The real bullies


A Brisbane 13 year old committed suicide last week because, according to his mother, he was being bullied. He identified as being gay and apparently was being bullied at school. Rather than join the chorus of those who instantly know what was going on and speculate for a week or so until something else comes along, how about we look at the culture that seems to be genuinely regretful when a tragedy such as the death of a Brisbane school boy occurs but votes for and allows much greater crimes against our society to be celebrated.

Prime Minister Turnbull appeared on the ABC’s 7.30 a few weeks ago and left no one in doubt that in his opinion the ‘elite media’ at the ABC was keeping the issue of Section 18C of the Racial Discrimination Act in the public view. Now Section 18C is the bit of the legislation that doesn’t allow you to ‘offend, insult, humiliate or intimidate’ someone based on their race or ethnicity . The Institute of Public Affairs (IPA) has been a leading light in the calls for this section to be repealed since radio announcer and newspaper columnist Andrew Bolt was found guilty of an offence under the section in 2013 in regard to two articles he wrote in 2009. The IPA claims that Section 18C restricts ‘freedom of speech’. According to the IPA:
First, it has become a major touchstone for a growing debate about freedom of speech in Australia. Since the Bolt case in 2011 there has been a sustained campaign in favour of repealing 18C. This campaign was partly born out of the deep concern about the provision being used to silence a prominent and well-respected columnist in a mature liberal democracy such as Australia.

But it also brought to the fore the idea that governments have passed laws which restrict this most fundamental human right, and that something must be done to turn back that tide.

Second, political activists and their lawyers have come to realise that section 18C can be used to aggressively pursue political goals.

The case against Bolt was not merely a group of offended individuals making a legal complaint in an effort to remedy personal loss. It is possible that the complainants could have made out a defamation suit against Bolt. But the case was pursued using 18C as a battering ram because of the negative perception that would be created by a breach of the Racial Discrimination Act.
The problem with the IPA’s (and by association Turnbull and his conservative LNP colleagues) argument is the existence of Section 18D of the Racial Discrimination Act. According to the Human Rights Commission website:
Section 18D of the Racial Discrimination Act contains exemptions which protect freedom of speech. These ensure that artistic works, scientific debate and fair comment on matters of public interest are exempt from section 18C, providing they are said or done reasonably and in good faith.
In the same week as the schoolboy died in Brisbane, Australia’s Immigration Minister claimed that his predecessors (ironically from the same side of politics) in the 1970’s did the wrong thing by allowing refugees from Lebanon to enter the country because some of their grandchildren were now radicalised Muslims. According to news.com.au, Dutton made the argument:
Australians were “sick” of over the top political correctness, the Minister told media after a Greens Senator said his comments might be factual but they weren’t “productive”.

Mr Dutton rejected suggestions his comments were whipping up racism.

Instead, he blamed the “tricky elite”, Opposition leader Bill Shorten and Greens MPs for making the remarks a big deal to win political points.

“I want to have an honest discussion,” he said.
Dutton may have evidence to back up his original claim:
The advice I have is that out of the last 33 people who have been charged with terrorist-related offences in this country, 22 of those people are from second and third generation Lebanese-Muslim background …
But he conveniently overlooks the fact that every person charged with a crime in Australia since 1788 is either an immigrant or descended from immigrants. As news.com.au reported:
Opposition Leader Bill Shorten issued a statement calling on Mr Dutton to apologise for his remarks.

“Enough is enough,” Mr Shorten said.

“Our hardworking migrant communities shouldn’t have to tolerate this kind of ignorant stupidity and he needs to immediately apologise.

“It’s time for Malcolm Turnbull to show some leadership and pull his Immigration Minister into line.”
Shorten is right to a point: enough is enough and Turnbull should pull his Immigration Minister into line; however, Shorten’s political party still supports the indefinite detention of refugees in sub-human conditions, or their refoulment to their original country, contrary to the 1951 Refugee Convention (to which Australia is a signatory). Shorten is sitting on both sides of the ‘barbed wire’ fence here.

What is really interesting, however, is Turnbull and Dutton using the term ‘elites’ as an insult. According to the Merriam-Webster dictionary, elite has two definitions, although it is doubtful if Turnbull and Dutton are referring to the one involving typewriters. So we are left with one definition — broadly, the best part or the socially superior. Others have already done the Turnbull is ‘more elite’ than you or I thing seriously or in fun than it’s possible to do here, so it’s not worth repeating the blindingly obvious.

While Dutton may not as be as well off as Turnbull, he’s not going to be ‘short of a bob’ as he gets older — unlike a lot of those in Dickson he claims to represent. Dutton will be sitting on a parliamentary pension when he leaves parliament as well as his superannuation as a police officer (for which of course he has to wait until his late 50s or 60 to access, along with the rest of us) rather than eking the increasingly hard to get pension out until the next payment.

Paul Bongiorno, writing in The Saturday Paper suggested:
Whatever way you cut it, Australian politics in the past week travelled further down the low road of ignorance, prejudice and bigotry. It’s the new fashion propelled by the extraordinary success in Britain and the United States of politicians who push these buttons.

Immigration Minister Peter Dutton, already a practitioner in the dark arts, quickly took his cue in an interview with Andrew Bolt on Sky News. Bolt suggested that former prime minister Malcolm Fraser got the Lebanese refugee program wrong in the late 1970s. Dutton agreed “mistakes were made”. When parliament resumed, Labor wanted to know what these mistakes were. The answer was profoundly jarring.
Of course Dutton’s response was that a number of the people most recently charged with terrorist related offences were Lebanese Muslims, a failure of the Fraser Government. Bongiorno went on to suggest:
What should be remembered is that Dutton, who is fast becoming the leading conservative voice in the Liberal party, is a Queenslander. A clue to his approach could be the alarm at the spike in support for One Nation of which his fellow Queenslander, Attorney-General George Brandis, speaks. A hot microphone picked up his frank conversation with Victorian Liberal party powerbroker Michael Kroger this week. In what he thought were private remarks, Brandis revealed support for One Nation is already running at 16 per cent in the Sunshine State. He is convinced it will win seats at the next state poll.

In 1998, One Nation peaked at 22 per cent to capture 11 seats in the state parliament and deny the Nationals and Liberals government. Adding to the alarm is the Palaszczuk Labor government’s reinstatement of compulsory preferential voting. According to the sotto voce Brandis, this could lead to a split between the merged Liberal and National parties that form the LNP. The ABC’s election analyst Antony Green believes that had preferential voting existed at the last state election, Labor would have won a majority on Greens preferences.
Politicians playing politics is to be expected and both Turnbull and Dutton have been around long enough to be ‘good at their game’. However, as the leaders of the country surely they should be the moral elite as well as the financial elite. As Shorten suggested, Turnbull should have pulled his immigration minister into line. As Bongiorno wrote:
Fraser’s immigration minister, Ian Macphee, was scathing in his reaction to Dutton. In a statement released through the Refugee Council, he said the attack was “outrageous”. He said: “We have had a succession of inadequate immigration ministers in recent years but Dutton is setting the standards even lower. Yet Turnbull recently declared him to be ‘an outstanding immigration minister’. The Liberal Party has long ceased to be liberal.
From Turnbull, all we heard was crickets (nothing).

Not that the politicians are the only ones who seem to be practicing the ‘game’ of kicking groups of people while they are down. Fairfax reported in the last week of November that a number of Caltex franchisees seem to be paying their staff considerably under the award rate of pay for working all hours of the day or night in an environment that has a number of hazards to the physical and mental well being of the employees. Caltex isn’t the only organisation that has been accused of underpaying staff with, according to Fairfax:
One in four Australian workers who checked their pay through a union-run online wage calculator found out they were being ripped off, with staff in the restaurant business the worst affected.

Based on nearly 20,000 workers' pay details entered into the Fair Pay Campaign Calculator over three weeks, more than half of all restaurant industry submissions (60 per cent) showed staff were being denied minimum rates of pay.
And it gets worse:
"It's horrifying," said Maurice Blackburn employment principal Giri Sivaraman.

"It's horrifying to think that so many people across a wide variety of industries are getting underpaid.

"This isn't a case of a few bad apples — you can't isolate it to one type of job, one industry, or one employer — this is systemic wage theft, and it's just so widespread."

Another troubling result from the data related to employment in Australia's pubs and clubs, where nearly 92 per cent of casual staff who used the calculator to check their wages found out they were being underpaid.
Sivaraman is already assisting a number of people who were underpaid by 7-Eleven franchisees in the related scandal earlier this year.

It’s probably unfortunate for Caltex that they are a public company and under Australian listing laws, they operate in an environment of continuous disclosure. So we know their profit for 2014 was $493 million and the 2015 ‘record’ profit was estimated to be between $615 and $635 million at the time the Sydney Morning Herald reported in December 2015. Their franchisees and other smaller businesses (along with the corporate structure of 7-Eleven) have considerably fewer requirements for publicly reported financial results.

While Caltex is probably not responsible legally for the actions of its franchisees, it is responsible for the contracts it has with the franchisees and, as they have been in the industry for a long time, they should by all rights know the costs involved in the 24 hour a day operation of a petrol shop. In a similar way, 7-Eleven corporate should know the costs of running a corner shop or petrol shop. It seems on the face of it that either Caltex and 7-Eleven both charge the franchisees too much or the franchisees are greedy. Regardless, if you were a small shareholder in a large firm that was involved in underpayment of wages, you would have to be concerned at the senior management of the company who stood by and watched the business’s name be trashed due to taking advantage of those who could least respond to bullying and intimidation.

So how does all this relate to a Brisbane schoolboy who committed suicide?

According to the boy’s mother, he was bullied because he believed he was different to the ‘ordinary’. Regardless of the matter of the school knowing about the claims or acting on them, some of the students at the school seemed to think that it was acceptable practice to tease or bully someone who was ‘different’. Do you wonder where they got the idea that their actions were acceptable behaviour? Could it be they were following the behaviour of Turnbull or Dutton (or Abbott)? Surely the actions of big business of imposing conditions on contractors that conspire to ensure they cannot comply with Australian laws for the payment of staff while making a profit is also bullying.

It is a sad indictment on Australia, if at the same time as we rightfully decry bullying at schools and similar institutions, we allow our political and business elite (in the true sense of the word) to get away with bullying consumers of a certain media channel, grandchildren of migrants from the 1970’s or those who have to work in lower paying and (let’s face it) rather insecure employment.

Teenage boys who suicide should be mourned – and those that victimise or bully anyone should be called out. Pity our national elite seem not to think so.

If you or someone you know is suffering distress, please call Lifeline on 13 11 14.

What do you think?
Let us know in comments below.

Recent Posts
Let’s welcome President Trump
2353NM, 20 November 2016
Yes, you read the title correctly. Donald J Trump will be the 45th President of the United States of America after amassing more ‘Electoral College’ votes on 8 November 2016. It doesn’t matter that Clinton won the popular vote as the ‘Electoral College’ is where you need to outperform. The …
More...
Trump’s Uncertainty Principle
Ad astra, 23 November 2016
Way back in 1927 German physicist Werner Heisenberg described the Uncertainty Principle that applies to quantum mechanics. It states that the more precisely the position of a particle is determined, the less precisely its momentum can be known, and vice versa. With apologies to …
More...
The rise of political staffers: how people disappeared from policy advice
Ken Wolff, 27 November 2016
In October Attorney-General Senator George Brandis got into a stoush with Solicitor-General Justin Gleeson which ultimately led to Gleeson’s resignation. At one point Brandis attempted to turn the issue into an argument about what constituted …
More...

The rise of political staffers: how people disappeared from policy advice

Australia represented by a prime minister and a staffer!

In October Attorney-General Senator George Brandis got into a stoush with Solicitor-General Justin Gleeson which ultimately led to Gleeson’s resignation. At one point Brandis attempted to turn the issue into an argument about what constituted ‘consultation’ but the real issue was that Brandis had decided his office should have control of what advice could be offered by Gleeson — Gleeson would not have been allowed to provide advice unless the request for advice was first approved in Brandis’ office.

The Solicitor-General acts as the first counsel of the commonwealth and in 2013 and 2014, appeared in matters involving constitutional law, extradition, migration, native title, trade practices, taxation, corporations, customs, international arbitration and criminal law.

Section 12 of the Law Officers Act 1964 sets out his/her functions:
The functions of the Solicitor General are:
  1. to act as counsel for:
    1. the Crown in right of the Commonwealth;
    2. the Commonwealth;
    3. a person suing or being sued on behalf of the Commonwealth;
    4. a Minister;
    5. an officer of the Commonwealth;
    6. a person holding office under an Act or a law of a Territory;
    7. a body established by an Act or a law of a Territory; or
    8. any other person or body for whom the Attorney General requests him or her to act;
  2. to furnish his or her opinion to the Attorney General on questions of law referred to him or her by the Attorney General; and
  3. to carry out such other functions ordinarily performed by counsel as the Attorney General requests.
Part (b) does not rule out independently providing advice to people listed under (a) but simply specifically spells out that the Solicitor-General must provide advice when requested by the Attorney-General. While Brandis as Attorney-General is the ‘first law officer’ of the land, his decision to effectively control what advice Gleeson could provide, and to whom, clearly has political implications and that comes about largely through the number of political staffers who now occupy ministers’ offices.

Paul Grimes, Secretary of the Department of Agriculture, resigned in March 2015 after a letter to his minister, Barnaby Joyce, that questioned the minister’s integrity. It arose from an incorrect statement Joyce had made to the House. Joyce quickly corrected his statement (on the same day) but the issue was that changes were also made in Hansard to Joyce’s original incorrect statement. Joyce blamed a ‘rogue’ staffer. It is standard procedure that parliamentarians are allowed to amend draft Hansard records but this is meant to be primarily for grammatical and similar errors — in other words, just tidying up their sentences. It is not meant to allow substantive changes to what was originally said. As in Barnaby Joyce’s case, errors of fact are corrected by an additional statement to the parliament.

I can certainly imagine that a junior staffer may have been given the task of ‘tidying up’ the minister’s statement in the draft Hansard and taken that a step too far. The question, however, was whether or not the minister knew, or had even directed, that the substantial change be made. Grimes’ letter suggests that he thought Joyce was directly involved. Even if not, Joyce should at the very least have accepted responsibility for what was done in his office because the changes would certainly have been cleared by a senior person in the office (as would have been done in the public service, so that such a change would never have seen the light of day).

The Joyce episode shows the modus operandi of political staff in ministers’ offices, where protecting the minister is always the first priority. A classic example was the ‘children overboard’ affair. Staffers in the office of then Prime Minister Howard kept from him the public service advice (from the Department of Defence) that the original interpretation of events, that refugees were throwing their children into the water, was wrong. That allowed ‘plausible deniability’. Howard could truthfully claim he had not lied because he was not advised of the new information — his staffers had made sure of that!

Although the people in ministers’ offices are often simply referred to as ‘staffers’, as a former public servant I take the view that for the most part they are ‘political staffers’ — they are both appointed politically and provide politically oriented advice. Their first allegiance is to their minister and their primary role is to protect him or her and ensure their minister is presented in the best light (they use ‘spin’). Their increasing role since the 1990s has to a significant extent overtaken the advisory role of the public service. The old system was not perfect but neither is the new system.

Historically the public service provided ‘frank and fearless’ advice to ministers. That was possible for a number of reasons. One was that departmental secretaries had permanent tenure. There are arguments for and against that but in its favour was that secretaries could give advice a minister may not like and not feel vulnerable for having given it. Secondly, for a long time departments saw their major client as the people for whom they had portfolio responsibility — during my time in the public service that was, for the department and agencies in which I worked, Aboriginal and Torres Strait Islander people — which meant the advice often provided to a minister was intended to assist those ‘clients’, not necessarily the minister. I can’t recall exactly when, but around 1990 that began to change with public servants being told their primary responsibility was to the minister and yet this at a time when political staffers, already with a primary responsibility to the minister, were growing in number and power. Thirdly, ministers’ offices were originally staffed by public servants from the minister’s department, many just undertaking administrative and secretarial tasks. But there was usually a departmental PPS (Principal Private Secretary) to the minister whose major role was as a conduit for two-way advice flowing between the department and the minister. They were usually up-and-coming relatively senior people and that PPS role gave them insight into the political requirements of a minister’s office, which stood them in good stead for future promotion. I had a boss during my time who undertook that role and he was later often consulted by the departmental secretary on the political implications of advice we were proposing and/or a political strategy we may need to pursue to have it accepted. So it wasn’t as though the public service ignored political ramifications but, at the time, saw them as of lesser importance than ‘sound’ advice. And after weighing the advice, or even ignoring it, the minister always had the final say.

All that changed.

It was Paul Keating in 1994 who did away with permanent tenure for departmental secretaries. He was of the view that the public service should pay more heed to ‘the will of the government’. No doubt Labor’s history contributed to that view. When the Whitlam government was elected in 1972 it inherited a public service that had known nothing but Coalition governments for 23 years. For that reason Whitlam and his ministers did not trust the public service. It could be argued that the Whitlam government may have lasted longer if it had taken more notice of public service advice but, on the other hand, that may also have slowed its reform agenda. And when the Hawke government was elected in 1983, the public service had had Coalition governments for 31 of the past 34 years — not something to instil confidence in the public service for a new Labor government.

Keating’s changes paved the way for Howard, after 13 years of Labor governments, to wield the axe when he was elected in 1996. He removed six departmental secretaries, or a third of the total number at the time. If they did not already know it, secretaries were then made well aware that their job depended on providing appropriate advice, not frank and fearless advice. Rudd did not remove any when elected in 2007 and Abbott kept it to only three on his election in 2013. While the public service has often been criticised by government ministers, of all political persuasions, for being ‘risk averse’, the uncertainty regarding the security of secretaries was only likely to make that more so.

At the same time the number of political staffers was on the rise. During the Howard years, from May 1996 to May 2006, the number of ministerial staff increased from 294 to 445. On AIMN Kaye Lee also quoted another set of figures from Adam Creighton (in The Australian’s ‘Business Review’ of June 2014) that from 1984 to 2014 the number of staff for federal parliamentarians had more than doubled to 590 — including about 420 for ministers and 88 for the opposition (which is traditionally given 21 per cent of whatever the government has). On top of that there were 925 electorate staff whose main task is ensuring the re-election of their member of parliament (including ministers) — so that is another political role. A minister then has three key sources of advice, his political staffers, his electorate staff (who can also provide information on local community views) and the public service but two are definitely political and the third, the public service, has become more political in recent years. Of course, lobbyists also come into this as another source of ‘advice’ although it comes from a clearly partisan and self-interested perspective.

At the start of his prime ministership, Howard restructured the prime minister’s office, creating his own Cabinet Policy Unit (CPU) of political appointees. He also made the Secretary to Cabinet a political position whereas previously that role had been filled by the Secretary of the Department of Prime Minister and Cabinet.

Turnbull has an advisory structure in his office that includes five main areas: international affairs, including foreign and national security policy; social policy; climate, water, infrastructure and cities policy; innovation and higher education policy; and economic policy. He did, however, appoint a public servant as his Chief of Staff, which was an acknowledgement of previous practice.

Since the Keating years, the prime minister’s office has grown from about 30 staff to over 50. Other ministers have between 10 and 20 staff on average.

While policy may still be determined by Cabinet and ministers, advice now comes from many sources and is generally interpreted by the political staffers before it lands on a minister’s desk. Even advice from the public service that implementation of a policy may create problems can often be ignored in favour of advice from political staffers that the policy may be a ‘political winner’.

There is no need to revisit the history of Peta Credlin in Tony Abbott’s office except to say that she portrays the ultimate power of a political staffer. She attended Cabinet meetings, advised Abbott on policy, controlled access and advice to Abbott and also exercised a degree of control over other members of Abbott’s party. Even many of those who supported Abbott thought that was a step too far.


The ‘children overboard’ affair showed one way in which these political staffers protect their ministers: politically damaging or risky information may never appear on a minister’s desk — they are basically deciding what information it may be ‘dangerous’ for a minister to know. Nowadays they also influence the advice the public service provides as advice will often not reach a minister unless it has been endorsed by the political staffers. I know from experience that, in some situations, public servants have virtually to negotiate with the political staffers what advice will go to a minister. What has advice come to when it has to be ‘negotiated’!

Operating that way, political staffers have even undermined ministers having the final say on policy issues. If ministers do not see appropriate advice, both pro and con a policy position or potential problems with implementation, how can they make a legitimate decision? Decisions simply become echoes of political views.

The Barnaby Joyce example shows, at the least, that political staffers may not fully understand parliamentary procedures (let alone public service checks and balances). Departments have people skilled in those procedures and processes of checking to ensure little goes wrong. At worst, it was an example of blatant over-riding of those procedures, whether by the minister or his office, all in the name of protecting the minister.

The Brandis situation exemplifies the efforts to politicise advice, no longer wanting independent or frank and fearless advice but only that advice suiting the political agenda or ‘the will of the government’, to use Keating’s words.

It seems to me that the changes that took place simultaneously within the public service and in ministers’ offices were the wrong changes at the wrong time. Surely the growth in the number of political staffers should have provided more scope, not less, for the public service to provide frank and fearless advice, leaving it to the political staffers to assess the political implications and advise the minister so that she or he could then make a balanced decision. Instead, the public service was also changed so that the advice it provided already took account of many of the political aspects. There seemed no one left who was considering the interests of the people for whom departments were responsible.

If voters are dissatisfied with politics, I suggest one reason is because most policy now is driven by politics rather than basic or frank and fearless advice about what may be good policy for particular groups of people. If both the public service and political staffers advising ministers now consider the minister is their most important ‘client’, it is little wonder that people feel left out. It is because they are!

What do you think?
Do ministers need as many as staff as they have when they also have whole public service departments to advise them?

Where does the balance lie between political advice and ‘frank and fearless’ advice?

Is Ken right in suggesting that the politicisation of policy advice has effectively removed people from the equation?

Let us know in comments below.


Recent Posts
Aaand it’s sold
2353NM, 16 November 2016
Housing affordability is perceived to be an issue in Australia. In some areas of Australia, the median price of a house is in excess of $1million and there is some justification in the common questions around how on earth can a young couple ever be able to afford a house in that market. There are a number of answers …
More...
Let’s welcome President Trump
2353NM, 20 November 2016
Yes, you read the title correctly. Donald J Trump will be the 45th President of the United States of America after amassing more ‘Electoral College’ votes on 8 November 2016. It doesn’t matter that Clinton won the popular vote as the ‘Electoral College’ is where you need to outperform. The …
More...
Trump’s Uncertainty Principle
Ad astra, 23 November 2016
Way back in 1927 German physicist Werner Heisenberg described the Uncertainty Principle that applies to quantum mechanics. It states that the more precisely the position of a particle is determined, the less precisely its momentum can be known, and vice versa. With apologies to …
More...

Trump’s Uncertainty Principle


Way back in 1927 German physicist Werner Heisenberg described the Uncertainty Principle that applies to quantum mechanics. It states that the more precisely the position of a particle is determined, the less precisely its momentum can be known, and vice versa. With apologies to Heisenberg and quantum physicists, the uncertainty principle seems to be a suitable metaphor for America’s President Elect.

Of all the nouns that could now be applied to the name ‘Donald Trump’, ‘uncertainty’ is the most plausible. Is there anyone who is prepared to make predictions with certainty about what Trump’s contribution to American and world politics might be?

Read these synonyms of ‘uncertainty’: unpredictability, unreliability, riskiness, chanciness, precariousness, unsureness, changeability, inconsistency, fickleness, hesitancy, doubt, vacillation, equivocation, vagueness, ambivalence, disquiet, wariness, chariness, skepticism, doubt, misgiving, apprehension, quandary, dilemma, reservation, query, and suspicion.

Read these antonyms: certainty, predictability, and confidence.

Are there any synonyms that do not apply to Trump?

In the June issue of The Atlantic, long before the presidential election, Dan P. McAdams, professor of psychology and the director of the Foley Center for the Study of Lives at Northwestern University, wrote The Mind of Donald Trump, a detailed appraisal of the psychological traits that govern Trump’s behaviour. It’s a long article that is well worth the time it takes to read it.

McAdams based his analysis of Trump on the five basic dimensions of human variability, which are pretty stable across a person’s lifetime (Trump is 70):

Extroversion: gregariousness, social dominance, enthusiasm, reward-seeking behavior

Neuroticism: anxiety, emotional instability, depressive tendencies, negative emotions

Conscientiousness: industriousness, discipline, rule abidance, organization

Agreeableness: warmth, care for others, altruism, compassion, modesty

Openness: curiosity, unconventionality, imagination, receptivity to new ideas.

Who would disagree that Trump exhibits hyper-extroversion and hypo-agreeableness? He seems to be low on neuroticism, but on the ‘conscientiousness’ scale he is high on industriousness, yet low on discipline; his minders had to endure his ill discipline on the campaign trail and on social media. His ‘openness’ is questionable. He is unconventional, but who is willing to predict his willingness to embrace new ideas?

McAdam analysed Trump’s traits in detail:
“Across his lifetime, Donald Trump has exhibited a trait profile that you would not expect of a U.S. president: sky-high extroversion combined with off-the-chart low agreeableness…

“A cardinal feature of high extroversion is relentless reward-seeking. Prompted by the activity of dopamine circuits in the brain, highly extroverted actors are driven to pursue positive emotional experiences, whether they come in the form of social approval, fame, or wealth. Indeed, it is the pursuit itself, more so even than the actual attainment of the goal, that extroverts find so gratifying. When Barbara Walters asked Trump in 1987 whether he would like to be appointed president of the United States, rather than having to run for the job, Trump said no: “It’s the hunt that I believe I love.”
McAdams asked his readers to: “Imagine Donald Trump in the White House. What kind of decision maker might he be?”

He concedes that it is very difficult to predict the actions a president will take:
"Research suggests that extroverts tend to take high-stakes risks and that people with low levels of openness rarely question their deepest convictions. Entering office with high levels of extroversion and very low openness, George W. Bush was predisposed to make bold decisions aimed at achieving big rewards, and to make them with the assurance that he could not be wrong…

“Like Bush, a President Trump might try to swing for the fences in an effort to deliver big payoffs – to make America great again, as his campaign slogan says.

“As a real-estate developer, he has certainly taken big risks, although he has become a more conservative businessman following setbacks in the 1990s. As a result of the risks he has taken, Trump can (and does) point to luxurious urban towers, lavish golf courses, and a personal fortune that is, by some estimates, in the billions, all of which clearly bring him big psychic rewards. Risky decisions have also resulted in four Chapter 11 business bankruptcies involving some of his casinos and resorts.

“Because he is not burdened with Bush’s low level of openness, Trump may be a more flexible and pragmatic decision maker, more like Bill Clinton than Bush: He may look longer and harder than Bush did before he leaps. And because he is viewed as markedly less ideological than most presidential candidates (political observers note that on some issues he seems conservative, on others liberal, and on still others non-classifiable), Trump may be able to switch positions easily, leaving room to maneuver in negotiations with Congress and foreign leaders.

“But on balance, he’s unlikely to shy away from risky decisions that, should they work out, could burnish his legacy and provide him an emotional payoff.”
It has been observed that Trump reads little. He relies on his gut feelings when assessing risks, even when the stakes are high.

In his article McAdams relates a story about Trump negotiating the purchase of an estate in Scotland to convert the dunes and grassland into a luxury golf resort. “The estate’s owner, Tom Griffin, recalls that Trump was a hard-nosed negotiator, reluctant to give in on even the tiniest details, but as Michael D’Antonio wrote in his recent biography of Trump, ‘Never Enough’, Griffin’s most vivid recollection of the evening pertains to the theatrics. It was as if the golden-haired guest sitting across the table were an actor playing a part on the London stage. “It was Donald Trump playing Donald Trump,” Griffin observed. There was something unreal about it.”

