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September 30, 2008

as in film so in...

It is high drama in Washington these days and who better to express the public mood than Hollywood.

Martin Rowson

The House Republicans are willing to play Russian roulette with fragile financial markets. So what now in terms of this political crisis? Bush couldn't deliver his own party for a bill he wanted. So he doesn't really have much credibility with them. He doesn't have credibility with the public either. Will the Republicans "standing up for Main Street against Wall Street" convince the public?

Schumpeter would have called the chaos on Wall Street 'creative destruction'.

Update
Megan McArdle at The Atlantic is critical of the use of metaphor in making sense of the financial crisis. She says:

Metaphors, comparative situations, are useful when you have a firm grasp of the underlying principles which make the important features of what you are discuss fundamentally akin to the important principles of whatever metaphor you wish to employ.....If you cannot explain in clear English exactly what all the salient questions and facts are about the bailout, then please do not attempt to convince others that it is best understood in terms of Dirty Harry movies or the time your Aunt Mavis lost her car keys in the garbage disposal.

Fair enough. We do resort to all kinds metaphors to disguise murky our thinking. But we are watching the disintegration of the financial system. It is difficult to understand what the financial system ceasing to function properly, a range of financial institutions collapsing, and the investment-banking industry disappearing in a couple of weeks means. It is difficult to comprehend what happens next.

What is the significance of the US ’experiencing a huge financial crisis, and the political system still doesn’t seem to work? The Americans are doing this to themselves--it’s their own failure to regulate their financial system and to legislate the proper remedy. They are shooting themselves in the foot.

Posted by Gary Sauer-Thompson at 9:18 AM | Comments (10) | TrackBack

September 29, 2008

Building Australia

The Building Australia Fund is a multi-billion dollar infrastructure fund set up by the Rudd Government to help modernize Australia by easing road congestion, roll out faster broadband services and build coal ports. It is to overseen by Infrastructure Australia, an independent body that will evaluate and scrutinize the various projects in terms of their economic importance.

So far it sounds as if the whole infrastructure push has a corporate agenda---- ie., limited to building infrastructure to help business--- rather than assessing infrastructure projects in terms of both their economic importance and greenhouse implications. Maybe this is because it is basically Labor's rebadging of the Coalition's AusLink during the last election. So ity is more about six lane highways than public transport. Still the failure by the Rudd Government to connect infrastructure development with climate change is worrying, given the imperative of Australia needing to adapt in a warmer climate.

The current debate about climate change is disconnected from the debate about infrastructure development, even though the two are deeply intertwined in making the shift to low carbon-economy. Few ministers in the Rudd Government are talking about prioritising climate friendly infrastructure--other than protecting the coal industry from competition and compensating them from loss of asset value caused by the carbon emissions trading scheme.

Business, of course, is saying that cutting greenhouse emissions by 10% is beyond the capacity of the economy. Business does not appear to be interested in building infrastructure so that Australia is able to live in a future one of more extreme weather events and natural disasters, inadequate rainfall and water shortages, higher utility and food prices and insurance costs, better health services for the vulnerable and aged, and which has much more responsible management of Australia's finite resources and fragile environments.

Business just want infrastructure built that will enable it to ship more rocks to China as fast as possible. China, apparently, is Australia's sure bet in a slowing global economy. Exporting more rocks is what is urgent, not addressing climate change, as exporting more rocks will protect jobs.

Posted by Gary Sauer-Thompson at 8:49 AM | Comments (4) | TrackBack

just reviving financial markets?

Leaders in the United States Congress last night approved an unprecedented $US700 billion ($840 billion) plan to revive credit markets. In the UK Bradford and Bingley is the latest high street bank to fall victim to the financial contagion as unemployment is rising and consumers are tightening their belts. On Friday the Rudd Government made $4biilion available ( a support package) for no- bank financial institutions providing household mortgages.

So things aren't alright in Australia. The bank mortgage lenders are unable to get funds to provide new mortgages, and of those that can have to charge much higher interest rates. As mortgage rates rose ihousands of homeowners now struggle to find affordable finance.

The US plan does not reduce across the board the debt burden of the distressed household sector. Does that mean that without such a component the debt overhang of the household sector will continue to depress consumption spending and will exacerbate the current economic recession?

Will purchasing toxic/illiquid assets of the financial system be an effective and efficient way to recapitalize the banking system? It would appear that the plan does not address the need to recapitalize those financial institutions that are badly undercapitalized. It looks to be a bailout of reckless bankers, lenders and investors. Bailing out wealthy bankers when the millions of families losing their homes get little direct help is not going to play well in Main Street America, which has seen factory after factory close and jobs move overseas. What has happened to fairness in the US?

John Gray says that the era of American global leadership, reaching back to the Second World War, is over in The Guardian. His argument is that America will be even more starkly dependent on the world's new rising powers. and it is unclear that the governments of countries that buy large quantities of American bonds---China, the Gulf States and Russia---will be ready to continue supporting the dollar's role as the world's reserve currency? Gray says:

The fate of empires is very often sealed by the interaction of war and debt. That was true of the British Empire, whose finances deteriorated from the First World War onwards, and of the Soviet Union. Defeat in Afghanistan and the economic burden of trying to respond to Reagan's technically flawed but politically extremely effective Star Wars programme were vital factors in triggering the Soviet collapse. Despite its insistent exceptionalism, America is no different. The Iraq War and the credit bubble have fatally undermined America's economic primacy. The US will continue to be the world's largest economy for a while longer, but it will be the new rising powers that, once the crisis is over, buy up what remains intact in the wreckage of America's financial system.

He says that America's political leaders appear unable to grasp the fact that American global leadership is fast ebbing away.

Update: 30 September
The House of Representatives voted to reject a $700 billion rescue of the financial industry in defiance of President Bush and Congressional leaders of both parties who had said the bailout was needed to prevent a widespread financial collapse.The vote against the measure was 228 to 205, with 133 Republicans turning against President Bush to join 95 Democrats in opposition. The bill was backed by 140 Democrats and 65 Republicans.

So House Republicans voted roughly two-to-one against the bail-out, while the Democrats split three-to-two in favour. This was a Republican bill and 2/3rds of the Democrats voted for the bill.

Posted by Gary Sauer-Thompson at 7:53 AM | Comments (10) | TrackBack

September 28, 2008

Arena: the administered state

John Hinkson's editorial in the June/July issue of Arena briefly explores how the new social order is now administered in the name of a politics beyond Left and Right. Hinkson says:

While the wider world moves towards catastrophe, the world of politics in Australia has imploded towards the small and petty. In the face of momentous possibilities, and in the absence of practical thinking able to interpret and face those possibilities, politics has turned to small talk. The rapidity of the decline is stunning. The Rudd administration has backed away from any claim to being a government prepared to take on the big problems honestly from the point of view of concern for the common good. Indeed, its contribution to the wellbeing of the nation appears to have been exhausted with the removal of the Howard government. Now all issues tend to be reduced to what is administratively possible - what 'good' administration can fix

.
Hinkson considers the obvious objection--climate change where the Rudd Government has set in place a developmental process focusing on significant goals for the reduction of greenhouse gases and processes of emission control.

He responds thus:

But even in relation to climate change it has developed a policy that amounts to nothing more than an administrative tool. Formed in the campaign to defeat Howard, and influenced by opinion polls that in no way reflect the reality of the on-the-ground costs of responding to climate change, it attends to the global threat as merely an aspect of normal governance.

Hinkson says that the political effort is to normalise climate change: both in terms of policy and in the minds of voters. Whether our way of life might contribute to climate change, and what might count as a serious response at this level of thinking and action is marginalised because administration looks after an assumed way of life. The administrative fix covers up the way our social life is being radically transformed by globalisation:

In particular, the high technologies amplify and transform aspects of life once protected from the market. Today, inflated expectations of the self, even the denial that there is a self, the new role of the university, the assault upon nature, the market in its global form, the possibilities of techno-embodiment, the infinite wants of the consumer, all appear to confirm that the possibilities are limitless. High-tech processes amplify our world and draw us away from any notion that it might be finite.

Hinkson adds that the multi-faceted media that accompany the globalisation of social life radically undermine community-based and generation-based settings. Relatively rich face-to-face local and neighbourhood social relations are thinned out and displaced by technological mediums, putting in their place conditions that underpin both moral panics and interventions. He says that the administrative state, in ignoring these processes of social transformation, also allows the question of how we should live also to be avoided.

But is the Rudd Government that different from Hawke/Keating in this respect? Both seemed to be concerned to keep the economic machine ticking over through the strategy of turning all problems into managerial or administrative problems.

Posted by Gary Sauer-Thompson at 10:04 AM | Comments (4) | TrackBack

September 27, 2008

toxic assets

The prospect of Congress reaching swift agreement on the Bush Administration's $US700 billion fund to stabilise the world's financial markets has deteriorated sharply, despite the collapse of Washington Mutual, the biggest bank to fold in US history and banks having all but stopped lending to each.

Ironically it is the House Republicans rebelling, despite the recent history of Republicans attempting to undermine the constitutional checks and balances by removing judicial reviews legislatively, or supporting the executive branch doing so., in order to establish executive dominance over Congress.

Ingram Penn, toxic assets, 2008

Investment banking’s long boom is over and lean years lie ahead. The business is likely to be narrower in scope, subject to greater regulation, smaller and less profitable.

As Peter Thal Larsen and Francesco Guerrera go on to remind us:

it can be easy to forget that the industry was not always this large. As recently as the mid-1980s, most Wall Street firms were private partnerships, with limited capital, that specialised mainly in underwriting equity and bond offerings and providing advice to companies.Since then, fuelled by deregulation, consolidation and the globalisation of capital flows, they have transformed themselves into publicly traded behemoths, intermediating in a bewildering array of financial risks and placing huge bets with their own capital.

Leverage turbocharged profits by enabling banks to reap high returns from relatively small amounts of capital. Goldman and Morgan Stanley are the last examples of investment banks.The others have been subsumed into larger universal banks, which have a more diverse funding base, including retail deposits.

Posted by Gary Sauer-Thompson at 1:49 PM | Comments (5) | TrackBack

September 26, 2008

adverse events in Australia's public hospitals

Finally it is coming out-----adverse events in the health system that are preventable. The Australasian College for Emergency Medicine has said that research shows that overcrowding and delays in moving patients from emergency departments to a hospital bed caused 1500 extra deaths nationally.The claim is that more people die from hospital overcrowding and admission logjams than in road accidents. This is not the kind of news that state politicians want to be made public.

