Public Opinion

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March 30, 2009

Eco-tourism

I'm in the Paparoa National Park in the West Coast of NZ, shortly to depart for Kahurangi National Park, further north.

I am in what could be called an internet cafe. You line up to access the one of the 5 computers paying by the hour, only to discover that two of the five PC's don't work, and the other three have problems. The one I'm on has problems with internet explorer---it crashes---and I cannot download Firefox. So I am on the margins of the global village. Barely connected.

This is largely bushwalking territory in what could be called wilderness areas---luxuriant coastal forest, limestone cliffs and canyons, caves and flowing rivers and creeks. There is water everywhere, even at the end of summer. I'm off the beaten global tourism circuit and have entered backbacker territory. The backpackers can be seen as the cutting edge of tourism in that they are opening new areas for tourism.

The national parks have been set up for eco-tourism and they want no other form, even though the West Coast economy is dependent on coal mining in and around Greymouth. Industrialization never happened on the West Coast of the South Island whilst the tourism appears to be run by the Department of Conservation. They are the ones providing the information to explore the wilderness.

Posted by Gary Sauer-Thompson at 1:41 PM | Comments (8) | TrackBack

March 29, 2009

one of these things

Back when the kids were little and regular Sesame Street watchers they used to enjoy a segment, One of These Things is Not Like the Other Things. The point was to work out which object in a given set was the odd object out. The challenge was practically non-existent, but the song was catchy.

It often comes to mind in what passes for public debate, where you commonly see connections being made which don't actually exist. Supporting a fair trial for David Hicks/terrorist sympathiser/lefty, objecting to the clean feed proposal/anarchist/paedophile, pro-life/Christian/idiot. And now, Earth Hour supporter/greeny/gay soccer fan.

Maybe it's because I read one straight after the other, but Ken's question about the seemingly natural ABC/progressive/diry commies fit smells like one of these category conflations. Not so much the question itself:

Why progressives continue to show such touching loyalty to the institution is beyond me.

although it's worth asking, but why anybody has the impression the ABC is the natural stomping ground of the left?

If you ignore the Howard mob's evidence of bias (Maxine McKew), calls for balance (extremists deserve air time too), and short memories (political reporting on the ABC began with the Howard Government), does the ABC still look like the preserve of the progressive left?

'Progressive left' is a category conflation itself, as is 'conservative right'. But I don't see anything particularly leftish about the ABC as an institution except for its public funding. At that rate, surely you need to be asking questions about the costs and benefits of commercial interests, rather than political leanings?

Content-wise, in comparison with Fox News the ABC probably does look leftish, but so would your average fence paling, carrot cake or Family First senator.

When ABC free to air politics and current affairs reporting is compared with other free to air Australian politics and current affairs reporting, it doesn't look so much leftist as it looks halfway intelligent. Is that the mark of leftishness? And if it is, if thinking is the sole preserve of the left, what of the right?

Surely some sections of the right find grandmothers chained to bedposts and other commercial current affairs tomfoolery a tad ridiculous? Some may see a natural fit between concern for the environment and soccer gayness, but surely some of the 'conservative right' is capable of recognising category distinctions? What are they supposed to watch/listen to, or must they limit themselves to The Australian and Quadrant?

Posted by Lyn Calcutt at 4:50 PM | Comments (7) | TrackBack

cars not people

It is not overpopulation per se. It is more the auto-industrial civilization isn't it.

Matt Golding

It is the industrial auto-civilization that needs to change ---is changing in fact, as it is in decline. Thus the Obama administration in the US is to extend more short-term aid to General Motors and Chrysler but impose a strict deadline for union workers to make concessions that would help the ailing automakers become viable businesses and avert bankruptcy.

Posted by Gary Sauer-Thompson at 5:41 AM | TrackBack

March 28, 2009

an internet sensation

A political moment:

It is a political speech by 37-year-old Tory MEP Daniel Hannan in which he denounces Gordon Brown, the British MP, as a "Brezhnev-era apparatchik". Hannan is a free market nationalist. A strange hybrid that one, since nationalism is opposed to the global market. It captures the anger of the Right about the big spending Brown-Obama-Rudd juggernaut---even though this opposition would do the same.

The nationalism appealed to does offer an alternative to the politician's claim that life can be indefinitely continued by urging people to get out and shop.but this return to the nation---and its appeal to unity ---can take a virulent form that goes way beyond British jobs for British workers.

Posted by Gary Sauer-Thompson at 7:51 PM | Comments (3) | TrackBack

March 27, 2009

off to NZ

I'm off to New Zealand for a quick holiday. By all accounts NZ is taking a hit from the global economic recession---its current account deficit is widening---9% of GDP--- and the economy is looking to be pretty vulnerable. So much for the rhetoric about endless growth from the spinmeisters of capitalism.

Unemployment is rising ---it is the highest in five years--- consumer and business sentiment is gloomy and pessimistic and households are debt ladened. Interest rates have been cut, income taxes will be reduced and infrastructure spending will be be accelerated. It is the same situation everywhere. Only some countries are being hit harder than others at the moment. The NZ aim is to stimulate the economy to restore growth and then to hope to continue pretty much as before. Just like Australia. Will they make the turn away from the notion of a globalised world as failed countries like Ukraine and Latvia are already beginning to do?

As in Australia there is little talk or strategic policy about making the transition to a low-debt, low carbon economy and society. It is all about jobs--protecting jobs in old industries and not jobs in new industries.

Like Australia the New Zealanders are dependent on the G20 doing something positive. Will the summit next week of Group of 20 leaders down as the turning point that helped the world pull out of the great recession of 2009 and engineered a historic shift in global economic governance?

It is more likely that the global crisis will deepen due to the failure of the global economic elite to develop the right instruments in order to to govern the global economy. Nation states cannot do it on their own---they need to work together in a co-operative manner.

Update
Guy Rundle in The Age observes:

As was clear to some at the time, and is now obvious to all, this new economy was based on fictional capital — credit extended on assets that were themselves abstract bundles of other assets, their value vastly inflated by the process of bundling, and subsequent trading. While the cunning plan worked, a group like the G20 was adequate to the task of twiddling the knobs of free trade, intellectual property and financial non-regulation. Now that a systemic problem has emerged, the organisation and its participants are well out of their depth.

He adds that one way or another, sooner or later, the local, the regional, the particular, will be making a return against the compulsorily globalised, the flattened out. There isn't any alternative to that — the only real choice is whether it will come in a benign and creative form, or once again wrapped up in the myths of nationalism and worse.

Posted by Gary Sauer-Thompson at 4:17 AM | Comments (3) | TrackBack

March 26, 2009

governing the economy

"We have to clean up the banking system" is the refrain from politicians and policy advisors as they gear up to the G20 Summit, to discuss the reforming the governance of the global economy. The Summit will probably achieve very little, but they will present the face of consensus and warn about the need to avoid protectionism.

We do need to remind ourselves that very few of the country's economic experts (market economists who are representatives of financial institutions) foresaw the global financial and economic crisis that is now upon us. Most of them thought that the global economy was working well and needed nothing more than some tweaking here and there since the invisible hand of the deregulated market would continue to do its thing etc etc.

Steve Bell

The reality is that the culture of financial capitalism is rather rotten. How could How could so many economic experts have been so mistaken something as significant as the global financial and economic crisis? How come they didn't see the flaws in the neo-liberal mode of governance?

The shift is to governance of the conduct of a population rather than ideology of the free or unregulated market. Neo-liberalism, on this account, is a mode of governing a population, not a fundamentalist belief in extreme capitalism and excessive greed; a mode of governance of an economy that is currently undergoing a major restructuring.

The market economists, along with the economic experts in the Obama administration (eg.,Timothy Geithner, Larry Summers), remain deeply committed to Wall Street and its economic mode of governance, and they assume that when the crisis is over, everything will return to normal. Until then, the government must support finance sector at all costs and the taxpayer foots the bill.

Posted by Gary Sauer-Thompson at 7:52 AM | Comments (4) | TrackBack

March 25, 2009

blacklist bonanza and filtering fun

The time to man the decks and hoist the flag, or petard, or whatever else is handy, in the interests of the free flow of information is upon us. Again. Or still. Depending on what, precisely, is meant by the term 'hoist', which could have something to do with child porn or, more likely, unacceptable violence against things that innocently flutter in breezes.