Donald Trump is an actor. He is a TV reality show star. He is accomplished at acting. A week after his election he has already retreated on several policy issues that were key to his success. It looks now as if Trump’s election rhetoric was an act to attract votes from the audience that he perceived would support him strongly: working, white middle class males resentful at having lost their jobs to overseas countries because of globalization and technology.

Let’s look at what’s become of some of his pre-election rhetoric.

The Mexican wall now might be made up in part by fences. There’s been no more talk of Mexico footing the bill.

The threat to deport some three million illegal Mexican immigrants is no longer a certainty, as it was pre-election. Who can guess how that threat will play out?

It seems now that ‘Obamacare’ will no longer be discontinued and replaced by Trump’s ‘superior scheme’. How much of it will survive? Will another scheme even be offered?

NATO now seems to be back in favour with Trump, and the nuclear threat that embellished his rhetoric has been toned down.

After Trump met Barack Obama, whom he had denounced repeatedly, he began to talk about seeking his counsel. His condemnation of Crooked Hillary and the criminal Clinton family has turned into words of admiration for what the Clintons have contributed, and there’s even talk of Trump seeking their advice. The threat of criminal prosecution and gaol for Hillary has evaporated, at least for now. Trump’s acerbic comments about several of his Republican rivals and colleagues have lost much of their acidity.

Already, predictions of what President Trump might do are proving problematic. Writing in the November 12-13 issue of The Weekend Australian, Paul Kelly warns: Beware of confident predictions about what Trumpism means once the man sits in the Oval Office. This is a classic Donald Rumsfield’s notion of ‘known unknowns’ – things we know we don’t know. The smartest people in the world are clueless about how Trump will govern or what he will actually do.”

Given that Trump is a consummate actor who can be whatever Trump he wants to be at any time, who can change like a chameleon from one policy position to the converse, how finely tuned are his political skills?

He certainly tapped into the prevailing anger and resentment of unemployed white males in the rust belt. Although it was a close election (Clinton won the popular vote), Trump captured 60% of the white male vote with his promises to fix their problems.

Paul Kelly wrote: “He has mobilized a new force in the country…the key was Trump's cunning in diagnosing the ‘personal grievances’ plaguing the American soul. Trump became a symbol – the fixer, the nostalgic agent, the man who shared your anger, and he depicted a political establishment rotten to the core. His victory revealed an America even more politically divided than we grasped, with its sense of moral compass smashed to pieces.”

So far Trump gets high marks in political acumen on the domestic front for winning what the pundits and polls said was unwinnable for him. But how will he fare on the international front? Nobody knows.

Kelly’s assessment is:
"Trump’s brazen capacity to impose parts of his agenda and ditch others should not be misjudged. Remember, Trump doesn’t play by the rulebook; he just tore it up and got rewarded.

“This is a time for calm and rationality. Anger at Trump’s election is as worthless as denouncing the American public. It is as true today as it was before to say Trump is unfit to be president. But it is counter productive because he is president. History keeps remaking our realities. And Trump, inexperienced in public life, must figure out how to keep remaking himself.

“If you believe that Trump’s agenda is a danger to the world – pretty much a statement of the obvious – then the only rational response is to engage, advocate and persuade.” This is how political leaders around the world should act…

“In truth, Trump is about to enter a steep learning curve. He will be more prepared to listen to friends and supporters, not patronizing leaders who think criticizing Trump will earn them electoral kudos at home. Trump, no doubt, will treat such leaders as mugs. You don’t need a doctorate in psychology to realize Trump is a vain man with a glass jaw likely to visit retribution on leaders and countries that opt for gratuitous insults.
[He is said to keep count of insults and slights and extract revenge later.]

“The most fascinating element in Trump, however, is his dual identity. There seems to be two Donald Trumps, thereby complicating how the new president will govern: the real Trump and candidate Trump.”
What motivates Trump?

Winning, success, admiration, praise and wealth top the list.

According to Barack Obama, Trump is pragmatic rather than ideological. Judging from his pre-election pronouncements, he seems not to have fixed policy positions, nor does he have many. In that case he might not find the ideologies of the conservatives and their hard right colleagues in the Tea Party attractive enough to underpin his policies when he gets round to formulating them.

Obama has reassured us that Trump is committed to America’s four international alliances, of which NATO is the most important. Former US ambassador to Australia, John Berry, in an interview on Lateline, indicated that Trump would likely honour the deal to take refugees from Nauru and Manus Island as the US alliance with Australia was so strong; Australia is “a great friend and great ally”. The ABC reported that Australia was Trump’s ‘poster boy’! Less reassuring is the talk of the US amassing a fleet to challenge China’s incursion into the South China Sea.

Trump’s commitment to the UN Climate Change initiative is more problematic. He regards all the talk of global warming as a hoax, ”created by and for the Chinese in order to make US manufacturing non-competitive”, and has threatened to cut US funding for the UN initiative. Should he do so, the UN efforts to restrict global warming to 1.5 degrees above pre-industrial levels would be severely frustrated. Chaos in the environmental arena would result. We can only hope his advisors will persuade him not to go down that dangerous track, and instead focus on renewable energy rather than his beloved fossil fuels.

Another contentious policy area is free trade. Trump is isolationist, and threatens to put up trade barriers in the form of high tariffs on imported goods, especially those from China. The Trans Pacific Partnership, which has only lukewarm support in America, seems doomed already.

On the economic front he talks as if he is a latter-day Ronald Reagan, intent on giving massive tax cuts – from 35% down to 15% – a move that would cut federal revenues by an estimated $9.5 trillion over a decade. He lauds Reaganomics, based as it was on trickle down economics, but as Saul Eslake points out, he ignores the fact that during Reagan’s presidency “the US Federal Reserve cut rates from 17.5 to 6 per cent, and the US debt-to-GDP ratio rose from 20 to 40 per cent.” Trumponomics will do no more to benefit the unemployed and lower income workers than any other iteration of trickle down economics has. His stated intention though to build massive infrastructure might.

Writing in The Weekend Australian about Trump, John Durie noted: “The magic wand is missing, as is some magic potion. No wonder, when asked, Australia’s financial regulators were unanimous in their warning that ‘it’s too early to tell what Trump will do’ ”

All the above leaves aside the fact that the US President Elect has many personal defects. To paraphrase what I wrote in Trump is just part of the problem:
"We can see from his words and actions that on the personal front he is an ugly misogynist and a womanizer, yet is disrespectful of so many of the women who have entered his ambit, women whom he regards as his property, to do with as he wishes. He labels as liars the continuing procession of women who have accused him of sexual predation, insisting that all these claims have been ‘proven false’, and that he will sue them after the election.


“We know too that he is a bully, and has a nasty streak that shows when he calls his opponent ‘Crooked Hillary’…labels her a ‘criminal’... calls her a liar, accuses her of ‘having tremendous hate in her heart’, attacks her over her husband’s alleged womanizing, and suggests she should be drug tested before their debates.”
It’s curious that these obnoxious attributes have attracted little comment since the election; commentators are now so concerned about the domestic and global consequences of a Trump presidency that they have faded into the background. Womanizing is one thing, but the prospect that he will propel the US and the world into chaos and conflict is what Trump observers are petrified about.

’Uncertainty’ makes for anxiety, apprehension, and fear. World and national leaders are afflicted, as are international bodies, defence analysts, economists, international and national bankers, business and industry bodies, unions, refugee agencies, advocates for women, pro-choice advocates, immigration and multicultural activists, and countless men, women and even children who are now even more uncertain about the future, the future of their nation, the future of the globe as it faces multiple challenges which world leaders seem unable to manage. To add to their anguish, they now have the burden of having to deal with a loose cannon leading the most powerful nation on earth. Understandably, uncertainty and fear are the prevailing emotions.

So much depends on those with whom Trump surrounds himself, and those to whom he listens.

Isn’t is astonishing that just one man has created this extraordinary global upheaval!



What do you think?
What is your assessment of how Trump will govern?

Let us know in comments below.

Recent Posts
Inequality is an invasive global cancer
Ad astra, 9 November 2016
Inequality has been the subject of several pieces on The Political Sword. They have focussed primarily on income and wealth inequality, which afflicts massive swathes of the world’s peoples, consigning them to constrained lives where poverty, underprivilege, disadvantage …
More...
Aaand it’s sold
2353NM, 16 November 2016
Housing affordability is perceived to be an issue in Australia. In some areas of Australia, the median price of a house is in excess of $1million and there is some justification in the common questions around how on earth can a young couple ever be able to afford a house in that market. There are a number of answers …
More...
Let’s welcome President Trump
2353NM, 20 November 2016
Yes, you read the title correctly. Donald J Trump will be the 45th President of the United States of America after amassing more ‘Electoral College’ votes on 8 November 2016. It doesn’t matter that Clinton won the popular vote as the ‘Electoral College’ is where you need to outperform. The reality is that close to 45% of the population used their democratic right of not voting for any Presidential candidate.
More...

Let’s welcome President Trump


Yes, you read the title correctly. Donald J Trump will be the 45th President of the United States of America after amassing more ‘Electoral College’ votes on 8 November 2016. It doesn’t matter that Clinton won the popular vote as the ‘Electoral College’ is where you need to outperform. The reality is that close to 45% of the population used their democratic right (in the US anyway) of not voting for any Presidential candidate. It’s easy to make the assumption that a lot of people either didn’t care, didn’t like the candidates or just couldn’t be bothered. Some of those may now be regretting their choice.

The internet is awash with articles by full time and citizen journalists telling us why Clinton lost or Trump won. To be honest, there is probably a grain of truth in a lot of the discussion. This isn’t another ‘we woz robbed’ or ‘wot went wrong’ monologue, history is history and Trump may last as President from 20 January 2017 to 20 January 2021 or beyond. Despite the apparently common theme in Australia that Trump is not a good thing, are we not seeing the wood for the trees here? Michael Moore of Bowling for Columbine and other documentary movies’ fame actually tipped not only that Trump would win the election last July, but which US states Trump would pick up:
You need to stop living in denial and face the truth which you know deep down is very, very real. Trying to soothe yourself with the facts — “77% of the electorate are women, people of color, young adults under 35 and Trump can’t win a majority of any of them!” — or logic — “people aren’t going to vote for a buffoon or against their own best interests!” — is your brain’s way of trying to protect you from trauma. Like when you hear a loud noise on the street and you think, “oh, a tire just blew out,” or, “wow, who’s playing with firecrackers?” because you don’t want to think you just heard someone being shot with a gun. It’s the same reason why all the initial news and eyewitness reports on 9/11 said “a small plane accidentally flew into the World Trade Center.” We want to — we need to — hope for the best because, frankly, life is already a s**t show and it’s hard enough struggling to get by from paycheck to paycheck. We can’t handle much more bad news. So our mental state goes to default when something scary is actually, truly happening. The first people plowed down by the truck in Nice spent their final moments on earth waving at the driver whom they thought had simply lost control of his truck, trying to tell him that he jumped the curb: “Watch out!,” they shouted. “There are people on the sidewalk!”
Moore suggested:
I believe Trump is going to focus much of his attention on the four blue states in the rustbelt of the upper Great Lakes — Michigan, Ohio, Pennsylvania and Wisconsin. Four traditionally Democratic states — but each of them have elected a Republican governor since 2010 (only Pennsylvania has now finally elected a Democrat). In the Michigan primary in March, more Michiganders came out to vote for the Republicans (1.32 million) that the Democrats (1.19 million). Trump is ahead of Hillary in the latest polls in Pennsylvania and tied with her in Ohio. Tied? How can the race be this close after everything Trump has said and done? Well maybe it’s because he’s said (correctly) that the Clintons’ support of NAFTA helped to destroy the industrial states of the Upper Midwest. Trump is going to hammer Clinton on this and her support of TPP and other trade policies that have royally screwed the people of these four states. When Trump stood in the shadow of a Ford Motor factory during the Michigan primary, he threatened the corporation that if they did indeed go ahead with their planned closure of that factory and move it to Mexico, he would slap a 35% tariff on any Mexican-built cars shipped back to the United States. It was sweet, sweet music to the ears of the working class of Michigan, and when he tossed in his threat to Apple that he would force them to stop making their iPhones in China and build them here in America, well, hearts swooned and Trump walked away with a big victory that should have gone to the governor next-door, John Kasich.
Moore also talks about ‘angry white men’ who can’t adjust to equality of race or gender, Clinton’s negatives, the Democrats who supported Sanders not necessarily supporting the Democrats eventual nominee with the same gusto as ‘their’ candidate and those who were always going to vote for Trump because doing so gives the royal finger to established politics.

And you know what, Moore is right. If you are a factory worker in Michigan who no longer has a job because the cars you used to make are now imported — or even a mining worker in the Hunter Valley or Central Queensland who has lost their job because of global markets either not requiring or finding a cheaper alternative to ‘their’ product — you too would think about destroying the system that on the face of it looks after itself, but not you.

Rightly or wrongly Clinton wasn’t a great candidate. Sure, she knew how the system worked and had the experience, as she has been a part of the system for a long time. Unfortunately, she also had made some decisions in the past that were marketed as demonstrating Clinton didn’t follow the rules when it didn’t suit her. The perception therefore is that she is there to look after herself, rather than the unemployed labourer or farm worker suffering because of changing economic circumstances.

So if you think that Clinton could refute Trump’s appeal, in the words of Moore:
… you obviously missed the past year of 56 primaries and caucuses where 16 Republican candidates tried that and every kitchen sink they could throw at Trump and nothing could stop his juggernaut.
Yes, from the other side of the Pacific, Trump is a xenophobe, narcissistic and seemingly will do what it takes to gather popularity. However, how about we look at this strategically?

Trump (and Hanson/Abbott in Australia, Farage in the UK and La Pen in France amongst others) is telling voters that if you vote for me, I will ‘fix’ your individual problem, be it health care, education, jobs, commodity prices or whatever else is the reason you are disaffected with the ‘political’ class. Trump has made that implied promise to something like 380 million people. Before he starts campaigning for his Presidential re-election campaign somewhere around 2019, he has to deliver on a lot of promises made to a lot of people. Given that it would be well-nigh impossible to understand the problems of a lot of the US population inside two years, there is Buckley’s chance of a solution being delivered. Let’s say that Trump ‘fixes’ imports, giving jobs back to the ‘rustbelt’ states that effectively elected him. Apart from the domestic replacements being more expensive and/or of lesser quality than the current import, imported products also have a supply line of distributors and resellers who would conceivably be worse off if the tap on imports is turned off. In a similar vein, a lot of those who rely on what are claimed to be ‘undocumented Americans’ to do the menial work around the home and so on would probably find themselves either doing the work or paying a lot more for a ‘documented American’ to perform the same tasks.

Trump has by implication promised to ‘fix’ the perceived personal problem of every person that has voted for him, as well as those who didn’t. It really doesn’t matter that there are a multitude of problems and, given all the good will in the world, some of the problems are so entrenched in the global economic system that they will never be ‘fixed’, Trump’s implicit promise is to ‘fix it’ and benefit all those US citizens who voted for him. When it comes time for other Republicans to challenge him for the 2020 nomination sometime in 2019, a lot of the disaffected that voted for Trump this time around will look at their individual circumstances and decide whether they are either worse or no better off. While Trump may not necessarily follow the usual political protocols, he can’t ‘fix’ everything he claimed to be able to manage in under 24 months. He is already ‘talking down’ his promise to cancel Obama’s Affordable Health initiative. Will these people (probably numbered in the hundreds of millions) accept Trump’s inevitable line that he is gradually turning things around? Or will they, to paraphrase a former Australian politician be waiting on the porch with a baseball bat?

We do have a precedent here. Campbell Newman came to power in Queensland promising to fix the state, and the people gave him a wallopingly large margin to do it (the Official Opposition, led by Annastacia Palaszczuk, could hold meetings in an eight-seater people mover and still have a spare seat). Newman instituted his vision of reform and not only did Palaszczuk form a minority government at the next election some two and a half years later, Newman lost his seat in the 89 seat Queensland parliament. You could also argue that the 2016 federal election result was a result of Abbott’s claims prior to 2013 that he would ‘fix it’ with a similar lack of actual ability to do so.

The beauty of Trump’s election is that from 20 January 2017, he is arguably the most important person in the world. The common belief is that if the US President says jump, the expected answer is ‘how high’. If Trump can’t make everyone happy in the next couple of years, do the Hansons and Farages of this world have any chance of doing so? In reality — probably not. Probably the easier question to ask is will every other political party in the world (apart from the ultra conservatives such as One Nation, UKIP, etc) be reticent about pointing out that Trump couldn’t fix it — so how on earth will Hanson, Farage or whoever else do better?

Trump in the view of a lot of people doesn’t deserve to be President because he worked outside the traditional rules of engagement. Rightly or wrongly, he convinced enough people in the right areas to trust him to deliver. While the jury is still out on the delivery of his promises, Trump is highly susceptible to claims that he is no better than the rest if each one of the implied promises he made to make things better for every American citizen isn’t happening by 2019. Trump will soon have in his command the established forces of the largest and most well-resourced democracy in the world to make the changes he considers necessary to the world’s political and economic systems. If Trump can’t do it (and the chances are he won’t in the minds of a lot of Americans) people like Abbott, Hanson and the other ‘like-minded’ people around the world have even less. Trump’s probable failure also should be concerning other political players who have been using similar arguments for a number of years — including Hanson’s One Nation Party.

Michael Moore managed to blitz the field with his tips for the 2016 US Elections. He still has one tip in play. As reported by Paste magazine, Moore appeared on American television on November 11, 2016:
During the sprawling 45-minute discussion, Moore said that he didn’t think Trump would last his whole term of office. Moore said:

This is why we’re not going to have to suffer through four years of Donald J. Trump, because he has no ideology except the ideology of Donald J. Trump. And when you have a narcissist like that, who’s so narcissistic where it’s all about him, he will — maybe unintentionally — break laws. He will break laws because he’s only thinking about what’s best for him.
In some ways, impeaching Trump would be a tragedy.

What do you think?
Let us know in comments below.

Recent Posts
Inequality is an invasive global cancer
Ad astra, 9 November 2016
Inequality has been the subject of several pieces on The Political Sword. They have focussed primarily on income and wealth inequality, which afflicts massive swathes of the world’s peoples, consigning them to constrained lives where poverty, underprivilege, disadvantage …
More...
Who invents this cruelty?
2353NM, 13 November 2016
In the past fortnight, the Turnbull Coalition government announced proposed legislation to ensure that each person on Manus Island or Nauru sentenced to the cruel and unusual punishment for no legal or moral reason since an arbitrary date in 2013, will never come to Australia. That’s never ever …
More...
Aaand it’s sold
2353NM, 16 November 2016
Housing affordability is perceived to be an issue in Australia. In some areas of Australia, the median price of a house is in excess of $1million and there is some justification in the common questions around how on earth can a young couple ever be able to afford a house in that market. There are a number of answers …
More...

Aaand it’s sold


Housing affordability is perceived to be an issue in Australia. In some areas of Australia, the median price of a house is in excess of $1million and there is some justification in the common questions around how on earth can a young couple ever be able to afford a house in that market. There are a number of answers to the question and there are also a number of inequities that are assisting to take house prices in ‘desirable’ areas out the reach of those who are not on a well above average income.

Most would attest that the choosing of a home either to rent or buy is not the stress-free experience that is portrayed in advertising for various real estate agents. For a variety of reasons, I have recently sold and purchased a home, which apart from the angst over someone paying me as much as possible and my payment of as little as possible, gave me a few insights into the current state of play in the residential real estate market.

In short, it is easy to believe that the real estate market is loaded against those who are younger, not earning that much (when compared to those who have been in the workforce for a while), with little or no deposit to contribute to the purchase of a house to call ‘their home’.

Generally, in Australia, the suburbs closer to the CBD in each capital city receive better services. There is a better variety of shopping centres, the public transport is usually better and more frequent, healthcare and education facilities are closer and accordingly easier to get to and so on. On the downside, there is a higher chance of living in a noisier environment with closer neighbours, more traffic and congestion.

Each member of the finance industry collectively spends a lot convincing you to borrow money from them rather than the mob down the road. What they don’t tell you in the glossy advertising is that if you have less than 20% of the purchase price of your future home, you will be required to pay mortgage insurance.

Normally an insurance policy paid for by a particular person will benefit that person. Mortgage insurance doesn’t. The ‘logic’ behind mortgage insurance is to pay out the financier of the home loan should the loan default. While the lender may get all their money back, the mortgage insurer is then out of pocket and chases the borrower. The insurance premium is frequently in the tens of thousands.

While there is probably some statistical reason for the requirement for loan insurance for those with what the finance industry considers to be a low deposit, it effectively penalises those who can’t for some reason save the ‘reasonable’ deposit for the area where they would like to live. The purchaser is then forced to live further away from the CBD, in an area with less services. Sooner or later pressure is applied to all levels of government for the services to improve further out from the CBD, applying upward pressure to taxes and charges so the improvements can be funded.

According to Realesate.com.au, the time it takes to save a deposit to purchase a ‘median priced’ house in each capital city varies according to the city, number of incomes and the earnings capability of the people involved. It could take in excess of eight years to save the 20% deposit to avoid the mortgage insurance. Don’t forget that while you are saving for the eight years, the house prices will go up as will your income. However, with housing prices in some areas rising faster than salaries and wages, is it any wonder that people decide that the occasional $22 smashed avo on bruschetta is more attainable? If you follow the advice in this ABC website article, you might actually have your avo while saving for the home of your own, but it isn’t guaranteed.

A considerable number of people saving for a house are renting somewhere while they ‘save the deposit’. Realestate.com.au listed the ‘cheapest five’ rental suburbs within 10km of the respective capital city CBD during October. Looking at the Brisbane suburbs listed on the website, the latter three generally have much better access to services than the first two, which probably accounts for the difference in price. So while paying generally in excess of $300 a week to rent a place to live, people have to find a way to put a similar or greater amount away to eventually buy a house.

Unfortunately the area with the cheapest rentals is not necessarily one of the cheaper areas to purchase in, leading to people either having to save a higher deposit or accept a reduction in nearby services when they choose to commence the process of buying a house.

That’s when you meet the real estate agents and the house sellers (better known as vendors). Real estate agents generally are paid on a commission basis. The seller of the property generally pays a certain percentage of the eventual purchase price to the real estate agent for the work they have put into introducing the purchaser to the property. In the past few months I have met some really nice people working as real estate agents and some that would sell their mother for five cents.

Observation would tell you that most real estate agents work out of offices with a number of other agents. As a result, you would think that if a customer of real estate agent ‘A’ is looking for a particular type of house that real estate agent ‘B’, who works in the same office had just been employed to sell, ‘A’ and ‘B’ would talk to ensure that the property owner and potential purchaser would be given an opportunity to sign a contract of sale. You might think it, but there is no guarantee of it happening as the usual arrangement would be that real estate agent ‘B’ would have to share his commission and may not want to do so.

Vendors have expectations of the price they want for their properties. These expectations could be related to what is needed to ‘move on’, what they have seen the house next door sell for, what the estate agent tells the seller the place is worth or some other completely rational (to the vendor anyway) process. It stands to reason that vendors want the highest price they can get as do the real estate agents (to maximise their commission payment). The next group don’t.

Purchasers are the people who drive around the area they intend to live in, traditionally on a Saturday morning, looking at houses that they can ‘live with’. Purchasers are usually limited by some financial impost, either the deposit they have available, ability to make the repayments on a loan or the need to keep some money aside to pursue some other goal.

The vendors employ the real estate agents to sell their property with the expectation that the agent has the requisite skills to achieve the highest price. The agent also wants to achieve the highest price, as it maximises the commission paid. Unfortunately, the purchaser wants to find a house for the lowest price. In an economic sense, the real estate market cannot be a completely transparent market as the agent and vendor are both attempting to achieve the highest price — only limited by the purchaser’s negotiation skills or the need of other vendors with similar homes who also want to sell their house at the same time.

The purchaser who is attempting to buy their first home is also up against the investor. Peter Martin, the Economics Editor for Fairfax’s The Age recently looked at what could be considered to be the constant battle between owner-occupiers and investors, noting the Reserve Bank’s comment in evidence to a recent enquiry: ‘It is a truism that if an investor is buying a property, an owner-occupier is not.’

According to Martin:
What matters for a tolerable retirement (far more than superannuation) is owning the home in which you live. If you do, the age pension is enough to get by on. If you don't, you have to pay rent. Morrison's own figures show we are condemning more and more Australians to retirements burdened by rent.
Liberal MP John Alexander started an enquiry into housing prices back in the day when Abbott was the prime minister and Hockey was the treasurer. The enquiry was allowed to lapse after the recent election but Alexander was moved on about a year prior to that.

Hockey’s Treasury Department made a submission to Alexander’s enquiry. In the words of Peter Martin:
Graph 13 in its submission shows that up until the end of the 1990s the median dwelling price stayed in a tight band of 2.5 to 3 times household after-tax income. Then in the space of three years it shot up to near four times after-tax income and has stayed there ever since.



What happened at the end of the 1990s? In September 1999, the government halved the headline rate of capital gains tax, making negative gearing suddenly an essential tax strategy. Whereas before, renting out a house at a loss for tax purposes had been mainly an exercise in delaying tax because the eventual profit made selling the property would be taxed at close to the seller's marginal rate, afterwards, with the profit taxed at only half the marginal rate, it became an exercise in cutting tax.
So those with a desire to cut their tax took the opportunity given to them on a plate by the Howard government and negatively geared a house. Howard used to claim that rising housing prices were a sign of a good economy. The problem is that the investors (and more recently those from overseas) are in a position to squeeze owner-occupiers out of the market by bidding up house prices. The vendors and agents are happy — they are getting more money at the time of sale; the investors are effectively and legally writing off tax they would otherwise have to pay; and those who are trying to get their foot in the door are priced out of the market. After all the areas that are attractive to owner-occupiers because of features such as services or the natural surroundings are also attractive to investors, as the same attractions are also valuable to renters.

Take it from me, buying and selling houses is not the easy process that is commonly suggested in the advertising from real estate agencies and financial institutions. It is apparently worse for someone who is buying a house for the first time — as discussed by Erin Munro on the Domain website.

Current treasurer Scott Morrison made a speech to the Urban Development Institute recently where he called on state governments to reduce artificial constraints on housing supply. While there are probably some constraints that do require attention, maybe Morrison should take care of his own backyard first. The ALP had a policy at the last federal election to reduce the benefits of negative gearing and capital gains tax for those who invest in residential housing — maybe they were on to something.

Peter Martin suggests:
Reinstating capital gains tax and imposing a land tax would help, as would building more houses. But there is something in our psychology that's doing it as well. We seem to want to push up the prices we complain about. Adding "supply" might do no more than give us something else to bid up.
Until some rationality is restored, if someone in your family wants to buy a first house, best of luck.

What do you think?
Let us know in comments below.

Recent Posts
The problem with conservative warriors
2353NM, 6 November 2016
A lot of employers place significant levels of trust in their employees. Retailers trust their employees to charge the customers the correct amount for the products they sell and put the money into the register; airlines trust that their employees are fit and mentally capable …
More...
Inequality is an invasive global cancer
Ad astra, 9 November 2016
Inequality has been the subject of several pieces on The Political Sword. They have focussed primarily on income and wealth inequality, which afflicts massive swathes of the world’s peoples, consigning them to constrained lives where poverty, underprivilege, disadvantage …
More...
Who invents this cruelty?
2353NM, 13 November 2016
In the past fortnight, the Turnbull Coalition government announced proposed legislation to ensure that each person on Manus Island or Nauru sentenced to the cruel and unusual punishment for no legal or moral reason since an arbitrary date in 2013, will never come to Australia. That’s never ever …
More...

Who invents this cruelty?