The claims have escalated into a furious row between senior doctors and the SA state government. In SA a senior emergency specialist, Tony Eliseo, claimed the crisis was costing 150 lives a year in SA alone, rivalling the road toll. John Hill, the Minister of Health, is outraged and rejects any comparison between road toll and hospital-related deaths. Pure theory put about by academics is his rather implausible response.

If it is 150 deaths in SA, then how many die in WA from access blocking and overcrowding?

“Access block” is defined as the situation where patients are unable to gain access to appropriate hospital beds within a reasonable amount of time, no greater than 8 hours. “Overcrowding” refers to the situation where Emergency Department (ED) function is impeded by the number of patients waiting to be seen, undergoing assessment and treatment, or waiting for departure, exceeding the physical or staffing capacity of the department.

The literature review undertaken by the Australasian College for Emergency Medicine states that:

The most vulnerable individuals affected by access block and ED [emergency department] overcrowding are those who due to their medical conditions require unplanned admissions to hospital. The most common groups include: the elderly, particularly those with chronic and complex conditions; people
arriving by ambulance; people visiting EDs after hours or on week-ends; children and parents of
young children; mental health patients; drug and alcohol patients; nursing home patients;
people without social support; patients with medical conditions exacerbated by seasonal
changes; people with painful conditions; the undiagnosed critically ill; seriously-ill patients who
leave without being seen by a doctor; and patients who are inappropriately discharged from
hospital in order to increase bed availability.

Access blocking and overcrowding result from there being not enough available beds to meet demand.
ED overcrowding. This is associated with significant mortality and human suffering.

Posted by Gary Sauer-Thompson at 4:41 PM | TrackBack

September 25, 2008

Senate blocks change to Medicare threshold levy

I understand that the budget changes to the Medicare levy surcharge threshold were defeated by a single vote from Victorian Family First senator Steve Fielding.This was in spite of last-minute changes to the proposed legislation by Health Minister Nicola Roxon on Tuesday, which altered the new threshold for singles from $100,000 to $75,000.

So Family First sides with Coalition to block this compromise, which was based on indexing the Coalition's 1997 thresholds. It is the equivalent to a tax cut, and the Liberals are in the position of opposing tax cuts to prop up the private health insurance industry.Had the Bill passed, it would have delivered up to $1200 of tax relief to 330,000 people.

Senator Fielding defends his move by saying the Government had done nothing for lower-income earners who could be affected by higher health insurance premiums:

When you change it, you've got to be really careful that you look after those who will be worse off..hese are people vulnerable Australians, low-income earners and pensioners that are now going to have the rug pulled out from under their feet.

Yet health insurance premiums would be 2.5% p.a. (roughly $20) whilst around 70% of lower income earners do not have private health insurance. So Fielding is defending corporate welfare in the form of rent seeking from tax payers.

Health Minister Nicola Roxon will stare down the Senate, introducing redrawn Medicare legislation that will give effect to her compromise plan to slash a proposed increase in the Medicare levy income threshold from $100,000 to $75,000.

Posted by Gary Sauer-Thompson at 8:52 AM | Comments (4) | TrackBack

September 24, 2008

grabbing the water

I've always thought that the Victorian Government's north south pipeline, which pipes water from the Goulbourn Murray River to Melbourne, was a bad policy in terms of sustainability. It assumes that there is extra water in the Murray-Darling system that could be used to increase Melbourne's water supply when all and sundry are saying that there is no water to save the lower lakes of the River Murray and the Corrong wetlands.

I see that Tim Flannery concurs:

Why would you take the water from an already stressed river system, and then they say 'Well, we're actually making more water in the end', which is bullshit. Sorry, there is only a certain amount of water in the system.Why would you do that rather than trying to do something about coal-fired power plants, which consume 20% of the water used in the state?

Critical human needs is the rationale. If so, then why is there little attempt by the State Government to store storm water in aquifers, or recycle storm water? Why the intense opposition of the Brumby Government to household water tanks?

Oddly enough, Flannery doesn't mention water in his quarterly essay Now or Never A Sustainable Future for Australia. He deals with coal, geothermal energy, growing forests to sequester carbon, sustainable agriculture within a framework of Gaian imbalance. But no mention of water or cities. Strange.

In the essay Flannery says that he has focused on the most urgent crisis ---the climate problem---in order to forge a sustainable way of living in the 21st century.

Posted by Gary Sauer-Thompson at 8:56 AM | Comments (3) | TrackBack

welfare for the rich

For those interested the Economists Forum at the Financial Times has a series of discussions about the crisis in the financial system, Paulson's RTC bailout of the financial industry at taxpayers’ expense, and what should be done about it. The US is now a system where profits are private, but losses are socialized, and taxpayer money is used to prop up failed firms. It is welfare for the rich.

Ingram Penn

Why not force the failed firms into bankruptcy. Isn't that capitalism's way? Why not impose a restructuring plan on creditors, where part of the debt is forgiven in exchange for some equity? Why isn't Wall Street held responsible for its actions?

Peter Costello was on Lateline last night talking about the financial crisis amongst other things. He said little new beyond his usual argument that it was a failure of the US regulatory system and that Australia was in good shape (good regulatory system, no government debt, and limited bank exposure to toxic securities). He gave no assessment of the Paulson bailout of Wall Street or its fundamental problems other than say that he agreed with the rescue packages that are put together.

Still it was far more sophisticated than what passes for debate in the House of Representatives where the debate is about such weighty matters such as plagiarism and not knowing the current Treasury cash rate. So much for the claim that Parliament is the clearing house of ideas.

Posted by Gary Sauer-Thompson at 8:25 AM | Comments (9) | TrackBack

September 23, 2008

US bails out Wall Street

Some institutions find themselves with too little capital to support lending. Some are also unable to raise the money they need to finance the securities. By selling assets, to raise money, they have depressed prices further. This has weakened balance sheets, forcing them to dump yet more. The plan of Hank Paulson, the US Treasury secretary, is to buy up $700bn of these toxic securities and to put a floor under the price.The aim is to end the spiral and the de-leveraging convulsion.

This cash for trash effectively bails out Wall Street. The libertarians in this financial crisis are hiding in the foxholes since government isn’t seen as the problem in Washington these days, as it’s the solution.

The spiral highlights a real problem. As finance shrinks, credit is being sucked out of the economy and without credit, people cannot buy houses, run businesses or as easily invest in the future.The financial sector needs capital, because assets like houses and promises to pay debts are worth less than most people thought. Even if some gain from falling asset prices, lenders and insurers have to book losses, which leaves them needing money. Governments are the only buyers around.

If bailing out Wall Street's shadow banking system increases the huge US national debt, then it also puts another nail into the body of the US model of free-market capitalism. Morgan Stanley has turned to Asia for a capital lifeline of $9 billion. Morgan Stanley and Goldman Sachs have converted into banks and so will now be regulated as banks. So the shadow banking system continues to unravel.

A question: isn't it it better to boost the banking system by increasing its capital than by reducing its loans?As Paul Krugman points out even if the vicious circle is limited, the financial system will still be crippled by inadequate capital. The financial system needs more capital is the core argument. You can’t socialize the losses if you don’t also socialize some of the gains.

And if the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to – a share in ownership, so that all the gains if the rescue plan works don’t go to the people who made the mess in the first place.

Posted by Gary Sauer-Thompson at 7:56 AM | Comments (6) | TrackBack

September 22, 2008

health reform: looking good

As is becoming increasingly clear the Rudd Government's health reform aims to reduce health inequality and increase access to good health care. Inequality means poor health and poor health means inequality. The commitment to reform clashes with the interests of doctors as it seeks to remake the role of general practitioners and how health funding is delivered to the states.

What the reforms seek to do around primary care is for nurses, psychologists, physiotherapists and dieticians to take on more work traditionally performed by doctors. This directly attacks the way that the health system has been organized around doctors and the way that health care is funded by Medicare.

In a recent speech entitled 'The Light on the Hill: History Repeating', given as an address to the Annual Ben Chifley Memorial Light of the Hill Dinner in Bathurst, Nicola Roxon, the Minister of Health and Ageing, argues that prevention a key weapon in the arsenal of health. Investing just in hospitals can play only a very limited role in addressing disadvantage. It can do a great deal of good, but the chance at early intervention, and a better life, has been lost. It is the notorious ambulance at the bottom of the cliff – not the fence at the top that stops the fall in the first place.

Roxon goes on to say that our health system, including funding for health services, is organised almost entirely around doctors, despite the fact that many services are now safely and ably provided by other health professionals – nurses, psychologists, physiotherapists, dieticians and others:

Doctors must and will remain central to our health system. But to date, professional resistance and government funding have prevented the development of a health sector in which services are delivered not only by doctors, but by other health professionals who are safe, potentially cheaper and, most importantly, available....Doctors will need to be prepared to let go of some work that others can safely do. To ensure this transition, there needs to be an incentive for doctors to eschew less complex work, and focus on the work that does require their high-level skills and expertise. Or if doctors do not want to let go of it, to accept being paid less for devoting their highly skilled and heavily trained selves to less complex tasks then they might.

So the reform thrust is to addresse the historical bias towards medical intervention and acute care by shifting the focus of the health system to prevention and to explore the ways in which nurses and allied health professionals can take on some of the work of GP's.

Posted by Gary Sauer-Thompson at 9:03 AM | Comments (5) | TrackBack

September 21, 2008

Russia's return to great power status

George Friedman in an op-ed in the New York Review of Books makes some interesting observations of Russia, Georgia and the US. He argues that Putin did not want to reestablish the Soviet Union, but he did want to re- establish the Russian sphere of influence in the former Soviet region.

To accomplish that, he had to reestablish the credibility of the Russian army as a fighting force, at least in its own region and secondly, he had to establish that Western guarantees, including NATO membership, meant nothing in the face of Russian power. Georgia was the perfect choice. Georgia is a marginal issue to the United States; Iran is a central issue.