Following a series of unfortunate incidents involving the ACMA's nasty nets blacklist, or not, depending on who you believe, the good Senator Conroy is set to appear on Q and A tomorrow night. GetUp encourages audience participation. I wonder whether the ABC keeps track of the volume of questions submitted to a given panellist? It's probably best we don't know. For our own good.

It's fairly inconvenient timing for the Minister With Some Doubts About the Benefits of Communication, to say the least. And given the nature of some of the fallout, it takes more spine than I can spare to link too generously on recent developments.

Somebody Think of the Children still appears to be functioning, but you never can tell. The status of Wikileaks is less certain, as is the situation of anyone else linking to the site, including the experimental DBCDE blog. Is that an example of short sightedness, or blindness? The Blog Which Cannot be Named in Front of Filters, Children, or Other Clean Minded Folk has some clever artwork which may or may not be classified unclassifiable and therefore unsuitable between now and tomorrow morning. 1984 or Fight Club. The first and second rules of fight club are currently being assessed by the ACMA and the decision will not be made public, considering that the first rule of...and so on.

Whirlpool may have attracted ire or increased its fan base. It's hard to tell. Depends what you mean by 'monitor', which could be as open to doubt as the meaning of the word 'blog'.

Whether an actual forum of actual people meeting in meatspace to discuss censorship and filtering, which are two entirely different things apparently, counts as offensive may come up for consideration, depending on their mode of transport. Or something else. When the appropriate secret body makes up it's mind about it, you won't know. (See the first rule. At your peril.)

Posted by Lyn Calcutt at 6:46 PM | Comments (4) | TrackBack

Afghanistan and the media

Pratap Chatterjee's account of divided Afghanistan in The Atlantic gives a different account to Afghanistan as the official one of Afghanistan being the haven for Islamic terrorists who threaten our national security.

The reality is that most American taxpayer money is actually spent on US troops, not on poor Afghans to provide them with electricity, water, healthcare, a steady food supply and jobs. The Obama administration's policy is one of escalation of US military presence in Afghanistan and the continuation of drone attacks in Pakistan. Australia will tag along whilst offering advice about nation building and remaining silent about the lack of a coherent strategic plan by the US in southwest Asia.

Will the media coverage of Australia's war in Afghanistan glorify this war and mostly show the pro-Government side? Will our largest media outlets (News Ltd, Fairfax, Channel Nine etc ) continue to pay people who receive their talking points from government press releases to pose as independent experts? Will the media raise the question that Australia's interests in southwest Asia are minimal and do not require major social engineering.

Stephen Colbert's speech at the 2006 White House Correspondents' Dinner spells out the rules:

But, listen, let's review the rules. Here's how it works. The President makes decisions. He's the decider. The press secretary announces those decisions, and you people of the press type those decisions down. Make, announce, type. Just put 'em through a spell check and go home. Get to know your family again. Make love to your wife. Write that novel you got kicking around in your head. You know, the one about the intrepid Washington reporter with the courage to stand up to the administration? You know, fiction.

The illusion in the media world--ie., the political media establishment--- is that there is an built antagonism between the government and the media. Yet what is on display on the Sunday morning talk shows (Insiders, Meet the Press etc ) is the insider savviness, professionalism and coolness, coupled to a desire for a deep respect and appreciation from the audience, whose proper role in one of blissful ignorance and populist emotionalism.

Yet what drives these media stars is the desperate-to-be-close-to-power neediness, and they fight tooth and nail as gatekeepers to deny that access to power to others. The gatewatching is about access. This is a relationship that presupposes that experts in defence, national security and foreign policy make the decisions because they know best. So much for the checks and balances provided by the establishment-loyal, political media. The media stars ignore the criticisms of their behavior in acting as conduits for political leaks, and they often act to suppress their amplification of government spin.

What needs to be said is that wading deeper into Afghanistan and Pakistan is a fool's errand, and it is a policy that Australia --and the Obama administration--- will regret. Australia has no vital interest in determining who actually governs in Afghanistan.

Posted by Gary Sauer-Thompson at 8:08 AM | Comments (8) | TrackBack

March 24, 2009

liveable cities + economic crisis

Despite cities being critical to Australia's future development there is no central urban body advising commonwealth and state governments. Current roles in urban governance are still divided amongst various portfolios, despite arguments for some organised approach for urban policy. We have gone backward since the Whitlam government of the1970s whilst the focus has been on global cities, such as Sydney, on the grounds that these are connected to the global economy.

My argument that one way to deal with the global economic crisis is to reinvent cities to make them more liveable and sustainable is also argued for by Barack Obama. There are differences in that the CBD of American cities are in a bad way: they are boarded, marked by high crime and deep neglect, poverty and peopled by blacks, Hispanics and an underclass. The white middle class has fled to the green, monoracial suburbs with their shopping malls and gated communities.

According to Edward Blakely in the Australian Financial Review Obama's argument is that the central cities can be the new hub for entrepreneurship, culture and environmentally sustainable economy:

first, central cities are underused space that can be reused to cheaper and more efficiently than sprawling suburbs; second, young energetic immigrants and college students are choosing central cities as the places to start up businesses; and third, rebuilding cities will generate a set of green industries that will reshape the 21st century global economy.

According to Edward Blakely, an internationally renowned urban development strategist, the argument is for federal strategy and resources to leverage improvements in inner-city areas as liveable, sustainable and competitive economic incubators. The official rhetoric is that it’s time to stop seeing our cities as the problem and start seeing them as the solution.

Vibrant cities spawn innovation, economic growth, and cultural enrichment; the policy needs to focus on investments and development in urban areas that will create employment and housing opportunities and make the country more competitive, prosperous, and strong.

Unlike the hub-and-spoke city-suburban model of yesteryear, today’s metro regions encompass broad swaths of multiple center cities, downtowns, suburbs and exurbs. The challenges of energy scarcity and climate change require closely aligned approaches in land use, transportation and location of housing. This in turn implies the co-ordination of federal-state urban policies across all departments.

What can we take from Blakely's account of urban policy to inform and enable urban redevelopment and regeneration in Australia? The following suggestions are useful:

* funding for city community development so cities can deliver vital housing, and become walkable and bikeable with clustered housing developments and other services critical to attracting and retaining 21st century educated workforce that will transform the regional economy.

*supporting regional innovation and economic development to build new jobs through a range of small businesses and innovation supports for emerging industries.

*increased public transport to reduce car-orientated development

*creating clean -industry businesses and jobs within the uderused spaces of urban areas

*making cities and urban regions energy efficient and making these technologies into competitive exports

*reducing poverty by lifting the quantity and quality of education

* improving quality housing in inner city areas/neighbourhoods to make them attractive places where people can and will work from home or near home.

As the "Low Carbon Industrial Strategy: A vision by the Department of Energy and Climate Change and Department of Energy and Climate Change states the transition to a low carbon world will transform our whole economy, changing our industrial landscape, our supply chain, and the way in which we all work and consume.

Nicholas' Stern’s landmark Review in 2006 set out the economic case for action on climate change and for investment in a low carbon economy. For as well as being an environmental and economic imperative, the shift to a low carbon economy is also an economic opportunity over the decades to come. The shift to a low carbon economy could help to drive renewed growth that will lift us out of the economic downturn. It will be key to the UK’s long term industrial future.

Posted by Gary Sauer-Thompson at 7:55 AM | Comments (11) | TrackBack

toxic assets

How do you clean up the toxic assets of the troubled banks? Just how bad are their books? No one really knows. However, everybody is insisting that the banks in Wall St and in the City are cleaned up. Though the regulators are all over the banks---given the abdication of responsibility for oversight of these markets-- there is precious little evidence of any fundamental rethinking, either in the industry or by the economics profession, much of which still seems in denial about the character and gravity of the present crisis.

Letting banks that took excessive risks fail in order to encourage more prudent behaviour is seen to be all very well in theory. However, with few exceptions, the argument from all sides—and from most in politics too—is for a return to business as usual as quickly as possible:

Martin Rowson

The current US proposal is a programme to appeal to the culture of greed ( the "animal spirits" of capitalism) by matching private sector money with treasury funds to buy up to $US1 trillion) of toxic assets from the sagging balance sheets of failing institutions.The treasury intends to use between $75bn and $100bn from its emergency bailout fund to generate co-investment from hedge funds, private equity funds and other private-sector investors willing to participate in buying derivatives, mortgage-backed securities and other troubled financial instruments.

