Friday, June 5, 2009

Selling The Goose That Lays The Golden Eggs

Forget About the opposition, the New South Wales government now has to get privatization plans past its own members. In what I snow a well established pattern the increasingly desperate leaders of the government are seeking to patch up the state’s finances by selling things off, only to be thwarted by a combination of their union colleagues and dissenters from within government ranks. First it was the disastrous attempt to privatise electricity which saw the demise of Morris Iemma and Michael Costa’s political careers, and which left the government in tatters. Then there is the ongoing conflict over plans to privatise some prisons, with one jail still subject to ongoing dispute, and now the plan to sell off New South Wales Lotteries is running into similar opposition from within.

While the business argument to sell electricity always had a legitimate foundation in terms of how the industry is managed, the argument in favour of privatizing prisons is purely based on cost cutting and the plan to sell the Lotteries office is pure fire sale. It’s all about plugging holes in the budget by selling assets and trying to find some sort of justification so that the people of New South Wales might be convinced that they are not being ripped off. Justice is a function of the state and fro that reason should not be privatized at all. But in the case of the lotteries office it just plain doesn’t make sense.

From a business point of view, it would be quite literally selling the goose that lays the golden egg. The government enjoys good solid income from the lotteries office, and every cent of it goes into delivering government services. Putting aside the question of whether the government is capable of spending our money wisely, at least it is contributing to the revenue which pays for our hospitals roads and schools. If it is sold to private enterprise, the new owner will pocket the profit, leaving only taxes and fees to flow back to the government. How can that possibly deliver a better outcome for taxpayers?

Equally, there is no benefit from a moral and ethical point of view either. At present, the decision to purchase a lottery ticket or a scratchy can be viewed as a voluntary tax which not only contributes to government services bit also carries the added bonus of giving the purchase the slim chance to win a windfall. Conversely, a private operator will only return to the community whatever is required by law in the form of taxes, while seeking to entice players to spend more on their products whether it is responsible or not. We already have enough of a social problem with pokies, casinos, bookies and so on. While it is the right of the individual to choose to gamble if he wishes, surely we already have opportunities to do so, and enough social fallout as it is.

Further, the concerns raised by Labor backbenchers such as Paul Gibson from Blacktown that a private operator might take the lottery and scratchies business out of newsagencies are also serious. Such an outcome could decimate thousands of small businesses, and all for no particular benefit to the community. It is clear that the motivation behind the plan has nothing to do with what’s in the best interests of the community, and everything to do with a short term cash grab which can only leave the state poorer.

Thursday, June 4, 2009

I Want My Eight Cents Back

The Chaser’s War On Everything is supposed to be a satirical comedy program. It has made a point of offending people, flaunting bad taste, crossing lines, pushing boundaries, disrespecting authority, humiliating the high and mighty, and cutting tall poppies down to size. It works because most of the time the target of the attack can be seen by the audience as being in some way deserving of the ridicule. This style of humour works precisely because the audience, although sometimes shocked, generally stays on side with the presenters. To achieve that, two ingredients are necessary. The satire must have a point, and the comedy must be funny.

The ill-considered skit presented by the Chaser this week about the “Make A Realistic Wish Foundation” failed on every count. It makes no salient point, it serves no useful social observation purpose, it isn’t very clever or inventive, and is simply not funny. Worse than that, it is downright cruel to anyone who has ever had anything to do with a dying child. How tragic that some people struggling with this precise situation were actually watching the show, possibly as a way of looking for something to laugh about in the face of their own adversity, only to have this travesty thrown in their faces. Yes, cruel is the right choice of word.

Of course, there is such a thing as “black comedy” and as “existential comedy”, and presumably that’s what the intention was. Black comedy can work, and work very well, but the cardinal rule must be that it is funny. An excellent example of “existential humour” is Monty Python’s Meaning Of Life. It’s shocking at times, even disgusting, but it is funny. But if that was the aim of the Chaser, then the skit was incredibly poorly thought out. While all humour comes at the expense of somebody, that “somebody” cannot be your own audience, or even anybody with whom your audience strongly identifies, unless for some reason of existential agony of your own, you feel the strange need to sabotage your own career as an entertainer.