Friedman says:

The war in Georgia, therefore, is Russia's public return to great power status. This is not something that just happened—it has been unfolding ever since Putin took power, and with growing intensity in the past five years. Part of it has to do with the increase in Russian power, but a great deal of it has to do with the fact that the Middle Eastern wars in Iraq and Afghanistan have left the United States off-balance and short on resources. This conflict created a window of opportunity. The Russian goal is to use that window to assert a new reality throughout the region while the Americans are tied down elsewhere and dependent on Russian cooperation. The war was far from a surprise; it has been building for months. But the geopolitical foundations of the war have been building since 1992. Russia has been an empire for centuries. The last fifteen years or so were not the new reality, but simply an aberration that would be rectified. And now it is being rectified. Whether the US and its allies can mount a coherent response has now become a central question of Western foreign policy.

Posted by Gary Sauer-Thompson at 7:08 PM | Comments (2) | TrackBack

September 20, 2008

Quadrant's myopia

Quadrant claims that it is Australia's leading intellectual monthly. Is this claim justified? We can explore this by looking at Ian McFayden's Our New Established Religion in the latest issue.

This article refers to climate change and environmentalism, and it works within the conservative tradition that holds environmentalism is a religion and that greens are anti-capitalist and desire a return to pre-modernity. McFayden finishes his article thus:

Environmentalism has, in a mere fifty years, attained the hegemony, political influence and moral authority formerly accorded to the church. We have come the full circle to a pre-Enlightenment society, ruled by an officially sanctioned religion that is as dogmatic, inquisitorial and eschatological as medieval Christianity, where environmental scientists are the clergy, Green is the colour of purity and the central icon is not Jesus suffering on a cross but the image of a tortured planet dying for our sins.

I find it astonishing that conservatives can continue with this fiction in the light of both the public policy being guided by natural science and the policy embrace of an emissions trading scheme to address market failure (eg., externalities of greenhouse pollution) through the use of market mechanisms. What is being argued in public policy circles is the nature of that trading scheme. This locates us firmly within modernity and the ecological Enlightenment.

What then is McFayden's argument. He says:

What is interesting about the debate—what sets is apart from almost every other scientific investigation in the last two centuries—is that within no more than a few years, several people announced that the issue was no longer a debate at all. Despite the fact that climate scientists were still analysing data, revising models and indeed revising modelling methods, it was proclaimed publicly that there was no longer any doubt; the issue was resolved; it had been proved beyond a doubt that the world was getting warmer, humans were to blame, and the world was facing a major catastrophe as a result.

"It had been proved beyond a doubt"? was not the claim by the UN's international panel on climate change. Their talk is in terms of scientific consensus that is constantly being modified as new data comes in.

McFayden goes on to say that:

Whatever the complexities of climate and climate science, one thing is clear: there was a specific point where the theory of global warming ceased to be a scientific hypothesis to be tested over time and became an incontrovertible article of dogma. Indeed it became the critical article of faith that would finally lock all the various environmental issues together in one overarching doctrine and bestow incalculable gravitas on the religion of Environmentalism, finally establishing it as the official religion of Western society.

He argues for this by saying that "just in case this seems to be a wildly rhetorical characterisation, consider the follow [sic] features that Environmentalism shares with religions in general. Just because two different things have similarities does not mean that are not different. What is driving the establishment of an emission trading scheme is economics and the market which is the core part of the liberal Enlightenment and the liberal understanding of modernity.

Posted by Gary Sauer-Thompson at 11:08 AM | Comments (18) | TrackBack

September 19, 2008

standing on the sidelines watching

I watched a bit of Q+A on ABC last night on the global financial crisis. Robert Manne reckoned it signified the end of neo-liberalism, Tony Abbott said Manne's talk of the end of capitalism was silly since capitalism would survive as it was a resilient beast, whilst Maxine McKew dismissed all apocalyptic talk as unwarranted given the weathering of the Credit and Loan's collapse in the US in the 1980s and the Asian crisis in the 1990s.

At no point did Manne say anything like 'capitalism will not survive these financial shocks.' (He reckoned that global warming was a far bigger issue that the global financial crisis). Neither Abbott and McKew were willing to pick up and explore Manne's point about the limits of neo-liberalism, or even mention the ways to deal with or manage the crisis.

Ingram Pinn

What the politicians did say was to highlight the interconnectedness of the global economy. What they didn't say is that there is a growing tension between global integration and a shortage of credible international governance and that governments of nation-states have been left with responsibility without power.

The significance of this is that politicians are on the sidelines watching like the rest of us despite their claim to inside information from those who really know what's going on. They really don't know what is happening or what to do about it. Abbott actually implied that it was all a bit of a glitch and was not market failure.

Given their insider information---which McKew made so much of --- they could have made reference to the transformation of the USA into a country where there is socialism for the rich, the well connected and Wall Street (i.e. where profits are privatized and losses are socialized) with the nationalization of AIG. Or they could have mentioned the need for greater international governance beyond the G7 central banks--(where's China?); or the need to quarantine the toxic bad debts; or the need to recapitalize the remaining investment banks.

Or the politicians could ghave mentioned how this financial crisis was different from the previous ones. The previous ones started on fringes of the global financial system-- in the developing or emerging economies in Latin America, Asia or Russia--- and the West (G7) worried about the contagion. This crisis was made in the US--the heart of the global financial system--- and it is the emerging powers of the east that fear contagion. Doesn't that highlight the big shift in economic power in the world?

Posted by Gary Sauer-Thompson at 7:18 AM | Comments (13) | TrackBack

September 18, 2008

great minds

In the interests of raising the quality of public debate in this country, Robert Manne and Gerard Henderson have thoughtfully provided the public with a fascinating behind-the-scenes tour of public intellectual exchange. We don't often get to witness great thoughts in the process of formulation, or sharp minds honing their arguments.

Jack Marx spotted the publication of a previously private email exchange between the two at The Sydney Institute and Monthly websites. Manne's is the longer, uncut version. Henderson's is published in two parts, and if there are prizes for comprehension-considerate layout and design, Henderson's wins.

Henderson is upset that Manne published an article in The Monthly suggesting that Henderson is one of a group of politicians and commentators who calculate the appropriate degree of horror at human slaughter on a basis which values political ideology over human life. Henderson is also cross at the suggestion that his only right of reply option is the online-only Letters to the Editor at The Monthly website. It's just not the same if a tree doesn't have to die for it.

According to Marx' word count, the tiff has so far clocked up over 8,000 words. That's got to be approaching the total output of the 2020 Summit.

As Marx observes:

"Significantly (perhaps) occurring just before the recent crash on Wall Street, the ancient feud between Gerard Henderson and Robert Manne has flared up again, a state of high emergency being thrust upon their reader, with at least two publications plunged into so much chaos...It might be important, when trying to understand a enmity of this nature, to look back of over the history of the disagreement, but sucks to that - that Henderson and Manne don’t like each other is all you really need to know."

That much is now abundantly clear, if it was ever in doubt. Hopefully somebody, somewhere, whose job is to document significant events in Australian intellectual history, is busily preserving these precious documents for posterity, even if they are only published on the crummy, not-the-real-thing internet.

Posted by Lyn Calcutt at 6:12 PM | Comments (17) | TrackBack

neo-liberal bankruptcy?

The current financial crisis has its roots in deregulation (i.e. "globalisation") in the 2000s which allowed capital to flow free and untrammelled around the world.The international financial architecture ("globalisation") was so structured as to enable the United States to "hoover up" money from the rest of the world, and use these resources to live beyond its means and go on a spending binge.

Seumas Miller in a comment in The Guardian puts his finger on the core issue arising from the global financial crisis.

Miller says:

What is certain is that the dominance of the free-market model of capitalism, which has held sway across the world for more than two decades, is rapidly coming to an end. When its high priests in Washington are forced to carry out the largest nationalisations ever undertaken outside the communist world, while intervening on an unprecedented scale across markets that were supposed to be self-regulating in order to keep the system afloat, the neoliberal order is transparently falling apart.

The free marketeers are saying that the unfolding of the banking crisis showed that capitalism and markets were working as they should however "brutal and unforgiving" the level of creative destruction. It's government that is the problem not the efficient market. The government should get out of the way and let the market efficiently allocate resources by eliminating excess.

I read that argument somewhere yesterday. The Wall Street Journal? Regulators ought to have some humility in the face of the corrective actions of the markets.The deeper the downturn the quicker the recovery. The financial system is now purging itself of years of excess and it will result in larger, better-capitalized financial institutions.

The key arguments these economists make are this. First the fundamentals of the market are strong so there is no need for government intervention. Secondly, the current crisis has been caused by the low interest-rate monetary policy Greenspan presided over after 2001. This case permits a twofold diversion - for it pins the blame for the crisis on interest rates (not deregulation of credit-creation) and on central bankers (not the private-finance sector). The policy implications of this focus neatly avoid proposals for what is clearly and urgently required: re-regulation of the finance sector. It is a defence of raw capitalism and markets being left to their own devices.

Raw capitalism is dead. Even US Treasury Secretary Henry Paulson, who has spent years attacking government intervention and regulation of financial capitalism, concedes that. He's now into the nationalisation business big time. The US government is now in the position of owning parts of the financial system and providing regulation of it.

Posted by Gary Sauer-Thompson at 7:59 AM | Comments (22) | TrackBack

Senate debates Medicare Ley Surcharge

The ALP's Medicare Ley Surcharge threshold bill is in trouble in the Senate The Rudd Government wants to raise the income thresholds determining liability for the 1 per cent surcharge from $50,000 to $100,000 for singles and from $100, 000 to $150,000 for couples. Both Xenophon and Fielding are saying 'hang on a mo' folks, not so fast.

Nick Xenophon said he would block the bill on the grounds that the increase would likely lead to an exodus of members from the private health funds, increase pressure on public hospitals, and lead to higher premiums for those who retained private health insurance. His position is that he wants the government to index the income threshold of its original base, which means that the surcharge kicks in at $67,000 for singles and $134,000 for couples. Grounds for negotiation one would think.

Steve Fielding had similar concerns about an exodus from private cover and rising premiums for those who remained. He said that his support for the bill was contingent on the government agreeing to raise the private insurance rebate by 5% to help lower income income earners who might face higher premiums. He made no mention of what constitutes low income.

Compromise is clearly needed. The Rudd Government is showing little inclination to negotiate as it spends lots of its energy attacking the Liberals for not supporting its measures in the Senate. Why bother? The Liberals have clearly said they strongly stand behind private health insurance and oppose its undermining. That means negotiating with Xenophon, Fielding and the Greens on the narrow issues of threshold.