What is a realistic value for the toxic assets?

The bank plan appears to turn on a metaphor. Credit is “blocked” or “frozen.” It must be made to “flow again.” Take a plunger to the toxic assets, a blowtorch to the pipes, it's said, and credit will flow. This will make the recession essentially normal, validating the baseline forecast. Add the stimulus to a normalization of credit, and the crisis will end. That's the thinking, so far as I can tell, of the Treasury department in this new administration.

It is a replay of the Bush administration “cash for trash” plan with variations that avoids taking temporary control of the insolvent banks, in order to clean up their books. Secretary Treasury Timothy Geithner proposes a complicated scheme in which the government lends money to private investors, who then use the money to buy the trash. The assumption is that the bad assets on banks’ books are really worth more than anyone is currently willing to pay for them. As Paul Krugman observes in the New York Times:

the Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt. So this isn’t really about letting markets work. It’s just an indirect, disguised way to subsidize purchases of bad assets.The likely cost to taxpayers aside, there’s something strange going on here. By my count, this is the third time Obama administration officials have floated a scheme that is essentially a rehash of the Paulson plan, each time adding a new set of bells and whistles and claiming that they’re doing something completely different. This is starting to look obsessive. Will it work? Krugman reckons not, but offers little by way of argument. But he's probably made the right call, as the logic is one in which a calm investor whose mood does not swing with the mood of the average investor who is also willing to buy and hold to maturity would be eager to invest in CDO's. Are such investors?

Posted by Gary Sauer-Thompson at 12:43 AM | Comments (7) | TrackBack

March 22, 2009

Anna

Queensland, swinging one day, not really swinging all that much the next.

Wiser folk than I will no doubt explain the election result in way more complex terms than this, but it looks to me as though Anna won and Lawrence lost.

A couple of weeks ago Graham Young questioned the wisdom of an ALP campaign photo which portrayed Bligh as a dominatrix. My voting age daughter said the same thing yesterday. The severe figure in the photo was not responsible for Anna's high personal rating, which ended up reflecting the election outcome more closely than the polls.

It appears that large numbers of the large number of polled undecideds decided in Anna's favour at the last minute, and some of the previously decideds eventually decided the other way. What caused them to decide the way they did is anyone's guess, but I'm putting it down to Anna vs The Borg.

Had Lawrence comported himself through the campaign the same way he did during his concession speech, it might have been a closer thing. After weeks of braying and thumping and making up words Barnaby Joyce-style, he came across as someone you wouldn't mind representing you at an important function when it was all too late. He'd campaigned as the angriest person in the state, and while the state might have been a bit cross about some things, it wasn't beside itself with fury. And certainly not at a smallish woman whose smile could light up an AFL stadium. She has that in common with Beattie.

We'd settled in for a long, nail-biting night in front of the telly, but Possum called it at about 5.05pm when the exit polls came out. ABC coverage of the count started at 6.30 and while Antony Green tried to do the traditional suspense thing, it was all over before 7. After that it was the pure guest-politicians-in-the-studio theatre and the novelty of Pauline Hanson's result. She came in just over 21%.

Lawrence will stand aside and let someone else have a go at leading the LNP, which should be interesting. The conservative side of politics Australia-wide will go on wondering what's gone wrong. Barnaby will continue to be a one man, two parties kind of guy. Queensland will now be the first state to elect a female premier but will probably manage to maintain its parochial image. The Qld ALP will go on excorcising the ghost of Joh.

So you people in NSW, Victoria and SA might just get some water out of us yet, but don't go getting too excited. The Gold Coast will get its AFL stadium, which will make Clive Palmer cross. Anna will pick her own team, which has to be better than the one the factions chose for her. Brisbane will have one children's hospital and the public service can relax about their jobs. We can also stay friends with the big fellas in Canberra, which could come in handy in a recession.

Posted by Lyn Calcutt at 11:00 AM | Comments (28) | TrackBack

March 21, 2009

Canberra gaze

It's hard not to disagree with Leak about Senator Fielding. There is something strange, if not disturbing, about Senator Fielding and Family First that goes beyond their 1950s style conservatism, which is still strong in the ALP. It is to be found on the Labor Right --eg., Senator Conroy on the mandatory filtering of "unwanted" material ---and many of them do sound like the DLP of yesteryear. They disguise their 1950s conservatism and shift to a climate of fear by saying that they are Family Friendly.

Given the contradictions in Fielding's position on alcopops and family values, it is hard to put my finger on the disturbing bit, so I will just leave it to Leak:

Bil Leak

The good news for the ALP is that Julie Gillard got her industrial reforms through. It is a big political win and should be celebrated as such. Gillard had never let an opportunity pass to squeeze every bit of political advantage out of the Liberal confusion on the issue in the last weeks of Parliament. No doubt the Rudd Government will probably be talking pay restraint soon.

The bad news is that the Labor conservatives (eg., in NSW and South Australia) continueto outflank the Right on the law and order issue, with a distinctive centre-left twist. If the Liberal Right talks in terms of "throwing away the key", "three strikes", etc, then Labor works in terms of clean feeds, censorship, mandatory internet filters, CCTVs and so on. In doing so the ALP has backed away from defending and enabling a freer and more open society--- it has backed away from liberalism as it has increasingly embraced social conservatism that is concerned to silence dissenting voices to net censorship of prohibited content and unwanted material.

The social and cultural conservatism has become explicit as a result of the social dissolution and rupture caused by a neoliberal economics that has produced a society of winners and losers. The ALP right are willing to let the market rip, allow it to change the culture, and then seek to control and reshape people's behaviour, by a toughened up, authoritarian law and order regime that is marketed as "protecting the many against the few". The few are defined as bikes, child pornographers, drug pushers, gangs, graffitists etc

Posted by Gary Sauer-Thompson at 9:13 AM | Comments (6) | TrackBack

March 20, 2009

public broadcasting in the 21st century

In Public Broadcasting looks for a future Margaret Simons says that the challenge is coming not from government, not from the cultural warriors of the right (or not only from them) but from pay television:

The pay television sector understands that the commercial free-to-air business model is broken. Commercial free-to-air television cannot afford to compete with pay television in providing multiple channels of specialised content to niche audiences. To do so would fragment the audience and remove the motivation for mass market advertisers to spend their bucks on television commercials.Public broadcasters are a different matter. They are, potentially, the main competition for pay television....This battle between public and pay is not only about government money, but also about spectrum and government favour.

In its submission to the commonwealth governments Review of the future of Australia's two national broadcasters, the Australian Broadcasting Corporation (ABC) and Special Broadcasting Service (SBS) ASTRA, the Australian Subscription Television and Radio Association, says that that the ABC and SBS should receive government money for new channels only in cases where there is a clear market failure.

Even if there is a market failure, ASTRA says, then the money to address it should not go straight to the ABC and SBS. The required services should probably be put out to competitive tender. Likewise spectrum. If that is available, it too should be put out to competitive auction, not given to the public broadcasters.

Simons says that the ASTRA submission directly challenges almost every leg of the ABC’s funding pitch and vision. Mark Scott has used words like “market failure” at virtually every opportunity to press his claim for government money for children’s content, investigative journalism and more Australian content.

What role then for public broadcasting? An socially innovative one---ABC and SBS have led the way in multichannelling and in use of the internet and pioneering innovative drama--- as this takes us beyond market failure argue argue Terry Flew, Stuart Cunningham, Axel Bruns, and Jason Wilson in their submission:

In the 21st century digital media environment, where all media outlets are multi-platform and digitised in their modes of content production and delivery, it is better to understand the ABC and SBS as public service media organizations, rather than public service broadcasters. This emphasizes how it is the services provided, rather than the delivery platforms, that are at the core of rationales for public support of the ABC and SBS.

Social innovation refers to user-created content strategies, particularly in the provision of online services; hyper-local content; content innovators in the provision of news and information utilizing user created content strategies. The ‘people formerly known as the audience’ are increasingly finding their own means of producing and distributing content and the ABC and SBS can help to shape this activity.