In the past fortnight, the Turnbull Coalition government announced proposed legislation to ensure that each person on Manus Island or Nauru sentenced to the cruel and unusual punishment for no legal or moral reason since an arbitrary date in 2013, will never come to Australia. That’s never ever; doesn’t matter if they want to visit the Great Barrier Reef before government lack of policy on climate change kills it off; doesn’t matter if the person is a famous actor, musician or movie star in their future life; doesn’t matter if the person is representing a country at the 2018 Commonwealth Games on the Gold Coast; and it even doesn’t matter if a current refugee on Manus Island or Nauru is a head of state in the future — they won’t be allowed to visit Australia (or only allowed to visit at the absolute discretion of the minister for immigration at the time).

Blatantly unfair, unreasonable and un-called for? — certainly. Unfortunately, we should be used to the Abbott/Turnbull government doubling down on the nastiness and sheer hate defined by their policy on refugees. The Abbott/Turnbull government will tell you that they are stopping the people smugglers from sending people on dangerous open sea voyages using equipment that is clearly not designed for the purpose. Immigration Minister Dutton claims:
What we don't want is if someone is to go to a third country, that they apply for a tourist visa or some other way to circumvent what the government's policy intent is by coming back to Australia from that third country.
The Abbott/Turnbull government has a problem. After being given a lesson in humanity by the Papua New Guinea High Court when it ruled that the detention camp on Manus Island breached PNG law, Turnbull has to find a place to house the 1200 or so people we as Australians have illegally imprisoned by various governments going back to the Rudd ALP government. Politically, the government can’t let these people come to Australia as the neo-conservative right wing of the Liberal and National Parties will head further towards the divisive policies of the ultra-right wing parties such as One Nation. As well as that, if the refugees were housed in (say) New Zealand or other countries in the South Pacific, the argument could be made that refugees could simply board a plane to Australia after they had residency in the third country. Logically you would have to ask why anyone that had been treated so poorly by others would ever want to ‘darken the door’ of their oppressors, but according to Dutton it is a concern. While yes, that is a hole in the current arrangements if those on Manus Island or Nauru are successfully integrated into a third country’s society, they might want to come to Australia at a later date, has anyone stopped to think what we are potentially losing by not standing up to the vindictive and xenophobic policies of successive Australian governments?

The Political Sword looked at the contributions made to our society by refugees in March 2014. We looked at Michael Gawenda, the ‘ten pound poms’ (which include Tony Abbott, Julia Gillard, the Gibb Brothers (aka The Bee Gees), Noni Hazlehurst, Alan Bond, Frank Tyson, Harold Larwood, and the parents of people such as Kylie Minogue, Al Grassby and Hugh Jackman), Tony Le Nguyen and Munjed Al Muderis. All the people listed in this paragraph have made a wonderful contribution to this country, and if the governments that supported and encouraged the immigration of these Australians had the same racist policies of the current government, we would live in a much poorer place.

This isn’t solely the view of this admittedly left of centre political blog, this letter was shared around on social media in the few days after Turnbull and Dutton announced their draconian policy.



Clearly, Dr Al Muderis makes a significant contribution to Australia and the world — as people fly to Australia from around the world just to see Dr Al Muderis.

Noni Hazelhurst, the Bee Gees and even Gillard and Abbott have also made a contribution to this country in their own sphere of influence. So why are we persecuting those that are attempting to become refugees in Australia in the twenty teens? While many were ridiculing (probably with some justification) ex-Prime Minister Rudd’s contribution to the debate at the beginning of the month, Rudd does have a few points that are worth considering. Rudd claims:
This is both bad policy and bad politics: on policy, the far right in Australia represent the worst of the xenophobic, nationalist and protectionist wave that we now see raging across Europe and America; while on politics, appeasement of political thugs like Abbott, Dutton, Abetz, Andrews and, depending on which way the wind is blowing, Morrison, only embolden the far right to demand more, not less.
And:
This measure is about the politics of symbols, designed to throw red meat at the right, including the Hansonite insurgency, and to grovel to the broad politics of xenophobia. Turnbull, once an intelligent, global citizen, knows better.
Rudd claims that Gillard (his successor and predecessor) changed his policy.
It sought to negotiate offshore processing arrangements with East Timor and later Malaysia. These failed. Then in August 2012, the government announced the reopening of offshore processing in Manus and Nauru. The government also increased the number of refugees we would take from the UNHCR "global pool" of refugees from 13,000 to 20,000. Nonetheless, in the first half of 2013, the UNHCR delivered reports criticising the treatment of refugees, which the government sought to respond to.
It is also claimed that when Rudd regained power he made significant changes to the agreement around refugees that Australia had signed with PNG, including a clause that the Manus Island camp would only operate for one year. Rudd’s opinion article concludes by stating:
I have kept silent on Australian domestic policy debates for the past three years. But this one sinks to new lows. It is pure politics designed to appease the xenophobes. It is without any policy merit in dealing with the real policy challenges all countries face today in what is now a global refugees crisis. And it does nothing to help those refugees left to rot for more than three years, who should be resettled now.
While a lot of the article by Rudd is an attempt to justify his own past deeds, he is correct to suggest that refugees are not solely an Australian ‘problem’ and, to be realistic, Australia’s ‘problem’ is insignificant on a global scale. Rudd is also correct that far right political groups around the world are attracting votes using issues such as protectionism, isolationism and blatant racism. The Guardian runs a series called ‘The Long Read’. Co-incidentally, on 1 November, it published an article in the series titled ‘The ruthlessly effective branding of Europe’s far right’.

As The Guardian suggests:
They have effectively claimed the progressive causes of the left — from gay rights to women’s equality and protecting Jews from antisemitism — as their own, by depicting Muslim immigrants as the primary threat to all three groups. As fear of Islam has spread, with their encouragement, they have presented themselves as the only true defenders of western identity and western liberties — the last bulwark protecting a besieged Judeo-Christian civilisation from the barbarians at the gates.

These parties have steadily filled an electoral vacuum left open by social democratic and centre-right parties, who ignored voters’ growing anger over immigration – some of it legitimate, some of it bigoted – or simply waited too long to address it.
The move to the far right is not just a problem in Europe or arguably part of the reason for Donald Trump’s nomination as President by the Republican Party in the USA. The New Yorker recently published a stinging takedown of Trump and the ultra-conservatives noting:
Trumpism does not seek simply to make a point and pass on its genes to more politically palatable heirs, nor is it readily apparent why he would need to settle for this. When George Will announced his departure from the G.O.P., last summer, he offered a modified version of Ronald Reagan’s quote about leaving the Democrats—“I didn’t leave the Party; the Party left me.” But a kind of converse narrative applies to Trump; he didn’t join the Republican Party so much as its most febrile elements joined him. Trump is partly a product of forces that the G.O.P. created by pandering to a base whose dilated pupils the Party mistook for gullibility, not abject, irrational fear that would send those voters scurrying to the nearest authoritarian savior they could find. The error was in thinking that this populace, mainlining Glenn Beck and Alex Jones theories and pondering how the Minutemen would have fought Sharia law, could be controlled. (For evidence to the contrary, the Party needed look no further than the premature political demise of Eric Cantor.) The old adage warns that one should beware of puppets that begin pulling their own strings.
Australia too has its extreme right wing claiming far more influence that they deserve.

Pauline Hanson stood as the Liberal Party candidate for the seat of Oxley in Queensland at the 1996 election and was dis-endorsed two weeks prior to the election due to some extremely ill-advised remarks made in the campaign on Aboriginal welfare. In her 1996 maiden speech in the House of Representatives, Hanson claimed that Australia was being ‘swamped’ by Asians. On the morning of Hanson’s maiden Senate speech last September, the ABC looked at her claim from 20 years ago and looked at the immigration figures from the 2011 census. It found:
By 2011, the proportion of people in Australia who were born in Asia had almost doubled to 8.08 per cent.

The proportion of people born in Australia fell from 73.93 per cent to 69.83 per cent — more than eight times the proportion of people born in Asia.
In addition, the ABC reported that:
James Raymer, head of the School of Demography at the Australian National University, said the incidence of Asian migration to Australia was hardly surprising, given our geographical location in the region and the sheer size of the world's Asian population.

"The whole Asian population represents 60 per cent of the world's population … Europe only represents 10 per cent of the world's population," he said.

"There's a lot of Asians in Europe, there's a lot of Asians in North America, a lot of Asians in Canada, and they've all been increasing."
Undeterred by her previous prediction falling somewhat short of the mark, when Hanson made her maiden speech in the Senate in September 2016, she warned Australia was at risk of being "swamped" by Muslims.

As far back as 2011, Fairfax media was questioning the racism of politicians such as Cory Bernardi:
Independent MP Andrew Wilkie should be applauded for his stand against racism in the Liberal Party and, in particular, the recent comments by Liberal senator Cory Bernardi, singling out Muslims for denigration.

Does Bernardi think that by demonising Islam he will win votes, and is Opposition Leader Tony Abbott tacitly approving this latest attempt to play the politics of hate so he can watch where it goes?

This is a disturbing insight into the thinking of some senior Liberal figures. It comes from a party that has, in turn, used fear of Muslim extremism to lead us into two wars and then used that fear to prevent the victims of those same wars coming to Australia.
The current hatred of refugees isn’t logical, moral or ethical — it is a part of a political race to the bottom of the ocean. Ultra-conservatives such as Hanson, Bernardi, Trump, Le Pen in France and so on are using the misery of fellow humans to improve the prospects of a political career and are manipulating the vulnerable and hard done by to do so.

In the 1970’s, Coalition Prime Minister Fraser and the ALP both supported the arrival of hundreds of thousands of South East Asian refugees who came to settle in Australia. While the policy at the time was not universally popular, the benefits to Australia in the long term have clearly outweighed any problems. On a logical basis, the policy was fair enough — we had been part of a coalition of armies that had bombed much of South East Asia in an attempt to stop the expansion of communism. It is now history that the Vietnam War was unsuccessful, communism didn’t expand and the refugees that came here have largely integrated into our society. So why the difference with those from the middle east? We are a part of coalition of armies that are bombing that area of the world to stop the rise of ISIS. Don’t we owe something to those that are the unintended victims of having their homes bombed back to the stone age?

In the 1950’s and 1960’s, successive Coalition Australian governments, with support from the ALP, supported the arrival of hundreds of thousands of Europeans who were displaced before or during World War 2. The photos at the top of this article are not recent, they are from social media and portray Europeans using whatever they can to emigrate to North Africa prior to Hitler’s Germany taking over parts of Southern Europe. What goes around comes around apparently. And as The Political Sword observed in September 2014, Jesus was a refugee.

What do you think?
Let us know in comments below.

Recent Posts
Statistics are people too
Ken Wolff, 30 October 2016
On 20 October, the ABS released its labour force survey data for September 2016. The media duly reported the drop in unemployment from an upwardly revised 5.7% for the previous month to 5.6% but most also picked up that this was largely a result of a drop in the participation rate, from 64.7% to 64.5%.
More...
The problem with conservative warriors
2353NM, 6 November 2016
A lot of employers place significant levels of trust in their employees. Retailers trust their employees to charge the customers the correct amount for the products they sell and put the money into the register; airlines trust that their employees are fit and mentally capable …
More...
Inequality is an invasive global cancer
Ad astra, 9 November 2016
Inequality has been the subject of several pieces on The Political Sword. They have focussed primarily on income and wealth inequality, which afflicts massive swathes of the world’s peoples, consigning them to constrained lives where poverty, underprivilege, disadvantage …
More...

Inequality is an invasive global cancer


Inequality has been the subject of several pieces on The Political Sword. They have focussed primarily on income and wealth inequality, which afflicts massive swathes of the world’s peoples, consigning them to constrained lives where poverty, underprivilege, disadvantage, and lack of opportunity has blighted individuals, families, communities, and in some instances, whole nations. Such inequality is divisive, disruptive and destructive to civilized society.

Recently we have seen the ‘inequality syndrome’ play out more strikingly and alarmingly as a metastasizing global malignancy that threatens to invade and destroy the very foundation of the harmonious social order we crave within societies, and more widely across national boundaries. Unless national and international immune systems can counter this cancer’s spread, we are doomed to ongoing discord, conflict, confrontation, warfare, and the death of our cherished institutions.

We don’t need to think back too far to remember Brexit and the reasons for it. And in the US we have witnessed a most unedifying display of the consequences of inequality played out during the long and distressing presidential election campaign.

Inequality is a global cancer that afflicts countless societies and billions of people. Chillingly, the cancer seems out of control. No one has the cure. We feel like the patient who has been told that nothing more can be done.

I will expand on this theme later, but for those who might not have been following the discourse on inequality on The Political Sword, in April there was Inequality will be a hot button election issue. Although Bill Shorten tried to make it so, Malcolm Turnbull and his Liberals were having nothing of that, so inequality was no more than a dark shadow in the background. Then in May there was Trickle down thinking breeds inequality that described standard neoliberal economic dogma that postulates that giving tax cuts to the top end of town will foster investment, grow jobs and increase wages. Although long ago debunked as zombie economics, it remains holy writ to conservatives, and is still being trotted out here and elsewhere.

The recent visit of French economist Thomas Piketty has heightened interest in inequality. In The Picketty divide Part 1, his basic theory is delineated: “
Piketty has a basic equation developed from tax data across a number of countries going back over two hundred years: r > g That is, the rate of return on capital (r) is greater than the rate of growth of income (g). Throughout the nineteenth century and up to World War I, that greater rate of return led to high levels of inequality, with wealth concentrated at the top. In periods of high inequality, the rich can hold capital up to seven times the value of total national annual income. Thus those with inherited wealth who invest their capital will become even wealthier, and will always outperform those on wages alone.”
Piketty’s views have been widely endorsed by economists, although not by neoliberal thinkers.

One reviewer of his book Capital in the 21st Century interpreted his thesis as follows: '…inherited wealth will, on average, “dominate wealth amassed from a lifetime’s labour by a wide margin. Wealth will concentrate to levels incompatible with democracy, let alone social justice. Capitalism, in short, automatically creates levels of inequality that are unsustainable.”'

For those interested in his work there was also The Piketty divide Part 2 and Piketty Un-picked.

Inequality has been a life-long interest of Nobel Laureate in economics Joseph Stiglitz, whose views were discussed in Focus on political ideology: Joseph E Stiglitz. In that piece there was a summary of Stiglitz’ thesis provided by Project Syndicate, an international not-for-profit newspaper syndicate and association of newspapers that distributes commentaries and analysis. It read:
America likes to think of itself as a land of opportunity, and others view it in much the same light. But, while we can all think of examples of Americans who rose to the top on their own, what really matters are the statistics: to what extent do an individual’s life chances depend on the income and education of his or her parents?

“Nowadays, these numbers show that the American dream is a myth. There is less equality of opportunity in the United States today than there is in Europe – or, indeed, in any advanced industrial country for which there are data.

“This is one of the reasons that America has the highest level of inequality of any of the advanced countries – and its gap with the rest has been widening. In the “recovery” of 2009-2010, the top 1% of US income earners captured 93% of the income growth. Other inequality indicators – like wealth, health, and life expectancy – are as bad or even worse. The clear trend is one of concentration of income and wealth at the top, the hollowing out of the middle, and increasing poverty at the bottom.

“It would be one thing if the high incomes of those at the top were the result of greater contributions to society, but the Great Recession showed otherwise: even bankers who had led the global economy, as well as their own firms, to the brink of ruin, received outsize bonuses.”
This brings me to the main thrust of this piece. Feelings of unfairness and inequality are corrosive. We see this the world over.

Take Brexit. There are many reasons why UK voters voted for Brexit, but prominent among them was opposition to immigration. Many British folk voted for leaving the European Union because they felt alienated from their own communities because of the influx of migrants from foreign countries. Some said they hardly recognized their local community when they walked down their main street because there were so many foreigners on the streets and in business there. They were angry that these people were taking their jobs, and more poignantly taking away their British way of life. They felt they were being left behind in their own country. Anguish is the genesis of their sense of dispossession and their feelings of inequality. Their anger persists to this day. The recent UK High Court decision that only parliament can trigger the activation of Article 50 that initiates exit from the European Union, has re-activated the hope among Brexit opponents that exit might be thwarted. Brexit supporters are furious.


All across Europe, in America, in Asia, and even in our own country, there are those who strongly resent asylum seekers and even invited immigrants arriving at their country’s borders. Pauline Hanson was unapologetic when she stridently asserted: “Refugees are not welcome here”. No doubt the quarter of a million who voted her in feel the same.

The resentment extends even to benign communities. Last week, citizens of Eltham, an outer suburb of Melbourne that is largely middle class, joined together to welcome government-invited Syrian refugees into spare accommodation in a local aged care facility. They initiated a ‘butterfly’ movement, festooning fences with welcoming words. To their surprise and disappointment, their peaceful suburb was invaded at the weekend by a group of protestors angry at the welcome being extended to these distressed refugees from that grotesquely war-torn nation. This vignette is symptomatic of the invasive cancer that can spread even into peaceful communities when resentful protestors feel that immigrants are getting an unfair share of this country’s resources and welfare. The Good Samaritan came out to assist the traveller, beaten and robbed and left for dead, while the Priest and the Levite, not satisfied with simply ignoring him, reviled him for good measure.

Resentment and anger are cancerous. The cancer emerges when there is a threat to what people and communities have come to value: security, a decent job, a family home, a sense of belonging, the respect of peers, and societal harmony.

The US presidential election has exposed even more starkly the ugly side of human nature. Donald Trump has tapped into the intense feelings of inequality, dispossession, disadvantage and despair that many feel as they see their jobs going overseas, or to illegal Mexican migrants, or to Muslim refugees. Many white men in America’s rust belt have lost their once-secure jobs; with globalisation manufacturing has moved from their home towns to overseas plants. Automation and rapidly changing technology has made many jobs redundant. They feel hopeless. They harbour deep resentment that the America that was once great is no longer so, and they have been the losers.

It is not surprising then, when Trump calculatingly stirs up their resentment and promises to ‘Make America Great Again’, they believe he can, and that life would be great for them again as jobs return and prosperity abounds! They think their feelings of disadvantage and inequality would magically evaporate.


Trump has taken an isolationist, protectionist stance. He says he will tear up trade deals that he believes disadvantage America, he will build a wall to keep Mexicans out, and he will put a stop to Muslim immigration. Because he believes global warming is a hoax, he boasts that he will scrap America’s commitment to the UN climate change initiatives, and will reinstate coal as America’s prime energy source. In classic neoliberal fashion, he promises that 'massive tax cuts' will restore lost jobs. All of these ideas are anathema to clear-thinking economists, but his followers believe his every word, his every promise. He backs his promises by referring to his business success, and on the international front by stating his intention to create a supercharged military that will ensure America's global superiority. What he says appeals and gives them hope. He is their messiah, and their messianic hope cannot be extinguished. Facts and logic are irrelevant; blind faith, akin to religious fervour, is their bulwark.

There is no point in denouncing their edifice of beliefs. They are built brick by brick out of feelings of disenfranchisement, alienation, dispossession, poverty, despair, and fear. They believe that the political establishment has no concern for them, no interest in their plight, no remedy for their desperate condition. They believe, and Trump reinforces this belief every day, that the political establishment is incompetent, and like its elite backers and the media, is corrupt and self-serving. Many agree with the general thrust of his thesis, but few believe that he has the understanding, or the skill or capacity to change the establishment for the better. Ironically, his background is as a member of a powerful wealthy elite that flouts the law and uses it for personal advantage. He is a billionaire businessman who has paid no tax for a decade, and who refuses to reveal any tax details.

His singular immorality though is that in pursuit of the presidency he is deliberately amplifying the feelings of inequality and dispossession his supporters feel so intensely, and promising what he would never be able to deliver.

Inequality is much broader than wealth and income equality. It affects all facets of life. As celebrated epidemiologist Michael Marmot has shown, health inequality parallels income inequality. Those lowest on the social scale have the worst health. Yet Trump says he will abolish ‘Obamacare’, even although it has afforded health insurance for millions of poor people who previously could not afford it.

Because we now live in a global society, we are able to see what others have, here and overseas. When individuals see others prospering in peaceful societies while they languish in poverty, when they endure conflict, war, destruction and death, they feel unequal and deeply resent it. Even if those in war-torn countries were gifted a good income, their suffering and terror would continue, and they would still seek a safer place to live and bring up their children.

Inequality is not restricted to wealth and income. Just as distressing are inequalities in job opportunities, rewarding employment and decent housing; inequalities in education, healthcare, life expectancy and justice; and inequalities in the enjoyment of a productive and peaceful family life free of political, religious and racial persecution, xenophobia and hatred. These inequalities are all sources of resentment and anger, and in extreme situations, discord, conflict and social disruption.

Every day we see the malignant cancer of inequality spreading throughout the world. It has invaded the UK, Europe, the Middle East, Asia, the US and its presidential election, and even our own country as xenophobic forces seek to shape our politics and our society. The cancer of inequality has metastasized globally. Is it beyond cure? Is there the possibility of a remission? Is it possible even to excise a local metastasis?

Every day there is one commentator or another who highlights inequality as a major issue in society. Progressives echo this, but conservatives never mention it. Equality is not part of their DNA. Indeed, they regard inequality as the acceptable norm. Their policies and actions worsen inequality. They do not see its malignancy, nor do they see that it is spreading inexorably, here and elsewhere. They have no cure, because to them it’s insignificant and inconsequential, a benign condition not worthy of a politician’s attention.

When conservatives are society’s physicians, expect no diagnosis of the cancer of inequality; expect no remediation.


What do you think?
What is your view of inequality in the world?

Do you see it as a threat to global harmony and stability?

Do you have a remedy for inequality?

Let us know in comments below.

Recent Posts
All hail the mighty banks
Ken Wolff, 23 October 2016
Banks have been in the news recently and there is a clear difference in the approaches of the government and the opposition. While some may suggest that Bill Shorten is being populist in his call for a Royal Commission into the activities of the banks, particularly the ‘big four’, it is clear that Turnbull’s approach of calling them …
More...
Trump is just part of the problem
Ad astra, 26 October 2016
There are two outcomes of the US presidential election that should horrify us all: Trump wins or Trump loses.

The horror of his winning leaves little to the imagination. We can see from his words and actions that on the personal front …
More...
The problem with conservative warriors
2353NM, 6 November 2016
A lot of employers place significant levels of trust in their employees. Retailers trust their employees to charge the customers the correct amount for the products they sell and put the money into the register; airlines trust that their employees are fit and mentally capable of servicing or flying the plane they are assigned to fly; bus and truck operators trust that their drivers will drive the vehicle along the assigned route; while health care workers are trusted to look after those in their care.
More...

The problem with conservative warriors

[The bookcases that were too big to move]
A lot of employers place significant levels of trust in their employees. Retailers trust their employees to charge the customers the correct amount for the products they sell and put the money into the register; airlines trust that their employees are fit and mentally capable of servicing or flying the plane they are assigned to fly; bus and truck operators trust that their drivers will drive the vehicle along the assigned route; while health care workers are trusted to look after those in their care.

At times, employees have to make decisions that may have an inimical impact on their employer’s business. The retailer’s staff usually have a mandate to deduct a percentage of the price of an item if there is some imperfection. External factors may delay the arrival time of the plane in Sydney or the 456 bus to the City. Obviously a number of 737s can’t land on one runway at the same time and if the 456 bus is caught in a traffic jam, the bus can’t push other vehicles out of the way. This in turn affects the operation of the other services as transport operators tend not to have a spare 737 or commuter bus sitting around at every terminal ‘just in case’ something doesn’t turn up on time. This is the greater good in operation, it is better for a plane or bus to be late than for the system to fail completely because of the actions of one person who was following their employer’s requirements regardless of the outcomes.

At times there are those who try to beat the system and there are probably a set of checks to ensure that the trust is respected and the cash register takings balance the amount of stock that has left the store; the pilot for the 8.30 plane to Sydney isn’t enjoying the free drinks in the Business Class Lounge with the passengers before the flight; the heavy vehicle driver hasn’t found a nice shady spot beside a creek and decided to wet a line and so on. The number of trucks and buses in the streets of our major towns and planes that arrive and depart about the right time would demonstrate that most employees demonstrate that the trust their employers show is not misplaced.

Just about everyone who works in a shop, flies a plane or drives a heavy vehicle is paid significantly less than Justin Gleeson, Australia’s Solicitor-General and second ranking ‘law officer’ in the land. Gleeson is a ‘Senior Counsel’ — the latter-day version of a ‘Queens Counsel’. Gleeson is having a very public argument with his supervisor, Attorney-General (and Senator) George Brandis who is the nation’s ‘first law officer’. Brandis is a ‘Queens Counsel’ — better known as a QC. Apparently, the issue at the heart of the argument is Brandis decreeing that Gleeson’s office will not offer advice or counsel to anyone in the federal government (political or public servant) unless the request comes through Brandis’ office.

The ABC’s website has given us a four-act play (probably generous, it seems more like a soap opera) that describes the situation to date. At a meeting between Brandis and Gleeson, Brandis apparently said:
… there had been a lazy practice within the Government and the public service to approach the solicitor-general requesting legal advice directly, and that his office should act as something of a gatekeeper.
Apart from the implication that a senior public servant and lawyer can’t manage his workload, why would Brandis want to know what other politicians or senior public servants need legal advice about?

It’s not the first time Brandis has attempted to influence the work of public servants in his employ. Human Rights Commissioner, Professor Gillian Triggs, conducted an enquiry with less than flattering findings for the government into the children Australia holds in detention camps in PNG and Nauru. Brandis, through a government official, asked Triggs to resign (thus reducing the ‘severity’ of the findings) at a meeting on February 3, 2015. Triggs, when recounting the matter in a Senate Estimates Committee hearing, advised that she had rejected the overture:
"My answer was that I have a five-year statutory position, which is designed for the president of the Human Rights Commission specifically to avoid political interference in the exercise of my tasks under the Human Rights Commission Act," she said.

Professor Triggs also testified that the secretary, Chris Moraitis, told her she would be offered another job if she did.

She described the offer as "entirely inappropriate".
Brandis claimed that he had lost confidence in Triggs as in his view:
… she had made a decision to hold the inquiry after the 2013 election and had spoken during the caretaker period, quite inappropriately, with two Labor ministers, a fact concealed from the then-opposition — I felt that the political impartiality of the commission had been fatally compromised.

"The Human Rights Commission has to be like Caesar's wife, it has to be beyond blemish."
So Brandis is suggesting because Triggs discussed a relevant issue with two politicians from the other political party during an election campaign, she should be sacked. Those of a somewhat cynical bent might suggest that conversations between senior public servants and politicians occur all the time during election campaigns despite the ‘caretaker conventions’ that are put into place: the real issue here was something else — potentially the contents of a report that rightly gained some publicity at the time for its criticism of the government’s policy. To be fair to Triggs, her office isn’t the only human rights organisation critical of Australian government refugee policy. Rationally, if the ALP government had been returned in the 2013 election, the Human Rights Commission enquiry into detained children would have reflected just as badly on the ALP as it did on the Coalition government.

In the 2014 Federal budget, Brandis oversaw significant cuts to the community legal sector. When asked if he had consulted with the sector, he claimed he did. Others in the sector claimed he didn’t. Shadow Attorney-General, Mark Dreyfus effectively invited Brandis to ‘put up or shut up’ by releasing his diary for the period where the consultation was supposed to have occurred. Brandis chose not to, so Dreyfus made a Freedom of Information request. As the ABC reported:
The FOI was originally blocked by the Attorney-General's chief of staff, who claimed it would take hundreds of hours to process because Senator Brandis would have to personally vet each and every entry before they could be released.
Dreyfus appealed the decision to the Administrative Appeals Tribunal and won. Brandis appealed the appeal decision to the Full Court; which eventually found in Dreyfus’ favour. While Dreyfus (who is also a QC) represented himself, apparently at no cost to the taxpayer, Brandis’ legal fees came in at over $50,000 according to Dreyfus, as reported by the ABC. Even after that, the Freedom of Information request has to be reconsidered rather than released immediately.

