligations under resolution 661 were enshrined in the Customs (Prohibited Export) Regulations, which placed an obligation on the Foreign Minister or his delegate to satisfy himself that exports to Iraq did not breach sanctions.
So much for the Government's evasion of responsibility. We know the Government's response. Downer and Vaile will say that none of the warning cables were drawn to their attentio prior to the Volker Inquiry. At the Cole Inquiry this week they will put on a public performance of anger for the way the public service ‘failed’ its responsibilities.
Posted by Gary Sauer-Thompson at 8:52 AM | Comments (0) | TrackBack
April 9, 2006
SA--don't expect too much greenness
As a commentator John Spoehr is generally very upbeat about the Rann Labor Government in SA. He has reason to, considering the poverty of the Liberal opposition, its rejection in its own heartland seats by once faithful friends, and its failure to offer any policies new or different. And the Democrats are finished. After almost 30 years the recent election was the first time no Democrat had been returned to the legislative council. Sandra Kanck remains as the sole Democrat.
Sometimes Spoehr's optimism disconnects from political reality and becomes a form of policy dreaming. Consider this passage from an article entitled 'State politics to take on a green glow in years ahead' in The Adelaide Review on its response to global warming:
If Labor listens to [Tim] Flannery, South Australia will become an international leader in tackling global warming, replacing our carbon-based economy with one based on renewable sources of energy. The challenge for the state government is to ensure the widespread use of renewable, safe and clean forms of energy like solar and wind. By 2015, every house in South Australia should be powered by solar or wind energy and every business buying energy generated from a range of clean and renewable fuels.
That whole paragraph is premised on an 'if' and 'should'. Little is actually happening in SA in terms of sustainable living and what is happening is mostly spin.
To his credit Spoehr does acknowledge this inaction:
The Rann government is already backing solar and wind energy generation but it needs to develop strategies that dramatically accelerate the takeup of these options and measures to increase household and industry energy efficiency. It is hard to see how we will achieve this without regaining public control of the electricity industry in South Australia. South Australian policy makers have done it once before. They may do it again if the circumstances and the citizens demand it.
The pro-business Rann Government doesn't have any strategies period, nor did it given any indication that it plans to do so in its first term. Things could change though, couldn't they.
If there are to be strategies then they need to be a lot more than regaining public ownership of electricity or saying no to more tariff reductions to protect the car industry so it can make the shift to producing hybrid cars. These are not going to green the city by rolling back the cars, making it more people friendly and providing more shade for people to walk around the city.
It may well be the case, as Spoehr says, that 'the next state election might be fought less on the health of the economy and more on the health of our environment'--notice the 'might'---but if it is, it will be more spin than substance. The substance in SA is in law and order, uranium mining, service defence centre, and budget cuts to health and education, whilst the environment is about spin.
Posted by Gary Sauer-Thompson at 9:53 AM | Comments (4) | TrackBack
April 8, 2006
real men go to Tehran
By 2003 it had become clear to many that there were no weapons of mass destruction in Iraq, and that Bush, Blair and Howard had invaded the wrong country for the wrong reason in their long war against international terrorism. The inference is that the Bush administration officials, led by Cheney and Rumsfeld, had systematically misled the US nation into a disastrous war.
Of courses, the stated reasons were not the real ones, as the stated reasons kept changing to take account of the shifts in the wind. The American empire required a solid foothold in the Middle East---Iraq would be the anchor for a long-term US military and economic presence in the Persian Gulf region. Americanizing Iraq would be a step in establishing US hegemony in the Gulf.
Alas, as Robert Dreyfuss points out, power in Iraq comes not from acquiescing to US might, but from resisting it. The insurgency is now a Sunni-led resistance of Ba'athists and army veterans and a growing Shi'ite-led, Iranian-linked resistance. What is worse is that 'Iraq has now gone from a country with a shaky US-backed regime fighting a resistance movement to a country in which sectarian killings and ethnic cleansing predominate. '
The neo-con mission has not been completed in the Middle East; not by a long shot.
The target is now Iran. Real men go to Tehran to overturn the Islamic regime, not to fight the insurgency in Baghdad. The civil war in Iraq is the result of the Iranian military and secret service of sponsoring the militias, paramilitary forces and death squads wreaking havoc in Baghdad and across southern Iraq. The US already has clandestine activities inside Iran and its nuclear confrontation with Iran is really about regime change. For the gun totting neo-cons Iran had no choice other than to accede to America’s demands or face a military attack.