Terry Flew in his blog says that:

The development of the Internet draws attention to a second vision of social innovation, where it comes from the margin and it built incrementally rather than being the product of large-scale, conscious organizational design. Whatever were the original intentions in developing the Internet, it has proved to be a radically decentralized informational and communications system, where innovation arises from the ad hoc and unco-ordinated actions of myriad individuals whose activities become interconnected in the complex networked ecology to a whole that is exponentially greater than the sum of its parts.

The ABC and SBS can effectively harness both of these models of social innovation. To do so, however, he agues that there should be a substantial opening up of both organizations to user-created content. By becoming more participatory public service media organisations, there is the scope to stimulate more public participation, creative output, diversity of sources and, ultimately, more public support for both the ABC and the SBS.

Posted by Gary Sauer-Thompson at 4:37 AM | Comments (2) | TrackBack

March 19, 2009

AIG: corporate governance

Edward Liddy, chairman of AIG, makes remarks that indicate how the bailout is being used by Wall Street to consolidate their power. He says:

We cannot attract and retain the best and brightest talent to lead and staff the AIG businesses, which are now being operated principally on behalf of the American taxpayers, if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury.

The best and brightest?

The US government had to take over AIG to ensure its survival because of the actions of the notorious credit default swap unit.(It was hedge fund grafted onto an insurance company). AIG was bailed out to prevent a cascade of counterparty failures which could kill the entire financial system. If AIG didn't get the money, the entire global financial system would be put at risk of collapse.

The populist moral outrage is directed at the gaming or looting the corpse: ---those large bonus paid to incompetent, arrogant executives that have resulted in the company AIG hemorrhaging red ink. AIG's near bankruptcy was due to hugely risky and irresponsibly stupid investment decisions. The company fundamentally misunderstood the nature of risks that it was underwriting.

AIG now stands for all that is wrong about Wall Street. Six months after the Wall Street bailout it’s still the case that almost no loans are being made to Main Street. It is not possible for the economy to grow until credit markets are working again. A banking system that is substantially impaired will eat your stimulus. If you do not get the banks lending and creating money, then everything else you do will fizzle. So AIG stands for fiasco--both corporate fraud and government fiasco.

Impaired banks lend less. Edaward harrison at Naked Capitalism says:

This is what is happening now. The problem is that while all this is ongoing, the institutions that issue credit, financial institutions, are hemorrhaging losses. After all, de-leveraging means institutions are selling out of necessity, not out of opportunity. And when everyone's a seller and few are buyers, asset prices fall and massive losses are the order of the day. When banks lose money, they have less capital and when their capital gets low enough they can't lend. Less lending = less credit = less growth. So, if we want to get the economy back on its feet, we need to increase lending.

The banks are not lending because they need their capital to service the toxic sludge already sloshing around their balance sheet.

The US government's programs and bailouts have been designed to recapitalize the banks so that they can start lending again. This has limited effectiveness because the extent of the writedowns of assets already on the books is going to be too massive. The U.S. banking system is effectively insolvent in the sense that the banks do not have adequate capital to absorb the likely losses facing them later this year.

That means the policy response should include nationalization or liquidation of a significant number of banking institutions. The US is engaging in ad hoc measures and for the most part, taking the path of least resistance of propping up zombie banks rather than making banks write down bad assets to realistic values.

Posted by Gary Sauer-Thompson at 6:37 AM | Comments (5) | TrackBack

March 18, 2009

The Senate acts

It's good to see the Senate doing its job properly --using its powers responsibly to improve government legislation and to push the government further down the reform pathway to ensure the public interest or a public good. The crossbench is crucial to a long list of bills the Rudd Government wants passed, and it is far from being recalcitrant or dithering or obstructionist.

A good example is the Allcopops legislation, where the Greens and independent senator Nick Xenophon have used their power to persuade Health Minister Nicola Roxon to set aside an additional $50 million from the $1.6 billion raised for measures to tackle alcohol abuse. Why would the Rudd government resist that proposal,when its concern is to stop teens from binge drinking.?

The agreement includes the creation of a $25 million health sponsorship fund to provide support for sporting and cultural activities as an alternative to alcohol sponsorship, mandatory warnings on alcohol advertising, community-level initiatives to tackle binge drinking and enhanced telephone counselling services and alcohol referrals. Alcohol is connected to a health and can cause health problems.

The interpretation of this legislation by Bernard Keane, Crikey's Canberra correspondent, is that:

its lasting political significance will be no more than that of another stunt, Fuelwatch, which fell by the wayside last year after inquiries, theatrics and Parliamentary ranting, and was promptly forgotten

.
Keane does appear to behold the view that the Rudd Government has its agenda ensnared in Senate obstructionism and that the House of Represenatives rules. That how he interprets the Rudd Government needing to negotiate its key legislation through the Senate,

However, he misses the point of the allcopops issue. These may be small reform steps in taxing alcoholic lollywater, but they represent a break with the laissez-faire approach to alcohol advertising that paid no attention to the negative effects of alcohol. Keane misses the political symbolism of this, and the explicit rejection of the libertarian position that holds the "nanny state", or wowsers, or do-gooders are dictating how much people should drink or setting upper limits to drinking for everyone.

The Senate is acting because the full cost of alcoholic lollywater is not borne by the producer (Big Alcohol). This is the negative externality problem in economic language, and it challenges the view that the allcops tax is just the Rudd Government utilizing coercion for a tax grab (plunder) at the expense of individual liberty. What we have with allcopop is a political solution to market failure.

Family First senator Steve Fielding wants to push this issue further: to address alcohol advertising during sports programs on television.He wants the Government to close a loophole that permits television advertising of alcohol during family viewing time in sporting broadcasts. For once, Fielding has adopted a reasonable position. The implication is that the laws covering the banning and other restrictions on grog marketing and sponsorship do need to be tightened progressively.

Economic libertarians (the utilitarian variety) would argue against these government policies on the grounds that they exceed the bounds of the minimal state. They would oppose these laws on the grounds that they prohibit certain types of exchanges as well burdening exchanges by imposing high transaction costs. Some would argue that today's market failures will provide the opportunities for tomorrow's entrepreneurs to profit by new innovation. What they need to argue is that such policies to prevent market failure will not produce greater utility than a policy of laissez-faire.

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March 17, 2009

Larry Summers on the economic crisis

Larry Summers, the Director of the White House National Economic Council, gave a speech to the Brookings Institute on the Obama Administration's approach to the historic economic crisis. Or more specifically their understanding of the roots of their current economic crisis, the rationale for the administration's recovery strategy, and connecting that recovery strategy to the central objective of sustained and healthy expansion.

An important paragraph in the speech is this one:

One of the most important lessons in any introductory economics course is that markets are self-stabilizing. When there is an excess supply of wheat, its price falls. Farmers grow less and others consume more. The market equilibrates. When the economy slows, interest rates fall. When interest rates fall, more people take advantage of credit, the economy speeds up, and the market equilibrates.This is much of what Adam Smith had in mind when he talked about the “invisible hand.” However, it was a central insight of Keynes’ General Theory that two or three times each century, the self-equilibrating properties of markets break down as stabilizing mechanisms are overwhelmed by vicious cycles. And the right economic metaphor becomes an avalanche rather than a thermostat. That is what we are experiencing right now.

So Summers' notices the mess that he helped create and his plan to clean up the wreckage connects the avalanche to the need for extraordinary public action to restore the capitalist market system to health.

The rest of Summers' speech was an effort to talk up both the economy and the administration's economic plans in the face of the avalanche. Somehow the response seems inadequate in relation to the economic metaphor, even if it is the boldest economic program in the US to promote recovery and expansion in two generations.

Not to worry. The Wall Street Journal's new theme is that things are looking up. Then again, in the late 1990s, Larry Summers, in his capacity as U.S. Treasury Secretary and Tim Geithner as the Under Secretary for International Affairs were literally touring around the world to “make the world safe for AIG”, as the slogan went. They stood in a tradition that asserts U.S. independence and implied its domestic superiority on global rulemaking.