Brandis was also the one that couldn’t move his $7,000 bookcase to hold his $13,000 worth of taxpayer-funded books and magazines from the office he was in prior to the 2013 election into the ministerial office. So a $15,000 bookcase was custom made for his new office.

As well as being Attorney-General, Brandis has been the Minister for the Arts; maybe he likes attending the first-night performances. The Australia Council (for the Arts) was formed under the Holt Government in 1967 and has been traditionally the vehicle whereby the Australian government funds artistic and cultural endeavours across Australia. In the 2015 federal budget, Brandis, as Arts Minister, oversaw a $110 million cut in the budget of the Australia Council to create a new arts funding body called the National Program for Excellence in the Arts. While some who have had funding applications rejected by the Australia Council in the past may argue that that body wouldn’t know ‘arts’ if they fell over it, there is a probability that in some cases the claim is fuelled more by hurt and anger than any valid criticism of the Australia Council. Like all funding bodies, there is also potentially some internal politics to overcome that could conceivably increase the chances of a successful application ‘should the game be played correctly’.

The ABC reported at the time:
Senator Brandis said there is a widespread perception that the Australia Council is 'a closed shop'.

'We would be blind to pretend that there aren't complaints from those who miss out, who have a perception that the Australia Council is an iron wall; that you are either inside or outside,' he said.

'I've heard that from so many people. That is particularly a perception held outside Melbourne and Sydney.'
Having said that, Brandis was proposing his new arts funding body was to be run by his ministry office, rather than by arts funding professionals. The logic that supports taking arts funding away from professionals in their field and handing it to a potentially highly politicised minister’s office is dubious at best.

What is it with Brandis? We have a person who isn’t afraid to spend taxpayer money on Quixotic endeavours such as custom made book shelves and legal appeals costing the best part of $75,000 while cutting the funding to those that assist those on little or no income through the legal system. When the funding was provided, it allowed the community legal providers to run on the proverbial ‘smell of an oily rag’. The government rightly employs experts in their field such as Gleeson and Triggs to manage difficult and sensitive responsibilities within the government. The government also has an established bureaucracy that has significant knowledge and experience in ‘the arts’.

Yet Brandis believes that he needs to manage the Solicitor-General’s workflow, publically suggests that the reason the Human Rights Commission brings down a report challenging the government’s behaviour was to discredit the government of the day and believes his ministerial office knows more about ‘the arts’ than those with considerable demonstrated experience.

While it is a legitimate action for a government minister to make the final call when it comes to determining policy within their department, there is a difference between policy and implementation. It’s probably fair to suggest that a number of politicians on both sides of parliaments (at all three levels of government) are factional warriors; at some stage they have pledged complete loyalty to what they see to be the objectives of the political party. Rather than seeing the world through ‘rose coloured’ glasses, the world has a deep blue, red or green hue.

The problem with these people is that criticism of their chosen position is a problem. Brandis shows this by his treatment of Triggs and Gleeson – both of whom have criticised Coalition government policies or practices, Triggs with the report on children in detention camps and Gleeson has obviously given advice contrary to the wishes of Brandis. Conservatives seem to have no problem with demonstrating double standards in cutting services to others while improving their lot in life at others’ expense.

Brandis frequently chooses in media interviews to assume the ‘conservative warrior’ persona, and while his personality is not the problem of his political leader, his actions as a minister of the crown are. Setting himself up to muzzle independent experts within his department primarily because the advice doesn’t fit the Coalition’s view of the world is a dangerous precedent — and you would think that Australia’s first law officer would have a better idea of the importance of precedents. If he doesn’t, Turnbull, who is also a lawyer, should be in a position to see the problem. This article started by looking at how sometimes various employees have to make decisions that adversely affect their employer and determined that at times these decisions were made for the greater good. It’s a pity that political warriors seem to have little understanding of the greater good.

What do you think?
Let us know in comments below.

Recent Posts
All hail the mighty banks
Ken Wolff, 23 October 2016
Banks have been in the news recently and there is a clear difference in the approaches of the government and the opposition. While some may suggest that Bill Shorten is being populist in his call for a Royal Commission into the activities of the banks, particularly the ‘big four’, it is clear that Turnbull’s approach of calling them …
More...
Trump is just part of the problem
Ad astra, 26 October 2016
There are two outcomes of the US presidential election that should horrify us all: Trump wins or Trump loses.

The horror of his winning leaves little to the imagination. We can see from his words and actions that on the personal front …
More...
Statistics are people too
Ken Wolff, 30 October 2016
On 20 October, the ABS released its labour force survey data for September 2016. The media duly reported the drop in unemployment from an upwardly revised 5.7% for the previous month to 5.6% but most also picked up that this was largely a result of a drop in the participation rate, from 64.7% to 64.5%.
More...

Statistics are people too


On 20 October, the ABS released its labour force survey data for September 2016. The media duly reported the drop in unemployment from an upwardly revised 5.7% for the previous month to 5.6% but most also picked up that this was largely a result of a drop in the participation rate, from 64.7% to 64.5%.

Firstly, a few explanations. The participation rate was traditionally a measure of all those aged between 15 and 64 (the ‘working age population’) who were ‘in the workforce’ and, of course, owing to students and stay at home parents, and other factors, this would never be 100% — around 70% was usually very good. However, the ABS now uses the total population aged 15 and above which I think can be a little misleading because it encompasses many elder retirees — including over 450,000 people aged 85 and over, who I doubt would be considering work.

‘In the workforce’ includes those who are actually employed, whether full-time or part-time, and those who are unemployed but are looking for and are available for work. So a fall in the participation rate usually means that people have dropped out of the workforce and given up looking for work — at least for now. It should also be noted that to be counted as ‘employed’ a person only needs to have worked one hour in the week of the survey — not what most of us would call ‘employed’ but it is the international definition and the ABS uses it, arguing that even an hour’s work is contributing to the economy. What that does mean is students and retirees who may be working no more than a couple of hours a week are included in the employment count.

The ABS also provides raw figures, ‘seasonally adjusted’ figures and ‘trend’ figures. I will mostly use the seasonally adjusted figures which attempt to smooth out known large variations, such as the number of school leavers entering the workforce at the end of each year and seasonal workers who come and go from employment at particular times. The trend figures can be interesting for what they show statistically in terms of where the figures are heading. Except where otherwise referenced all the data I have used comes from the ABS website, including downloading some of their Excel spreadsheets for more detailed data, so I do not separately reference each of these individual sources.

Having said all that, and leaving aside debate about the quality of the ABS labour force data (which has been questioned), I want to pay attention to what these percentages actually mean in terms of people.

The 0.1% drop in unemployment meant that there were 12,500 fewer people unemployed. That may sound like a reasonable improvement but even at 5.6% the number unemployed is 705,100 and that is a lot of people whichever way you look at it — without including their families. But somehow, the government, the bureaucrats advising them, economists and even most of the media seem to overlook the scale of that number by focusing simplistically on the percentage. That is over 705,000 people whose spending power is limited which not only makes life hard for them but, through reduced consumption, also impacts the economy.

The situation is exacerbated when we consider the long-term unemployed — those unemployed for 12 months or longer. As at August 2016 there were 169,000 long term unemployed (based on ABS data) or about 24% of the unemployed. But in September the Department of Social Security released data showing it had 290,161 long-term job seekers on Newstart Allowance in August. No matter which figure you use, that is a large number of people ‘doing it tough’ for a long time and many of them will have little chance of ever finding suitable work after such lengthy periods of unemployment.

Considering the participation rate is a little more difficult given the way the ABS now calculates it. On their calculation, it would seem that almost 40,000 people have dropped out of the workforce but, as that now includes all people 15 and over, a number of those could be retirees. Focusing just on the working age population, at least 25,000 people (probably more) have stopped looking for work. Not large numbers in the overall scheme of things but significant in terms of the number of people involved.

Employment dropped by 9,800 but that partly hides the fact that 53,000 full-time jobs were lost (part-time employment increased by 43,200). That is on top of the continuing loss of full-time jobs over many months now. While the seasonally adjusted monthly figures vary, including both rises and falls, the trend estimates for full-time employment have been consistently lower for each month since December 2015, suggesting full-time employment is on a downward slide.

The September figure for full-time employment is the lowest since June 2015 and since a peak of 8.217 million in full-time employment in December 2015, 102,000 people have lost full-time work (or 54,000 in trend terms and 271,000 on the raw numbers). In that same time, part-time employment increased by 162,800 but, as this includes all those working one hour or more, much of it may not involve significant hours of work.

Even that is only part of the story. Since July 2014 the ABS has been providing data on ‘underemployment’ in the workforce: this includes those engaged full-time but actually working part-time ‘for economic reasons’ and those employed part-time who would prefer more hours. In the first category, there were 75,900 people, predominantly male (60,800), an increase of 3,700 over the August figure. There were 979,900 part-time workers who would prefer more hours, including about 600,000 females (that was a decrease of about 30,000 on the August figure). That is almost 9% of those employed.

If we add the unemployed, for total ‘underutilisation’ of the labour force, we get 1,760,900 people not able to contribute fully to the economy even though they wish to do so — that is about 14% of the workforce. How can our economy be going well if 1.8 million people are not contributing to production and consumption as much as they could? In economic terms they have less scope for discretionary spending: it is normal that as income falls a greater portion of it has to be spent on essentials, such as food and utilities.

To make things worse, we can also consider the data the ABS provides on those ‘not in the labour force’ (NILF) as it reveals more information about ‘hidden’ unemployment. The most recent data I could find was for 2014 (released in February 2015). A further explanation is required here. In the labour force surveys people are asked if they looked for work in the week of the survey and if they could start within four weeks: if they do not meet those criteria they are classified as not in the labour force. The 2014 NILF figures show 21,700 people who were actively looking for work but could not start within four weeks and another 53,200 who were ready to start work. In addition, there were 851,000 people who wanted work, could have started within four weeks, but were not actively looking, including 102,100 ‘discouraged jobseekers’ a majority of whom were over 55. There are many reasons why people are not looking for work, including family issues and illness, but they remain interested in returning to the workforce. While the figures may have changed since 2014, it is clear that we are talking about hundreds of thousands of people who would like to be in work but for a variety of reasons, including just giving up, are not. So now, including these ‘hidden’ unemployed, and those ‘underutilised’ in the labour force, we are talking about something like 2.5 million people. Imagine what could be done if we created sufficient jobs and hours of work to meet that demand!

Total hours worked in September increased by 4 million hours to 1.66 billion hours. This is more interesting in trend terms: an increase of 2.2 million hours and the fourth consecutive increase after declines in the previous five months but still 2.4 million hours below the December 2015 peak. Overall, total hours worked has been trending upwards since 2000 but that is largely driven by population and workforce growth. Callam Pickering from CP Economics pointed out that work hours have actually been trending downwards over that same time when calculated per person. That is a sign of the increase in part-time work.

Ad Astra recently wrote about Turnbull’s planning black hole and it is no more evident than in the lack of response to these figures. What is the government doing to provide work for the 705,000 unemployed, or to provide more work for the one million who are underemployed? What is it doing to encourage people to remain in the workforce, rather than dropping out through the sheer frustration of being unable to find suitable work? I would suggest that many of those dropping out of the workforce have found the ‘cost’ (in economic terms, which includes effort and time as well as money) of finding work too high. I have little doubt that the onerous Centrelink job search requirements would be contributing to that ‘cost’. Increasing the time before which a person is entitled to receive Centrelink payments will not help. And what will the government do to address the ‘hidden’ unemployed, those not in the labour force but who would like to be?

The government’s approach seems to be that it should all be left to ‘the market’, to businesses, both large and small, to provide employment — eventually! That does nothing to support people in the present nor even to offer hope of employment or better hours in the short term. And even in the medium term it may be no more than a mirage. As I pointed out in ‘Are governments ready for the coming economic and social changes’, we are witnessing the rise of the ‘gig economy’. While that may provide some entrepreneurial opportunities, many businesses will move to a labour-force model of part-time or short-term employment. Perhaps the rise in part-time work already evident in the ABS data may be its beginnings. Australia now has the third highest part-time workforce in the OECD, representing 32% of those in employment.

Simply relying on business to create employment, without government support, may also be fraught. The recent NAB quarterly business survey showed ‘weaker profits and softer trading conditions have led to a moderation in business conditions’. Businesses did think that conditions would be reasonable over the next three to twelve months and capital expenditure plans remained strong.

ABS data, however, suggested that business investment fell 5.4% in the June quarter, and more than 17% over the year but much of this was said to be driven by the winding down of the resources boom. Despite that qualification, the NAB survey found that ‘a broader non-mining recovery appeared to stall in the September quarter’. There was also a deterioration in the retail and wholesale sector — to me, not surprising if we have 2.5 million people with lesser income than would be provided by any work, full-time work or more hours of part-time work.

Other business indicators showed sales from manufacturing rose 0.2% (but ‒0.6% and also down 2.9% over the year in trend terms). Companies’ gross operating profits rose 6.9% but were flat over the year (or flat in the June quarter and falling 4.3% over the year in trend terms). While profits may have jumped in the June quarter, wages rose only 0.8%. So where is that money going? — not into new jobs!

All in all, the government is ignoring that labour force data is about people, not just a series of percentages. It is ignoring the unemployed, the ‘hidden’ unemployed, and ignoring the problems created by underemployment and the loss of full-time jobs. Turnbull seems to believe that businesses will come good and provide the jobs or that people will create their own jobs, all part of his new innovative and agile economy. But how do the long term unemployed fit into that scenario? How do 705,000 unemployed survive until the economy comes good with little or no government intervention? How do one million people find the work hours they are seeking? How much production and consumption are we losing by having 2.5 million people not fully engaged in the economy? How are those 2.5 million people faring? — has anybody in government bothered to ask that?

As Ad Astra asked, where is Turnbull’s plan to make job growth happen? After all, this is people we are talking about.

What do you think?
Why do the ‘experts’ talk in terms of percentages rather than the number of people affected?

Why is the government ignoring the scale of this problem and claiming success when there are marginal shifts in the percentages?

Let us know in comments below.


Recent Posts
Planning - Turnbull’s black hole
Ad Astra, 19 October 2016
Let’s stand back from the daily tumult of federal politics momentarily, hard though it is to ignore, and look into the distance. What do we see? Given that politicians believe their role is to make this nation a better one for us all, where is the evidence of them planning to make it so? Where is the Turnbull
More...
All hail the mighty banks
Ken Wolff, 23 October 2016
Banks have been in the news recently and there is a clear difference in the approaches of the government and the opposition. While some may suggest that Bill Shorten is being populist in his call for a Royal Commission into the activities of the banks, particularly the ‘big four’, it is clear that Turnbull’s approach of calling them …
More...
Trump is just part of the problem
Ad astra, 26 October 2016
There are two outcomes of the US presidential election that should horrify us all: Trump wins or Trump loses.

The horror of his winning leaves little to the imagination. We can see from his words and actions that on the personal front …
More...

Trump is just part of the problem



There are two outcomes of the US presidential election that should horrify us all: Trump wins or Trump loses.

The horror of his winning leaves little to the imagination. We can see from his words and actions that on the personal front he is an ugly misogynist and a womanizer, yet is disrespectful of so many of the women who have entered his ambit, women whom he regards as his property, to do with as he wishes. He labels as liars the continuing procession of women who have accused him of sexual predation, insisting that all these claims have been ‘proven false’, and that he will sue them after the election.

We know too that he is a bully, and has a nasty streak that shows when he calls his opponent ‘Crooked Hillary’. He labels her a ‘criminal’ because of her email difficulties, although no charges have ever been laid by any authority. He calls her a liar, accuses her of ‘having tremendous hate in her heart’, attacks her over her husband’s alleged womanizing, and suggests she should be drug tested before their debates, as ‘he doesn’t know what’s going on with her’. He insists that it would be a total disaster should she be elected since, among other calamities, ISIS and Muslims would take over the country, international relations would become even worse, and the economy, already 'busted', would sink still further.

At the second debate he informed her that if he won he would appoint a special prosecutor to investigate her e-mail habits as secretary of state, and when she expressed relief that someone with a temperament like his was not in charge of the law, his rejoinder was, ‘Because you’d be in jail.’ Subsequently, at his rallies his supporters have chanted: ‘Lock her up, lock her up’!

In the third debate we saw more of the same. At first more disciplined, he could not sustain that demeanour; halfway through he broke out into his usual ugly Trumpisms. Just 24 hours later they continued throughout the Al Smith Charity Dinner in Manhattan, a traditionally light-hearted event attended by both candidates, one usually devoid of nasty barbs. But Trump could not contain his nastiness, as the videos show in this article in The New Daily.

We know too that his policy platform includes banning Muslims from entry, with what he likes to term ‘extreme vetting’, building a wall across the border with Mexico at Mexico’s expense to keep out Mexican ‘criminals, drug dealers and rapists’, scrapping trade deals that ‘rob Americans of their jobs’, and smashing ISIS by ‘bombing the shit out of them’, all in the cause of ‘Making America Great Again’. He shows his admiration for tough man Vladimir Putin and exhibits his willingness to cozy-up to him, contrary to contemporary US policy.

Apart from these outrageous policy positions, his campaign is largely policy-free on such matters as health, education, and foreign relations. He has threatened to ‘cancel billions in payments to the UN climate change program’ agreed to in Paris, as he considers global warming to be a hoax.

His latest assault on American democracy is his accusation of voter fraud, his assertion that the presidential election is rigged, and that the media is culpable, dishonestly representing his and his opponents case for election. Even close colleagues will have none of that accusation, which many see as Trump’s attempt to give himself an excuse for losing, which many of his colleagues and numerous social commentators believe will be the case.

Barack Obama’s response was apt: he reminded Trump that it’s ‘unprecedented’ for any candidate to try to discredit an election before it began, and advised Trump to ‘stop whining’ and get on with making a case for winning more votes. But as Women’s Agenda reminds us: “Trump has previously embraced the label of “whiner”, telling a CNN interviewer last year that “I do whine because I want to win and I’m not happy about not winning and I am a whiner and I keep whining and whining until I win.��

Trump’s threat to not honour the election result no matter the outcome, covert in his earlier utterances, became the defining moment in the third debate when in response to a direct question on this matter he replied: “I will look at it at the time”, hardly reassuring for those who expect the traditional smooth transition to the next president. If his thinly veiled threat becomes reality, we can expect a level of discord and disruption never before seen post-election in the US. The following morning he reiterated that he would accept the result, but ‘only if he won’! Now he’s insisting that the opinion polls that put him well behind are 'phoney', and that he’s really winning!

Many Americans share the horror of a Trump victory, particularly a large majority of women (although sadly not the majority of American men), and are fearful of what a Trump presidency would bring about. There is a strong consensus among leaders of many other nations, and commentators worldwide, that a Trump presidency would be disastrous. Many of his Republican colleagues share this view. Some have disowned him and his views and have distanced themselves from him lest he spoil their chances of re-election; some have contradicted his bizarre statements.

While many express fear about what a Trump presidency would do for the global economy, world stability, and international relations, how many have seriously contemplated what might come about should Trump win, a highly unlikely but not impossible outcome, and how world leaders would cope?

But while a Trump loss could hardly be worse than a victory, it would be foolish to believe that it would be without trauma at many levels. This piece attempts to tease out the possibilities.

Trump’s blanket condemnation of the mainstream media suggests a plausible post election defeat scenario: Trump will establish his own extreme right wing media outlet, one that would rival the existing one – Fox News. Trump is a billionaire businessman who has had experience in reality TV. It would come naturally to him to establish a TV network to compete with Fox News with even more extreme conservative, Republican and anti-Democrat views, and he has a readymade audience of supporters keen to lap up its every utterance. Not only would such an outlet be able to push neoliberal ideology, but it would also be a bridgehead from which it could assault a Clinton presidency, and make governing near to impossible with rancorous publicity and continuous condemnation. Fox News is bad enough; ‘Trump News’ would be even more vicious, vindictive, vitriolic, vengeful, venal and vile, should Trump seek to take out his revenge on the one who defeated him and all those who supported her.

This is not an idle thought, an improbable outcome, a fanciful scenario; it is one that Americans should contemplate, fear, and prepare to counter. Several commentators now acknowledge that possibility. One clue to Trump’s TV intentions is that he invited Roger Ailes, former CEO of Murdoch’s Fox News, who resigned from Fox last month over sexual harassment claims, to be his adviser. The latest though is that after just a few weeks they have parted company as Ailes realized that Trump “couldn’t focus, and that advising him was a waste of time.”  

Media commentators are seeing Fox News as an ailing, ageing network that needs rehabilitation and refreshing – the removal of 76 year-old Ailes is part of that process. No doubt Trump sees the audience Fox once enjoyed a ripe takeover prospect. He sees himself as the alternative right of the American national establishment, which he criticizes so vehemently, insisting it is introspective, corrupt and unresponsive to the needs of the people.

So don’t be surprised to see Trump TV News emerge early next year, with lots of beautiful presenters and experienced commentators, poached from Fox News and other networks, which will make billionaire Trump even more money.

In my view the greatest danger when Trump loses though is how his large base of supporters will react.




His supporters follow him because he gives them hope, albeit false hope, that he will fix their problems, improve their situation and make them, like America, great again.

These folk feel left behind in the wake of globalization, technological changes, and free trade, all of which have robbed them of their jobs and left them less well off, often dependent on welfare, and feeling hopeless. They are angry. They see no future for themselves or their children. It is not surprising then that when a ‘saviour’ appears and promises to make their unhappy lives better, they respond as Trump’s supporters have.

Trump cannot help them anymore than could preachers in a bygone age that promised eternal life in heaven among the angels to those oppressed by poverty or illness during their earthly existence. Yet his followers believe him fervently. Moreover, they also believe his anti-Clinton rhetoric and at Trump rallies rail against ‘Crooked Hillary’, heatedly shaking their fists at her. Having convinced them that the ‘corrupt media’ and Clinton’s allies have rigged the election, and that there will be widespread voter fraud, you can imagine their anger when Trump loses. He will tell his supporters they were ‘robbed’ by a corrupt system. We should be very fearful if Trump decides to stir up fury and resentment post election.

It’s too easy to dismiss Trump’s supporters as a rabble of discontents, as Hillary Clinton did when she labeled them “a basket of deplorables…racist, sexist, homophobic, xenophobic, Islamophobic — you name it.”

But their feelings are the direct result of inequality in the American economy. Many have lost their jobs, notably in the rust belt. They are poor and struggling. The American dream has passed them by. Many are homeless, on welfare, lacking healthcare, deprived of education – the flotsam and jetsam of American society. And they are understandably angry, just as were those involved in the ‘Occupy America’ movement.

They have swallowed Trump’s trickle down economic plan of giving massive tax cuts to business. They believe his promise that these cuts will stimulate business, create jobs and increase wages, classic neoliberal trickle down thinking that we know so well. But Trump also intends to get rid of ‘Obama-care’, which had given health insurance to so many who previously could not afford it, and he will also cut welfare, which one would have thought would upset his followers, but seemingly his other promises outweigh these drawbacks. History shows that people often vote against their best interests.

On the other hand, Clinton offers a classic progressive strategy of increasing wages, taxing the rich, and stimulating the economy through government spending, such as on infrastructure, just as Democrat governor Mark Dayton did so successfully in Minnesota where the economy is booming. In contrast, in neighbouring Wisconsin where Republican governor Scott Walker implemented a classic neoliberal strategy of cutting taxes and welfare, job growth has been among the worst in the region, income growth is one of the worst in the country, it has a higher unemployment rate than Minnesota, and the budget is in bad shape.

We cannot condemn Trump’s supporters for lapping up his promises, for not seeing through the fallacy of his economic strategy. They are the manifestation of inequality, which we know leads to discord and social disruption. They feel disenfranchised, distressed, despondent and despairing. Who could blame them for embracing Trump and his offer of hope, no matter how phoney?

What is fearsome is not their understandable faith in Trump’s false promises, but the spectre of Trump stirring them to unbridled rage when he loses, as he seems likely to do, unprepared as he says he is to accept the will of the people, ‘unless he wins’. Add to that the likelihood that he will stir up even greater hatred for the winner – ‘Crooked Hillary’, ‘the criminal who should be locked up’. Can you imagine how much civil unrest Trump could inflame, and how easily he could do so? That is frightening. That would be evil. That is what should terrify all who value the democratic process.

To return to the title of this piece: ‘Trump is just part of the problem’, it is his followers, those who adore him, those who hang on his every word, those who turn up to his rallies and shout insults at his opponent, those who really believe he can lift them from their dispossessed state to a glorious sunlit land of hope and prosperity, who are a powder keg waiting for Trump to light the fuse and blow democracy to smithereens.

Trump is just part of the problem!


What do you think?
What do you think and feel about Donald Trump?

Do you believe he will become president of the United States of America?

What do you think would be the consequences if he did?

Let us know in comments below.


Recent Posts
All hail the almighty banks
Ken Wolff, 23 October 2016
Banks have been in the news recently and there is a clear difference in the approaches of the government and the opposition. While some may suggest that Bill Shorten is being populist in his call for a Royal Commission into the activities of the banks, particularly the ‘big four’, it is clear that Turnbull’s approach of calling them before the parliament’s Economics Committee once a year has been a sham.
More...
Let’s talk about ‘traditional’ values
2353NM, 16 October 2016
Donald Trump, in his mind anyway, is the next President of the United States of America. Last week, he was in deeper hot water than usual when a tape of a conversation between Trump and a reporter from Access Hollywood regarding his sexual exploits with women, made a decade ago …
More...
Planning - Turnbull’s black hole
Ad Astra, 19 October 2016
Let’s stand back from the daily tumult of federal politics momentarily, hard though it is to ignore, and look into the distance. What do we see? Given that politicians believe their role is to make this nation a better one for us all, where is the evidence of them planning to make it so? Where is the Turnbull…
More...

All hail the mighty banks


Banks have been in the news recently and there is a clear difference in the approaches of the government and the opposition. While some may suggest that Bill Shorten is being populist in his call for a Royal Commission into the activities of the banks, particularly the ‘big four’, it is clear that Turnbull’s approach of calling them before the parliament’s Economics Committee once a year has been a sham.

Ian Narev, CEO of the Commonwealth Bank, was the first to appear before the committee and set the tone for the CEOs of the other ‘big four’ to follow — they sang from the same hymn sheet or, dare I say, had colluded beforehand to ensure the substance of their answers was so similar as to be almost the same.

There were apologies and promises to do better. There were mea culpa but of limited culpability when examined carefully.

Shayne Elliot from ANZ admitted (from The Guardian’s live blog of the inquiry):
I think as an industry we have lost touch with our customers. It’s taken us down a path that’s created bad behaviour, some poor culture and really not treated customers with the respect they deserve.
And Brian Hartzer from Westpac said:
It is clear that a trust gap has opened up, and we as an industry and as individual banks need to work to close that gap.
Generally, each bank claimed commercial confidentiality not to reveal the profit they made from housing loans or credit cards although ANZ did suggest that its profit from credit cards was only ‘a couple of hundred million dollars’ out of its total profit of $7.5 billion.

While a number of financial planners who had given customers bad advice had been dismissed, it became clear that not one manager or executive had been fired or resigned as a result of some of the banking scandals. Whatever happened to executive responsibility, ‘the buck stops here’? — now blame is shifted down the ladder, not only in the banks but also in government (but that really requires another article).

The same argument about executive responsibility was raised in the US when Wells Fargo CEO John Stumpf appeared before a US Senate Committee after Wells Fargo staff, in an effort to meet sales and revenue targets, had been found to have opened millions of fake credit, savings and other accounts for customers without their consent. US Democratic Senator Elizabeth Warren, a former Harvard University law professor, said to Stumpf:
So, you haven’t resigned. You haven’t returned a single nickel of your personal earnings. You haven’t fired a single senior executive.