The nuclear issue is the public rallying point--just like WMD in Iraq. The real geo-political issue is who is going to control the Middle East and its oil in the next ten years. All the signs are that the doctrine of pre-emptive strike is being rolled out again. Read Seymour Hersh's latest on Iran---THE IRAN PLANS---in the New Yorker. Hirsh says that:
A government consultant with close ties to the civilian leadership in the Pentagon said that Bush was “absolutely convinced that Iran is going to get the bomb” if it is not stopped. He said that the President believes that he must do “what no Democrat or Republican, if elected in the future, would have the courage to do,” and “that saving Iran is going to be his legacy.”
Saving Iran? Saving Iran from what? From their own regime? Hirsh continues:
One former defense official, who still deals with sensitive issues for the Bush Administration, told me that the military planning was premised on a belief that “a sustained bombing campaign in Iran will humiliate the religious leadership and lead the public to rise up and overthrow the government.” He added, “I was shocked when I heard it, and asked myself, ‘What are they smoking?’ ”
The neocon illusions continue. Do read Hirsh, as he places the 'nuking Iran' to destroy the nuclear infrastructure option squarely on the table.
Posted by Gary Sauer-Thompson at 5:13 PM | Comments (3) | TrackBack
broadband in the slow lane
Broadband is a joke in Australia. As David Crowe points out in this weekends Australian Financial Review broadband is slow, expensive and has many hidden metering charges. So affordibility is very low. Little is being done to address this, even though various studies show that communities with broadband created more jobs, enjoyed higher property values and formed more businesses than communities without broadband.
The Howard Government's response is to rely on quarrying Australia, drafting broadband plans for regional Australia, identifying Broadband with Telstra whilst ensuring an enfeebled regulator, and saying that things are working well. Australia does not have a national telecomunications policy, and it has put off developing one since the 1990s.
Now Telstra may have a hip telecomunications website, and it understands the significance of the emerging digital world, but it continues to cap the speed of the digital subscriber network, and won't invest in higher speed infrastructure until there is lighter regulation about opening its DSL network to its competitors. As things stand now, Telstra is stifling the market by restricting both the speed and the amount of data that can be downloaded, so that it does not have to invest in extra network capacity.
Update: 9th April
The United States Trade Representative has sharply criticized Telstra for its anti-competitive practices and attempts tio undermine the authority of the ACCC in its 2006 annual review of the operation and effectiveness of telecommunications trade agreements, the "Section 1377 Review."The Review says:
Telstra has also unilaterally set a high, nationally averaged rate, arguing that it needs to cross-subsidize rural services with above-cost urban rates. The likely effect of this new tariff, if Telstra’s appeal to the DCITA succeeds, will be to preclude competition based on unbundled loops in the geographic areas that competitors want to serve. Given the effects on competition of Telstra’s proposed average rate, Australia should consider other mechanisms to address rural service issues, such as expanded use of a competitively-neutral universal service fund.
More pressure on the Howard Government to ensure competition in the telecommunications industry. Harry Clarke says that:
Providing close to universal access to high speed, low cost broadband would give the Australian economy a long-term boost and overcome disadvantages of being a large, sparsely-populated country. The Australian Government should bite the bullet and negotiate the minimum transfers necessary to drive this investment in our long-term future.
That implies a national telecommunications polcy doesn't it?
Posted by Gary Sauer-Thompson at 12:24 PM | Comments (2) | TrackBack
April 7, 2006
my my
Strange are the ways of politicians protecting the fossil fuel industry. Ian Campbell, the Federal Minister of the Environment, invoked the Environmental Protection and Biodiversity Conservation Act for only the fourth time to veto a $220 million wind farm proposal at Bald Hills in South Gippsland. He justifies his decision on the basis that, though the orange-bellied parrot has never actually been recorded there, one might turn up and it may get sliced by the spinning blades of the turbines.
Such concern for an iconic threatened species is touching considering that climate change caused by emissions from the fossil fuel industry will wipe out thousands of species of birds in Australia. However "potential' impact cannot be deemed a "significant impact" on the threatened species in the area, as required under the EPBC Act.
Tandberg
Campbell's decision directly confronts the support of the Bracks Government for the wind farm, as the latter had given the go ahead to the farm two years ago. Campbell's decision is interpreted to fulfill the Howard Government's pledge to stop the project during the 2004 federal election campaign so as to help the Liberal Party's Russell Broadbent take the seat of McMillan from Labor. MacMillian just happens to be in the LaTrobe Valley.
Broadbent opposes wind farms and the Liberal Party campaigned against wind farms at the last Federal election, with presumably such a policy in the LaTrobe Valley helped its local candidate Russell Broadbent wrest control of the seat of McMillan from Labor.