The ALP's cost saving rhetoric is a furphy. The real issue is the ALP shifting the emphasis from private to public health and spending lots more money on public health care.Their best line of attack is to point out the hypocrisy of the free market Liberals in providing public subsidy for private health insurance industry when they oppose it for the manufacturing industry to prevent it from going offshore.

The private health funds need to lift their game in terms of product. After all, their commitment to the free market and the disciplining effects competition means they stand or fall on meeting the demand for private health care with good product. What they offer can be improved. Good product would help prevent the exodus from private health insurance.

Posted by Gary Sauer-Thompson at 6:50 AM | Comments (2) | TrackBack

September 17, 2008

changing nature of the global financial system

Paul Krugman in The New York Times makes a good point about the way the global financial system has changed. In doing so he pinpoints how the regulatory regime of the US financial system has failed.

Ingam Pinn

Krugman says:

To understand the problem, you need to know that the old world of banking, in which institutions housed in big marble buildings accepted deposits deposits and lent the money out to long-term clients, has largely vanished, replaced by what is widely called the “shadow banking system.” Depository banks, the guys in the marble buildings, now play only a minor role in channeling funds from savers to borrowers; most of the business of finance is carried out through complex deals arranged by “nondepository” institutions, institutions like the late lamented Bear Stearns — and Lehman.

What evolved was the brave new US financial system----what Krugman calls the “shadow banking system” and it is this which is melting away before our eyes.

Krugman adds:

The new system was supposed to do a better job of spreading and reducing risk. But in the aftermath of the housing bust and the resulting mortgage crisis, it seems apparent that risk wasn’t so much reduced as hidden: all too many investors had no idea how exposed they were.

He adds that the defenses set up to prevent a return of those bank runs, mainly deposit insurance and access to credit lines with the Federal Reserve, only protect the guys in the marble buildings, who aren’t at the heart of the current crisis.

Yesterday, Peter Costello in his National Press Club address rightly raised the issue of regulation pointing out that the US has bad regulation and Australia has good regulation. Bad regulation of the US sub prime mortgage market was the cause of the problem, and Australia's good regulation was due to his time in Treasury. Costello, in making this point, was referring to the old world of banking, in which institutions housed in big marble buildings accepted deposits and lent the money out to long-term client, not the “nondepository” institutions-- like Bear Stearns and Lehman-- or the shadow banking system institutions. However, as Krugman points out the guys in the marble buildings aren't at the heart of the crisis.

Krugman concurs about the lack of regulation in the US as the cause of the problem --- but he is referring to the shadow banking system institutions:

The real answer to the current problem would, of course, have been to take preventive action before we reached this point. Even leaving aside the obvious need to regulate the shadow banking system — if institutions need to be rescued like banks, they should be regulated like banks — why were we so unprepared for this latest shock? When Bear went under, many people talked about the need for a mechanism for “orderly liquidation” of failing investment banks. Well, that was six months ago. Where’s the mechanism?

Costello knows this. At the National Press Club he was talking up the Australian financial system and selling or big noting himself vis-a-vis the Rudd Government. To his credit Costello did highlight the significance of the global financial system to a Canberra Press Gallery that was obsessed with Liberal leadership, and which has little understanding that this will turn out to be the worst financial crisis since the Great Depression and the worst US recession in decades. Presumably this is just too large for the Canberra Gallery hacks to cope with. It wasn't denial on their faces, it was incomprehension.

What Costello didn't say----and he should have since he talking truth to power-- was that the ability of US policy authorities to prop financial markets is rapidly eroding as market participants perceive that policy makers are desperate and running out of options. He did say that the US was a now debtor nation not a creditor.What he didn't say was that the US government cannot afford to provide the subsidy as the moral hazard problems are becoming severe. and that the real danger is the run on most of the shadow banking system, especially the other major independent broker dealers Morgan Stanley, Goldman Sachs now that Lehman and Merrill Lynch have gone down the tube.

Posted by Gary Sauer-Thompson at 8:45 AM | Comments (7) | TrackBack

the more things change

And so the dogs bark and the caravan moves on. The political climate changes yet again--away from the cultural traditionalism and social conservatism of the Howard era.

Bill Leak

The cyclical dynamics of being in opposition faced by a popular first term government will continue to grind mercilessly. The position of the leader of the opposition is known as the poisoned chalice and it more often than not it destroys the people who take on the role. In the leadership is a bruiser with ego, presence and a will to power who will take it up the Rudd Government. It is "game on" as the Canberra Press hacks and talking heads say.

Posted by Gary Sauer-Thompson at 3:03 AM | Comments (15) | TrackBack

September 16, 2008

turmoil in financial markets

The names read: Bear Sterns, Fannie Mae, Freddie Mac, Lehman Bros and Merrill Lynch. Financial pillars of Wall Street. The pillars of US capitalism. Gone. Even the Wall Street Journal admits that the American financial system was shaken to its core on Sunday.

The credit crisis signifies a marked failure of US regulation of Wall Street in the sub-prime mortgage market. Stocks in the US, Europe, Asia, and Australia have crashed as a result of the freezing up of credit and a downward spiral in asset values. Lots of unemployment on Wall Street. Have the markets adjusted?

The US Treasury Secretary Paulson drew the line at salvaging Lehman. Lehman Bros have filed for bankruptcy. There were no white knights. Merrill Lynch has been taken over by Bank of America. Is this the circuit breaker. Or is their more to come? American Insurance Group may well be next, as it hangs by a thread. Who next? What is needed to stabilize the financial markets?

Remember the de-coupling theory that any problems in the US real estate market would stay confined to the world's biggest economy. The rest of the world would happily steam on, driven by the strength of China and India. Australia had no worries.

Joseph Stiglitz in The Guardian says that:

The new low in the financial crisis...is the fruit of a pattern of dishonesty on the part of financial institutions, and incompetence on the part of policymakers...We had become accustomed to the hypocrisy. The banks reject any suggestion they should face regulation, rebuff any move towards anti-trust measures - yet when trouble strikes, all of a sudden they demand state intervention: they must be bailed out; they are too big, too important to be allowed to fail.

As the housing market turned toxic, the loans that Bear Stearns, Lehman Brothers, Fannie Mae et al, had cheerfully advanced, bought up, repackaged and insured, lost value. Stiglitz adds that:

It was all done in the name of innovation, and any regulatory initiative was fought away with claims that it would suppress that innovation. They were innovating, all right, but not in ways that made the economy stronger. Some of America's best and brightest were devoting their talents to getting around standards and regulations designed to ensure the efficiency of the economy and the safety of the banking system.

AIG is suffering from the shaky mortgages it holds, as well as the mortgage insurance contracts it has underwritten. Now it needs to borrow money on the financial markets on anything other than punitive terms – and this is the root cause of its problem.To raise funds AIG needs to show potential lenders what its assets are – and so is forced to put price tags on the swamp of mortgages and derivatives it is holding.

The New York Time reports that AIG has been valuing its mortgage junk bonds at far higher than the likes of Lehman Brothers, and so the hole in its accounts is bigger than expected. It has had its key credit ratings cut, potentially triggering billions of dollars of collateral payments on its many derivatives trades.

Update: 17 September
The Federal Reserve has agreed in principle to lend $US85bn to AIG in return for an 80% stake in the struggling company. The US Government has now become a major financier of the American financial system.

AIG has amassed huge liabilities by insuring financial investors against the risk of default on complex instruments including derivatives linked to subprime mortgages. A bridging loan gives it time to sell some of its sprawling collection of insurance businesses in order to bolster its finances.

Without that money, AIG would have defaulted on its obligations and the buyers of its insurance - such as banks and other financial companies - would have found themselves without protection against losses on the debt they hold. However, this morning AIG's shares traded at $US3.50, compared to the peak over the past year of more than $US70 a share. Its value at the close of trading was just over $US10 billion, but for all intents and purposes, it is now worthless.

Posted by Gary Sauer-Thompson at 5:19 PM | Comments (15) | TrackBack

Liberals leadership: it changes

Brendon Nelson has spilled the Liberal leadership to head off Turnbull. He would stand down at today's 9.30am party meeting and recontest his job. If he was re-elected he said that he would be sacking those who he knew had been plotting against him from the front bench. Tough talk.

Leak

Nelson has had a rough trot. He has been subjected to rumour, damaging leaks and character assassination in the media from leaks within his own party whilst he 's gone nowhere in the polls. But he has a minor chance to survive, despite the surprise, given the extensive ongoing destabilisation from within his party and the lack of clear air.

Update
Last time the leadership vote went 45-42 in Nelson's favour with the knights of the right falling behind Nelson. This time it went 45-41 in favour of Turnbull. It had to. The Liberals were on the ropes with the knights of the right in charge. It was only a question of time before Nelson was dumped and a new look Liberal Party is put in place.

The Liberals under Nelson were going nowhere despite Nelson being a good performer in difficult circumstances. He kept the Liberals in play on public issues with his highlighting bread and butter issues such as petrol, cost of living and pensions. "Populist" say the commentators. Trashed the Liberal's image of good economic record in the process say the economic commentators.

With Turnbull in charge the Liberal's will adopt a more rational position on emissions trading. This is the big issue in the first term of the Rudd Government. The gorilla in the policy/political world as it were, and the Liberals were unable to do much with it under Nelson.

Posted by Gary Sauer-Thompson at 4:16 AM | Comments (16) | TrackBack

September 15, 2008

Sarah Palin impersonated

Tina Fey impersonates Sarah Palin on Saturday Night Live:

Michael Tomasky asks what he reckons is the most important undercurrent question of the American presidential election: have Americans tired of conservatism, or have they merely tired of corrupt and incompetent conservatism?"

Posted by Gary Sauer-Thompson at 7:31 PM | Comments (3) | TrackBack

WA: Nationals decide

So the Nationals in WA have stayed true to tradition in their decision to deliver power to the Barnett-led Liberals. That spells the end of the Carpenter Government, Alan Carpenter and Labor's dominance Labor in all states and territories of the federation. It is also political humiliation for WA Labor, given the boom times in WA.

Bill Leak

Brendon Grylls said that a major factor in aligning with the Liberals was that a deal with them meant the Nationals would hold the balance of power in both houses of parliament. That would indicate they could remain an independent political force. Will they be able to do so? Will the pro-development Barnett Liberals deliver on health, education and transport (they say they have a social conscience) as well as invest heavily in infrastructure in the regions?