They endeavoured to achieve the above by claiming that the U.S. financial system was superior to that of all other nations — in terms of such metrics as transparency and disclosure, general accounting standards, market depth and liquidity, as well as compensation practices. Secondly, they argued that other nations could only benefit from adapting U.S. practices in a dynamic fashion (and would fall onto the ash heap of history if they didn’t).Thirdly, they argued that emerging markets from China and the rest of developing Asia to Brazil and South Africa, should adopt market opening measures to provide access to U.S. insurance firms, investment banks and other entities keen to expand their presence in those markets.

Thsi is a tradition in which the IMF, which has a mandate to establish rules for the international financial system, has been used as an instrument of U.S. policy. The United States has used the IMF as a vehicle for delivering messages to other countries about their policy weaknesses.The United States behaves as if it alone knows best how to deal with every global economic challenge. The U.S. economic authorities have acted as if they believe they know everything about the regulation of markets continually evolving in ways that are, in fact, unknowable.

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March 16, 2009

G20: co-ordinated policy

The Group of 20 has been charged with formulating a global response to the financial crisis. In preparation for the April meeting the G20 finance ministers meet on the weekend to work out the mode of governance that would be put in place to save the world economy and trading system. It's a big ask:

Kal

Australia needs international policy coordination as we can't get ourselves out of this on our own. Now Modest progress was made on the extent of the fiscal stimulus needed to boost depressed economies and on devising global regulations for financial institutions such as hedge funds and the derivatives market.

On the former the disagreements between the US and Europe are about the extent of bailing out the banks and the auto industry. On the latter point, since the Americans will not give up an ounce of their national sovereignty the mismatch between the reach of markets and the scope of governance will prevail, leaving global finance as unsafe as ever.

All very reassuring isn't it. The finance ministers co-operated in appearing statesmanlike and in control of events. As Alan Kohler says in Business Spectator:

There was no sophisticated analysis of the causes of the crisis, no realistic assessment of what can be done to fix it, and certainly no agreement about specific actions, beyond stating blandly that there is “resolve”....The G20 agreed to take “all necessary actions to ensure the soundness of systemically important institutions”, without saying what, and they agreed to take “decisive, coordinated and comprehensive action to boost demand and jobs”, without saying how.

Kohler adds that the G20 meeting left Spain, Ireland, Portugal, Greece and Austria to their fates, along with Eastern Europe and the Asian nations dealing with catastrophic declines in exports and industrial production.

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March 15, 2009

the future of capitalism

The Financial Times has an ongoing discussion on the changes to capitalism, as a result of the free-market model that dominated thinking for 30 years having been discredited by the global financial crisis.

The frame is the future of capitalism and the position of the Financial Times in this debate is that:

The story of the modern capitalist economy is a rhythmic repetition of cycles, syncopated by eerily similar crises. These crises, while their details differ, are but variations on the same theme. Easy money, geared up by leverage, floods the financial system through innovative products. This simultaneously pumps up asset prices and obscures their speculative nature, with euphoria usurping the place of analysis. Until, one day, something triggers a loss of confidence in the continued rise of prices, and the whole leveraged edifice crumbles.

The FT argues that:

Those who sound the death knell of market capitalism are therefore mistaken. This was not a failure of markets; it was a failure to create proper markets. What is to blame is a certain mindset, embodied not least by Mr Greenspan. It ignored a capitalist economy’s inherent instabilities – and therefore relieved policymakers who could manage those instabilities of their responsibility to do so. This is not the bankruptcy of a social system, but the intellectual and moral failure of those who were in charge of it: a failure for which there is no excuse.

It is a failure of regulators because the conditions for an unregulated market, in theory, to function efficiently were not put in place. These conditions are: full information, enforceable property rights and contracts, and the absence of “externalities” – effects of economic transactions on third parties. These conditions are never fulfilled, but many markets come close enough that participants’ self-interested actions achieve good outcomes for all.

So the government is to blame---not the market.It is accepted that the normal workings of capitalism cause unemployment, panics (busts) and manias (booms), but that this rollercoaster is just the result of markets not working efficiently. The assumption is that financial markets are stable. As Robert Schiller says, according to classical economic theory:

People will only make trades that they consider to benefit themselves. When entering financial markets – buying stocks or bonds or taking out a mortgage or even very complex securities – they will do due diligence in seeing that what they are buying is worth what they or paying, or what they are selling.

Schiller goes onto say that the problem with this theory is that it overlooks that financial capitalism:

will produce snake oil. Not only that: it may also produce the want for the snake oil itself. That is a downside to capitalism. Standard economic theory failed to take into account that buyers and sellers of assets might not be taking due diligence, and the marketplace was not selling them insurance against risk in the complex securities that they were buying, but was, instead, selling them the financial equivalent of snake oil.

And snake oil is what we got from the global financial institutions. Snake oil means unstable markets and market failure. Financial capitalism causes socio-economic havoc.

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March 14, 2009

the sluggish state

This time next week we Queenslanders will be off to the polls, but this fact could easily pass you by unless you were paying close attention. Suspense levels are around zero.

We've had a cyclone and now we're having an oil spill catastrophe to relieve the tedium, which is just as well because the one election debate wasn't even broadcast on telly.

One friend said "Why is Anna Bligh spending money on a stadium when our hospitals are in crisis?", which perfectly echoed Lawrence Springborg's line. Since she lives on the Gold Coast and the local paper has been getting stuck into Springborg all week over the stadium, it said something interesting about media consumption. She's voting for a Daylight Savings mob instead of Springborg, which may or may not be worthy of note.

Another friend is peed off because Anna Bligh made his favourite fishing spot a no fishing zone, but he can't stomach Springborg either.

The younger voters I know got a kick out of Springborg saying 'oblivity', when he presumably meant oblivion, but his chances of being able to keep them supplied with the stuff of linguistic sport won't stop them voting Green or, failing that option, someone with a silly name.

One theory has it that the campaign will begin in earnest this week and voters will start paying attention. That may be right, but it's hard to imagine at this point. Bligh and Springborg will both be up against footage of wildlife rescuers crash tackling oil-slicked pelicans. No prizes for guessing which news segment is more likely to get viewers' attention.

Posted by Lyn Calcutt at 4:31 PM | Comments (17) | TrackBack

The US in hock

The economic reality of the global economy is that China is funding the US. China owns around $US 2 trillion of US Treasury bonds. So the world's greatest political power is the world's greatest debtor. The $US 1.7 trillion budget deficit this year (and more deficits) in the following years) will be financed by more debt financed by foreign bondholders.

The US is a super power with $US 1750 billion fiscal deficit and a $US500 billion US current account deficit; a super power with feet of clay. From a Chinese perspective America has gotten into the current trouble from living beyond its means — borrowing to maintain a lifestyle (inflated housing market and maxed-out credit cards) it cannot afford.

At some point the foreign bondholders will act to protect their investments, such as demanding higher rates of return on their investments rather than dumping the Treasury bonds, nor do they want the dollar to plunge since they'd be stuck with a lot of paper worth far less than they got it for. Chinese officials have shown increasing signs of concern that the sharp increase in US government spending will lead eventually to inflation, a collapse in the dollar, and so threaten thge “safety” of China's huge holdings of US government debt.

Reducing the deficit and repaying the bondholders looks difficult, given that US consumers and businesses are in no mood to spend or invest; the financial institutions are severely weakened and hesitant to lend; short-term interest rates are effectively zero, leaving little room for conventional monetary policy; and world demand provides little hope for lifting the US economy. More stimulus packages? Does that mean more borrowing and debt? Probably.

In other words, the US economy is shrinking and angry right-wing populism lurks just below the surface (Obama is leading America into the abyss is the rhetoric of the Republican media attack machine). Yet the reality is that the US is more or less reliant on China and needs to take China's interests into account.

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March 13, 2009

the knowledge economy

Today knowledge is held to be the key to the economic success of developed countries such as Australia, so much so that the ‘knowledge economy’ is the frame within which governments in OECD countries view education policy. The Rudd Government’s rhetoric is about increasing productivity and prosperity and how these depend on increasing investment in education and training.The World Bank says:

[School] education is a gateway to the opportunities and benefits of economic and social development. … Furthermore, globalization and the increasing demand for a more sophisticated labour force, combined with the growth of knowledge-based economies gives a sense of urgency to the heightened demand for secondary education … Quality secondary education is indispensable in creating a bright future for individuals and nations alike.