We will see if Campbell's logic should lead to him banning the Heemskerk wind farm on the west coast of Tasmania, which the orange-bellied parrot recovery team says is putting at risk the entire orange-bellied parrot population.
Update: 8 April
Strange are the ways of the federal enivornment Minister. The Age reports that Minister Campbell has recently approved five wind farms over the past five years frequented by larger numbers of an endangered parrot than the Victorian wind farm it has blocked. The areas were potential habitat and migration areas used by orange-bellied parrots.
Posted by Gary Sauer-Thompson at 1:43 PM | Comments (2) | TrackBack
April 6, 2006
strange tunes
A catchy quote from an op.ed. by Jonah Goldberg in the Los Angeles Times:
In 1955, William F. Buckley defined conservatism as "standing athwart history yelling, stop!" That was when history was said to be on the side of collectivism and the state. Now that the market seems to be driving history, the left is standing athwart it, occasionally burning a Peugeot or two, yelling, "Forget liberty, give me my perks."
Clever huh. So what justifes the view that conservatives are the real revolutinaries. It's the proposal to do away with the welfare state and give everybody $US10, 000 and letting the market do its work.
Sounds libertarian to me. Not conservative.
Posted by Gary Sauer-Thompson at 9:11 PM | Comments (0) | TrackBack
Finally, some progress
It's taken a long time, but finally the Commonwealth has announced a $1.8 billion, five-year plan to treat mental health. It includes more respite care, mental health nurses, community-based programs and patients with mental illness will be able to get care from psychologists at a much lower cost than the current $120 per hour under a big expansion of Medicare. The plan turns around decades of neglect in mental health care after the de-inistutionalization process of reform.
John Mendoza, chairman, of the Mental Health Council, observed:
in the same way that the States and Territories got together to deal with aged care, and moved many of the people who were in long stay beds in our hospitals into appropriate aged care settings, there's an opportunity to move at least 30 per cent of those patients who use acute care, psychiatric beds, into longer stay facilities in the community. They don't exist now, they have to be funded to be built, they have to be funded to be staffed and resourced, and I think that's a discussion that has to happen between the Commonwealth and the States. I don't think the States can do it on their own.
So reform progress depends on whether the Commonwealth's move is matched by the states and whether together they can deliver a system of appropriately balanced hospital and community care.
Posted by Gary Sauer-Thompson at 4:04 PM | Comments (1) | TrackBack
April 5, 2006
privatising Medibank Private
So the Howard Government is going to privatise Medibank Private. It will be flogged to ensure the best possible sale price for the Commonwealth.
What then happens to the public interest of ensuring better health outcomes for Australians? Does not the sale mean that premiums will increase? Who is to ensure that there will be competition between pirvate health insurance funds? Who is there to force premiums down?
Fat
We have a highly subsidised private health industry that delivers a poor health product without a strong regulator. Who will now keep the private health insurers honest? Who will now consciously steer the health market in a given direction to achive better health for consumers? Which fund will now act as a health broker using its market power to purchase cost-effective services for members at the most competitive price commenssurate with account quality and safety considerations.
Jack Waterford in the Canberra Times outlines the possibilities of the sale that make the market less not more competitive.The first possibility is this:
Suppose, for example, that one of the bigger existing health funds took over Medibank Private, with its three million contributors and 29 per cent of the market. Would greater competition - and lower premiums - be more likely with a single player having half the market?
I presume the ACCC would say something about that, would it not? The second possibility is:
Suppose instead that the Government did something some ministers have mused aloud about - breaking up Medibank Private, perhaps into regional chunks. Would that improve its economies of scale, and lower administrative costs presently running significantly below those of its competitors?
That is the dismembering option as the other funds may be interested in stripping off parts of Medibank Private in order to improve their own national coverage. That leaves us with 3 health funds controlling 80 per cent of the market. The second possibility is not likely to produce improved performance of the private health insurance.
The third possibility is:
Suppose it were bought up by a merchant bank. Machealth would be too clever to run it into the ground, but how much temptation would it face to enhance the "value" of its product by shedding, through cost structures, the expensive customers? And given the history of supine responses by health ministers to demands for premium increases - in spite of increasing general taxpayer subsidisation of private health care - how confidently could one expect hard questions to be asked of the big end of town?
None of the possibilities are reassuring are they?
Posted by Gary Sauer-Thompson at 4:50 PM | Comments (6) | TrackBack
IR laws: good for families?