In an op-ed The Australian Peter Van Onselen observes that:

at a personal level, Grylls wanted his team to support a Labor government led by Alan Carpenter. He was outvoted by his Nationals colleagues ... The young leader was wooed by a significant slush fund for the bush offered by the Labor Party .... Carpenter's offer included an amount of money almost twice the size of Barnett's, the distribution of which would have been put in the hands of Nationals MPs given portfolio responsibility for the regions, effectively creating a two-tiered government structure: one set of ministers for the regions and one for Perth.The mobile slush fund looked conspicuously like the Howard government's Regional Partnership Scheme, labelled by federal Labor as blatant pork barrelling ... Grylls liked the look of Labor's proposal because he believed the pork-barrelling opportunities for regional electorates during the next four years would have helped the Nationals expand its voting base in the state's north...Grylls also wanted to send a strong message to soft Labor voters and the Liberal Party that the Nationals are truly independent, again as a way of broadening the party's appeal.

Van Onselen says that has not happened. The Nationals have done what is in their best interests, given the conservative make-up of its voting base. But Carpenter's offer would have delivered more money and more autonomy for regional WA.

Maybe the stench of corruption, Brian Burke style was too great for the Nationals.

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September 14, 2008

movement at the station

William Bowe's Poll Bludger and Possum Comitatus' Pollytics have both joined the growing crowd sheltering under the Crikey blogging umbrella.

Petering Time from North Coast Voices isn't terribly happy about it,

It is sad to see yet another very successful independent blog being absorbed into what is essentially the mainstream digital media.

With the best of intentions, true independence can be diminished by the needs of the new parent. Something Possum will have to guard against.
Previous visitors and participants on Possum Pollytics comment pages will notice the registration requirements on the new blog which add yet another level of basic data sharing.

On the other hand, the current period of uncertainty over the future of journalism and where blogs might fit in opens up spaces for thinking in grey areas. Does the idealism of the purist perspective work in the interests of either bloggers or journalists?

Stilgherrian has put together a few thoughts on the matter from the journalism angle. The central problem is not so much that journalism and blogging are different animals, as the fact that so many on either side of the fence believe that they are. Or that there's a fence to start with.

Where is the rule book which prohibits any of the recently sacked Fairfax journos from practicing their craft, or profession, or whatever they want to call it, in a blog instead of a newspaper? Where is it written that the only proper place for real blogging is some remote corner of the internet with a total audience of 5?

Some of mainstream media's biggest problems work to the advantage of blogs. There's what dk.au over at LP has called the collapse of facts, an idea from the sociology of science and Bruno Latour particularly. The authority of journalists and journalism depends on the willingness of lots of people to believe what journalists tell them. Stilgerrian points to the Shanahan vs the psephs mess of last year to illustrate the collapse of that willingness, but it's not just the Australian. Trust in mainstream media is disintegrating globally. A recent PIPA survey finds only 46% think al Qaeda was responsible for 9/11. The result says as much about attitudes towards Bush and American foreign policy as it does about media, but Presidents and policy fads come and go. Journalism was theoretically supposed to be around serving democracy for as long as it lasts. Not that democracy's all it's cracked up to be, but that's another story.

The other problem for mainstream news media is what you might call the collapse of the masses, or the notion of the masses as some kind of undifferentiated audience anyway. As Mark Bahnisch rightly points out in comments on the LP thread,

So while the journalism is there to fill the space between the ads, you can’t conclude with any rigour what best fills the space. The intense focus on the ephemeral and the day to day political reporting is probably very poorly read. It doesn’t rate in the online versions, and that probably means that it doesn’t rate that much in the print ones either. Flip straight to the “lifestyle” or sports pages. All the readership surveys show that’s what people want to read. The “quality journalism” stuff is a niche taste, and it’s no use pretending otherwise - if it’s not properly related to people’s lives then it deserves to go unread. Is there a “fourth estate” role in writing about what Peter Costello interjected at question time? Please!

I suspect the number of people who really focus on all this stuff in this country is smaller than 50000 on a regular basis.

That’s why doing focus group research on politics is very instructive. Almost no one cares about the day to day stuff - at most it’s background noise that combines to form an impression. Hence the recital of “working families” etc etc about 100 times a week.

There are two real options here. Write better analytical stuff for a niche market. Or relate the political stuff to a mass market in a way that really does relate. The MSM does neither.

The option of tailoring politics for a mass market has so far been done tabloid style, helped along by politicians making spectacles of themselves. But politicians drunkenly capering about in their smalls, snapping bras and sniffing chairs doesn't hold audiences for long, and the reporting doesn't require the kind of investigative work needed to make the public sphere ideal tick over.

Whether we like it or not, serious news and current affairs is a special interest which does not meet the profit needs of mainstream media or the self esteem needs of journalists who take themselves seriously. If the future of real news journalism lies anywhere it's with its own audience, and that audience has been drifting away from mainstream media for some time now.

The recent move of Possum and William can be understood as drifting toward the mainstream, but it can also be understood as something a bit more solid taking shape in the grey area between polarised MSM fact provision and purist blogging. Shanahan might consider the pseph bloggers to be a waste of pixels, but the mob who shuttled between them last year certainly don't. I wonder whether the scoffing 'real' journos at 'real' newspapers understand the cred that Crikey has just gained with the audience, and at whose expense?

And..

Mr Bahnisch has some more intelligent things to say about matters on the future of journalism front. So far the debate has failed to note the difference between the practice and the location of journalism and it's nice to see that being pointed out.

He also places the quibbles in the framework of the culture wars, with the tenured commentariat claiming to speak for all, which means the voices of proper reporters are rarely heard. For all we know there's a generation of real investigative reporters graduating from uni right now with their sights set anywhere but the industrial age model of journalism.

Posted by Lyn Calcutt at 4:37 PM | Comments (11) | TrackBack

September 13, 2008

The happy industry

According to The Guardian Big Pharma is worth £600bn, it pushes products to doctors, who are supposedly trained to spot drug company nonsense. The food supplement industry (vitamin pills and herbal supplements) is worth £30bn, and is marketed with sciencey-sounding rhetoric, through the media, and no regulator rarely evaluate their claims.

The supplement industry is marketed as a cottage industry, is linked to the "nutritional therapists" community who often make claims on poor evidence. The lack of regulation is compounded by the lack of national registration and accreditation.

If there is a need to ensure the regulation of the food supplement industry, then the medical thinking behind medication, quick fixes and doping the populace for mental illness also needs to change. The drug companies are marketing fear in order to re-define human illness. In alliance with company-friendly doctors and sponsored patient groups, the all-powerful pharmaceutical industry is helping to widen the very definitions of disease, in order to expand markets for its drugs. the over-medicalization of mental disorders and the overuse of medications is often the result of the way that financial incentives and managed care have contributed to the notion of a "quick fix" by taking a pill.

It is true that the effectiveness of antidepressant, mood-stabilizing, and antipsychotic medications has helped sensitize the public to the reality of mental illness and taught them that treatment works. In this way, Big Pharma has helped reduce stigma associated with psychiatric treatment and with psychiatrists. However, it does look as if psychiatry has been almost completely bought out by the drug companies and they often come across as prescription writers -- ciphers in the guise of being "helpers".

This turn to drugs has reduced the emphasis on psychotherapy and psychosocial treatments. The overmedication and overmedicalization as a result of the commercialization of health care by Big Pharma means that there is a serious decline in the interest in and practice of so-called talk therapy, a process that attempts to understand the in-depth source of people's emotional reactions, unconscious motivations and internal conflicts. There is also an increased reliance on antidepressants and short-term cures that are not only impersonal but inadequate.

Although medication and other shortcuts have certain value in conjunction with therapy and are sometimes essential, they generally represent only symptomatic cures and fail to address the deeper emotions and conflicts that produced them. These internal conflicts are likely to persist and continue to harm people's relationships, children, work habits and overall quality of life.

The turn to drugs is part and parcel of the theory that the great majority of common psychiatric conditions (such as depression or psychosis) are caused by underlying disturbances in brain function. The medical model of mental illness postulates brain pathology as the basis for mental illness.

Posted by Gary Sauer-Thompson at 8:55 PM | Comments (6) | TrackBack

September 12, 2008

Institute of Public Affairs: water

The Institute of Public Affairs' September issue of Review has an article by Mary Jo Fisher, a Liberal Senator for South Australia entitled 'Nanny state is a poor guide to policy design.' This article is about individual freedom being restricted by Adelaide's 4 year old backyard water bans.

Fisher argues that these bans are an example of the Rann state government being a nanny state wagging its finger and imposing a ban prohibition or punitive measure on our basic right to choose. Fisher's next argument is that debate about the bans or prohibition becomes a smokescreen for government inaction on what should be the real agenda. She says:

Adelaide's four year-old backyard water bans are a good example. They're unnecessary and don't save water. They cause our communities pain. And they won't help the Murray-Darling River. Even in cities and regional towns which don't rely on the Murray Darling, water restrictions are a cover for lack of genuine infrastructure are a cover for lack of genuine infrastructure planning and government inaction.

I concur with that. The current problems in the Murray-Darling Basin are the result of history of bad management over a long period by the states plus a long drought.

It is the next step Fisher's argument about what constitutes the real agenda that is problematic:

Addressing South Australia's water problems includes separating Adelaide from the Murray and allowing our farmers and river communities full access to to the Murray's available water. Adelaide has a long coastline with consistent winds. Re-using waste water and combing wind energy with desalinisation would afford coastal communities and Adelaide itself access to green and plentiful solution, at a price within our ability to pay.

It is the phrase " and allowing our farmers and river communities full access to the Murray's available water" that is problematic. Good water management in the Murray-Darling Basin requires reduced access--(reducing the over-allocated water licences) to water by irrigators and increased environmental flows for the river. So the Liberal Party, on this account, still resists reducing over -allocated water licences and increasing envirornmental flows to save the lower lakes and Corrong. The River Murray is there for the irrigators. It is their freedom from the nanny state that is paramount.

That anti-environmental position is buried amidst a green rhetoric about human needs

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Costello's memoirs

Costello's political memoirs are not out yet. What we have so far is publicity to entice us to buy the book. The publicity includes titbits in the form of interviews with senior Canberra Fairfax journalists

Spooner

The bits that I have read are not that interesting. There are the usual digs at Howard, Turnbull and Nelson; praise for his economic management and some remarks about the Liberals needing to remain a right of centre party. That's not enough to persuade me to buy the book.