Instead, evidently, your definition of accountable is to push the blame to your low-level employees who don’t have the money for a fancy public relations firm to defend themselves. It’s gutless leadership.
It’s a pity our parliamentarians didn’t follow such a line. (Stumpf has since stood down.)

The banking scandals have been spread over a wide area of the banks’ activities.

ComInsure, the CBA’s insurance arm, has refused to make payouts on the basis of dubious medical definitions and has even rejected a coroner’s ‘cause of death’.

ANZ has allegedly been involved in rigging the ‘bank bill swap reference rate’ (BBSW) which is used to set interest rates on business loans, also influences credit card and other loan rates, and is the rate at which banks lend to each other. This is similar to the LIBOR (London inter-bank offered rate) which has world-wide implications and four London traders have recently been gaoled for their role in rigging the LIBOR.

And banks have conceded their wrong doing by paying compensation to some of those who were affected by faulty financial planning advice.

Earlier this year at a Senate inquiry into white-collar crime, two economists presented an argument that banks were regularly fudging the numbers relating to clients’ income when making mortgage loans so as to make their loan portfolio appear ‘safer’.
The banks have trashed their lending standards over a prolonged period of time with significant evidence of banks massaging people’s incomes in their loan application forms to make them look more creditworthy than what they really are, which is essentially fraud.

The banks would do this for various reasons. One is the highly competitive environment between the banks. Second of all is profitability.

The safer your mortgage book looks, the lower it costs you to do business — simple as that. If you show that your borrowers are very creditworthy then you are going to get cheaper funding costs, and that’s a win-win for the bank …
Some of this results from the pressure on staff to meet sales and revenue targets. The Finance Sector Union surveyed its bank members on this and one member responded:
Managers have told us to tell clients certain things in order to get results that will generate bonuses for everyone.
The FSU’s Geoff Derrick said:
[staff] … are being pushed to deliver on sales targets to the point where some feel that they have no choice but to do anything they can to keep managers off their backs, including selling bank products to consumers who don’t need them.
Despite all that, the government’s decision to call the banks before the Economics Committee was based not on those scandals but the banks' decision not to pass on in full the RBA’s last decrease in its cash rate. The ABC provided a calculator to show how much additional interest people were paying on mortgages owing to decisions taken by the banks on interest rates. An example of a CBA mortgage of $300,000 over 30 years taken out in 2011 shows that in the last five years the person would have paid $5,214 in additional interest, made up of:
  • $1,745 because of additional rate rises outside the cycle of RBA rate increases
  • $228 from delays in the bank passing on RBA rate cuts
  • $3,241 from the bank not passing on the full RBA rate cut
The result of the banks’ decisions on interest rates is that they have increased their margin above the RBA cash rate. In 2011 the mortgage rate was on average about 3.25% above the RBA cash rate but in 2016 that had risen to 3.75%. Half-a-percent may not sound like much but when we are talking in billions of dollars it soon adds up to significant amounts (0.5% of 1 billion dollars is $5 million, so on a profit of $7 billion at least $35 million of that could be from this increase and that is just profit — the resulting increase in income would be many times higher).

Before the Economics Committee, the banks consistently listed many reasons for this embracing the actual cost to them of raising funds, including overseas funds, the requirement to hold more cash reserves, and pricing risk into their products. Since the GFC, however, the ‘big four’ have operated with a government ‘guarantee’ which, it has been estimated, saves them 0.2% on their borrowings compared to smaller banks — again a tiny percentage but amounting to millions when we are dealing with billions of dollars.

The banks also consistently rejected further regulation with arguments such as the cost of regulation would need to be passed on to customers or that there could be unforeseen consequences. They suggested that strong banks (read profitable) are necessary for a strong economy.

The government still thinks a Royal Commission is not necessary and instead announced a banking tribunal which customers would be able to approach with complaints without the need for lawyers. One consumer group suggested, however, that decisions of such a tribunal would likely be subject to appeal in the courts (as are decisions by the Administrative Appeals Tribunal) which would then mean the banks, with all their money, could tie up issues for years in the court system.

But why should we be surprised by this? It has been going on for centuries. Lehman Brothers (before its collapse) had identified that there were 11 banking and financial crises in the eighteenth century, 18 in the nineteenth century, and 33 in the twentieth century.

In Australia early in the 1890s there was a banking crisis, including a ‘run’ on banks (people withdrawing their deposits) and a number of bank closures. It was at its worst in Victoria and had been fuelled by a boom during the 1880s with increasing speculation and investment in the property market. At the time the financial sector was essentially unregulated and factors contributing to the problem included:
  • property market speculation
  • credit growth
  • unrestricted capital inflows from overseas
  • the degree of risk management within the financial system (with risk assessment being lowered to cash in on the boom)
  • competitive pressures in the financial system (which also contributed to lesser risk assessment as banks and building societies fought for their share of the boom)
Overseas factors led to a reduction in the inflow of capital, property prices crashed and the system came crashing down.

If that sounds familiar, it should. Mortgages have grown in importance in recent decades as a source of bank business and now represent 57% of the loan portfolios of Australian banks (up from about 30% a couple of decades ago). That core of property underpins the banks’ capacity to borrow overseas. Low interest rates have encouraged borrowers and allowed them to borrow larger amounts (also contributing to rising house prices). Using negative gearing and capital gains tax concessions, people have also invested in property, further fuelling the market. Competition between the banks, and the low interest rates, have encouraged the banks to lower their risk assessment of potential borrowers and, as suggested earlier, even led to ‘massaged’ income figures.

As in the 1890s, it will not take much to cause this system to crash. An increase in interest rates (becoming more likely) may well impact borrowers who have borrowed to their maximum capacity — encouraged by the banks — leading to loan defaults and pressure on the banks.

The risk is increasing and only a few days ago APRA (Australian Prudential Regulation Authority) issued an information paper on Risk Culture and indicated it would be taking a more intensive approach in its reviews of risk culture within financial institutions, including the influence of bonus payments.

In the latter half of the 1940s Ben Chifley moved to nationalise the banks by bringing them all under the then government controlled Commonwealth Bank. Although that move was not successful, some of Chifley’s comments in support of his action remain relevant:
Whatever regard they may claim to pay to the wider concerns of the nation, their policies are dictated in the last resort by the desire to make a profit and to secure the value of their own assets.

Experience of the past has been that private banks increased their lending in good times and contracted it in bad times …
He said that in 1931, as the Depression bit, the ‘trading banks refused to cooperate in proposals by the Commonwealth and States for the relief of unemployment and the revival of business activity’. Rather than helping provide a stimulus the banks had restricted new lending and called in loans, exacerbating the situation. ‘This should not be allowed to happen again,’ he said.

Chifley correctly saw that the flow of money was a major factor:
No single factor can do more to influence the welfare and progress of a community than the management of the volume and flow of money. Mismanagement of money, on the other hand, has contributed to the greatest economic disasters of modern times — booms and slumps, mass unemployment, waste of resources, industrial unrest and social misery.
The current neoliberal emphasis on the ‘free market’ means governments still do not have control of the flow of money and we are still subject to the booms and busts often caused, respectively, by capital inflows and lack of such inflows.

The banks in Australia did not cause the GFC but the collapse of the financial system in the US led to the drying up of capital on international money markets, restricting the ability of our banks to borrow necessary funds. That led to our government’s decision to provide a ‘bank guarantee’ — and then also to spend money to stimulate the economy.

In a paper by J Bradford De Long of the University of California comparing the financial crises of the 1890s and 1990s, one of his concluding remarks was:
A look back at history shows no easy way of controlling the macro-economic instability that large-scale capital inflows create. History does leave clues that a strong, credible, and credited commitment to unalterable exchange rate parities would do some good but we do not know how to create such a commitment in the age of mass politics by any means short of dollarization.
(‘Dollarisation’ refers to linking all currencies to the US dollar as was done in the Breton Woods agreement following WW2, or in some cases even adopting the US dollar as a national currency.)

So our banks are causing us problems — nothing new there. Our banks are contributing to a property investment boom that may not be sustainable — nothing new there. Any reduction in our banks’ ability to borrow overseas may lead to a credit crisis here in Australia — nothing new there. Our banks insist they will pass the cost of regulation on to us, their customers. The neoliberal economic approach adopted by our current government means it will not increase regulation so the banks will be free to continue as they are. The banks themselves claim, strong, profitable banks are necessary for a strong economy, and our government will not disagree even if the banks’ current profits are among the biggest corporate profits in Australia — in other words, the banks may be ‘strong’ but the rest of the economy isn’t.

While many things have changed in the past one hundred and thirty years, it appears banks have changed little.

What do you think?
Is the current devotion to the ‘free market’ simply allowing banks to do as they wish irespective of what is in the best interests of the country?

Has competition gone too far when banks bend, or even break, the rules to ensure profitability for their shareholders?

Let us know in comments below.


Recent Posts
The Turnbull endgame - again?
Ad astra, 12 October 2016
It was Karl Marx who said History repeats itself, first as tragedy, second as farce. Malcolm Turnbull gives contemporary credence to these words.

Seven years ago, in August 2009, as Malcolm Turnbull’s time as Leader of the Opposition seemed close …
More...
Let’s talk about ‘traditional’ values
2353NM, 16 October 2016
Donald Trump, in his mind anyway, is the next President of the United States of America. Last week, he was in deeper hot water than usual when a tape of a conversation between Trump and a reporter from Access Hollywood regarding his sexual exploits with women, made a decade ago …
More...
Planning - Turnbull’s black hole
Ad Astra, 19 October 2016
Let’s stand back from the daily tumult of federal politics momentarily, hard though it is to ignore, and look into the distance. What do we see? Given that politicians believe their role is to make this nation a better one for us all, where is the evidence of them planning to make it so? Where is the Turnbull
More...

Planning - Turnbull’s black hole



Let’s stand back from the daily tumult of federal politics momentarily, hard though it is to ignore, and look into the distance. What do we see? Given that politicians believe their role is to make this nation a better one for us all, where is the evidence of them planning to make it so? Where is the Turnbull Team's much touted 'Plan for a Strong New Economy' that the logo promised?

Let us start with a recent calamity – the electricity blackout in South Australia. The complexities of how this came about will be explained by Chief Scientist Alan Finkel’s enquiry. This is not the place to predict its outcome, but already there is evidence of a lack of planning that has contributed to this disaster.

Although the States and energy generators and providers have responsibility for energy supply, the federal government has overriding responsibility for energy security – indeed Environment and Energy Minister Josh Frydenberg declared the day after the calamity that "Energy security is the federal government’s number one priority." Did anyone hear him uttering these weighty words anytime before it occurred. No. This was a newfound mantra, now so important that it supplanted the Coalition’s top priority – national security. Turnbull concurred.

Which raises the question of exactly how much planning the feds had made to ensure energy security. Had they contemplated the effect that intermittent (or asynchronous) energy generation from renewables might have on the electricity grid and the constancy of supply?

They have known for years that renewable energy generation has been rising steadily. At the end of 2015 there were 77 wind projects, with 2064 turbines generating 4187 MW of power, with a further 365 MW under construction. Almost a year later there are many more. As at March 2015, in addition to household solar panels, there were over one hundred solar projects generating 4,100 MW of photovoltaic solar power.

This is not restricted information – it is freely available on the Internet. Yet there seems no evidence that the federal government and its Energy Minister have undertaken any planning to integrate intermittent power generated by wind or sun into a network that hitherto has been powered by regular base-load power generated from burning fossil fuels. There are complex arrangements already in place to modulate the level of power in the grid, which allow changes to the levels of power occasioned by intermittent power inputs. These arrangements are said to have failed during the fierce SA storm with its gusts of up to 140km an hour and over 80,000 lightening strikes, which took down 22 power transmission pylons and three transmission lines.

The consequent sudden drop in energy frequency in the network triggered an automatic cut at the interconnector with Victoria to protect the national network. SA Premier Jay Wetherill said: "The system behaved as it's meant to behave to protect the national energy market", but the federal Energy Minister and the PM seemed not to understand this reality, nor were they prepared to take any responsibility for this vulnerability despite trumpeting that ‘energy security was their top priority’. What they did do immediately though was to make political capital by castigating State Labor governments for their ‘unrealistic and ideologically-driven targets for wind power’; thereby insinuating that reliance on wind power was a prime cause of the disaster.

Frydenberg then called an urgent meeting with State energy ministers to discuss how the national electricity grid might be better protected in future. Why was this the first such meeting?

If ever there was an example of a gross planning deficit at a federal level, this is it. A Turnbull planning black hole!

Marriage equality
The marriage equality issue is another example of poor planning. Propelled by the promise to his right wing to continue Abbott’s policy, Turnbull has persisted with the plebiscite idea, which will be stone dead once the Senate rejects it.

Turnbull, despite his personal support for marriage equality and his proclaimed confidence that both the people and the parliament would support it strongly, has no Plan B. For him, Plan A, the plebiscite, is all there is. Other leaders have been able to change their mind in the face of an alternative view in the electorate (Mike Baird springs to mind), but so controlled is Turnbull by his conservative rump, which refuses to even consider a Plan B, that he will not to listen to the increasing public clamour for marriage equality and the rising desire for a parliamentary vote rather than an expensive and divisive plebiscite. A sound planner would have anticipated that the long and loudly voiced resistance to a plebiscite by Labor, the Greens and several crossbenchers in the Senate would eventually kill the plebiscite plans, leaving him with nothing.

Bernard Keane of Crikey has this cryptic view: “…there is a Plan B, even if the Prime Minister won’t discuss it. It’s to hope the issue that has hovered over federal politics for more than a year goes away, put off until at least the next election!” 2353NM analyses this issue at length in Turnbull – Abbott from a better postcode.

Turnbull’s lack of an alternative plan for introducing marriage equality is another planning black hole, one that is distressing to the LGBTI community. He ought to have anticipated the outcome now upon him and have planned an alternative approach.

Budget planning
This constitutes another black hole.

How long have we had to endure the ideologically driven budget planning that started with Joe Hockey and was continued by Scott Morrison and Mathias Cormann? We know that it is based on supply-side (trickle down) economics, which benefits the top end of town but penalises those lower down the pecking order. We know that the touted benefits of increased investment, more jobs and better pay for the workers are illusory, unsupported as they are by historical evidence accumulated over many decades. Yet they persist, driven by their ideological disdain for the ‘leaners’ whom they insist depend on the ‘lifters’ who work hard and pay their taxes.

You might be interested to view this You Tube video by economist Robert Reich, former labor secretary to US president Bill Clinton, which addresses this issue:



It goes on still. Only last week the Coalition, backed by Labor, passed a bill that embraces trickle-down economics – the Income Tax Relief Bill – which will drop the marginal tax rate for the $80,000-$87,000 bracket from 37 to 32.5 per cent. This was reported upon comprehensively in The New Daily, an abbreviated version of which follows:

Treasurer Scott Morrison sold it as an income tax cut for “middle income” workers, but The Australia Institute insists it’s not a cut for middle earners because average income earners don’t earn anything like $80,000 a year. Anyone on $80,000 a year is in the top 25 per cent of income earners, and this figure doesn’t include age pensioners, the unemployed, and the disabled. If they were added in, it would push those on $80,000-plus close to the top 10 per cent. While it’s true the average full-time worker earns just over $80,000, that figure is misleading; the Institute’s economist pointed out that when part-time workers are factored in, the average wage drops to $1575 a week, which works out to roughly $60,000 a year.

It’s even worse for women. The average female worker earns only $925 a week, which is about $48,000. Female workers constitute only 39 per cent of those who earn $80,000-plus.

Not only will the tax cut not benefit ‘middle’ Australia, but it will cost the Budget $3.9 billion over the next four financial years.

Giving an extra $315 a year to low-income earners would ensure it was spent immediately, resulting in much-needed economic stimulus, whereas higher earners are likely to bank more of their tax cut – trickle down will not occur.

There are other approaches. Take Mark Dayton, Democrat governor of Minnesota, who won office in 2010. This is what the US blog Mic had to say about his approach: 
“Since 2011, Minnesota has been doing quite well for itself. The state has created more than 170,000 jobs, according to the Huffington Post. Its unemployment rate stands at 3.6% - the fifth lowest in the country, and far below the nationwide rate of 5.7% - and the state government boasts a budget surplus of $1 billion. Forbes considers Minnesota one of the top 10 in the country for business.

“Given that Dayton is a well-connected millionaire whose family controls the Target fortune, one could be forgiven for thinking this was the result of embracing the corporate world. But in fact, over the past four years, the state has undergone a series of policy reforms that most of the corporate world decries: It has imposed higher taxes on the wealthy and raised the minimum wage. (My emphasis)

“When each of these progressive policies was initially proposed, Minnesota Republicans made dire predictions about their effects on the economy, and argued that bleeding-heart concerns about economic fairness would stifle growth. Despite all the warnings, Minnesota's economy hasn't tanked. Instead, it's sailing with greater force than it has in years.”
The Mic article contrasts this with the situation in the adjoining state Wisconsin.
“As Minnesota has enjoyed economic success, observers have often compared the state's situation to that of its neighbor Wisconsin. Republican Scott Walker also won the governor's mansion in Wisconsin in 2010, but pursued a deeply conservative agenda for managing the economy. He made huge spending cuts to vital services ranging from education to health care. He reduced taxes on the wealthy, and got rid of tax credits for low-wage earners. (My emphasis)

By a number of measures, Wisconsin hasn't fared as well as Minnesota. As the Milwaukee Sentinel Journal documents, Wisconsin's job growth has been among the worst in the region, and income growth is one of the worst in the country. It has a higher unemployment rate than Minnesota. And the budget is in bad shape.
This is just one example; there are others. But it illustrates two vastly different approaches to economics: one that increases taxes on the wealthy and increases the minimum wage, and the opposite: one that reduces taxes for the rich and cuts services, and shows that the former is superior.

Why can’t Turnbull, Morrison et al consider approaches other than the traditional conservative one of cutting services and giving tax breaks to the well off? Why haven’t they got a Plan B? The truth is that this is another Turnbull ideologically driven planning black hole. So driven are they by their supply side ideology that believes economies are stimulated by giving tax cuts to the top end of town, that they are unable to consider an alternative approach. The have a Plan A, but no Plan B. This planning black hole leaves them shackled to a discredited economic policy.

In their economic planning, have they ever considered the merits of Modern Monetary Theory as described by Ken Wolff in Modern Monetary Theory and will it help? The answer is: 'almost certainly no'.

What Government planning is evident as we approach an economy where many jobs will be automated, both manual and cognitive, and unemployment and underemployment will rise? Have they thought about and planned for the ‘gig economy’ described by Ken Wolff in Are governments ready for the coming economic and social changes? The short answer is: ‘not that any of us can see!’

Economic planning is among the government’s poorest efforts, leaving us all vulnerable, and many of us worse off.

Inequality
There is now abundant evidence that inequality is a social burden for millions of people in our country and in many others. A large part of the phenomenon we witness day after day as America prepares for its presidential election is the direct result of vast swathes of the nation feeling left behind, while the political establishment does little to elevate them from their impoverished state. Thus people like Bernie Sanders, who press for more equality, excites many followers, and even the arch-capitalist Donald Trump attracts supporters by promising to fix the ‘corrupt’ political establishment that he claims cares little for them.

We know too from the work of Professor Michael Marmot that health inequality runs parallel to economic inequality. Those with the least, those with the poorer jobs, have the worst health.

In The neoliberal execution of democracy, Ken Wolff describes in detail how neoliberal politics promote inequality. He quotes Noam Chomsky: “Neoliberal democracy, instead of citizens, produces consumers…The net result is an atomized society of disengaged individuals who feel demoralized and socially powerless”

Where are the Turnbull government’s plans for decreasing inequality? The Coalition is doing nothing to ameliorate the growing inequality that exists; indeed their neoliberal actions are making it worse.

Climate change
Here is where planning by the Turnbull government is so appalling. We know that its Direct Action Plan, Plan A, is a fraud. At this historic time when the world has crossed the threshold for the Paris agreement to take effect, the United Nations is challenging Australia’s policy. A report in The Age only last week read:
“Australia is facing renewed international pressure to explain what it is doing to tackle climate change, with a United Nations review finding its emissions continue to soar. Several countries are calling for clarity about what it will do after 2020. Countries including China and the US have put more than 30 questions to the Turnbull government, asking for detail about how Australia will meet its 2030 emissions target and raising concerns about a lack of transparency over how the government calculates and reports emissions.

“It comes as the federal government has been facing calls at home - sparked by its own criticism of ambitious state renewable energy targets - to reveal what it would do on climate change and clean energy beyond 2020. An expert review commissioned by the UN found, based on data submitted by Australia, its emissions would be 11.5 per cent higher in 2020 than they were in 1990.”
The Turnbull government has no Plan B for mitigating global warming even although Plan A continues to be ineffective.

GST in WA
Malcolm Turnbull made a big pre-election political play when in Western Australia about its unfair share of GST revenue and promised to fix it. Several months later there is no fix, nor is there any plan to do so. In his quest for a fairer share of GST for WA, and in the absence of any action by Turnbull, Brendon Grylls, (who is also attempting to regain his position as Leader of the WA Nationals), is promoting a mining tax, which would increase WA’s GST take. He is highly critical of Turnbull for having no plan to match his words.

Here’s another planning black hole with which the Turnbull government is riddled!

I could go on and on, but let’s finish with a laughable procedural planning shemozzle.

Procedural non-planning
With just a one-seat majority, it would be reasonable to expect careful planning in the area of parliamentary procedure. But already, in just a couple of months, the Turnbull government has suffered three defeats on the floor of the House because some of its members decided to leave on an early flight home, and last week Kelly O’Dwyer managed to embarrass the government through a procedural bungle by accidentally endorsing a bill amended by Labor, which criticized the Government. Of course she, the Manager of Government Business, Christopher Pyne, and the PM tried to play down the incident, but observers see it as a metaphor for the awful planning of the Turnbull government.

Whichever way we turn, wherever we look, we see either no planning in critically important areas, or faulty planning that imperils the Turnbull government, and of course we the citizens who depend on government to do those things that keep us safe, that enhance our prosperity, that give each of us a fair go, that enable us to be part of an integrated multicultural society which cares for all its citizens, rich and poor, able and disabled, healthy and ill.

The Turnbull government is letting us down badly because of its many planning black holes.
And sadly there is no sign that planning will improve in the time ahead.




What do you think?
Let us know in comments below.

Can you think of Turnbull's other black holes?

What evidence do you have?
Recent Posts
The neo-liberal execution of democracy
Ken Wolff, 5 October 2016
In my inbox each day I get an e-mail from The Washington Post called The Daily 202. This year it has been, as is to be expected, mostly about the American Presidential primaries and forthcoming election but, in reporting Bernie Sanders’ primary win in West Virginia back on 10 May, it stated the win was …
More...
Let’s talk about ‘traditional’ values
2353NM, 16 October 2016
Donald Trump, in his mind anyway, is the next President of the United States of America. Last week, he was in deeper hot water than usual when a tape of a conversation between Trump and a reporter from Access Hollywood regarding his sexual exploits with women, made a decade ago, was released.
More...
The Turnbull endgame - again?
Ad astra, 12 October 2016
It was Karl Marx who said History repeats itself, first as tragedy, second as farce. Malcolm Turnbull gives contemporary credence to these words.

Seven years ago, in August 2009, as Malcolm Turnbull’s time as Leader of the Opposition seemed close …
More...

Let’s talk about ‘traditional’ values


Donald Trump, in his mind anyway, is the next President of the United States of America. Last week, he was in deeper hot water than usual when a tape of a conversation between Trump and a reporter from Access Hollywood regarding his sexual exploits with women, made a decade ago, was released. Trump released an apology around midnight on 7 October (US time) and where he did state
“I’ve said some foolish things,” Trump said in a taped apology posted on his Facebook page. “But there’s a big difference between the words and actions of other people. Bill Clinton has actually abused women.”

Turning to his Democratic rival Hillary Clinton, Trump accused her of having “bullied, attacked, shamed and intimidated” her husband’s “victims.”
It’s a classic ‘look over there’ approach, that demonstrates that while there is an apology on record, it’s a pretty safe bet that Trump’s campaign team told him he had to do it, rather than some intrinsic understanding that the original conversation was just wrong. The apology went for 90 seconds and the text is available on the CBS News website here.

While Trump’s supporters are also apparently ‘looking over there’, some Republicans are less convinced. According to CBS, his choice for Vice-President, Indiana Governor Mike Pense,
was “beside himself” and his wife was furious, according to a person familiar with their thinking. That person spoke on the condition of anonymity, because they were not authorized to share the private discussion.
CBS also reports the head of the Republican Party was, if anything, more direct
“No woman should ever be described in these terms or talked about in this manner. Ever,” said Reince Priebus, who had stood by Trump through his past provocative comments.
According to the CBS report, Trump’s justification for his actions in the original interview was “When you’re a star they let you do it,” Trump says. "You can do anything."

So Trump is a misogynist. At the time of preparation of this article, Trump is refusing to stand down as the Republican Party’s nomination for US President. It’s not the first time that Trump has made derogatory comments about women, immigrants foreign countries, welfare recipients or the current President, just to name a few. The actor Robert De Niro was asked to film a spot for a ‘get out to vote’ activist group in the US, which contains a really interesting Trump character assessment:
"I mean, he's so blatantly stupid," the Academy Award winner, 73, said of Trump, 70, in the clip. "He's a punk, he's a dog, he's a pig. He's a con, a bulls--t artist, a mutt. He doesn't know what he's talking about, doesn't do his homework, doesn't care, thinks he's gaming society, doesn't pay his taxes. He's an idiot. Colin Powell said it best: He's a national disaster. He's an embarrassment to this country. It makes me so angry that this country has gotten to this point that this fool, this bozo, has wound up where he has."

De Niro continued, "He talks [about] how he wants to punch people in the face. Well, I'd like to punch him in the face. This is somebody that we want for president? I don't think so. What I care about is the direction of this country, and what I'm very, very worried about is that it might go in the wrong direction with someone like Donald Trump. If you care about your future, vote for it."
In 2012, Prime Minister, Julia Gillard rightly called out then Opposition Leader Tony Abbott on misogyny



The speech reverberated around the world. It’s probably fair to suggest that Gillard’s speech was not just a reaction to Abbott’s claim that Gillard was supporting then Speaker of the House Peter Slipper (who probably wasn’t the most moral character in the house), it was a reflection of the years of continual sniping at Gillard’s gender and her ‘lack of fitness’ to be Prime Minister as a result. Abbott’s wife runs an apparently successful business and he has three daughters. He obviously supports and respects his family’s successes and supports their endeavours. What Abbott didn’t and probably still doesn’t realise is continual sniping of a person based on their gender (as Abbott did to Gillard) is not fair game because the victim has differing opinions, it is as Gillard suggested – misogynisy.

Both Abbott and Trump are extremely conservative political leaders. While Trump could claim that he has reflected on his 2005 comments and knows better and Abbott did suggest that Gillard over reacted, is there a common theme here?

Prime Minister Turnbull committed to retaining Abbott’s plebiscite on marriage equity when he rolled Abbott in 2015. While the contents of the 2016 Coalition agreement are secret, is widely believed that the commitment remains – as Turnbull has brought the legislation to Parliament and if it was passed, the plebiscite would have been held on 11 February 2017.

Those who populate a number of religious organisations around Australia as well as organisations such as the Australian Christian Lobby will tell you any family that doesn’t consist of a husband and wife in a deeply committed loving relationship will lead to problems for the children later in their lives. In some cases, they are probably right; however, there are plenty of people with problems later in life that came from married couples with deeply committed and loving relationships as well.