Pru Goward, the Sex Discrimination Commissioner, observes in an op. ed. in The Australian that family life is already under unsustainable pressure for many in the shift to a 24/7 global economy. She says that:
It is unclear how these new [IR] laws will really change this. What is clear is that families would like these arrangements to improve their work-life balance and will be enormously resentful of any further deterioration. That is very much the call of employers, with one eye on the legislature, and a call for caution.
She adds that the changes in industrial relations arrangements means that other things will have to change to accommodate it. People's lives will have to change. There is greater freedom but there are now challenges to do other things differently, like welfare arrangements, such as maternity leave, or superannuation.
The employers are flexing their muscles judging by the way that Cowra Abattoirs moved quickly to sack 29 employees and rehiring 20 of the dismissed workers on much lower rates of pay for operational reasons.
The Cowra action reinforced the ACTU's claims that the new IR laws are geared towards helping business and that the Howard Government's new dismissal laws allowed employers to sack without recourse and to drive down wages.
Though Cowra Abattoirs backed down after intense Government pressure, we can expect a repeat of the Cowra sackings at other workplaces.
On Lateline Pru Goward warned of a backlash if the changed IR conditions detracted from the quality of family life. She says that what:
...you sense is that people are worried. Older parents are worried about the consequences for their grandchildren. They're worried about the hours their children are working, the fact they both have to work to pay off mortgages and that they themselves are now filling in for their children as parents. You have such widespread concerns about work-life balance. Fair or not, I think Australians would feel very resentful of employers and what they would then see as the conditions that created this. That's why, as I say, it's very much up to employers to ensure that these new laws are treated respectfully.
First indications are that employers will not treat these IR laws respectfully.
Posted by Gary Sauer-Thompson at 9:13 AM | Comments (0) | TrackBack
April 4, 2006
Stiglitz, globalization, welfare state
Joseph Stiglitz, writing in the The Nation, says that:
Globalization is often viewed as posing a major threat to "capitalism with a human face." Trade liberalization puts downward pressure on unskilled wages (and increasingly even skilled wages), increasing inequality in more developed countries. Countries trying to compete are repeatedly told to increase labor-market flexibility, code words for lowering the minimum wage and weakening worker protections. Competition for business puts pressure to reduce taxes on corporate income and on capital more generally, decreasing funds available for supporting basic investments in people and the safety net.
Isn't that what is in happening in Australia today? One of the great political achievements of the twentieth century, a social contract between capital and labour that provided far more economic security and prosperity for working Australians is being torn up in response to the pressures of global capitalism? And we have this scenario
How do we become highly integrated into the global economy, remain a highly successful economy that still provide strong social protections and make high levels of investments in people? Is this possible? Is the social democratic project?
Stiglitz thinks so. He says:
Coping with globalization entails recognizing both the consequences of globalization and the limitations in the standard responses. Increased education is important, but it is not enough. At this time we should make taxation more progressive in order to offset the economic forces increasing inequality, not decrease the degree of progressivity as we have done in the past five years. We should strengthen our safety nets, not weaken them.
Posted by Gary Sauer-Thompson at 8:33 PM | Comments (2) | TrackBack
selling yellowcake and ....
So the way has been cleared for China to buy massive shipments of Australian uranium worth billions of dollars, with the signing of a nuclear safeguards agreement with Beijing.
Bruce Petty
That's just the beginning isn't it. The ALP is beginning to feel the political heat over its resistance to uranium expansion. Nothing should stay in the way of making profits. Quarry Australia stands to make a lot of money. That's how it should be.That is what matters.
Just a query. Aren't those who until last year denied that climate change was happening now say that climate change is so severe that nuclear energy is the answer and as Australia has the uranium, so.......forget renewable energy. Nuclear is the key to our problems. No worries. Another query. If Australian uranium is not used to manufacture weapons, won't it free up other Chinese uranium for the same use?
Nicholas Stuart says that there are three basic reasons why people are concerned about selling uranium to China.
Firstly there are the inherent dangers of the nuclear fuel cycle. Both America and Russia have demonstrated - at Three Mile Island and Chernobyl - that safely managing a nuclear reactor is not easy.The second problem is disposing of radioactive waste. Nevertheless, with one eye on the very real dangers of global warming, and the other on the lucrative export dollars we'll be earning, a way will be found around the storage issue.The third danger is something no one is really prepared to speak about. It is the risk that by selling uranium to China we are, somehow, fuelling a new nuclear arms race.