On the renewal of the Liberal Party Costello says:

Well, I think this is the question. It didn't renew itself in office, and so I think the public voted it out. I think the message from the public was 'You're now in Opposition, you have the chance to renew.And you in the media have to give them space to do this, you've got to give them space to engage in some critical analysis. If all critical analysis is going to be turned into 'shock horror, divisions in the party, leadership instability', they won't be able to do that.

Costello argues the Liberals are captive of "a cult of the leader", which he contrasts with Labor's "cult of the party". Labor removes the leader when necessary; the Liberals, argues Costello, are the leader's captive. Costello is not sure that this can be reformed - "it's a cultural thing".

Posted by Gary Sauer-Thompson at 7:18 AM | Comments (8) | TrackBack

September 11, 2008

Mark Day trashes blogs

In defending the watchdog for democracy role for journalism in an op-ed in The Australian Mark Day takes a swipe at blogs. He says:

There was a time a few years ago when blogging was seen by some as the magic potion to sustain journalism. It was said to be the ultimate in publishing democracy: a means by which everybody could have their say, everybody could contribute to the great community debates, and we would all become citizen journalists. Well, it hasn’t happened, and it’s not likely to.I was taken by an expression used in an editorial in The Australian a month or so ago that observed that blogging had all the intellectual value of graffiti on a toilet door.

Now Day does qualify this by acknowledging that some blogs have value and potency—he mentions the Baghdad blogger Salam Pax during the early days of the Iraq war; but he adds that he cannot see how blogging does much other than add a forum for discussion to newspaper sites. No argument is offered for that reduction of blogs to newspaper bogs.

Presumably the majority of independent blogs are assumed to be equivalent to graffiti on a toilet door. Again there is no argument. Day then says:

I have used blogging as a convenient channel for readers to comment on or respond to this column. It has, in the way that letters to the editor did in an earlier age, led to some interesting points of view being aired, but a disturbingly high proportion has consisted of abuse, ridicule or allegations of bias or irrelevancy directed at me or others who post comments.

That ignores the existence of independent blogs and weblogs offering a forum for discussion of public issues in liberal democracy. These, however, are not Day's concern. His concern is newspapers:

Rather than wasting our efforts on blogging, I think editors should focus on creating news: revealing information about the communities in which they work, setting agendas for discussion, reporting events figuratively over the back fence, and using this to add value to the essentially free flow of breaking news and information accessible virtually anywhere....It makes sense to me that more newspapers will follow the lead of The Philadelphia Inquirer by reverting to a model where the news stories it breaks appear first in print. Why, if there is value attached to revealing these stories, should they be given away first on the net?

Fair enough. However, breaking news is not the same as journalism playing a watchdog role in democracy. That role requires investigation (in depth analysis) and interpretation---or commentary--which is what the better independent blogs offer.

Posted by Gary Sauer-Thompson at 8:45 AM | Comments (7) | TrackBack

Costello speaks

So Costello affirms what we already know. He is just not interested in leadership of the ragtag Liberal Party. His position has not changed since the day after the 2007 election when he renounced any claim to the party's leadership and signalled that he was planning to leave politics. He says:

I've got a few things that I'm working on but my position as a backbencher is quite separate from any return to the leadership. I'll continue to serve my constituents and if I get to the point where I feel I'm no longer able to do that as well as I want, I'll make an announcement then. But at the moment I'm very happy serving my constituency. But I'm just a backbencher.

So much for The Australian's draft Costello campaign that was grounded on inside knowledge.

Moir

That campaign was all built on thin air. This whole affair says a lot about the political commentary in the Australian media. Most of it is empty speculation that borders on gossip that pretends to have the inside information on what is really happening. I doubt if the media will reflect on their performance on this issue, since self-reflection is not part of their ethos. Even when the political commentary has been fantasy built around a conspiracy theory.

Posted by Gary Sauer-Thompson at 7:10 AM | Comments (9) | TrackBack

September 10, 2008

Medicare Levy surcharge

The Senate's Economics Committee has handed down its report into the Rudd Government's raising of the Medicare Levy Surcharge (MLS) Threshold for people without private health insurance.

The bill proposed to increase the Medicare levy surcharge threshold for individuals from $50 000 to $100 000 and for couples from $100 000 to $150 000. The increased thresholds will apply from the 2008–09 year of income and later years of income. The overriding consideration was the danger of forcing an ever larger number of low-income people to pay the MLS or to buy low value fund policies for which they have little use, due to the threshold being unindexed since 1997.

The points of contention are structured around the possible impact of the bill on membership of private health funds, subsequent premium increases and the consequent cost to public hospitals as a result of the proposed increase in the Medicare Levy Surcharge (MLS) thresholds.

The core argument of the private health insurance industry is that the bill upsets the delicate balance in the Australian health system between public and private health provision. The crux of this argument is the claim that without a strong private health insurance industry, the provision of private health services will falter and lead to a flood of demand into the public system which it would be unable to meet.

If there is to be a public subsidy to maintain the "delicate balance" then the funding should have been provided to the private hospitals themselves, rather than the funds. We are in effect subsidising the insurers-- the insurers’ administrative costs and surpluses when all but one of them are now large profit-making businesses.

In his op-ed in the AFR Terry Barnes, a former ministerial staffer and now a policy consultant, argues that Rudd's health policy is a basket case. He says:

Senior bureaucrats see inexperienced new governments coming. Treasury and Finance hate the non-means-tested PHI [private health insurance]. It is anathema for them--an open-ended appropriation, driven by demand. They consider its success a triumph of populism over prudence, even though it helped save the private health sector from collapse. But this year a new government with an ambivalent view of private health was preparing its first budget and looking desperately for savings. In opposition it had railed against the perceived injustice of the unindexed surcharge thresholds.Once again savings on the rebate were offered. This time to Wayne Swan not Peter Costello. This time they were accepted with alacrity.

Barnes adds that it was a measure that could be dressed up as a fiscally responsible tax break on the one hand, and keeping faith with Labor's anti-PHI constituency on the other, was a an added political bonus. Labor's health policy is a basket case because it faces defeat in the Senate and it is not sensible.

So there you have the Coalition's health policy--prop up the private insurance industry at all costs.

Posted by Gary Sauer-Thompson at 10:31 AM | Comments (4) | TrackBack

It's Afghanistan not Iraq now

The focus in the US's eternal, global war on terrorism to establish a Pax Americana, currently through the Bush administration's neoconservative agenda of democratizing the Muslim world, has shifted back to Afghanistan. The resurgence of the Taliban, the revitalisation of al-Qaida, and even the jihadist presence in western Pakistan is meet by intense military force by the Americans.

So there will be more civilian deaths, increased instability in Pakistan, a deepening civil war in Afghanistan that is now in its eight year, NATO increasingly being seen as an occupying force in Afghanistan by Afghans and growing hatred of the United States across Afghanistan and Pakistan.

The decision to launch missile and commando raids by US troops against al-Qaeda-related targets in Pakistan's North-West Frontier Province region risks further destabilizing the Pakistani military and government.

As Tony Karon at Rootless Cosmopolitan says:

No amount of wishful thinking can hide the reality, however, that six and a half years after the US-led military intervention that scattered the Taliban, the presence of some 50,000 Nato troops has not prevented the movement from regrouping and mounting a resurgence that has sabotaged plans to rebuild the country on Western-friendly terms.

Rebuild? The American government has consistently failed to develop a comprehensive policy of nation-building in Afghanistan. Rather than invest in the renewal of the country’s agriculture, educational system, and infrastructure, the Americans had decided to trust entirely to a military solution against al-Qaeda. The idea seems to be that the U.S. can invade and occupy parts of Pakistan and Afghanistan just as it has invaded and occupied Iraq.

The corrupt American-dominated status quo in Afghanistan (the client Karzai regime) been helpless in providing an alternative to the frighteningly resurgent Taliban and its ally al-Qaeda. So we have endless conflict. It is not a a “development assistance” mission which the Australian military is involved in, but a full scale war. For the war party Pakistan looks to be the new frontier.

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September 9, 2008

Why the economic gloom?

Michael Stutchbury, Economics editor of The Australian, asks some good questions about the state of the economy:

If the Australian economy is still basically healthy, why has economic confidence slumped so sharply compared with other countries? If we've got the cushion of the China boom, why has our stock market fallen further than other rich countries, including even the US where the whole credit crunch began? If the economy is being propped up by an investment boom, why is business so pessimistic? If Australia is so well placed, why is our currency being marked down?

He turns to the appearance by Glenn Stevens, the Governor of the Reserve Bank, before a federal parliamentary backbench committee yesterday Stevens said that the high export prices of iron ore , coal and other minerals will fall by 5 per cent during the next year. He acknowledged that China is slowing down.

As the credit crunch had hammered the US and Europe, exports from China clearly have suffered. The rest of the world is marking down the value of Australian assets on the back of the China slowdown.

The scenario is one of slow economic growth in Australia and rising unemployment.

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September 8, 2008

US: financial bailout of Freddie + Fannie

The US Government has taken control of Freddie Mac and Fannie Mae, the stricken companies that underpin America’s mortgage market, yesterday and promised to inject up to £110 billion of taxpayers’ money to keep them afloat as a result of the credit crunch. The cash infusion was one of a series of measures designed to restore order to America’s stricken financial system. Another case of the American corporate welfare style of privatizing the profits and socializing the risk.

The bailout of Fannie and Freddie is one of the severe toxic collateral damages of the biggest housing and mortgage bubble and bust in US history. It has led to a systemic banking crisis, a financial crisis, a severe credit crunch, as serious recession and the bust of Fannie and Freddie .

Henry Paulson, the US Treasury Secretary and a key orchestrator of the rescue package, emphasised that the two struggling groups represented a special case for invention because their survival was crucial to the health of the worst housing market since the Great Depression of the 1930s. This market is vital to the financial system, not only because it affects the rates charged on new US mortgages but also because banks around the world, including in Britain, have large holdings of the securities.

This must sound like socialism to Wall Street and the free market Republicans whose rhetoric is that "small government" is a virtue. Didn't the Republican convention include countless attacks on big government? Yet here we have the Republican Bush administration nationalizes a major industry! The illusions need puncturing.The Republican economists consistently dismissed the possibility that there was a housing bubble and they were enraged at the suggestion that these two corporate giants could face financial problems.