In a perfect world, it would be wonderful if every person was valued for their potential contribution to the world and treated accordingly. Apart from creating ‘ideal’ families, this ‘perfect’ view of the world would also close the detention centres on Nauru and Manus Island, stop the bombing in Syria and provide food and shelter for those who are incapable of supporting themselves across the world. No Virginia, the world is not perfect, and those who are proclaiming the need for ‘ideal’ families are not similarly vocal about the conditions on Nauru, the various wars and human emergencies around the world.

This is where the moral and ethical problem is. For example, the top of the Australian Christian Lobby’s Home webpage looks like this:

Given that most religious groupings, be they Christian, Buddhist, Muslim or Jedi (it was accepted as a choice in the last Census) probably desire a compassionate, just and moral society through having the tenets of their particular religious text reflected in the political life of the nation, it would be seemingly obvious that ethical and moral issues such as treatment of refugees, treatment of young adults in custody and attempting to assist those around the world would be amongst the issues at the top of their mind, after all most of the religious texts request their believers to ‘do unto others as you would have them do unto you’. None of those issues make the ACL’s ‘hit list’ contained on the 377 pages of ‘latest news’. Unfortunately, the actions of people like the Trump, Abbott and conservative groups such as the ACL do not reflect their claimed values. Unsurprisingly most of the ‘hot topics’ on the ACL’s list relate to marriage equity or sex education in schools.

Trump and Abbott clearly do not actually give women the respect they have claimed they do. The ACL has a very narrow view of Christian faith if it just stands by without calling out the Australian Government’s actions in regard to refugees, detention centres and recurring efforts to further marginalise those who can least afford private health care, private schools or even private rental homes. When others called out Trump and Abbott on misogyny, Trump’s response was to suggest that the husband of the Presidential candidate was worse than he was and Abbott suggested that Gillard ‘over reacted’. The ACL’s CEO, Lyle Shelton will make whatever claim he believes will further his argument such as
“Research clearly shows the quickest pathway to poverty for a child is for their biological mum and dad to break up, that's just a fact.”
to argue for his preferred position of the ‘ideal family’. Shelton’s Lobby group is also potentially one of the beneficiaries of the $7.5 million Turnbull would have given the “NO” case should the plebiscite legislation have passed Parliament. As it seems that his public utterances have no factual basis, as there is certainly no collaborating evidence for the issues they claim others are going to implement made in the “Latest News” section of their website (although to be fair the entire 377 pages of items were not checked), and while Trump, Abbott and the ACL are entitled to believe they have done the right and honourable thing, the reality is somewhat different.

There are numerous reasons why a child may not grow up with their biological mum or dad. One parent may have died, the parents may have separated, a parent may have to work in a different town, be in jail or even stuck in a detention centre operated by the Australian Government. Logically, most of these kids will have mental and physical issues to work through as a part of that process. Shelton’s comments (and a large proportion of the anti-marriage equity advertising that has already gone to air) giving the ‘traditional’ view of marriage will not assist the mental health of those kids who have a different reality – regardless of the reason for that reality.

Trump, Abbott and groups such as the ACL all claim to be good Christians who are upholding the values of society. Yet, Trump admits to abuse of women physically and mentally, Abbott certainly treated Gillard (and other women) as second class citizens and conservative groups such as the ACL seem to feel that there is no need for the facts to ruin a good story. If the values of society are those that suggest that the actions above are acceptable, let alone desirable attributes of ‘traditional’ society, we should be re-imaging society so that all people are equal, regardless of their gender, beliefs or attitudes.

In addition to the cost of a plebiscite that isn’t binding (estimated to be $160 million), Turnbull has decided to gift $7.5 million to both the ‘YES’ and ‘NO’ cases for the plebiscite, allowing further attacks on the mental health of those kids that don’t live in the conservatives’ ‘traditional’ families and their caregivers. According to news.com.au, the ACL has already planned to use some of the funding to widen the argument to include sex education in schools.
Deputy Opposition Leader Tanya Plibersek today said she had concerns about “the idea that we’ll have a $15 million publicly-funded battle, when we’ve already seen the sort of material that’s been put out against marriage equality”.

“And we’ve got organisations engaged in this debate saying anti-discrimination law and rules around advertising should be suspended,” Ms Plibersek told ABC Radio.

She wanted to know what they intended to say during the campaign that currently was illegal.
It is a truism that sunlight is the best disinfectant. Political leaders legitimising abuse of other people, advertising legitimising only certain forms of family life and so on creates victims. While abuse of women, discrimination based on gender, preferences or beliefs may have been acceptable in the ‘good ole days’ of ‘traditional’ families, victims have to know firstly that they are victims, secondly there is help available and thirdly how to access that help. If conservatives try to push these issues back into the closet, they are deterring those who are having problems from putting their hand up and asking for help. World Mental Health Day is 10 October and in Australia, the week including that date is Mental Health Week. It’s a shame and not healthy for our society that Turnbull is again being held hostage by the conservatives on his side of politics and plans to fund advertising around a non-binding plebiscite that effectively seeks to de-legitimise a number of loving and sharing families around Australia.

What do you think?
Let us know in comments below.
Recent Posts

Recent Posts
The neo-liberal execution of democracy
Ken Wolff, 5 October 2016
In my inbox each day I get an e-mail from The Washington Post called The Daily 202. This year it has been, as is to be expected, mostly about the American Presidential primaries and forthcoming election but, in reporting Bernie Sanders’ primary win in West Virginia back on 10 May, it stated the win was …
More...
Turnbull – Abbott from a better postcode?
2353NM, 9 October 2016
Assuming the Opposition agrees, there will be a plebiscite on the proposition to allow same sex marriage in Australia in February 2017. The independents in the parliament have (mostly) stated their positions on the matter and the Greens are against the plebiscite but in favour of same sex …
More...
The Turnbull endgame - again?
Ad astra, 12 October 2016
It was Karl Marx who said History repeats itself, first as tragedy, second as farce. Malcolm Turnbull gives contemporary credence to these words.

Seven years ago, in August 2009, as Malcolm Turnbull’s time as Leader of the Opposition seemed close …
More...

The Turnbull endgame - again?



It was Karl Marx who said History repeats itself, first as tragedy, second as farce. Malcolm Turnbull gives contemporary credence to these words.

Seven years ago, in August 2009, as Malcolm Turnbull’s time as Leader of the Opposition seemed close to its end, I wrote The Turnbull endgame? Four months later he was gone, replaced by Tony Abbott by just one vote.

The leopard has not changed his spots. What was written about him then, applies now. This piece highlights the striking parallels between now and then.

I shall intersperse in block quotes clips from that earlier piece, with contemporary comment to illustrate my argument.

The Australian today [6 August 2009] abounds with talk of replacing Malcolm Turnbull as Coalition leader. Dennis Shanahan and Matthew Franklin wrote a piece Desperate Liberals look to replace Turnbull with Robb, and Shanahan has a blog It's a loser or the last man standing. The sixty comments that followed are evenly divided between support for making a change and leaving Turnbull there, as Robb would be no better!

Jack the Insider has a blog Turnbull artistry no match for the numbers. He concludes “...the hard heads in the Coalition will soon reach the view, if they have not already done so, that the continued existence of the Liberal Party depends on a change in leadership.”... Most of the 240 respondents, even those with Liberal leanings, agreed that a change was necessary.

The Political Sword has long maintained that while Malcolm Turnbull was an accomplished journalist, barrister, businessman and banker, he was not a politician and would have difficulty in the political milieu.

On 19 September last year [2008] in Will the real Malcolm Turnbull please stand up?, it was argued that after starting so promisingly when he entered parliament, when this independent thinker and decision-maker was being forced uncomfortably into a political mould as a Howard Government minister, his authority faded and he became less convincing. He seemed to not have his heart in what he was saying.

Then in The Turnbull Report Card 10 days in posted on 26 September 2008 soon after he became leader, after acknowledging his pluses, concluded “...where he falls short is when he is not on his favoured turf, when he’s challenged with uncomfortable facts, when he attempts to advocate causes in which he does not have his heart, and when he has to defend untenable positions. As political life abounds with such circumstance, unless he can overcome this flaw, he will have difficulty convincing the people of the merit of his approach and his capacity to manage a nation beset with many contemporary challenges and complexities. Leading a nation is so much more complex and demanding, so different from life at the bar and managing a merchant bank.”
Sounds familiar doesn’t it!

Despite the unhappy memories of the Turnbull of 2009, when he toppled Abbott in September last year the sense of relief among the general public that finally the calamitous Abbott was gone (at least from the top job) was so great that memories of the earlier Turnbull were erased from the public’s mind. Great hope was held out that at last we had a leader that was prime ministerial in appearance, demeanour and speech. At last our embarrassment of having Abbott as our leader was behind us.

His prime ministership started well, but soon doubts began. Had he learned from his previous period as leader? Had the Turnbull nature changed? The public was at first prepared to give him the benefit of the gathering doubts that people had.

Let’s look back again to 2008:
In Malcolm’s at it again posted on 15 October [2008], when he was beginning to qualify his support initially given to the first Rudd Government stimulus package, he began to sound less persuasive, became circumlocutory, and arguably lost his audience. The piece concluded: “Kim Beasley was criticized for his prolixity, and unable to overcome it, eventually people stopped listening. Indeed this was a major factor behind the move to replace him as leader. Leaders who lose their audience – Beasley and Howard are examples - lose elections. Turnbull’s minders would be wise to point out this defect to him, and try to rectify it, always providing Malcolm’s ego will tolerate such a move.

To quibble or not to quibble, posted the next day when Turnbull again quibbled about his support for the stimulus, concluded “As said so many times in this blog, when Turnbull does his own thing and promotes his own views, he looks impressive and sounds authentic; but as soon as he’s forced to toe the party line, he loses his lustre and becomes an ordinary politician...When will the Coalition learn? When will they realize that sometimes it’s better not to quibble?”
Sounds familiar again. Balanced journalists have commented time and again that Turnbull is under the thumb of his right wing members, the very ones who extracted promises from him for their vote when he challenged Abbott for leadership.

Now we hear him arguing strongly in support of the Coalition’s paltry Direct Action Plan although he vowed previously never to lead a government that did not put a price on carbon pollution. Just as before, he now sounds unconvincing, and is marked down for being a turncoat.

Although a strong supporter of marriage equality, he persists with his intention to hold a plebiscite. His rationale is that it was an election promise, but more importantly it was a promise to his right wing. The fact that recent polls show that the public’s desire for a plebiscite is waning and that they want parliament to get on with its job of legislating for equality, has so far not persuaded him to reverse his stand and show the leadership they hoped he would. Although he knows how close he went to losing the recent election, he realizes that his prime ministership depends more on the support of his right wing than on the support of the people. He knows where the power rests.
The emerging Opposition strategy, posted on 13 November [2008], described the strategy being adopted by Turnbull and the Coalition: attacking everything the Government did, criticizing everything Kevin Rudd and Wayne Swan proposed, and attacking them personally, labeling them as incompetent and reckless. At the time Crikey’s Bernard Keane said “The risk with Turnbull’s tactics are that they backfire, and create a public impression of a smart-rse, someone who failed to get behind the Government as it tried to manage a global crisis...The risk at the moment is that he cruels his public image before that can happen. Once the public has an image of you, it’s very hard to shake it off.”

The TPS piece concluded “So it’s hard to see any logic to Turnbull’s strategy and tactics other than his belief that if he throws enough mud, some will stick, and that by repeatedly attempting to discredit Rudd, Swan and the Government generally, he will gain traction, the scales will fall from the voters’ eyes, and he will emerge as the indispensable statesman who can restore Australia to the ‘glory’ of the Howard years. On the other hand, as Keane suggests, his strategy may inflict so much damage on his image that recovery will be difficult, if not impossible. Some are already punting he will not survive as leader to the next election; what he’s now doing may ensure that this becomes a discerning prophesy. Unfortunately for him, his impatience, his ego and his determination to use a ‘do whatever it takes’ strategy no matter how politically opportunistic, may be his undoing.”
The pattern of Turnbull’s behaviour was becoming clearer:
The ‘deficit’ wedge posted on 25 November [2008] was written when the deficit and debt slogan was launched. The piece concluded “What this amounts to is an opportunistic ploy by the Opposition to wrong-foot and embarrass the Government about the much-talked-about deficit, and to paint it as incapable of sound economic management if it finally does go into deficit for the good of the nation. That the Coalition’s wedge campaign flies in the face of sensible economic management in these troubled times is of no importance to them; political advantage and the wistful hope of winning the next election is all that counts...Since his election to leadership Turnbull has posed as a financial guru, but he has gained no traction in two party preferred terms in the opinion polls...The people don’t seem to be buying his rhetoric...Turnbull needs to be careful that his blatant opportunism doesn’t backfire.”

Turnbull’s benchmarks for failure of 30 November [2008] described his three benchmarks for Rudd Government failure: going into a deficit, rising unemployment, and recession. The piece concluded: “Economist after economist, commentator upon commentator agree that under the current economic circumstances a deficit occasioned by a well-targeted fiscal stimulus is necessary to limit the risk of recession. They agree with Rudd and Swan, not with Turnbull. His demand that the Government avoids a deficit, although this would be detrimental to the economy, to jobs, and to the nation, is irresponsible. But will contrary opinion be enough to stop him? Laurie Oakes doesn’t think so. Writing in the 29 November issue of the Daily Telegraph: ‘Turnbull falls into deficit’, he suggests that even if he is wrong, Turnbull is never in doubt about the correctness of his position. So it’s unlikely Turnbull will change tack – no price is too high for him to achieve political traction. If one can judge from the latest opinion polls, Turnbull is spinning his wheels. He desperately needs traction. But his strategy is risky. The people are watching. When they see through his glib talk, he will be the one who fails.”

The ‘stop at nothing’ pattern was emerging.
History repeats itself.

In the wake of the disastrous storms that blacked out South Australia, we have Turnbull in full political mode, lambasting Labor states for having ‘aggressive and extremely unrealistic targets for renewable energy’, insinuating that South Australia’s high use of wind power was a significant factor in the catastrophic failure of electricity supply to that State. He persists with this line despite energy providers and experts in power generation, as well as renewable energy providers and advocates insisting that the blackout was caused by the unprecedented disastrous weather event that hit the State, and not the use of renewables. As he condemned Kevin Rudd and Wayne Swan for their actions during the GFC (now shown to be life-saving for our economy), he now condemns Labor premiers for their support of renewables, and piously (echoed by energy minister Josh Frydenberg) boasts that ‘energy security is the Coalition’s top priority’ (apparently national security has slipped down the list). Again accruing political capital is his object, not the wellbeing of the nation.
The 2 December [2009] piece Why does Malcolm Turnbull make so many mistakes? concluded “History may show that Turnbull’s biggest mistakes are underestimating Kevin Rudd and Wayne Swan, perpetually insisting they ‘simply don’t understand’ financial or economic matters, consistently condemning their every move, changing his tune whenever it suits him, flying in the face of competent economic intelligence, failing to exercise strong leadership, continuing to make political points at a time of unparalleled financial turmoil and steadily losing credibility as he does, indulging in obfuscation and circumlocution while avoiding answering questions asked by interviewers, and most significantly failing to notice that the people are not behind him.”
He is now in similar mode, asserting that Labor does not understand energy security, that it is obsessed with renewables, that its targets are wildly unrealistic, all the time neglecting to set national targets to guide the states, or even to carry out modeling for the very modest emission reduction and renewable targets he agreed to in Paris. He is dragging his feet while castigating the Labor states which have filled the void. Again, he is failing to provide leadership. He seems oblivious to the increasing demands of the people who want action on climate change urgently.

And it’s not just ordinary people who want action. Major business organizations and energy users have urged federal and state governments to work cooperatively to map out a “strategic response to Australia’s energy transition and challenges”… warning that investment is at risk. The Australian Energy Council, the Australian Industry Group, the Business Council of Australia, the Energy Users Association of Australia, Energy Consumers Australia, the Energy Efficiency Council, the Energy Networks Association and the Clean Energy Council are jointly calling for leadership from and between the jurisdictions, and bipartisanship on “the tightly connected issues of energy and climate change”, warning that in the absence of bipartisanship, “uncertainty will cause essential energy investments to be deferred or distorted, to the ultimate cost of us all.” But will Turnbull listen to them?
On 11 April [2009], a piece Why is Malcolm Turnbull so unpopular? began “There’s not much need to emphasize Turnbull’s contemporary unpopularity – it’s all over the air waves and the papers. It takes only a few metrics to quantify it...He leads a Coalition that currently shows has an average TPP of 60/40 in Labor's favour across several polls, which show a steady trend away from the Coalition.
His polling situation is not quite as bad now, but compared with the stellar polls he enjoyed just a little over a year ago, his personal popularity is in a steady downward spiral, and recently the Coalition’s TPP was as bad as it was when Abbott was PM!

This piece is already long enough. Let’s finish with the conclusion of the 2009 piece; The Turnbull endgame?
To draw this long piece to an end, should we be surprised at the position in which Turnbull now finds himself? Looking back over a year or more a pattern of behaviour has become clearly apparent: impetuosity, poor political judgement, ruthlessness and self-confidence not matched by political ability, that goes to his character, his integrity and his political wisdom, all of which are now highly questionable.

Is Turnbull’s endgame upon him? ‘Endgame’ describes the last part of a chess game, when there are very few pieces left. That looks like the right word.

It seems that only lack of a plausible alternative can now save him.
Here we are again! Nothing has changed since 2009 except the dates. Turnbull is still the Turnbull he always was, and always will be. The electorate, initially buoyed with high expectations, has that sinking feeling again as disappointment and disillusionment overwhelms.

And his right wing would have him gone in a flash if they could mount a plausible case, provided they could find an acceptable alternative, as was the case in 2009.


As 2353NM put it in Turnbull – Abbott from a better postcode?: “When Turnbull became prime minister, there was a hope that he would bring the claimed decency and ability to appeal to the middle ground that was so lacking with Abbott. After 13 months, it hasn’t happened. There are two possibilities: Turnbull is just as bad as Abbott (except for better clothing choices and living in a ‘more expensive’ postcode); or, to coin a phrase, Turnbull ’doesn’t have the ticker’ to promote and implement policy and legislation that isn’t approved by his conservative rump thereby ensuring his longevity as prime minister. Either way, the rest of us as Australian citizens will continue to suffer as a result."

Marx said: History repeats itself, first as tragedy, second as farce.

We’ve had the tragedy; now we have the farce.

Is this the Turnbull endgame – again?




What do you think?
Let us know in comments below.

Is Turnbull reaching his endgame again?

What evidence do you have?
Recent Posts
Turnbull – Abbott from a better postcode
2353NM, 9 October 2016
Assuming the Opposition agrees, there will be a plebiscite on the proposition to allow same sex marriage in Australia in February 2017. The independents in the parliament have (mostly) stated their positions on the matter and the Greens are against the plebiscite but in favour of same sex marriage.
More...
Do politicians make you sick?
Ad astra, 2 October 2016
I expect most of you would answer with a resounding YES. They make us sick when they lie, break promises, assail us with mendacious rhetoric, engage in adversarial behaviour, fail to recognise this nation's problems, seek to blame their opponents for any ills we have, and exhibit incompetence in doing …
More...
The neo-liberal execution of democracy
Ken Wolff, 5 October 2016
In my inbox each day I get an e-mail from The Washington Post called The Daily 202. This year it has been, as is to be expected, mostly about the American Presidential primaries and forthcoming election but, in reporting Bernie Sanders’ primary win in West Virginia back on 10 May, it stated the win was not really about …
More...

Turnbull – Abbott from a better postcode?


Assuming the Opposition agrees, there will be a plebiscite on the proposition to allow same sex marriage in Australia in February 2017. The independents in the parliament have (mostly) stated their positions on the matter and the Greens are against the plebiscite but in favour of same sex marriage.

The history here is that the Marriage Act was legislated in the 1961 saying (basically) marriage is a union of two people and that union is recognised across Australia. It also recognised marriages legally made under the laws of another country. As Rodney Croome wrote in the ‘Winter 2011’ issue of Overland magazine, the reason the law was made was to eliminate blatant discrimination in Australia whereby Aboriginal people were not allowed to marry who they wanted to in some states and Territories. Until 2004, there was nothing in the legislation to suggest that marriage had to be between a man and a woman, leading some same sex couples to have their marriage legally recognised in jurisdictions such as Ontario, Canada which, they claimed, automatically made their marriage ‘legal’ in Australia. The Howard Government didn’t agree and stripped the marital rights of same sex couples as soon as they landed back in Australia.

According to Croome, in early 2004:
… two such couples sought a ruling from the Federal Court on whether Australia’s relatively liberal laws on foreign marriages extended to the recognition of their Canadian unions.

The court was never allowed to decide. Liberal senator Guy Barnett petitioned the prime minister to ‘protect marriage’ from being ‘demeaned and degraded’. The petition was successful, not least because 2004 was an election year in both Australia and the United States, and the politicisation of ‘gay marriage’ welded wealthy and highly disciplined evangelical churches in marginal electorates to the conservative cause.
In August 2004, the Senate passed the ‘man and woman’ amendment to the Australian Marriage Act. Again Croome suggests:
The government’s marriage amendment — declaring matrimony to be exclusively hetero-sexual, and limiting the powers of the courts to recognise overseas same-sex unions — was raced through parliament, prioritised over government anti-terror legislation. For good measure, the prime minister addressed a rowdy meeting in the Great Hall of Parliament House in defence of ‘traditional marriage’, during which homosexuals were condemned as ‘moral terrorists’.
Not that the ALP was any better:
In her address to that anti-gay audience, shadow attorney-general Nicola Roxon declared Labor’s support for entrenching discrimination against gay relationships. She was given a standing ovation.
So why waste somewhere between $160 and $200 million on a plebiscite to change the legislation back to the way it was in the 45 or so years until 2004? Clearly, the reason is not due to some specific wording in the legislation, as Howard had no problem in changing the law in the first place.

In 2015, Time Magazine listed 21 Countries (apart from the USA) where same sex marriage is legal. The USA legalised same sex marriage in June 2015, New Zealand did in 2013. It is plainly obvious that life as we know it has not ended in either the USA or ‘over the ditch’ in New Zealand.

We’ve done the history — now for the politics. Turnbull, like most prime ministers before him, claim that they govern for the benefit of all Australians, regardless of whether or not you voted for him. While it is true that the ALP governments between 2007 and 2013 could have legalised same sex marriage, to be fair around half of the countries on the Time magazine list have only acted since 2013. It makes sense that while the issue had been building for a while, it was the Abbott Coalition government that felt the effects of the debate from 2013. Abbott ‘bought some time’ by promising a plebiscite in the next term of government (he also didn’t know that he wouldn’t be the prime minister at the 2016 election — and that story has been done to death so let’s move on).

Details of the Coalition Agreement between the Liberal and National Parties are re-negotiated every time the leader changes and subsequent to each election, so when Abbott was ousted in favour of Turnbull in 2015 there was a re-negotiation. Both parties confirmed there was an agreement for a plebiscite on same sex marriage in the next term of parliament (the parliament subsequent to the one elected in 2013). Subsequent to the 2016 election there was another renegotiation, as is customary. The 2016 agreement is secret but believed to include an understanding that a plebiscite on same sex marriage is required before the legislation is considered. (A small but worthwhile digression is to ponder why a secret agreement governing an arrangement between two political parties is perfectly acceptable in the case of the Liberals and Nationals, but any co-operative arrangement between the ALP and the Greens is frowned upon by both the ALP and the Liberals.)

Turnbull, rightly or wrongly, has continued to support a number of Abbott government measures, including a plebiscite on same sex marriage, claiming it should be non-binding but compulsory. The logic here is interesting as Howard rammed through changes to the Marriage Act in double quick time (with ALP support) in 2004 to insert the ‘man and woman’ concept into the Act. So according to Turnbull it is completely logical to change legislation to address the concerns of conservative members of his political party in 2004, but we have to waste $200 million in a vote to change it back to the way it was. To ensure tracing the logic is the equal to the triple pike with twist, the plebiscite is non-binding, so if your conservative member of parliament doesn’t want to change the legislation, they can still vote no in parliament — in spite of the results of the plebiscite (however the individual politicians choose to ‘spin’ the response and their eventual vote).

To make it even worse, the federal government has decided in its wisdom to fund both sides of the argument to the tune of $7.5 million each. Turnbull claims this will allow for a respectable debate which will allow the public to make an informed decision. Before the funding was even allocated, the ‘no’ case was linking the same sex marriage discussion to educational matters as well as using (apparently without permission) the image and words of Nelson Mandela.

Managing Director of the Australian Christian Lobby, Lyle Shelton, claims that:
“The baby who is taken from the breast of her mother doesn’t have a voice in this debate, the child who doesn’t get to know their father doesn’t have a voice,”
And
“Research clearly shows the quickest pathway to poverty for a child is for their biological mum and dad to break up, that's just a fact.”
While Shelton didn’t offer any evidence to support his claim, he is claiming that those who are brought up in a family that doesn’t replicate his idealistic view of the world are somehow fatally flawed, something that both Shorten and Turnbull (who were both raised by single parents) should demonstrably be arguing against. Instead Turnbull proposes to give the ‘no’ case $7.5 million to further denigrate those who don’t live in Shelton’s ‘nuclear’ family. While you could suggest that Shelton has ‘jumped the shark’ (again), Turnbull as the nation’s leader has a responsibility to ensure that all are treated equally. He clearly hasn’t to those children in Australia who for a variety of reasons (including same sex partnerships, death, divorce or numerous other reasons) have only have one parent. Clearly keeping the conservative rump of his political party ‘on side’ is far more important than correcting the false testament of people like Shelton who is belittling Turnbull’s own upbringing.

Another example of Turnbull’s behaviour concerns his ‘new’ approach to climate change. It has been widely reported that the Great Barrier Reef is undergoing significant bleaching of the coral. The government’s own Great Barrier Reef Marine Park Authority (better known by its slightly easier to say GBRMPA acronym) reported in June 2016 that this was caused by a seemingly small rise in sea surface temperature. The overwhelming consensus of scientists with experience in the area of study suggests that sea surface warming is an indicator of human induced climate change. One proven way to reduce human induced climate change is to move away from burning fossil fuel to generate electricity. South Australia has probably moved quicker towards renewable energy power than other states connected to the ‘National Grid’, but recently suffered a statewide power failure. Turnbull is publically implying that ‘extremely unrealistic’ renewable energy targets are the problem.

In reality, the South Australian blackout in late September had nothing to do with renewable energy. Twenty-two high voltage power pylons blew over due to excessive wind during a severe storm. As the article points out:
If the recently closed Port Augusta coal power station was still operating, it would have been cut off by the downed distribution lines too. And that would have likely made the disruption worse, since it would have created an even bigger sudden change to the network.
Lenore Taylor argued recently in The Guardian:
… state targets are exactly what Australia needs to meet the promises the prime minister made in Paris last year about reducing greenhouse gases.

Of course it would be preferable to have a consistent national policy to reach those goals, but it’s not exactly the states’ fault that we haven’t got one.

That vacuum was Tony Abbott’s proud achievement, with the abolition of the carbon price and the winding back of the federal renewable energy target, after a lengthy debate about whether it should be abolished altogether, which of course dried up almost all investment in renewable energy.

And consistent, credible national policy hasn’t been any more evident in the year since Turnbull took over either.

His own officials admitted in a Senate inquiry this week they had undertaken no modelling at all about how to meet the target Turnbull pledged in Paris for reducing Australia’s emissions out to 2030. That’s the target he is about to ratify, the target that will be Australia’s legal obligation.

But plenty of others have done modelling and analysis for him, and they all conclude that he won’t meet it, not with the Coalition’s current policies.
Clearly Turnbull is keeping the conservative rump of his political party ‘on side’ and apparently arguing the false testament of notable ‘thinkers’ and conservatives such as Deputy Prime Minister Barnaby Joyce, Queensland Senator (with 77 direct votes) Malcolm Roberts and Brett Hogan, the Research Director of the Institute of Public Affairs.