Globalisation and increasing economic competition have sharpened this concern about education over recent years. A recent Australian Government discussion paper, Skilling Australia, points out, if current education participation continues as is, in 2020 Australia will have three times the proportion of low-skilled workers than countries like Finland and Singapore, which have the best-performing economies.

Despite official concern about this and reports into teacher education very little has changed in any area of education. There is is stasss.

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March 12, 2009

a question about the media

A question. Journalists in the mainstream media conventionally understand themselves to be watchdogs over the political establishment, and see themselves as defending democracy. They stand for truth and enlightenment in the face of the lies, coverups and mass deceptions that further the vested interests of political power. They stand for, and represent, adversarial journalism and are responsible for the clashes of ideas in the agora or public sphere.

Is the political reality one in which these journalists are publicists for political power? And further, does the drip feed relationship (access journalism) mean that journalists are actually subservient to political power, not watchdogs over it? They are loyal spokespeople for political power because they are merged into the processes of political power and become part of the process of media management. Is access journalism the dominant form of journalism in Australia?

Glenn Greenward makes the following observations about access journalism:

what fuels "access journalism" [is] the willingness of politicians to speak only to deferential reporters, who stay deferential in order to ensure that those politicians continue to speak with them, a process that perpetuates itself ad infnitum. That has created a virtually complete -- and quite destructive -- accountability-free zone where politicians and pundits alike can simply avoid any form of adversarial questioning or challenges to their claims

It's the ability of politicians, journalists and pundits to avoid meaningful challenges to their views that, more than any other factor, degrades our political discourse. So we have a self-imposed cocooning process that is now pervasive and has become the norm. The gatekeeping that takes place in the media functions to protect both access journalism and to avoid any questioning of the structure of the political/media system.

Update
Access journalism---- in the form of the Canberra Press Gallery--- works in terms of the corporate model of journalism. The changes the newspapers are currently going through ( declining revenue, cost cutting, staff laayoffs etc) suggest that newspapers are failing as businesses and they are becoming a different industry.
By "different industry " is meant that newspapers will struggle to publish under something like the current corporate model (eg., Fairfax) but with somehow different content, eg., infotainment or lifestyle fluff. Escapes! Styles!----junk no one wants to pay for.

This kind of newspaper isn't going to be interested, or able to, produce the news that’s vital to a democracy----giving citizens the information they need to be free and self-governing. Though the newspapers (as old media) will still have great power, the internet has taught the public to expect to talk back to the mainstream media and to become content providers. That also changes the dynamics in the media---- the old model of daily print journalism is dying, and we are seeing the beginning of the end. The end of something means the birth of something new-- ie., the media as a platform for user generated content rather than a portal?

Posted by Gary Sauer-Thompson at 7:04 AM | Comments (8) | TrackBack

March 11, 2009

ETS: negotiations

The Rudd Government’s ETS legislation came out yesterday. It sticks close to the compromises of their White Paper and the Garnaut Report. This response ignored science and focused on politics---setting the emission reduction targets low in the hope of winning the support of the energy intensive trade exposed industries and the coal industry for the ETS.

Despite Treasury modelling on the low economic impact of reducing Australia’s emissions over the medium and long term, the Rudd Government rolled over from the pressure exerted by the Greenhouse mafia.

The obvious problems with the CPRS version of a cap-and-trade, as presented in this legislation, are:
(i) the proposed cap--- 5 or 15%--- for 2020 is too weak;
(ii) too many free permits are being handed to heavy polluters;
(iii) exclusion of voluntary emissions reductions beyond those represented by the national cap.

Will the Parliamentary debate and negotiations in the Senate focus on increasing the percentage reduction in Australia’s emissions by 2020 and removing the perverse subsidies to major greenhouse gas emitters? The Coalition has made its position clear--roll back the date and give the major greenhouse gas emitters 100% permits. They, in effect, become free riders.

So it depends on the Greens and the two independent Senators--Fielding and Xenophon---to help ensure that the legislation meets the target of 450 ppm CO2−e. As Treasury argued Australia’s aggregate economic costs of mitigation are small (although the costs to sectors and regions vary), whilst growth in emission-intensive sectors slows and growth in low- and negative-emission sectors accelerates.

Posted by Gary Sauer-Thompson at 7:39 AM | Comments (10) | TrackBack

March 10, 2009

Higher education: reforms heralded

The Rudd Government's response to the Bradley Review of higher education is to move towards to a “new student-centred, demand-driven higher education system” in which universities will need to be more responsive to student demand. The reform agenda is a shift more choice, differentiation and competition;

Gillard proposes that the education is more integrated and that it places vocational education at the centre. She seeks to make the system more equitable by increasing the percentage of students from poor backgrounds to 20%. It also accepts a national target of 40% of 25-24 year olds having an undergraduate qualification by 2020. If the latter is to be achieved, then the increasing students from poorer backgrounds would be essential.

That would require changing the culture of public schools as this is where the aspirations to higher education are nurtured. However, a fundamental problem is that Australia's high-demand universities select most of their students by examination performance, which is strongly associated with socioeconomic status and ethnic origin. Consequently, high socioeconomic students are heavily over-represented in Australian universities--in the Go8 universities not the regional ones.

The context of the Rudd Government's response is the economic crisis and the slump in world trade--the sharpest contraction since World War 2. If it is a shift away from the era of centralised control and towards the need for a more highly skilled workforce, then though higher education has been linked to the need to make the shift to the "knowledge economy", this in turn is yet to be linked to the "sustainable economy".

The knowledge economy emphasized the importance of knowledge in creating economic growth and global competitiveness. One interpretation of the ‘knowledge economy’ is turning science into a saleable commodity. In this kind of innovation policy universities and research become centres for the production of intellectual property --- eg., biotechnology-- though the public goods being annexed for private purposes in the market. It means commercialization at the expense of basic research capacity with competition and the market now defined at a global level. The implication is that some higher education institutions are becoming and will become disembedded from their national contexts because some driving forces of globalization exceed the strength of national factors.

The policy assumption here is that the future objectives of education and training systems place an emphasis on the central role of those systems in achieving the aim of Australia becoming a competitive and dynamic knowledge society. The increasing under-funding of Australia's higher education institutions since the 1990s was seen to be jeopardising their capacity to attract and keep the best talent and to strengthen the excellence of their research and teaching activities.

We still have the existence of competing visions in Australia: between the neo-liberal conception of the university as a service enterprise in competitive markets, the social democratic conception of the university as an instrument for national political agendas (nation building), and the traditional idea of the university as a public service model based on the argument that higher education cannot be solely market-driven because the logic of the market does not apply easily to education.

Posted by Gary Sauer-Thompson at 7:33 AM | Comments (5) | TrackBack

March 9, 2009

the horrors

No, no, the horrors do not come from the haunting spectres of the political past. It is the present. It is not just the developers going bust leaving the holes in the ground. It is the unwillingness of the banks to lend for the big infrastructure development. We have zombie banks.

Petty

By “zombie banks”, I don't mean the US version---banks that should be dead and buried but are “still walking around” at the moment on life support. I also mean financial institutions that refuse to do what they are created for -- to lend money for worthwhile projects.

Posted by Gary Sauer-Thompson at 1:36 PM | Comments (12) | TrackBack

March 8, 2009

epochal shifts + economic crisis

Richard Florida in How the Crash Will Reshape America in The Atlantic updates his creative economy account in the context of the global financial and economic crisises. He says:

Economic crises tend to reinforce and accelerate the underlying, long-term trends within an economy. Our economy is in the midst of a fundamental long-term transformation—similar to that of the late 19th century, when people streamed off farms and into new and rising industrial cities. In this case, the economy is shifting away from manufacturing and toward idea-driven creative industries—and that, too, favors America’s talent-rich, fast-metabolizing places.

By talent -rich, fast-metabolizing places Florida means well-educated professionals and creative workers who live together in dense ecosystems, interacting directly, generate ideas and turn them into products and services faster than talented people in other places can. Places like New York with finance and media, Los Angeles with film and music, and Silicon Valley with hightech are all examples of high-metabolism places are examples.