George Soros, writing in the New York Review of Books, observes that:

We are currently experiencing the bursting of a credit bubble that has involved the entire financial system and, at the same time, a rise and eventual fall in the price of oil and other commodities that have had some of the characteristics of a bubble. I believe the two phenomena are connected in what I call a super-bubble that has evolved over the last quarter of a century. The fundamental trend in the super-bubble has been the ever-increasing use of leverage—borrowing money to finance consumption and investment—and the misconception about that trend was what I call market fundamentalism, the belief that markets assure the best allocation of resources.

Market fundamnentalism is the illusion that needs puncturing since what we have the bailout of Fannie and Freddie (and Bear Sterns) is a form of privatization of profits and socialization of losses; it is socialism and corporate welfare for the rich, well connected and Wall Street.

What is more serious for the US economy is that the debt burdened consumer is on the ropes and real consumption is falling. Nor does it appear likely that the rest of the world will rescue the US from recession through buying lots of US exports since growth in Europe, Japan and Canada is slowing, and so will their imports of US goods.

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NSW: just a basket case

Michael Costa, the former Treasurer of Iemma Government in NSW gave a press conference in which he stated that NSW faced an imminent recession through a rapidly contracting economy, plummeting stamp duty revenues, a blow-out in the health budget, unsustainable capital works commitments particularly the north-west metro and unaddressed public sector reform.

Moir

Costa and Iemma had argued that electricity privatisation was absolutely necessary as it was their only means to salvage the state's dire financial position and fund the required infrastructure investment. The June Budget stated that the capital works budget was not contingent on proceeds from the sale of the generators and the retailers.

Iemma and Costa may have gone---political roadkill?--- but most of the ministers in the ex- Iemma Government remain in the Nathan Rees' Labor Government. So it is the same tired incompetent government with a some fresh faces. Shuffling the deckchairs is merely a stay of execution. The expectation is that there will be no service reforms from this government, which will continue to live in a bubble.

What we see is the failure of both the market driven small government politics that pays lip service to the fair go but has little time for equality since that makes markets inefficient and sticking it to the inner city elites who look down on ordinary people. That politics means that business dominates NSW politics and the public are left out of trickle down economics in terms of good public services. Hence the public resentment.

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September 7, 2008

Sarah Palin: theocratic politics

Sarah Palin stands for a theocratic politics. Palin has an apocalyptic End Times theological viewpoint. Youu know---Four horsemen. Fire from the skies. The raising of the dead. The return of Christ--- a few of the “signs” and “events” supposed to take place at the end of time.

As an evangelical Christian Palin is engaged in a battle against secular humanism. This holds that evangelicals need to become politically involved to fight the great evil, secular humanism, that is threatening to destroy America.For Palin politics is subject to religious guidance and that guidance is the truth of the Bible:

In the address at the Assembly of God Church here, Ms. Palin’s ease in talking about the intersection of faith and public life was clear. Among other things, she encouraged the group of young church leaders to pray that “God’s will” be done in bringing about the construction of a big pipeline in the state, and suggested her work as governor would be hampered “if the people of Alaska’s heart isn’t right with God.”

She also told the group that her eldest child, Track, would soon be deployed by the Army to Iraq, and that they should pray “that our national leaders are sending them out on a task that is from God, that’s what we have to make sure we are praying for, that there is a plan, and that plan is God’s plan.”

Her politics is according to God's plan, and God's plan is revealed in the literal words of the Bible, Old and New Testament. She is part of the Dominionist tendency among Protestant Christian evangelicals and fundamentalists that encourages them to not only be active political participants in civic society, but also seek to dominate the political process as part of a mandate from God.

This politicized concept of dominionism is based on the Bible's text in Genesis 1:26:

"And God said, Let us make man in our image, after our likeness: and let them have dominion over the fish of the sea, and over the fowl of the air, and over the cattle, and over all the earth, and over every creeping thing that creepeth upon the earth." (King James Version)."Then God said, 'Let us make man in our image, in our likeness and let them rule over the fish of the sea and the birds of the air, over the livestock, over all the earth and over all the creatures that move along the ground.'" (New International Version).

The vast majority of Christians read this text and conclude that God has appointed them stewards and caretakers of Earth. As Sara Diamond explains, however, some Christian read the text and believe, "that Christians alone are Biblically mandated to occupy all secular institutions until Christ returns." That, in a nutshell, is the idea of "dominionism."

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September 6, 2008

Mayo by-election, then WA

I expect that the Liberals will get a bit of a shock in the Mayo by election as both The Greens and Di Bell, an independent supported by Nick Xenophon, will poll more strongly than expected by either major party. Though the Liberals --Jamie Biggs, an ex-Howard staffer----- will hold onto the seat with preferences and postals, water (the state of the River Murray) will play an influential role in this by election. it will reduce their traditional margin.

My judgement is that the Greens, on preferences from the independent candidate Di Bell will push the Liberals to a very close contest, with the Liberals dropping their primary vote significantly. Di Bell is attracting around 17 per cent of the primary vote after campaigning almost exclusively on the issue of the plight of the river Murray and the lower lakes.

And Western Australia? Labor could well face defeat there. If so, that would send shock waves through to Canberra. At best the Carpenter Government is fighting for its survival. The ALP has a buffer of nine seats whilst a uniform swing of 3.6% would put the Liberals in power. By all accounts it may not be enough. Green preferences in the key marginal seats could determine the outcome. How could the ALP lose so many votes during an historic minerals boom against an opposition that was until recently dysfunctional?

Update
It doesn't look good for Labor. There's been a big swing against them--- more than 6% in some seats, whilst statewide, the swing was 5.5%. Labor look to have lost 9-10 seats and its fate may be decided by a handful of independents and Nationals.he best scenario for the ALP is a hung Parliament.Labor appeared unlikely to be able to gain more than 27 seats in the 59-seat parliament, while the Liberals were likely to take 25 and the Nationals four, with two independents and another seat to be decided.

Update:7 September
The Liberals suffered a near 11 per cent swing on the primary vote in the Mayo by-election. On the two candidate preferred tally, Briggs (LIberal) led with 51.7 per cent of the vote to Vonow's (Green) 48.3 per cent. The preferences from Family First flowed back in sufficient numbers to ensure a victory for the Liberal Party. The Liberals are confident that margin would be enough for victory with 10,000 pre-poll votes to be counted this week. The real story is that a historically deep blue Liberal seat has now become pale blue. One that The Advertiser will ignore in favour of celebrating a Liberal victory.

In WA it looks as if the Labor government could only stay in power with the support of two independents or if they can get to 29 seats, if they win 2 of the doubtfuls. Another (more realistic) possibility is that West Australian Liberals can form government after some tough negotiations with the Nationals, that would to enable them to form a Liberal-National Coalition. This may look this: 24 Liberal +2 Liberal (Ind) Sue Walker and Liz Constable + 4 National

The significance of the WA election is that state Labor cannot blame the Liberals for their failure to govern competently since Labor is now in power in Canberra. We have wall-to-wall Labor. So state Labor will be seen for what it is ---bad government. A corrupt NSW Labor is the next linchpin to fall.

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Bloody hell

Ross Garnaut has adopted a softly softly approach to emissions trading ---cut emissions by 10% by 2020 ---and Australian business---heavy industry and the mining industry---- says that's far too much. The cost to the economy was just too great. We will all be ruined. Garnaut even qualified the 10% by saying that it should be 5% if the world failed to agree on a comprehensive strategy.

Penny Wong is now talking in terms of the importance of a "measured start" to an emissions trading scheme even though the consequences are larger increase global temperature and the destruction of the Great Barrier Reef,the Murray darling and Kakadu National Park.

No matter. The mining industry calls the shots. They want 5% cut at the most. The big unions sing from the same song sheet.

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September 5, 2008

political disintegration in NSW

Well I didn't think that the hopeless and incompetent Iemma Government in NSW would unravel as fast as it did. In quick succession, Watkins resigned as Deputy premier on Wednesday, on Thursday night Iemma sacked Costa; and on Friday morning the Centre Right Caucus dumped Iemma after refusing to accept the Cabinet changes he was seeking that attacked the Right's own power base.

Moir

It is the disintegration of the right wing ALP in NSW. The new Premier is Nathan Rees whilst the new Deputy Premier is Carmel Tebbutt. They have to clean up the mess quick smart. The new cabinet will be announced next week.They will deal with the collapse in revenue because of the nation's economic slowdown, budget blowouts, over commitment on infrastructure investment, and the possibility of a reduced credit rating.

Michell Grattin in The Age gives a good description of the disintegration well:

Iemma had been hanging by a thread, his administration a shambles. Treasurer Michael Costa was a reformer but generally regarded as crazy, fighting colleagues and unions like a Kilkenny cat. The unions tore at the Government and stood up Iemma. Labor HQ plotted against the Premier. The effort to privatise electricity was thwarted; the limited compromise still proposed is now in limbo. NSW has been resistant to economic change; business people speak of the Government with contempt. The public is frustrated and angry by transport problems and scandals in hospitals. Wednesday's national accounts have shown the NSW economy in the doldrums.

She adds that things have fallen so low in NSW Labor that the once formidable and feared Right has had to back a little-heard-of left-winger, Nathan Rees, for premier. Such is the lack of alternatives in a party that hasn't recruited enough talent.

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Comedy Central Daily Show

Comedy is the critical edge in political commentary:

It has a sharper edge than the commentary in the quality broadsheets which has become very bland.

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US Republicanism: drill, baby, drill

The Republicans are grounded in the values of the small towns of regional America that is in opposition to both the elitist-class in the big cosmopolitan cities who o don't put "Country First" and the liberal media that the Republican machine continually trashes----the press is out to get her etc etc. The right-wing base say yeah yeah UnAmerican. Smalltown America forms the core pro-life Republican base that remains uneasy about McCain.

Palin is seen as the conservative unifier (of the anti-taxers and the evangelicals) who can attack with a smile on her face (a pitbull in lipstick), make a crude populist pitch (cutting taxes, Republican small government against the Democrat nanny state) and exacerbate traditional political divisions.

Steve Bell

The soap opera's turn to the family-value conservative base by the Republicans is also a turn away from the centre. Yet the centre is where they need to go in order to be returned to the White House. So how do they build towards the centre? Arguing that drilling for oil in Alaska is a national energy policy?

Palin's is the face of the old GOP as her speech was one of fierce, sarcastic, unrelenting partisanship; a Republicanism that Americans have been voting against since the Democrats gained control of Congress. Under the partisanship is the working class, the nuclear family, the concerns and anxieties of downscale Americans, and their cultural traditionalism in preserving the traditional family structure.