(Roberts actually linked to a news item stating the real reason for the power failure and still gets it wrong!).



In an environment where Turnbull publically called for the resignation of ALP Senator Sam Dastyari for accepting around $6,500 from people who have ‘connections’ with the Chinese government, he is doing nothing about the claims of a former minister in his government, Stuart Robert, who apparently sees nothing wrong with attempting to stack the Gold Coast City Council with people sympathetic to development proposals. Robert was sacked from his ministerial position in February after (separate) claims of inappropriate use of political donations. Fairfax’s The Age called for his resignation from parliament in an editorial on September 29. At the time of preparation, however, it appears that Turnbull is again keeping the conservatives in his own party ‘on side’ rather than calling out Robert’s behaviour for what it is.

When Turnbull became prime minister, there was a hope that he would bring the claimed decency and ability to appeal to the middle ground that was so lacking with Abbott. After 13 months, it hasn’t happened. There are two possibilities: Turnbull is just as bad as Abbott (except for better clothing choices and living in a ‘more expensive’ postcode); or, to coin a phrase, Turnbull ’doesn’t have the ticker’ to promote and implement policy and legislation that isn’t approved by his conservative rump thereby ensuring his longevity as prime minister.

Either way, the rest of us as Australian citizens will continue to suffer as a result.

What do you think?
Let us know in comments below.
Recent Posts

Recent Posts
Are governments ready for the coming economic and social changes?
Ken Wolff, 28 September 2016
In 1930 John Maynard Keynes predicted widespread technological unemployment ‘due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour’.

In the decades since …
More...
Do politicians make you sick?
Ad astra, 2 October 2016
I expect most of you would answer with a resounding YES. They make us sick when they lie, break promises, assail us with mendacious rhetoric, engage in adversarial behaviour, fail to recognise this nation's problems, seek to blame their opponents for any ills we have, and exhibit incompetence in doing …
More...
The neo-liberal execution of democracy
Ken Wolff, 5 October 2016
In my inbox each day I get an e-mail from The Washington Post called The Daily 202. This year it has been, as is to be expected, mostly about the American Presidential primaries and forthcoming election but, in reporting Bernie Sanders’ primary win in West Virginia back on 10 May, it stated the win was not really about …
More...

The neo-liberal execution of democracy


In my inbox each day I get an e-mail from The Washington Post called The Daily 202. This year it has been, as is to be expected, mostly about the American Presidential primaries and forthcoming election but, in reporting Bernie Sanders’ primary win in West Virginia back on 10 May, it stated the win was not really about ideology but disaffection:
Americans, collectively, are not as angry as watching cable TV would lead you to believe. But many poorer, less-educated folks who have been left behind in the 21st century — the ones who have seen their wages stagnate, their opportunities for upward mobility disappear and their life expectancies shorten — are looking to disrupt a status quo that has not worked for them.

That’s what Sanders and Trump are both promising to do.

So how did the septuagenarian socialist do it? The bottom line is most people are not voting for Bernie because he is liberal. They are voting for him because they perceive his promised “political revolution” as a challenge to the system that has failed them.

“West Virginia is a working-class state, and like many other states in this country, including Oregon, working people are hurting,” Sanders said last night at a rally in Salem, Oregon. “And what the people of West Virginia said tonight, and I believe the people of Oregon will say next week, is that we need an economy that works for all of us, not just the 1 percent.”
We are seeing the same phenomenon around the world: the election of Jeremy Corbin to the Labour leadership in the UK; the rise of anti-establishment parties in Spain and Greece; and, unfortunately, it has also meant the rise of extreme right (and sometimes neo-fascist) parties that tap into that disaffection with the political system.

How has it come to this?

Basically, as Sanders alluded to, it is the economic approach followed by governments that, since the Thatcher and Reagan years, has been based on a neoliberal economic philosophy which appears to be benefitting the wealthy rather than society as a whole. We know the shortcomings of that approach, based as it is on supply-side or ‘trickle down’ economics, but we have seen little discussion (at least here in Australia) on the broader impact it is having on democracy.

We live in a system where a democratic form of governance is coupled with a capitalist competitive free-market economic system.

In a democratic political system all people are meant to be equal — one person, one vote, and all votes of equal value.

The neoliberals also base their political approach on the individual but tend towards the libertarian view that governments should have no role in an individual’s life choices. Thus, in Australia, we have a libertarian, Leyonhjelm, arguing against anti-smoking regulations and the mandatory wearing of bicycle helmets. While that may support individual freedom, it ignores the wider social benefits of those approaches and the cost to the community, through our taxes, of hospitalisation and associated services for smokers or cyclists suffering head injuries. If the wider community bears the cost of such ‘freedom’, then surely it has a right to say that in the community interest some individual freedoms can and should be curtailed.

The neoliberals, however, would argue that the community concern is overcome by privatising health services: then the individuals who suffer health problems from smoking or cycling accidents have to meet their own costs — but so does everyone else, including the less well-off and those cast out of their jobs by the neoliberal economic approach.

This emphasis on the individual, as applied to economics, creates even more problems. A philosopher in the 1970s, Robert Nozick, basically set out a philosophical underpinning for neoliberalism.

There is no such thing as the ‘common good’ in Nozick’s (and the neoliberals’) approach, only individuals:
While it is true that some individuals might make sacrifices of some of their interests in order to gain benefits for some other of their interests, society can never be justified in sacrificing the interests of some individuals for the sake of others. [emphasis added]
Nozick considered that the state’s single proper duty is the protection of persons and property and that it requires taxation only for that purpose. Taking tax for redistributive purposes is on a par with forced labour, he wrote. So government should play little or no role in regulating the economy: the state then can be seen as an institution that serves to protect private property rights and the economic transactions that follow from them regardless of whether we think some people deserve more or less than they have.

The neoliberal economic approach also emphasises debt. I used this quotation in my previous article but it is also relevant here. Although written about the US, it could readily apply in Australia:
Indebting government gives creditors a lever to pry away land, public infrastructure and other property in the public domain. Indebting companies enables creditors to seize employee pension savings. And indebting labor means that it no longer is necessary to hire strikebreakers to attack union organizers and strikers. Workers have become so deeply indebted on their home mortgages, credit card and other bank debt that they fear to strike or even to complain about working conditions.
The sale of public assets to relieve debt and the emphasis on the individual means the areas in which government can exercise control in the interests of the wider society are diminishing.

George Monbiot, writing in The Guardian (UK) in April said:
Perhaps the most dangerous impact of neoliberalism is not the economic crises it has caused, but the political crisis. As the domain of the state is reduced, our ability to change the course of our lives through voting also contracts. Instead, neoliberal theory asserts, people can exercise choice through spending. But some have more to spend than others: in the great consumer or shareholder democracy, votes are not equally distributed. The result is a disempowerment of the poor and middle. As parties of the right and former left adopt similar neoliberal policies, disempowerment turns to disenfranchisement. Large numbers of people have been shed from politics.

Chris Hedges remarks that “fascist movements build their base not from the politically active but the politically inactive, the “losers” who feel, often correctly, they have no voice or role to play in the political establishment.” When political debate no longer speaks to us, people become responsive instead to slogans, symbols and sensation. To the admirers of Donald Trump, for example, facts and arguments appear irrelevant.
The remarks by Chris Hedges explain the rise of the far-right and capture the same disillusion referred to in The Washington Post article. Consider also the initial success of Tony Abbott: ‘slogans, symbols and sensation’ and ‘to [his] admirers, … facts and arguments appear irrelevant’. It certainly fits!

We can also go back to Naom Chomsky in 1999 when he wrote:
… to be effective, democracy requires that people feel a connection to their fellow citizens, and that this connection manifests itself though a variety of nonmarket organizations and institutions. A vibrant political culture needs community groups, libraries, public schools, neighbourhood organizations, cooperatives, public meeting places, voluntary associations, and trade unions to provide ways for citizens to meet, communicate, and interact with their fellow citizens. Neoliberal democracy, with its notion of the market uber alles, takes dead aim at this sector. Instead of citizens, it produces consumers. Instead of communities, it produces shopping malls. The net result is an atomized society of disengaged individuals who feel demoralized and socially powerless.
Basically, democracy is being undermined, leaving people disaffected, unable to foresee how they can influence the political process for their benefit. As Monbiot pointed out, the range of politically influenced decisions is contracting. Privatisation of former public assets mean governments are controlling less and less, their decisions also cover less and less. If all our services are privatised and the individual is placed above society, what role is left for government? And in that circumstance, what is the point or the value of voting?

I wrote about this previously in relation to the situation in Greece and noted this comment from eminent economist Joseph Stiglitz:
Seldom do democratic elections give as clear a message as that in Greece. If Europe says no to Greek voters’ demand for a change of course, it is saying that democracy is of no importance, at least when it comes to economics.
We know that the bankers and financiers did say no to the democratic wish of the Greek people.

People are also further and further removed from influence over the economy, and yet the economy relies on people. The neoliberal economy has seen the rise of inequality in most countries around the world. The neoliberals see no inconsistency in inequality.

To return to Robert Nozick’s philosophy: as each individual owns the products of his or her own endeavours and talents, it is possible for an individual to acquire property rights (as long as they are not gained by theft, force or fraud) over a disproportionate amount of the world; once private property has been appropriated in that way, it is ‘morally’ necessary for a free market to exist so as to allow further exchange of the property. And the individual then has complete control as to how that property is passed on. So it is logically okay for someone to inherit a fortune having contributed nothing to gain that wealth: reward for effort or just desert do not come into it for Nozick — it is only property rights and market mechanisms that count. That, of course, is the neoliberal approach.

Piketty made this clear in his work Capitalism in the twenty-first century in which he explained the rise of rentiers (those who gain their income from rents, dividends and interest) and that the growth of such wealth is outstripping the rise of earned income.

Monbiot also quoted another author who was making a similar point:
“Investment”, as Andrew Sayer notes, means two quite different things. One is the funding of productive and socially useful activities, the other is the purchase of existing assets to milk them for rent, interest, dividends and capital gains. Using the same word for different activities “camouflages the sources of wealth”, leading us to confuse wealth extraction with wealth creation. [emphasis added]
Too much economic activity now seems to be based on ‘wealth extraction’ rather than genuinely productive activity. In Australia, the increase in the number of investment houses is a symptom of this, particularly when it is an existing house and provides no new productive activity (construction) and relies on rent and/or capital gains for a return on investment. The negative gearing tax incentive and capital gains tax concessions have distorted the market and made it more profitable to put money into ‘wealth extraction’ rather than ‘wealth creation’. And our government intends to do nothing about it because it may curtail the rights of some individuals — what it falsely called the ‘mum and dad’ investors.

The rise of the global economy has transferred jobs. Chinese manufacturing has replaced significant portions of manufacturing in the US and the UK, as well as in Australia. Even work in call centres has been ‘off-shored’. There is some evidence that the Brexit vote in the UK was influenced by the loss of traditional employment in particular areas, not just by immigration: some of the strongest ‘leave’ vote occurred in areas where major industrial plants had closed in the preceding decade and jobs had not been replaced. Some predict that ‘jobs’ will be the major political battleground in coming years arising not just from a globalised economy but from the increasing spread of robotics.

When people feel economically threatened they look to their government to relieve the situation but governments will not intervene, or intervene minimally, while they continue to pursue neoliberal economic approaches. As Monbiot pointed out, one’s capacity to participate in this new world is determined by spending power but as more people lose jobs they have little or no capacity to participate.

The next step in the process, which has already begun, is that people also then feel that the political system is failing them and will turn to those offering either radical or more despotic (even fascist) solutions. They will be attracted to solutions harking back to a ‘golden age’ — whether it is myth or reality. But in the neoliberal world the government will have almost no capacity to respond: it will be in debt; it will not have control over major economic areas that have been privatised (sold off to meet ‘debt’); it will believe it should not intervene in ‘the market’; it will continue to believe that people improve their situation only by their own individual effort; it will have no answer to those offering alternative solutions that may be attractive to the masses.

If governments across the Western world continue to follow neoliberalism in both their social and economic policies we will also see the continuing slow death of democracy, including in Australia, with more people disaffected and disillusioned with the economic and political systems and that may well lead to a willingness to embrace non-democratic solutions.

So governments beware! Your support of neoliberalism is planting the seeds for your own downfall.

What do you think?
Is One Nation and the rise of right-wing parties around the world simply a reaction against neoliberalism?

How long can democracy survive if governments continue pursuing neoliberalism?

Let us know in comments below.


Recent Posts
Who is the culprit?
Ad astra, 25 September 2016
When you reflect on the dilapidated state of federal politics; when you question how on earth we have become encumbered with so many appalling policies, do you ever ask: 'Why is it so?'

I do often. And when I do, one culprit emerges over and again. Who is it?

Who in this motley …
More...
Are governments ready for the coming economic and social changes?
Ken Wolff, 28 September 2016
In 1930 John Maynard Keynes predicted widespread technological unemployment ‘due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour’.

In the decades since …
More...
Do politicians make you sick?
Ad astra, 2 October 2016
I expect most of you would answer with a resounding YES. They make us sick when they lie, break promises, assail us with mendacious rhetoric, engage in adversarial behaviour, fail to recognise this nation's problems, seek to blame their opponents for any ills we have, and exhibit incompetence in doing …
More...

Do politicians make you sick?



I expect most of you would answer with a resounding YES. They make us sick when they lie, break promises, assail us with mendacious rhetoric, engage in adversarial behaviour, fail to recognise this nation's problems, seek to blame their opponents for any ills we have, and exhibit incompetence in doing what they are well paid to do.

They make us sick, though, in other ways - through their legislative actions. This piece will describe how policies can and do result in illness in individuals and groups in our society. It draws on the work of celebrated epidemiologist Professor Sir Michael Marmot, president of the World Medical Association, who is currently visiting this country. His book: The Health Gap: The Challenge of an Unequal World is rich with information garnered over many years of studying inequities in health and their causes. He is a medical doctor who moved from clinical medicine to public health because he saw that it was necessary to look for the 'causes of the causes' of ill health, the causes behind the traditional medical causes. He saw that social factors were central in the genesis of ill health. He has made a life-long study of the 'social determinants of health' and headed a World Health Organization commission that published Social Determinants of Health, Closing the Gap in a Generation in 2008.

Before looking at social factors in depth, let's examine some basic principles of cause and effect. The tubercle bacillus is a necessary factor in the genesis of tuberculosis, which usually affects the lungs, but sometimes other organs. But it is not the only factor. Some people exposed to the bacillus contract tuberculosis; others do not. A homely analogy is the 'seed and the soil' concept. No matter how potent the seed, it will germinate only in fertile soil, and wither on barren soil. Likewise, the tubercle bacillus needs a 'fertile' human environment to survive and cause disease. In the era of rampant tuberculosis in earlier centuries, there were the underprivileged who lived in cold, damp dwellings, who worked in dusty, demanding and dangerous occupations and who suffered malnutrition, whose bodies were thereby susceptible to the bacillus. The tubercle bacillus was therefore a necessary but insufficient factor in contracting tuberculosis. The susceptible host was the other necessary factor, and that factor derived from poor work and living conditions and poverty - all social factors.

Michael Marmot takes a holistic view of health. While acknowledging the importance of medical science in health and illness, he insists that there is so much more to it. In the introduction to his book he writes:
Knowledge of medicine and public health is not so much wrong, as too limited. Health is too important to be left solely to doctors. Health is related not only to access to technical solutions but to the nature of society. We are being foolish in ignoring a broader array of evidence, which shows that the conditions in which people are born, grow, live, work and age have profound influence on health and inequalities in health in childhood, working age and older age.
He illustrates his assertions with evidence. One of his most important is that the gradient of health parallels the social gradient. He contrasted life expectancy in two suburbs of Glasgow, Calton and Lenzie. He reported:
If a man dies in his prime in Calton, a down-at-heel part of Glasgow, it may be a tragedy, but it’s not a surprise. Actually, the question of what constitutes his ‘prime’ in Calton is moot. Life expectancy for men, when I first looked at figures from 1998–2002, was fifty-four. In Lenzie, a much more upmarket place a few kilometres away, ‘in his prime’ has an altogether different meaning: life expectancy for men was eighty-two. That converts to a twenty-eight-year gap in life expectancy in one Scottish city.
He carried out similar studies in several countries, with the same conclusion.
The social gradient in life expectancy runs all the way from top to bottom. It doesn’t just feel better at the top. It is better. At the top, not only do you live longer but the quality of life is better – you spend more years free from disability... The social gradient in disability-free life expectancy is even steeper than it is for life expectancy. ‘Disability’ here is quite broadly defined: any limiting long-standing illness. Talk about adding insult to injury: the more deprived people spend more of their shorter lives with ‘disability’. On average people at the top live twelve years of their lives with disability, people at the bottom twenty years.
I could go on quoting his many other studies, but will satisfy myself with his famous 'Whitehall' study of British public servants. The details are fascinating. Here's an abbreviated account of how Marmot described that experience:
The British Civil Service changed my life. Not very romantic, a bit like being inspired by a chartered accountant. The measured pace and careful rhythms of Her Majesty’s loyal servants had a profound effect on everything I did subsequently. Well, not quite the conservatism of the actual practices of the civil service, but the drama of the patterns of health that we found there. Inequality is central. The civil service seems the very antithesis of dramatic.

Please bear with me. You have been, let’s say, invited to a meeting with a top-grade civil servant. It is a trial by hierarchy. You arrive at the building and someone is watching the door – he is part of the office support grades, as is the person who checks your bag and lets you through the security gate. A clerical assistant checks your name and calls up to the office on the fifth floor. A higher-grade clerical person comes to escort you upstairs, where a low-grade executive officer greets you. Two technical people, a doctor and a statistician, who will be joining the meeting, are already waiting. Then the great man’s, or woman’s, high-flying junior administrator says that Richard, or Fiona, will be ready shortly. Finally you are ushered in to the real deal where studied informality is now the rule. In the last ten minutes you have completed a journey up the civil service ranking ladder – takes some people a lifetime: office support grades, through clerical assistants, clerical officers, executive grades, professionals, junior administrators to, at the pinnacle, senior administrators. So far so boring: little different from a private insurance company.

The striking thing about this procession up the bureaucratic ladder is that health maps on to it, remarkably closely. Those at the bottom, the men at the door, have the worst health, on average. And so it goes. Each person we meet has worse health, and shorter life expectancy, than the next one a little higher up the ladder, but better health than the one lower down. Health is correlated with seniority. In our first study, 1978–1984, of mortality of civil servants (the Whitehall Study), who were all men unfortunately, men at the bottom had a mortality rate four times higher than the men at the top – they were four times more likely to die in a specific period of time. In between top and bottom, health improved steadily with rank. This linking of social position with health – higher rank, better health – I call the social gradient in health. Investigating the causes of the gradient, teasing out the policy implications of such health inequalities, and advocating for change, have been at the centre of my activities since.
The difference between top and bottom was attributed to work stress. While initially it was postulated that those at the top had higher demand and more stress and therefore should have poorer health, that was shown to be wrong. There was another factor. Marmot puts it this way:
It was not high demand that was stressful, but a combination of high demand and low control. To describe it as a Eureka moment goes too far, but it did provide a potential explanation of the Whitehall findings. Whoever spread the rumour that it is more stressful at the top? People up there have more psychological demands, but they also have more control.
Having control over one's life, one's destiny, is a necessary factor for having a more healthy life.

Let's now look at how some policy decisions and legislative moves that the federal government has made, are likely to influence health. There are many; I shall select just a representative few.

Contemplate how those on welfare must have felt when Joe Hockey declared 'the end of the age of entitlement', when he tagged welfare recipients as 'leaners', supported by the good guys, the 'lifters', who worked and paid taxes to support them in their indolence, and when he brought in his punitive 2014 Budget designed to punish them. His behaviour increased their stress, reinforced any feelings of inadequacy they may have been harbouring, and deprived them of control over their destiny. They were in his careless hands. Hockey's policies and actions, supported by his leader and his party, created conditions conductive to anxiety, depression, feelings of inferiority and inadequacy, all manifestations of ill health. And the longer his rhetoric lasted, the more vulnerable they became.

This ideologically-driven politician made them sick.

Reflect on Eric Abetz' declaration that those on welfare must complete forty job applications a month - twice the number previously - for the very limited number of jobs in his home state of Tasmania. How did they feel about this demanding yet pointless imposition? Did that affect their mental health?

Liberals just can't give up on 'welfare dependency'. Minister Christian Porter was at it again last week. Although he clothed his policy recommendations in words of support for those in that predicament, the prime purpose was clear - to reduce the burden of welfare on the federal Budget. He exaggerated his case by using 'lifetime' projections of cost that soared into the trillions, neglecting though to point out that this figure was but a tiny proportion of the multi-trillion revenue budget over the same 'lifetime' period. Ideology dominated his thinking. But the effect on the targeted was as always - demeaning, demanding, destructive to their wellbeing and mental health. Porter's move would make them sick despite his stated intention to make their life better, sincere though it purported to be.

Remember the attempts to increase the required waiting period to receive the dole from one week to six months, a measure designed to save the Budget $1.8 billion over five years. Imagine how potential recipients felt about being without income for a long six months! The threat of this Coalition move must have made them sick with worry and apprehension. This is what Peter Martin had to say on this subject.

Attacks on welfare create anxiety, increase uncertainty, demean the recipients, and make them sick.

Reflect on the plebiscite on marriage equality, which PM Turnbull insists he is bound to implement. Already we are hearing of the distress the LGBTI community is feeling at the prospect of a bitter, biased, and likely bigoted public debate about whether they should be afforded the right to declare and publicly confirm their love and commitment as do heterosexual couples. Their right to do so is to be subject to the whims of the ACL and other opposing bodies. Will the LGBTI community feel they have been placed like insects under the public microscope? Will their mental health, already fragile from past experiences in 'coming out', deteriorate? Will suicide, that some contemplated when 'coming out', become more inviting? It seems hard to avoid the conclusion that some will take this course.

The policy of subjecting this matter to a plebiscite will make some of our community sick. Politicians do make us sick!

I could go on, but these examples, taken against the profusion of evidence that Michael Marmot has documented in his book, ought to caution us not to inflict any more distress and misery on those amongst us who are vulnerable. We have no right; politicians have no right to make us sick through making decisions, by legislating policies that can have no other health outcome among our most distressed, underprivileged and marginalised than to make them sick, even sicker than they are already.

If you wish to learn more about Michael Marmot's work on health inequality, watch Jane Hutcheon interviewing him on One Plus One on ABC TV.

For even more information, listen to Professor Marmot's Boyer Lectures.

Politicians do make us sick. They need not; they ought not; but they do.

What do you think?
Do politicians make you sick?

Please give us some examples.

Let us have your views in comments below.


Recent Posts
It’s all about me
2353NM, 18 September 2016
At the risk of earning a Godwin Award in the first sentence, according to those who staffed his office, Hitler was a kind and paternal man. Apparently Goebbels was kind to his family as are no doubt most of the world’s leaders today.

However, the same people who make sure they are kind to their staff, helpful for …
More...
Are governments ready for the coming economic and social changes?
Ken Wolff, 28 September 2016
In 1930 John Maynard Keynes predicted widespread technological unemployment ‘due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour’.
More...
Who is the culprit?
Ad astra, 25 September 2016
When you reflect on the dilapidated state of federal politics; when you question how on earth we have become encumbered with so many appalling policies, do you ever ask: 'Why is it so?'

I do often. And when I do, one culprit emerges over and again. Who is it?

Who in this motley …
More...

Are governments ready for the coming economic and social changes?


In 1930 John Maynard Keynes predicted widespread technological unemployment ‘due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour’.

In the decades since there has been rapidly increasing technological change but employment has generally been increasing, matching population growth, although not without winners and losers. The creation of new jobs often lags behind the pace of loss of jobs (as Keynes predicted) and those who have lost jobs are not always the ones who take the new jobs — they are often taken by the new generation.

Since the GFC, governments around the world have felt constrained in responding to the changes in the workforce because they lack money — they are in debt — and are being told by mainstream economists that they must return to budget surpluses. People losing their jobs are not being provided the full range of assistance they need to re-enter the workforce nor, in some cases, even the support to sustain themselves and their families whilst unemployed.

That is a direct result of the dominant neoliberal economic approach adopted by so many Western governments. The neoliberal emphasis on debt also has political implications and the following, although written about the US, could readily apply in Australia:
Indebting government gives creditors a lever to pry away land, public infrastructure and other property in the public domain. Indebting companies enables creditors to seize employee pension savings. And indebting labor means that it no longer is necessary to hire strikebreakers to attack union organizers and strikers. Workers have become so deeply indebted on their home mortgages, credit card and other bank debt that they fear to strike or even to complain about working conditions.
While the neoliberal approach remains in place, governments will not be well-placed to respond to current and coming changes in the economy and workforce — selling public assets to reduce ‘debt’ will not help people. Modern Monetary Theory (MMT), on the other hand, offers an approach in which sovereign currency-issuing governments are not so constrained. It is possible for a government to both retain public assets and have the money to provide more programs and assistance to people in these times of economic change. Unless governments embrace a new economic approach like MMT, then the technological unemployment predicted by Keynes is likely to be a real outcome.

The spread of robotics and computerisation throughout the workforce is already happening without us being fully prepared. While there is talk of the need for improved education in things like STEM, computer coding and even innovative approaches, and of the need for a flexible, agile and innovative workforce, these are essentially economic issues and we seem to be ignoring some wider social implications.

A basic question in the rise of robotics is that of ethics. One writer raised an interesting ethical question in the scenario of driverless vehicles: if a driverless vehicle ‘perceives’ that it is about to be involved in an accident and the only pathway to avoid the collision may involve hitting a woman with a pram, which decision will it make? A human would likely make a moral judgment to face the accident and minimise the impact by braking, swerving slightly or whatever action is appropriate but will an automated vehicle see saving itself as the primary response? Whether driverless vehicles can ‘learn’ to place humans first in such situations is debatable. While theoretically driverless trucks seem to be one of the next major targets of computerisation, I think there are still issues to be resolved but I doubt they will be prior to their introduction as the economic imperative will over-rule the ethical.

Computerisation generally will displace many people from their current work, as discussed in more detail in ‘An economy without people’. New forms of work will emerge but how long will that take? Much of the new work will require higher level skills: will we have the capacity to retrain people for the new jobs or do they simply move to the ‘scrap heap’ to be replaced by the next, better educated, generation? As unemployment increases, how will governments respond? If our government is already complaining about welfare costs, it will find it difficult to provide for the new unemployed as computerisation pushes further into the workforce. With an ageing population, there should be a need to keep more people in the workforce but that may no longer be possible.

Some unemployed may voluntarily enter ‘the gig economy’ to help tide them over. But the gig economy may also be on the rise as companies decide it is more ‘efficient’ (cheaper) to hire workers only as they are needed for specific tasks or projects rather than maintain a larger full-time workforce, meaning many more people will be forced into the gig economy. While for people it is ‘the gig economy’, for economists and businesses it is the ‘on-demand’ economy: that difference in terminology also shows how people can be removed from consideration in the coming changes. Whatever it is called, it will have many implications.

Nick Wales at the UNSW Business School has raised one basic concern:
“It polarises people”, says Wales. “Is this creating communities of entrepreneurs who have been marginalised from the traditional economy, such as housewives, students, retirees and immigrants, offering them the flexibility of part-time working? Or is it an underhand way for businesses to get around labour laws and pay these contractors low wages?”
If more and more people are working in the gig economy and on short-term contracts, what rights will workers have? They will not have paid sick days or holidays, or protection from unfair dismissal. Even many occupational health and safety rules may not apply. They will also need to provide for their own superannuation but the extent to which they can may well depend on how much they are able to earn. And will unions find new ways to cover them or is this the final death of unions? (If the role of unions diminishes even further what impact will that have on the future structure of the ALP?) Will these gig workers be treated as, or choose to become, small businesses? We have already seen the problems created by the use of ‘contract workers’ and in the new economy that looks set to expand exponentially.