With reference to the US Florida says that the financial/economic will likely find its fullest bloom in the older, manufacturing regions whose heydays are long past and in newer, shallow-rooted Sun Belt communities (the Gold Coast in Australia) whose recent booms have been fueled in part by real-estate speculation, overdevelopment, and fictitious housing wealth.

Florida says that the Rust Belt in particular looks likely to shed vast numbers of jobs, and some of its cities and towns, (from Cleveland to St. Louis to Buffalo to Detroit in the US) will have a hard time recovering, then adding

This decline is the result of long-term trends—increasing foreign competition and, especially, the relentless replacement of people with machines—that look unlikely to abate. But the job losses themselves have proceeded not steadily, but rather in sharp bursts, as recessions have killed off older plants and resulted in mass layoffs that are never fully reversed during subsequent upswings.

The implication is the challenge that many Rust Belt cities share is managing population decline without becoming blighted. The task is doubly difficult because as the manufacturing industry has shrunk, the local high-end services—finance, law, consulting—that it once supported have diminished as well, absorbed by bigger regional hubs and globally connected cities.

Will cities like Adelaide subsist on tourism and on the pension checks of their retirees? Its option, like Pittsburg, is to redevelop its core to attract young professionals and creative types, and by cultivating high-growth services and industries.

This depends on how it makes the transition to the new economy. The economy no longer revolves around simply making and moving things---it depends on generating and transporting ideas. The places that thrive today are those with the highest velocity of ideas, the highest density of talented and creative people, the highest rate of metabolism. Velocity and density are not words that many people use when describing the suburbs. The economy is driven by key urban areas; a different geography is required.

Florida argues the coming decades will likely see a further clustering of output, jobs, and innovation in a smaller number of bigger cities and city-regions. Consequently, properly shaping that growth will be one of the government’s biggest challenges. This means, for Florida, needing to ensure that key cities and regions continue to circulate people, goods, and ideas quickly and efficiently.

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March 7, 2009

commenters bad, commentators good

We've come a long way since the bad old days when The Australian got stuck into bloggers and completely overlooked the criticism from commenters in its own pages. It's becoming fashionable to deplore the antics of the hoi polloi in comments, who are apparently eroding the quality of public debate.

Last week Crikey published Peter Faris explaining why he doesn't want a Crikey blog:

I have changed my mind -- I do not think is "useful" for me to do a Crikey blog. This change of mind is propelled by the comments on the Crikey pages in response to my Henson piece. The two or three serious, on-topic comments are swamped by a deluge of personal abuse. A good number of comments are hate comments. I am as thick-skinned as the next commentator, probably more so, but there is no point in having dialogue with people who have a visceral hatred for you personally.

And another one from Clive Hamilton:

An ugly culture of dogmatic and belligerent interventions now dominates social and political debate on the Internet. Comment sections on Internet forums are blighted by a kind of cyber-rage that drowns out debate with table-thumping assertion and a style of personal engagement that owes more to Gordon Ramsay than Socrates. A new vocabulary has developed to describe the variety of offenses, with neologisms such as "flames", "trolls", "snarks" and "sock puppets". Moderators of blog and comment sites do their best to control the rage by setting rules against racism, sexism, coarse language and ad hominem attacks.

Note that Faris and Hamilton both have privileged access to media and both enjoy being controversial and getting stuck into groups of people they don't like. On the topics of Henson (Faris) and internet filtering (Hamilton), both whipped out the paedophilia card to suggest that the groups of people they don't like in relation to those issues have unhealthy ideas about kiddies, which is pretty low, yet both complain about personal abuse.

If a commenter said photographers or internet users are into child sexual abuse, say, 'artists are a bunch of fag peddos', they'd likely be moderated. But apparently it's not what you say but the way that you say it that counts. Faris and Hamilton have plausible deniability on their side.

Via Trevor Cook at Corporate Engagement, Judith Timson at Globe and Mail on bad behaviour among commenters, quoting from David Denby's Snark, which apparently sunk after a bunch of snarky reviews from commentators, not commenters. One such review in the New York Times has Denby sorting his snark from his hate speech. Irony doesn't count as snark,

But “hate speech” isn’t snark either, Denby writes, because it aims to “incite,” not get chuckles, and because it’s “directed at groups,” not individuals.

Snark is a kind of humour used to ridicule individuals, mostly high profile ones, so it's a kind of levelling mechanism in the toolkit of tall poppy syndrome.

So on one hand we have high profile individuals politely suggesting that groups, photographers, internet users and commenters are bad, but hate speech is bad because it's directed at groups and aims to incite. On the other hand it's bad for members of the groups in question to personally abuse said high profile individuals because that's playing the man and not the ball, so doesn't count as proper debate.

I liked Henson's photos, use the internet and enjoy snark. I resent the implication that that makes me a kiddy fiddler and unfit to participate in debate. Groups may be suggesting these things about people like me and so might commenters, but commenters don't expect to get away with it unchallenged just because they're articulate public figures. You say it, you own it, no matter how multi-syllabic or plausibly deniable your argument.

Faris and Hamilton both have a case when it comes to the worst kinds of personal abuse, and to be fair, Faris does point out that that's his major concern, but the broader argument about the erosion of quality in public debate now that the masses can join in needs a bit more thought.

What is being said can't realistically be corralled off from who is saying it, which is at the heart of the dog whistle and man/ball arguments. 'I have a dream' wouldn't be at all significant if some blog commenter said it. Neither would 'art galleries and the internet are brimming with paedophiles and commenters are mindless scum'. We could not have had our sad approximation of the culture wars, a series of brawls between a handful of public figures, if things were otherwise.

Posted by Lyn Calcutt at 10:35 AM | Comments (6) | TrackBack

March 6, 2009

Murray-Darling Basin: cooperative federalism?

Finally SA says that it will legally act on the decline of the Murray River caused by over allocated water licences and the protection of irrigation industry by state governments. This picks up on the way that the Rudd Government's co-operative federalism and the national management of the river system is under threat by the current action of the states. Lawrence Springborg has suggested that a Liberal National Party government would pull Queensland out of the deal should it win the state election on March 21.

South Australia is now saying it will go to the High Court to force states upstream to release water and pay damages under section 92of the Constitution. This targets Queensland, NSW and Victoria over water trading restrictions and SA will use the law to force them to release permanent water flows into the river and to seek damages for the harm caused by SA.

The specific target is Victoria's insistence on a cap for licensed water trading out of its jurisdiction, even though this is to rise from 4 per cent to 6 per cent this year under the COAG deal. Victoria's refusal to abolish the cap for another four years was a "barrier" to rescuing the river. It is also a barrier to interstate trade Victoria argues that easing the cap on permanent water trading out of irrigation districts would destroy farming in Victoria.

Jamie Walker in The Australian says:

Right back to square one, with the nation's greatest river system dying and the premiers bickering over who should control what remains of it.....Rann's nakedly cynical gambit makes a mockery of Rudd's co-operative federalism and should be called for what it is: an exercise in the parochial, petty politics that were supposed to have been taken off the table when the states agreed to refer their powers over the Murray-Darling to a new, commonwealth-backed authority and trouser the billions Canberra threw at them.

Pressure does need to be applied as the Rudd Government has done a deal with Victoria and tacitly supported the artificial barriers imposed on water trading.

Posted by Gary Sauer-Thompson at 6:25 AM | Comments (3) | TrackBack

March 5, 2009

Pakistan wobbles

Pakistan is an unstable country due to political turmoil and unrest that looks to become a failing state. It is politically fractured and economically destitute, with a weak central government. The country is isolated and in danger of imploding. It has a military, which as Tanveer Ahmed points out in the Sydney Morning Herald, has fostered Islamic groups:

A large share of responsibility for the current chaos must be put at the door of Pakistan's army and its Inter-Services Intelligence, or ISI. For more than 20 years, the ISI has deliberately and consistently funded a variety of Islamist groups, including Lashkar-e-Taiba, the group most likely to have co-ordinated the Mumbai bombings. The agency has long seen the jihadists as an ingenious and cost-effective means of controlling Afghanistan (which occurred with the retreat of the Soviets) and bogging down the Indian Army in Kashmir (achieved from the early 1990s).