So the Republicans will need to talk about America's economic woes, if they want to retain their control of the White House. So far the Republican machine is intensifying the culture wars and using cultural symbols as substitutes for policies in order to make Democrats, liberals, and “the media” into the cultural enemies of ordinary people.

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September 4, 2008

educational inequality

Kenneth Davidson in an op-ed in The Age on the Rudd/Gillard 'education revolution' makes a telling point. He says:

On education, Kevin Rudd and Julia Gillard are as one with previous coalition governments; they have all breached the original purpose of state aid in 1972 — to bring the Catholic system schools up to the standard of government schools. Now the total resources available to non-government schools per student are greater than the resources available to government schools. This is despite the fact that the education burden on government schools — which must provide places for all students irrespective of ability — is higher than for non-government schools, which pick the eyes out of the education market.

The situation now is one where total government per capita expenditure on students in 2006 was $11,303 for non-government schools and $9252 for government schools.

Davidson says that the real problem is the flight of the middle class from public schools aided by funding policies of federal governments. Consequently, the right policy would be to spend money to raise public schools that increasingly draw students from disadvantaged households and neighbourhoods to the level expected by the middle class.

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Melbourne + water

An interesting article on Melbourne's water supply and ensuring the city does not run of water in The Age by Royce Millar. Like Adelaide, a punishing decade of drought, culminating with record low rainfalls for winter and spring Melbourne is faced with a scenario of running out of water. With climate change the situation was possibly permanent.

The response by the Bracks/Brumby Government was turn away from the policy of engineering tempered by the logic of economics and the science of the ecologist to big engineering solutions:

plants and pipes that would delivered water fast, albeit at big financial and environmental costs: the energy-intensive, $3.1 billion desalination plant at Wonthaggi and a $1 billion north-south pipeline to link Melbourne to the river network north of the Great Divide....With desalination plants and other water initiatives coming in, the rainwater tank has been singled out as something that may not be warranted in the future

Millar says that the upward trend in water use in Melbourne and the anti-tank campaign have fuelled concern that Victoria is hitching itself to a water future more in keeping with 19th-century rather than 21st-century thinking; that is, a centralised system under which water is pumped from outside the city to consumers with little idea or interest in where it came from, or where it will end up. An increasing population and climate change means more desalinisation plants.

The Australian Conservation Foundation's sustainable cities campaigner, Kate Noble, says on current evidence Victoria's politicians are unlikely to make the long-term commitment necessary to avoid a string of additional desal plants.

In 2050, we will be in the odd situation (much like today) where we put huge amounts of public funding into desalination plants so we can use drinking water to flush our toilets, water the lawn and cool our power stations, while we watch stormwater equivalent to our annual metropolitan water use flow straight down the drain.We will have more empty dams in 2050 than we have now, because at some point one of the governments of the day had the bright idea that another dam would save us from climate change.

What is pushed aside in the big engineering approach that has dominated water policy is the other more sustainable options (e.g. rainwater tanks properly plumbed into the house, storm water recycling, indirect potable water, etc This alternative conception sees Melbourne movingto a more decentralised approach to water management and that the city will indeed have become a water catchment with tanks recycling, sewer mining and stormwater harvesting part of our daily lives.

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September 3, 2008

Sarah Palin chips fingernail

The amazing Sarah Palin gossip fest chugs on. And on.

If nothing else it's proven a great opportunity to study how colourful American culture can be.

Apparently, Palin eats moose, hates polar bears, doesn't mind if intelligent design is taught in schools as long as it's taught alongside creationism, is married to a bloke known as First Dude with an ancient drink driving record, is a mother of five with funny names unless you believe the youngest one is actually her daughter's, in which case the 17 year old's current unmarried pregnancy is her second, thinks the proximity of Russia to Alaska constitutes foreign policy experience, wants to drill for oil in Alaskan nature reserves, is the Republican idea of eye candy, has done some iffy things in the domains of campaign funding, abused her position with regard to an unpopular ex-brother in law, will give the McCain campaign a boost, will sink the McCain campaign to the bottom of the deepest sea.

As Trevor Cook observes, you can't make this stuff up.

In today's developments, according to his MySpace, the father of the 17 year old daughter's pregnancy is a proud redneck who doesn't want kids. Wow, that must be a historical first.

And it turns out Palin was foisted on a reluctant McCain because otherwise the Republican fundamentalists would stage a revolt at the Convention. It was better to choose Palin than suffer public embarrassment.

Everything will be OK now though, because at the last minute George W took a break from supervising the hurricane effort down south and addressed the convention via video link to assure the nation that McCain is ready to lead. Phew.

Posted by Lyn Calcutt at 1:04 PM | Comments (9) | TrackBack

Canberra: solar power

A sign of the times, Canberra may soon have a $141million solar power station capable of generating enough electricity for more than 10,000 homes after a pre-feasibility study last night ''gave the project the nod''.

The study, commissioned by the ACT Government and ActewAGL, looked at a 22MW-capacity plant using solar thermal trough technology, and suggests a gas-fired generator be added as an auxiliary system. It estimated that it would cost $141million to build and about $2million a year to run, while powering 10,000 homes with 80GWh a year. It could be operational by 2012.

The project will require a substantial level of subsidy from the ACT and federal governments. The report suggests up to 57per cent or $80million would have to come from taxpayers to make the project viable. However, it is too small to be economically viable. Doubling the size of the plant would make it 27 per cent cheaper.

When will the ACT shift to a gross feed-in tariff for solar power on household rooftops?

Something sure has shifted as I remember ActewAGL being deeply opposed to solar power last year and arguing against it in public.

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Liberals go postmodern in glum times

This cartoon is just too good to let slip by--retro Liberals appealing to the regional/country base:

Bill Leak

The Opposition is trying to defend its economic record. They realize that Labor lost control of the economic story when it lost government in 1996. It never really recovered until last year. The Liberals have a good economic story to tell about successful economic management. But they have lost control of it in that they allowed inflation to get out of hand and forced the Reserve bank to raise interest rates.

Now they are faced with the prospect of the Rudd Government becoming the crowd who delivered lower interest rates. The Rudd Government are the successful economic mamnagers. Or so the rhetoric goes.

The Coailtion is trying to regain the initiative by pointing to the economic downturn and rising unemployment now that Rudd Government's rhetoric about the inflation genie being let out of the bottle is quietly laid to rest as the global credit crisis (US, Europe, Japan) increasingly takes centre stage. Fears rise about the effects of a global economic downturn, takes the shine off resource stocks and prices.

Quarry Australia pins its hopes on China continuing to develop in leaps and bounds despite the lower demand for China's exports. Despite that hope Australia continues to block Chinese investment in Australia resource companies in the name of nationalist politics-----the national interest regime spalces regulatory barriers against Chinese investors.

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September 2, 2008

Murray-Darling Basin: more bad news

Pia Ackerman in The Australian reports that the acid sulphate soils, which threaten the Murray's lower lakes in South Australia, have spread to the river system's northern catchments in Queensland where up to 200 sites are under investigation by scientists. Pockets of acidification are also emerging in northern Victoria and along the Murray River in southwestern NSW. Acid sulphate soils can occur when river and lake beds are exposed to the air as water levels fall, triggering a toxic chemical reaction.

The Murray-Darling Basin Commission ordered the investigation in southern Queensland amid mounting evidence that wetlands and rivers in the north of the system were succumbing to the poisoning that threatened to overwhelm. More than 12,000 wetlands are potentially at risk in Queensland alone.

This is yet another sign of the consequences of taking too much water from the rivers by irrigators. Not that much will be done by Rudd and Wong to address the situation, judging by the way they handled the situation in the lower Lakes. It was a too little too late style of management in buying back over-allocated water licences.

The situation in the lower lakes is that unless it rains heavily between now and summer, October 28 may be the date used on the headstone of the Coorong and Lakes as it is laid to rest as a significant wetland. The Coorong will be delisted as a Ramsar wetland and become equivalent to the Dead Sea.

I doubt that Rudd or Wong will attend the wake. They will say something about climate change rather than mismanagement, do little to buy back irrigator licences, and allow the states to continue to grab as much as they can get for their irrigators.

Update: 3 September
The submission released by Senator Wong, to a parliamentary (Senate) inquiry into the Murray emergency, detailed eight emergency measures under consideration to prevent Lake Alexandrina and Lake Albert near the river mouth from turning acidic. But the advice from the Department of Environment, Water Heritage and the Arts makes clear that there may be little option but to flood the lakes, southeast of Adelaide, with sea water.

Diverting more water from the key southwestern NSW reservoir of Menindee Lakes could jeopardise drinking water supplies for downstream communities, including Adelaide, in 2009-10. Releasing water from Menindee Lakes would be taking water that may be needed for human consumption in the 2009-10 water year if rainfall remains low across the basin. Up to 50 per cent of any release from Menindee would be lost in transmission.

There is not enough water in the system to meet the modest allocations promised to farmers in the past two months and supply water for Adelaide and the towns along the Murray. Wong's priority is securing Adelaide's water supply and the towns along the Murray until next winter. There is no water for the lower lakes.

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September 1, 2008

RBA eases monetary policy?

It looks as if the Reserve Bank of Australia will ease monetary policy by starting to reduce interest rates as the global economy takes a downturn. Economists in the financial market (most are ex-Treaasury or ex RBA economists) are saying that this will likely be one of several cuts to boost a slowing economy.

Dyson

Business is saying its confidence is shattered; that the economy is fragile;the brakes have been on for too long, there is too much uncertainty and that they need some relief quick fast. Poor business.Unlike the Reserve Bank they have a very clear idea where the economy is going. Not for them the image of driving an unfamiliar care with dim headlights on a foggy night unsure where the next bend is or what direction the road takes.

Update: 2 September
So the RBA has started the reduction of interest rates even though the rate of inflation remains high. People clapped and cheered, then sighed with relief. It is 'ease the squeeze' time. About time too. Lots more are needed. The market factored in another three cuts.

However, the central bank gave no hint that it would follow up yesterday's cut with another, stressing the importance of bringing inflation back under control rather than keeping the economy growing. Notably absent from yesterday's statement was any echo of its assertion a month earlier to "make adjustments as required in order to promote sustainable growth". Instead the bank spoke about the need to "set monetary policy as needed to bring inflation back to the 2-3 per cent target".

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