Selling yellowcake is just the beginning. There's the matter of free trade agreement---to take advantage of ---profit from--- buying low-cost manufactured products from the new "workshop of the world". Now there is a small matter the such a free trade agreement threatening Australian industry, particularly the car and textiles, clothing and footwear industries, is ther enot? No worries says Murdoch's Australian:
Sure, a free trade deal with China would put competitive pressure on parts of Australian industry and the Howard battler voters who work there. But the entire reform agenda of the past two decades has taught us that such competition is the key to sustaining opportunity and prosperity. Working-class Australians benefit from buying inexpensive consumer goods, from cars, to home entertainment to shoes. They are more likely to get decent jobs in a more competitive economy (and a more flexible job market that helps the economy to adjust). And their mortgage repayments are more likely to remain under control with low inflation, in part imported from low-cost China.
Sounds like the low wage pathway of economic reform to me.
Posted by Gary Sauer-Thompson at 10:07 AM | Comments (0) | TrackBack
April 3, 2006
Republicans: 'tis the media
The battle for Baghdad between Shiia and Sunni militias has begun. So where do the Americans stand now? Do they have a plan? Other than "whatever it takes", or the empty slogans of "a long struggle" "promoting democracy and opposing tyranny" or "taking the fight to the enemy." How does that connect to fighting a counterinsurgency?
The Republican Whitehouse is being judged harshly by fellow conservatives. The hawks and war backers blame the media for the misfortunes in Iraq and difficulties in America as the midterm congressional elections loom larger on the horizon. Gee, and here's me thinking that the political right has both feet firmly planted inside the dominant corporate media structures. Silly me.
Update: 4 April
Are the Democrats any better? Do they have a plan? Do the Democratic politicians have a serious plan for the withdrawal of US troops from Iraq. Are the Democrats making it clear that enough's enough? Are they saying no to an open-ended commitment in Iraq. What are they saying about the civil war in Iraq? Do they acknowledge this?
From the bits I've read the Democrats do not have a serious plan for troop withdrawal. They appear to be in afraid of the Republican charge of "cutting and running". They seem to be happy to sit and let the Iraq war continue to cause further domestic political damage to the Republicans.
Personally I'd like to see the Democrats get control of the House later this year and for the Republicans to lose control of Congress.Then the Republicans could no longer block the Democrats from conducting genuine investigations backed by the subpoena power of Congress into the corruption surrounding the granting of 'rebuilding contracts' in Iraq to the US crooks and profiteers.
Posted by Gary Sauer-Thompson at 11:37 PM | Comments (15) | TrackBack
April 2, 2006
Blair selling the war in Iraq
When Tony Blair was in Australia he laid a wreath at the Australian War Memorial in Canberra and to pay his respects at the Tomb of the Unknown Soldier.
When Tony Blair was in Indonesia he called on moderate Muslims to challenge extremists, depicting a clash between "progress and reaction", but he was met with a barrage of calls to withdraw from Iraq on the grounds that the occupation is only promoting more radicalism and new acts of terrorism.They are right. The most withering critique of the Iraq intervention is that it has created terrorists that did not exist before.
Blair's justification of war with Iraq is usually along the lines of his seminal 1999 Chicago speech on humanitarian liberal intervention. As Timothy Garton Ash points out in The Guardian 'putting Iraq in a row with British participation in the interventions in Afghanistan, Sierra Leone and Kosovo, Blair does not strengthen the case for the Iraq war; he merely taints the case for the brave and justified interventions that preceded it.'
Posted by Gary Sauer-Thompson at 12:13 PM | Comments (10) | TrackBack
April 1, 2006
damaged goods
It's not just the lies from AWB or the incomptence of the federal bureaucracy is it? It's also a case of see no evil, hear no evil, speak no evil, with respect to the Ministers. It is pretty clear that the Howard Government could have nipped the wheat-for- kickbacks in the bud, if they had acted on the 26 more warnings. What comes through is negligence and contempt for the UN.
Tandberg
The terms of reference do not allow the Cole Commission to investigate the failure of the Department of Foreign Affairs and Trade and Ministers Downer and Vaile to investigate the repeated warnings. Cole is "prevented from exploring if these federal ministers had properly discharged their duties to meet nominated international legal obligations.--There's Howard's waggon train protection that allows public servants and politicians to twist the truth, dissemble and the deny their way out of trouble. Just like the children overboard scandal.
Still Alexander Downer, for all his twisting and ducking, is damaged goods. He has scratches all over him, despite the protection provided by the Prime Minister. So Downer can kiss goodbye to becoming Prime Minister or Deputy Leader of the Liberal Party when Howard retires.
Posted by Gary Sauer-Thompson at 9:46 AM | Comments (6) | TrackBack