Washington,is more concerned about defeating the Taliban and al-Qaeda in Central Asia than preserving the shell of a democratic system. The rise in cross-border attacks by US forces using Predator drones armed with missiles has further alienated tribal leaders and encouraged radicalisation in the north-western tribal areas dominated by Pakistani Taliban groups. So it is even possible that the attack in the Pakistani city of Lahore on a convoy carrying Sri Lankan cricketers was carried out by disgruntled Punjabi militants trained by the Inter-Services Intelligence,

Will the financial crisis heightens the risk of global terrorism? If militants thrive in places where no one is fully in charge, then the global recession threatens to create more such places especially in Pakistan. Ian Bremmer says that Pakistan:

is a country that is home to lawless regions where local and international militants thrive, nuclear weapons and material, a history of nuclear smuggling, a cash-starved government, and a deteriorating economy. Pakistan is far from the only country in which terrorism threatens to spill across borders. But there's a reason why the security threats flowing back and forth across the Afghan-Pakistani border rank so highly on Eurasia Group's list of top political risks for 2009 -- and why they remain near the top of the Obama administration's security agenda.

Pakistan could prove to be more of a danger to global peace and security in the long run than Afghanistan, because of its nuclear weapons and its highly politicised and Islamicised secret service, the Inter-Services Intelligence agency (ISI).

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March 4, 2009

nationality, energy + the global economy

The big miners, who once talked in terms of an eternal boom ensuring an Australian utopia, are now turning to Chinese capital in the form of direct investment to help them pay their debts in the face of falling demand for their products. The headline example is Chinalco's proposed $A30 billion investment in Rio Tinto that would give Chinalco an 18% shareholding in Rio. Chinalco's investment has to be approved by the Treasurer, who needs to consider whether the national interest will be harmed by the Chinese Government owning important Australian resources.

The context of this is the contraction of the Australian economy into recession and, with the global economy increasingly entering negative territory, that contraction or downturn will continue for some time to come.

Since the already deep US recession seems to be worsening as house prices and car sales continue to decline, the question is how severe will the contraction be and what will be its duration. That depends on the United States finding a new foundation for a resumption of growth, and that in turn, depends on its banking problems being resolved.

This turn to China is no different from the past in the sense that Australia has always depended on foreign capital to fund our capital expansion. Instead of the British, Americans, or Japanese, it is now the Chinese. Will the judgement about Chinalco's investment in Rio Tinto be judged in terms of needing to address climate change. Delaying until the rest of the world signs up to an international agreement would see us miss opportunities, as we have done already with areas such as renewable energy where other countries have stolen a march.

It is unclear whether the context means that energy is included in national security. It is the fossil fuel energy companies and the miners who write Australia's energy policy. Does the national interest include reduce carbon emissions as a goal, the need for cleaner energy and conservation technologies and environmental sustainability? Not according to the The Department of Resources, Energy and Tourism, which basically agrees with the miners in taking a denialist position on global warming.

These days it is unclear what the national interest actually means. Is it enlightened self interest of a nation state? So we have the tensions between sovereignty, national interest, and enlightened self-interest. Are concepts of sovereignty and national interest changing their meaning within the global economy and global warming? Enlightened self-interest means accepting shared sovereignty and multilateral commitment.

In contrast, the denialists work with both a narrow definition of the national interest and then reduces to that to assert the primacy of the interests of the coal-fired power stations and heavy energy issues.

Posted by Gary Sauer-Thompson at 6:22 AM | Comments (5) | TrackBack

March 3, 2009

media: the amateur returns

In Choice for local newspapers: evolve or die in the Financial Times Roger Parry says that with the web a working reality, the old advertising income is never coming back to print. The standard response to meltdown--eg., at Fairfax---is a ruthless cost-cutting that does more of the same, more cheaply. Well not quite the same, as Fairfax is increasingly shifting to infotainment on the 24/7 website. In doing so they give up their gatekeeping role in the agora.

Parry argues that something dramatic must happen to make community media franchises viable, such as strong weekly paper – in effect a print-out of the best content from a well-resourced 24/7 website. He adds:

Journalists are often busy doing things the audience no longer want. The traditional professional output is no longer valued by readers. Much, but not all, of local news gathering, feature production and photography are better done by enthusiastic amateurs for next to nothing. Want a critique of local rubbish collection policies? Ask a local resident for 500 words. It matters to them and they are more connected than a journalist sent over in a taxi. Want passionate reporting of local sports? Ask the fans. There will remain a vital role for trained journalists in investigations, analysis and quality control. But it will need fewer of them. They will need new skills of assembling user-generated content including video, digital pictures and audio.

This is a different way of doing business. In Australia it is exemplified by Crikey's use of, and reliance on, user generated content. The amateur returns. What then?

Why just produce work for the local tabloid? The produsing amateurs set up their own weblogs, websites and photoblogs, thereby creating more diverse voices in, and in turn, revitalizing the agora. And so we have stepped into the world of the creative industries and innovation and the shifting of policy in the creative industries beyond traditional industry development in areas like media or advertising to look at creative inputs right across the economy.

It is innovation policy not old‐style cultural policy that presents the compelling challenge for government.

Posted by Gary Sauer-Thompson at 7:31 AM | Comments (2) | TrackBack

March 2, 2009

ETS: design flaws

The Nicholson cartoon below expresses the great fear that is at the rhetorical core of the coal industry's resistance to an emissions trading scheme (ETS) The mining sector's everlasting hope that China's stimulus package will save us and everything will be alright, even though China is the largest trade surplus country in the world and it is trying to increase its trade surplus in spite of collapsing world demand,

Jobs jobs jobs is the way the coal industry spins their resistance, even though a 5 per cent target in emission reduction will do little for Australia's environment, and it is fixed until 2020. Nor can the Rudd Government easily adjust the target. The political and economic reality is otherwise to the cartoon:

Nicholson

The reality is that the voluntary actions of citizens in putting solar panels on their houses to reduce their carbon footprint merely frees up capacity for big polluters to pollute more. Not only will there be no additional emissions reductions from our voluntary efforts--the cap is fixed--- but there will not even be a price inducement to encourage big polluters to pollute less.

As Richard Dennis states in The Australian:

However, in order to take advantage of every additional emissions reduction and allow every concerned citizen to make a direct contribution, the Government needs to convert its "cap and trade" scheme to a "cap and slice" scheme, whereby the number of pollution permits is reduced each year directly in line with the amount of pollution saved by voluntary action. This will ensure that the efforts of people such as Joe and the voluntary actions of all sectors of the Australian community are recognised and useful.

So the Rudd Government's emissions trading scheme (ETS) has a design flaw---it does not have a process inbuilt reduction that recognizes voluntary actions. The Rudd government does not have a good track record on encouraging solar panels for households.

We face two crises: a deep global financial crisis, caused by inadequate management of risk in the financial sector; and an even deeper climate crisis. This provides a window of opportunity to act on the financial crisis and to lay the foundations for a new wave of growth based on the technologies for a low-carbon economy.

However, the country seems to have gone into drift mode, waiting for the tidal waves of the American Depression to roll over the coastline, unsure of how to link the short term to the long term. There is a hesitancy to repudiate the crasser elements of the mining boom years (the miners are the economy) and an unwillingness to act on the promise to invest in green technologies and public transport. Though there is action on investing in affordable, energy efficient homes, it's a dazed and confused period.

Posted by Gary Sauer-Thompson at 6:45 AM | Comments (6) | TrackBack

March 1, 2009

gloomy times

So the global economic crisis has finally hit Australia. All the rhetoric about Australia being an exception --uncoupled from the world!--could not hold the negative economic flows from the collapse in Asian exports over the fourth quarter 2008 at bay. Of course, they--the King Canutes--- are still around saying the good times are just around the corner as Australia is just experiencing a hiccup (or adjustment) in the smooth functioning of the market.

Matt Golding

Beware the greenies say the free market shrills, for they are holding the economy to ransom to save the planet from global warming. Meanwhile in the real world there isn’t much evidence that Asia is going to help pull the rest of the world out of its slump. Asia’s sharp deceleration implies it is adding to the forces that are pulling the global economy into recession, not propping it up.

According to Brad Sester China’s low-tech exports — shoes, textiles, toys, furniture — have held up and are doing and are doing (relatively) well

Posted by Gary Sauer-Thompson at 9:05 AM | Comments (14) | TrackBack