How do banks respond to people who do not have full-time work/regular income if they are working gigs? At the moment, loans to such people would either be out of the question or, at best, be classified at high risk of default. If, however, this form of work becomes normal for a large proportion of the workforce, banks simply cannot ignore such a significant customer base. There will need to be innovative products that cater to the needs of such customers.

Banks may become more important in another way. There is a possibility that people will become more reliant on debt (loans and credit cards) to carry them through between gigs. It may be in the interest of banks to move into areas of lending currently dominated by the so-called ‘payday lenders’ as there is likely to be a growing market for such short-term products. Banks will have much thinking to do about their role in the new economy.

The gig economy has implications for how government views employment and unemployment as the 37-hour week may no longer be the norm. The OECD is already working on new indicators for employment and unemployment. It is likely, however, that any new definition of ‘employment’ will reduce access to unemployment benefits as it is likely to involve shorter periods of work. Even paying unemployment and other welfare benefits in their current form may no longer be appropriate as they are tied to levels of income. The ‘paperwork’ (data entry) involved in making constant adjustments as people move in and out of short-term jobs (some very short-term) will become onerous as the number of gig workers increases. New forms of payment may be required.

Then there are issues of government regulation and taxation. Already the ATO has ruled that Uber drivers must register for and pay GST as they are providing a ‘taxi travel service’. Current taxi drivers believe Uber is not competing on a level playing field because it does not need to meet the same licence and safety regulations. Victorian cab drivers are protesting a Victorian government announcement that it intends to deregulate the industry. While that may create the level playing field the drivers are seeking, they are not happy that the Victorian government is offering to buy back current taxi licences at a price below what many paid.

On the other hand, if more ‘workers’ are operating as contractors and small businesses, what impact will that have on government revenue, particularly if the push continues to lower company tax rates? Governments may need to reconsider that approach as ‘company tax’ could conceivably become the biggest source of revenue as more people in the gig economy register as small businesses to reduce their taxation.

Deregulation and ‘contract work’ or operating as a small business do not provide the full answer — although it will be attractive to the neoliberal economists and, as such, support for those approaches may be the advice that governments receive. It would mean a large workforce not protected by any provisions for safety, holidays, superannuation nor even hours of work. As Wales suggested, it would allow companies to under-cut existing wage structures and make full-time employment even less attractive for other competing businesses, creating a feed-back mechanism encouraging further use of gig workers.

The Aspen Institute in the US, however, does not believe that governments should regulate but allow companies, workers and consumers to experiment with new models:
… that can begin to give shape to a social contract for a changing economy and new century. We need a better system that ensures workers have the stability and security they need, without stifling innovation or undermining the flexibility the on-demand economy offers.
While suggesting that ‘stability and security’ are required for workers it is basically leaving that to ‘the market’ to determine. Given the history of market solutions, I would have no faith in it reaching a suitable arrangement — because, as explained in the first article in this series, ‘the market’ after all is people manipulating trading for their own advantage and it is to their advantage to have an insecure workforce that is less likely to make demands regarding wages and conditions. Government, even if intending to allow such an approach, must hover at the edges and be prepared to regulate minimum conditions.

While a new economic approach like MMT will help governments understand that they do have the money to deal with problems, it is not the answer to all the issues I have raised (it is, after all, a macroeconomic theory). I am concerned whether its Job Guarantee can be used in the new economy or whether it, too, is based on a model of full-time employment.

At Davros earlier this year, a report to World Economic Forum stated:
During previous industrial revolutions, it often took decades to build the training systems and labour market institutions needed to develop major new skill sets on a large scale. Given the upcoming pace and scale of disruption brought about by the Fourth Industrial Revolution, however, this is simply not an option. Without targeted action today to manage the near-term transition and build a workforce with future proof skills, governments will have to cope with ever growing unemployment and inequality, and businesses with a shrinking consumer base.
So the final issue is that it is not just workers who will suffer. Robotics, computerisation and an increasing number of gig workers will each contribute to ‘a shrinking consumer base’ and that has implications for business survival — in essence, their rush to reduce costs could be creating the conditions for their own demise. That in turn will impact government revenue in lower company and individual tax revenue — but only if they continue to cling to the neoliberal economic approach. If there is a silver lining to this ‘cloud’, it may be that the neoliberal economic approach will be shown to provide an inadequate response to the new situation.

With the possibility of declining consumption and problems redefining employment and unemployment, the concept of a ‘universal basic income’ may gain more traction. Although a proposal to introduce such a payment was recently voted down in Switzerland, it is being considered in Finland and the Labour Party in the UK has begun discussing the concept. In simple terms it is an income payment made to every man, woman and child. It has the potential to replace virtually all welfare payments including pensions, unemployment benefits and family support payments for children: in the case of unemployment, it would remove the need to redefine ‘employment’ to meet the circumstances of the new economy. As it would be paid to everyone, it means those who are working would also receive the payment and it becomes necessary to apply tax to the payment so that those who are in work return a much greater proportion of it in the form of tax. Even the MMT approach would require taxation of such a payment to ensure that it did not create demand beyond the productive capacity of the economy. For businesses it would help maintain the consumer base and so be of benefit to them. With fewer workers, the productivity benefits of robotics and computerisation will not be spread throughout society but further concentrated in the hands of the company owners and shareholders, unless something like a universal basic income is adopted. As robotics and computerisation spread and replace major portions of the workforce, such an approach may become the only viable option.

It appears we have a rocky road ahead. Governments will not be able to respond effectively if they cling to neoliberal economic approaches. Avoiding regulation and spending, and leaving resolution to ‘the market’ will be a recipe for disaster and even businesses will suffer. Without new approaches we will continue to have an economy in which people are placed last and well-being is barely a consideration.

It is time this conversation began because if we leave it until the impact is being felt, it may be too late to avoid a major economic downturn, ironically created by the very process businesses thought would boost their profits.

What do you think?
Are businesses blindly pursuing robotics and computerisation without fully understanding the wider implications?

Can ‘the market’ be trusted to reach new solutions or must governments first find new approaches (including MMT) to protect the people?

Let us know in comments below.


Recent Posts
It’s all about me
2353NM, 18 September 2016
At the risk of earning a Godwin Award in the first sentence, according to those who staffed his office, Hitler was a kind and paternal man. Apparently Goebbels was kind to his family as are no doubt most of the world’s leaders today.

However, the same people who make sure they are kind to their staff, helpful for …
More...
What is Modern Monetary Theory and will it help?
Ken Wolff, 21 September 2016
Modern Monetary Theory (MMT) is a macroeconomic theory for the current age in which governments have abandoned the gold standard and also floated their currencies. It is ‘macroeconomic’ and ‘monetary’ because many of its conclusions relate to the money supply …
More...
Who is the culprit?
Ad astra, 25 September 2016
When you reflect on the dilapidated state of federal politics; when you question how on earth we have become encumbered with so many appalling policies, do you ever ask: 'Why is it so?'

I do often. And when I do, one culprit emerges over and again. Who is it?

Who in this motley …
More...

Who is the culprit?

When you reflect on the dilapidated state of federal politics; when you question how on earth we have become encumbered with so many appalling policies, do you ever ask: 'Why is it so?'

I do often. And when I do, one culprit emerges over and again. Who is it?



Who in this motley collection is the culprit? Who is responsible for these policy calamities?

You be the judge. It's not a big challenge for the politically astute, but it might be revealing for the casual political observer.

Let's look at just a handful of policy catastrophes that afflict us still.

Consider global warming
Leaving aside the uninformed utterances of our new One Nation senator Malcolm Roberts and all the other climate deniers, there is strong consensus among thousands of climate scientists that the planet is warming inexorably towards levels dangerous to life on earth, which if not curtailed will become irreversible. A majority of ordinary people believe this to be true, and want something purposeful and effective to be done about it. So what is being done?

All our government is doing is implementing its so-called 'Direct Action Plan'. No environmental scientist or economist worth their salt can demonstrate that it is working, or even can work. It's a dud. Since Labor's 'carbon tax' was repealed and the DAP began, carbon emissions, which had begun to fall, are now rising again. Forget all Greg Hunt's talk about Australia 'meeting and beating' its emission targets, and Josh Frydenberg's reiteration of it. Emissions are increasing. We are not pulling our weight as global citizens. We are frauds in the climate change world.

Why is it so?

Who was it who thwarted the move towards an Emissions Trading Scheme that PM Kevin Rudd and Opposition Leader Malcolm Turnbull had agreed upon? Who used this nascent agreement to upend Turnbull and take his position? You know. Who used the repeal of the 'toxic carbon tax' as a powerful weapon in gaining power. You know.

Have you reflected upon how destructive a move this was, one that left this nation far behind comparable countries, one that made us a pariah? We have never recovered from that, and never will while we have no ETS.

Turnbull lost his leadership over this, and even today clings to it by a thread, obliged as he is by his deal with the conservative clique in his party to make no change to climate change policy. But he was not the culprit. He did not dream up the DAP; he supports it now only to save his skin. It was he who boldly said he would not lead a government that did not take effective action to combat global warming. His support for the DAP is insincere. It puts the lie to his previous pro-ETS utterances. It belittles him. You know who the culprit is in this sorry tale of missed opportunities and ineffective action.

Of all the misdemeanours of our prime culprit, this is the most egregious. It is quite the most dangerous. It is shameful. You know who the culprit is.

Consider the National Broadband Network

It is a strange coincidence that our prime culprit and our current PM were also the players in this sorry saga. Labor proposed a fibre-to-the-premises NBN that experts around the world acknowledge is the ideal model, one that would give the best results and provide this nation with an enduring position in the communications world, and a competitive advantage over those nations with inferior models.

You will have no difficulty recalling who instructed the then Communications Minister, Malcolm Turnbull, to 'demolish the NBN'. Demolition was his modus operandi. Anything Labor did must be demolished irrespective of whether it was in our national interest to keep it. Turnbull must have been horrified. His reaction was to create a hybrid, multi-technology model with a substandard compromise of fibre-to-the-node on the street corner with ageing copper wire to the premises. Turnbull knew this was an inferior model, but at least it was better than demolition. So we are now stuck with a model that will leave this nation well behind in the world of communications and uncompetitive, just when our PM tells us that we must be innovative so that we can be globally competitive.

It is shameful that this has occurred for no other reason than our prime culprit regarded anything Labor created was anathema, and therefore must be destroyed. It is shameful too that tech-head Turnbull now vigorously but unconvincingly defends the Coalition's NBN. He knows it will be inferior, probably will cost the same as Labor's, and might be no faster in rollout. Turnbull has sold us another pup with his FTTN NBN. But there is no gainsaying who is the prime culprit in this lamentable saga. But for him we could have had the best, but now we are stuck with second-best or worse. All the talk about the excessive costs and slow rollout of Labor's model has turned out to be bunk. Now Turnbull is trying to convince us that users don't want the fast speeds Labor's FTTP guaranteed. Has he checked whether businessmen want and need very fast speeds to be competitive?

Our prime culprit has inflicted on our nation yet another destructive decision born of adversarial hatred of anything his opponents proposed to do. You know who he is.

Consider marriage equality

We all know our prime culprit does not support same sex marriage, no matter what he says. So, knowing there was clamour from the community to introduce marriage equality to reverse the Howard government's 2004 insertion of 'between a man and a woman' into the Marriage Act, done so subtly by a simple parliamentary vote, our prime culprit sought to thwart attempts to change the Act by insisting it be put to a plebiscite after the recent election.

He knew a plebiscite would delay a decision; he knew that he could obscure the matter by allowing lots of time for debate and argument 'from both sides'. He is ideologically opposed; same sex marriage is contrary to his religious beliefs. He does not want it, although the community does. He hopes that by fostering debate religious groups can cast doubts in the minds of voters. He knows that doubt is a potent element in any public vote, be it referendum or plebiscite.

He knows that if his allies in opposing marriage equality, prominent among whom is the so-called but unrepresentative Australian Christian Lobby with its persuasive spokesman Lyle Shelton, are given a chance to spread misinformation, fear and doubt, even bigoted views, it might engender a 'No' vote in the plebiscite. He is devious, cunning and ruthless. His conservative supporters have locked PM Turnbull into supporting the plebiscite, although Turnbull himself supports marriage equality.

If the plebiscite fails to reach a majority in favour of marriage equality, just one prime culprit will be responsible.

Now think about income and wealth inequality

You don't hear Liberals talking about inequality - they accept it as the normal state of affairs. There have always been the Lords and the Ladies and the Serfs to bow before them. Driven by their entrenched neoliberal belief in the power and wisdom of markets, they cling tenaciously to the long-discredited theory of supply-side economics, colloquially known as 'trickle down' economics, which posits that tax cuts given to the top end of town trickle down as benefits to the workers in the form of more jobs and better pay. It's bunk, but advocates recite this belief like a catechism mindlessly repeated during worship.

All the evidence is that inequality is increasing in this country. It has been for years. It shows no sign of lessening. The construction of the 2014 Budget made inequality even worse. Neo-liberals don't acknowledge this; neither do they care about it.

Who is the culprit?

Some may identify Joe Hockey, or his successor, Scott Morrison, but think about who put them up to their budgetary strategy. The 2014 Budget was not Hockey's; the punitive attack on the less well off was authorised and endorsed by our prime culprit. He was the one who was prepared to punish the poor. Even his supporters acknowledged that the Budget was unfair, the most unfair in many years, and that those who had the least were targeted for the most punishment. Why is our prime culprit so mean?

To add insult to injury, the Coalition now proposes to give generous tax cuts to businesses. This includes the banks and wealthy international companies, many of whom pay little or no tax anyway.

The budgetary assault on the less well off and the attack on Hockey's 'leaners' are shameful, and equally the handouts to the well off are obscene.

So who is the culprit?

We know that there are a few good politicians, many mediocre ones, several poor ones, and an occasional lamentable one. This piece argues that there is one person, just one, who has inflicted on the Australian public a succession of appalling policies, just four of which I have outlined. His egregious actions have diminished us as a nation.

He has made us a pariah in the world of climate change action. He has thrust upon us an inferior broadband network that will curtail our competitiveness. He has manipulated the debate about marriage equality to diminish its chances of becoming law despite the public's wish that it be so. He has accepted inequality as the norm in our society and has sought to make it worse.

Can you think of a single politician who has inflicted so much destruction, so much damage on our society? Can you identify a meaner person whose adversarial nature has caused so much harm?

Yet he still hovers in the background like a ghost of things past, quietly, subtly eroding confidence in his successor, hoping for another opportunity to wreak havoc once more upon our lucky country.

You know who the culprit is.

If you are still scratching your head, click here!

What do you think?
Let us know in comments below.

Did you identity the prime culprit?

Do you agree with my assessment of who fits this description?

What is your assessment of this person?
Recent Posts
Modern economics has lost sight of people
Ken Wolff, 7 September 2016
This is the first of four articles looking at particular changes, and potential changes, in our economic environment and approach to economics generally.

For those who have followed my pieces on TPS you may recall that I am qualified as a social anthropologist. …
More...
It’s all about me
2353NM, 18 September 2016
At the risk of earning a Godwin Award in the first sentence, according to those who staffed his office, Hitler was a kind and paternal man. Apparently Goebbels was kind to his family as are no doubt most of the world’s leaders today.

However, the same people who make sure they …
More...
An economy without people
Ken Wolff, 14 September 2016
Last week I suggested that modern economic theory has lost sight of people but the reality is now becoming that many segments of the economy require fewer people to undertake the work and that has serious implications not just for the people losing their jobs …
More...

What is Modern Monetary Theory and will it help?


Modern Monetary Theory (MMT) is a macroeconomic theory for the current age in which governments have abandoned the gold standard and also floated their currencies. It is ‘macroeconomic’ and ‘monetary’ because many of its conclusions relate to the money supply in an economy. Does it offer scope for a new economic approach recognising people? Can it better assist responses to robotics and computerisation than current economic approaches?

Historically, gold was important because coins were minted from it (and silver). Even when coins were no longer minted in gold, the currency issued by governments was convertible to gold and governments needed to hold sufficient gold reserves to satisfy a potential demand from all holders of their currency — that was the gold standard. In that situation governments could not spend without first taking money from the economy (taxation) because the money supply was limited to match the quantity of gold. Following WW2, fixed exchange rates also meant that governments, through their central banks, had to defend the rate they had fixed by buying or selling their own currency in international money markets: that also affected the money supply in their home economy and also placed limitations on government spending. Floating currencies now allow central banks and governments to target domestic economic policy goals knowing that the floating exchange rate will resolve the currency imbalances arising from trade deficits or surpluses.

MMT points out that much economic thinking since the 1980s operates as though the gold standard is still in place — namely, that governments can only fund their spending by taxation and therefore deficits are bad — but some MMT proponents and supporters argue that this has ideological (neoliberal) rather than genuine economic underpinnings.

Since the abandonment of the gold standard, most countries, including Australia, now have a fiat currency — that is, it is created by government fiat (decree) — and it has no intrinsic value. My $50 note is not matched by $50 worth of gold any longer, nor is my plastic note worth $50 itself (in 2012 Australia’s polymer notes cost 34c each on average to produce irrespective of their face value). My note has value only because the government decrees it has and the government is the monopoly provider of currency: therefore it is the currency I need to participate in the economy and to pay taxes.

MMT places this new reality at the centre of its approach. A sovereign government issuing its own currency can never run out of money, never go bankrupt or default on its ‘debt’. That in a sense was Greece’s problem: as part of the Eurozone it was no longer an issuer of its own currency. In that circumstance, as for the states within a sovereign nation, the oft-used analogy of a household budget still applies but it does not apply to the sovereign issuer of a currency.

The ‘sovereign issuer of currency’ argument leads to probably the most well-known and sometimes controversial aspect of MMT, that a government can always ‘create’ money. The critics argue such printing of money — although these days it actually requires only a few keystrokes on a computer to create deposits in the private banking system — will lead to hyperinflation as in Zimbabwe or the Weimar Republic in post-WW1 Germany. MMT accepts that inflation is one factor that imposes a limit on government spending but that limit is not reached until all the ‘real’ resources of the economy are fully utilised — all human resources (full employment) using all available physical resources. If a government continues to spend after that, then dangerous inflation may result but, prior to that point, MMT argues that government spending to assist utilisation of available resources will not lead to uncontrolled inflation. For MMT, the issue is not just money but the real human and physical resources that are available to the economy and not currently being used:
If there are slack resources available to purchase then a fiscal stimulus has the capacity to ensure they are fully employed.
As a means to help control inflation, current mainstream economic thinking accepts the Non-Accelerating Inflation Rate of Unemployment (more commonly known by its acronym, NAIRU). The Australian Treasury uses NAIRU in its modelling as the basic foundation of longer-term stable inflation — currently the NAIRU in Australia is 5% unemployment. Before NAIRU, full employment was taken to mean there would be about 2% unemployment, allowing for people moving between jobs or unemployed short term for various reasons. In practice, NAIRU provides a ‘buffer stock’ of unemployed which basically means that having those extra unemployed, above the previously accepted 2%, provides downward pressure on wages growth because the unemployed are more willing to accept lower wages simply to have a job. The argument goes that if unemployment falls below the NAIRU level the competition for workers will mean employers accept demands for higher wages thus leading to higher inflation. (Despite the whole capitalist free market system being based on competition, whenever workers appear to have a competitive advantage it is decried as a threat to the economy!)

MMT rejects the NAIRU and instead proposes a Job Guarantee for the ‘unemployed’, sometimes referred to as ‘transitional employment’ which probably describes it better. As opposed to the NAIRU ‘buffer stock of unemployed’, MMT offers a ‘buffer stock of employed’ but this is done at a ‘fixed price’ — in Australia this would be the minimum wage, inclusive of standard employment conditions. It means the government supports employment until such time as a person obtains higher paying mainstream work and it will be in productive work using under-utilised resources:
What matters … is whether there are enough real resources available to produce goods and services that are equal in value to the government’s job-guarantee spending. If these resources are available — if they are not already being used to produce something else — then the increased demand that results from the payment of job-guarantee wages will not be inflationary, regardless of what they go to produce.
On broader monetary issues, MMT says that there can only be saving in the private sector, inclusive of banks, businesses and households, if the government spends more than it collects in taxes: that is, only when the government adds money into the economy can there be private sector saving as well as investment.

A good, simplified explanation of this was provided by John Carney at CNBC in 2012:
The MMT people aren’t actually referring to you and I saving. They aren’t even talking about the entire household sector saving financial assets. They are talking about the entire private sector spending less money than it earns.

You can easily see why this would be impossible without the government spending more than it collects. Every dollar someone is paid is a dollar someone else has spent. If we all — every single person and company — spend less than we are paid, very quickly we will find we have to be paid less. The aggregate effect of savings is to reduce the total amount people are being paid for things.

So this is what MMT people are talking about when they refer to a “private sector desire to net save.” They mean that if you add up all the earning, spending and savings of every person and company in the economy outside of the government, sometimes you find that the private sector is trying — nearly impossibly — to earn more than it spends.

The only thing that can make private-sector net savings possible is government spending. If the government spends more than it takes in taxes, the private sector can earn more than it spends. Remember, if everyone pays less than they earn, some outsider must be paying more than he earns.
The MMT equation for this is:

(G – T) = (S – I)

Or in words, government spending (G) minus taxes (T) equals private saving (S) minus gross private investment (I). This is so because in macroeconomic terms the two represent the entire amount of money in the economy. And the other key of this equation is that it shows that money does not come into being in the private sector unless the government has first spent it (over many years now).

MMT points out that when governments run surpluses it leads to an increase in private sector debt because, in that circumstance, if the private sector wishes to save and invest, it has to borrow from the existing pool of money (and the government surpluses are actually reducing the money supply). This is explained by the concept that transactions between banks, businesses and households are ‘horizontal’ transactions and cannot change the amount of money in the economy (liquidity). Only a ‘vertical’ transaction between the government and the private sector can change liquidity (MMT includes both the treasury and central bank when it talks of ‘government’).

In the USA, on all occasions when the government has run surpluses, and reduced debt for a few years, it has been followed by recessions or depressions. Arising from the indebtedness forced on the private sector by the government surpluses, there comes a point when the private sector reduces spending because it cannot afford to take on more debt, thus creating an economic slow-down. In such circumstances, only government spending can relieve the situation. (It is also of interest that since 1776 the US government has been in debt in every year except for the years 1835 to 1837.)

In a globalised world, however, national economies do not operate in isolation so one more aspect needs to be added to the equation: exports (X) and imports (M).

(G – T) = (S – I) ‒ (X – M) or

(G – T) + (X – M) = (S – I)

If a country has a trade surplus that adds to private savings. Many countries, however, as Australia, operate a trade deficit which means that private sector saving is reduced and more reliant on government spending. And at a global level the nett outcome of all countries’ trade must sum to zero, so it is impossible for every country to run a trade surplus — a surplus in one country necessarily requires a deficit in other countries. So a trade deficit or surplus is not bad in itself but does affect private sector saving and creates more need for government to adjust its spending appropriately.

Although even MMT still talks about deficits and surpluses, my reading is that those words are less relevant in MMT. If a government can create money it can never really be in deficit (except perhaps in a point-in-time accounting sense). Even claiming that the deficit represents spending more than collected as taxes is not relevant. MMT says that the government does not need taxes in order to spend — it can always create whatever money it needs. The real purpose of taxes is to take money from the economy or, in economic terms, to reduce liquidity, meaning there is less money to spend and thereby total demand across the economy is also reduced. What taxes can achieve is to create ‘space’ for government spending. If an economy is already running at capacity and the government continues to spend, that is increases liquidity and demand without first making space for that spending, then high levels of inflation may result because there is more money in the economy to buy the same amount of goods and services, meaning people competing for those goods and services are willing and able to pay higher prices to obtain them. So taxes can be important in allowing government spending without dangerous inflation but are not necessary in themselves for that spending.

Similarly MMT argues that the sale of government bonds is not necessary to fund government ‘debt’. So-called ‘debt’ can actually be met at any time because the government can ‘create’ the money to do so. But as always the limiting factor is controlling demand in relation to the capacity of the economy so as not to allow dangerous levels of inflation.

MMT’s explanation is that the sale of government bonds is primarily a means of controlling interest rates: this relates to the overnight commercial bank reserves placed with the central bank but I won’t attempt to explain how that works. (This interview with Bill Mitchell for the Harvard International Review provides an explanation and also a good summary of MMT.) A secondary reason is that banks, financial markets and the private sector generally, desire government bonds as a safe haven to park money. Here in Australia, that became obvious during the Howard/Costello years when the government paid down its debt and saw little need to make new bond issues but the private sector complained and the government had to issue more ‘debt’ even though it had no debt: that fact alone gives credence to the MMT argument.

Although the approach is called Modern Monetary Theory, it places more emphasis on fiscal policy. Bill Mitchell writing on the current economic problems said, ‘until we stop relying on monetary policy and restore fiscal policy to the top of the macroeconomic policy hierarchy, nothing much is going to change’. Mitchell argues that governments have been using the wrong approach to overcome the current economic stagnation affecting many countries:
It is not that they have run out of ammunition. They have been using the wrong ‘ammunition’. For example, trying to drive growth with low or negative interest rates failed to work because the lack of bank lending had nothing to do with the ‘cost’ of loans.

It had all to do with the dearth of borrowers. Households, carrying record levels of debt and facing the daily prospect of losing their jobs, were not going to [start] suddenly bingeing on credit again.

Business firms, facing slack sales and a very uncertain future, could satisfy all the current (low) levels of aggregate spending in their economies with the existing capital stock they had in place and therefore had no reason to risk adding to that capital stock.
In the MMT model, the remedy to many economic problems is fiscal stimulus not austerity which only exacerbates the problems. And as a sovereign issuer of currency the government always has the capacity to provide such a stimulus when there are under-utilised resources in the economy.

Using fiscal policy, and the knowledge that governments can spend as much as they wish, limited only by available real economic resources and inflationary impacts, MMT suggests that the real issues are social policy issues. The debate should not be about ‘debt and deficit’ but what we as a society wish to achieve, wish to become, and, within the limits mentioned, governments do have the capacity to meet those goals. For me that is an important outcome from MMT, not just that it offers a new economic approach but that it offers scope for a new policy and political approach. To that extent, it does allow space for people by creating an economic approach that recognises social policy goals are of critical importance and the ability to achieve them is not so limited or proscribed as it is by existing neoliberal economic theory. For that reason alone MMT deserves more attention.

Next week, in the last of this four-part series, I will consider whether governments are ready for the coming economic and social changes.

What do you think?
Can MMT really change government thinking and overcome current neo-liberal approaches, not just in government but in Treasury?

Will it take a new generation of economists before MMT is accepted? Will that be too late to help the people?

Let us know in comments below.


Recent Posts
Our Government is morally bankrupt
2353NM, 11 September 2016
Recently on this website, we discussed the nastiness of the conservatives that currently inhabit the halls of power in Canberra. Ad Astra’s article gave a number of examples that demonstrated the point and you can read the article here rather than have me go over the fertile ground yet again. …
More...
An economy without people
Ken Wolff, 14 September 2016
Last week I suggested that modern economic theory has lost sight of people but the reality is now becoming that many segments of the economy require fewer people to undertake the work and that has serious implications not just for the people losing their jobs …
More...
It’s all about me
2353NM, 18 September 2016
At the risk of earning a Godwin Award in the first sentence, according to those who staffed his office, Hitler was a kind and paternal man. Apparently Goebbels was kind to his family as are no doubt most of the world’s leaders today.

However, the same people who make sure they …
More...