And perhaps that’s the explanation. Perhaps after lampooning politicians, corporate high flyers, the media, and just about everybody else, the Chaser is running out of victims. Already they have had to resort to perpetrating stunts overseas because they have become too recognizable in Australia. Now that John Howard has left office, Georg W. Bush has faded into obscurity and Sol Trujillo has been packed off to the land of the brave, there’s nobody left for the Chaser to attack. So, lacking any clear direction, there is nothing left for the Chaser to do but attack themselves by alienating their own audience. They have become the very thing they once lampooned… an establishment. And more to the point an establishment which is guilty of its own excesses and is now itself worthy of being lampooned.

In short, they have lost the plot. In “Happy Days” terms, the have jumped the shark. Thanks guys, it was fun while it lasted, but most of us have now decided to exercise our democratic right to tune out. All that remains is to get my lawyers to send a letter to the ABC asking for eight cents a day to be returned.

Wednesday, June 3, 2009

Australians All Let Us Rejoice For We Are Recession Free!

Let the rejoicing begin! Australia has defied the odds and avoided an “official” recession, and there is no doubt there will be much self congratulation for a day or too. And having achieved a positive figure for Gross Domestic Product growth in the March quarter, the clock is effectively reset on the technical definition of recession which requires two consecutive quarters of red ink before the “R” word is given official status. That means it will be six months before the opportunity for such conditions to be met can occur again. The government will presumably claim success for the stimulatory policies of the past six months, and bask in the warm sunshine of renewed public adoration for saving the nation from almost certain doom.

Of course, it’s not really like that at all. The growth registered for the March quarter is less than the decline recorded in the previous quarter so in trend terms we are still down for the six month period. The forecasts for the coming months continue to point towards falling business investment and rising unemployment, while in the rest of the world most of our trading partners continue to experience quite severe recession. Just because the rain has stopped falling for the moment doesn’t mean the flood waters are not still racing down the river towards us.

At the same time, today’s positive news does achieve two important things. To some extent it does vindicate the government’s policy of economic stimulus, because against all the predictions official recession has been held back. And the indicators are quite clear that the cash bonuses have found their way into retail spending, the first home buyers grant boost has inspired more dwelling approvals, and the assistance to banking and business is both bolstering the economy and preserving jobs. To that extent, the government is entitled to claim credit, even though it would be premature to claim victory over the recession we didn’t have.

The second thing that it does is that it provides a psychological boost. Having achieved a positive GDP figure against the odds, no matter how modest, is a symbolic victory that can only serve to encourage optimism. Already, the share market has responded today with a surge in value immediately following the announcement. Following on from a run of share market gains in recent days, it is clear to see the impact of a little bit of optimism translating into a tangible gain. While such gains can disappear quickly in the fickle stock market, the fact that the economic sword of Damocles won’t be hanging over the markets for the next six months provides just that much more room for a cheerful outlook.

So, for now, let the rejoicing begin, after all it is the Australian thing to do. Every Australian knows that any excuse will do for a party, and of course there is the added benefit that throwing a party will help to boost the economy even more. Think of the money spent on balloons and bubbly all adding to the bottom line of the nation’s economic activity. So, Australians all let us rejoice for we are recession free, just so long as we realize that the recession hasn’t been cancelled, it has only been held back. Today we can have a small celebration, but tomorrow the serious work of keeping the economy afloat in difficult times will continue.

Tuesday, June 2, 2009

What Recession?

Some people are starting to ask “What recession?” And it’s not surprising given the surprising amount of good news in recent weeks. Last month is was the surprise fall in unemployment and the healthy increase in retail sales figures or March. Yesterday the April retail figures showed continued growth. Today, the international trade figures have shown a surprise fall in the current account deficit. The share market has kicked into overdrive in the past few days, showing an increase in value of about 15% since its low point in February, and is today at its highest level for the year. The Australian dollar has suddenly gained value and is now above 80 U. S. cents. New home sales are increasing, and although there are mixed reports about property prices, affordability has also improved. So, what’s going on? Is it the beginning of the end of the gloom, or is it a false dawn, an Indian summer, before the really bad news hits home?

Tomorrow, we will finally get the answer to one of the fundamental questions when the national accounts figures are released. Are we or are we not in an “official” recession? Following the negative growth figure for the December quarter, anything below zero will mean that the answer is “yes”. But despite many observers, including the governor of the Reserve Bank, already having conceded that a recession is occurring, is it possible that all of this unexpected good news might continue with a Gross Domestic Product figure that is actually above zero? Well, actually, it might. But at the same time, it really doesn’t matter a great deal. Either way, the global economic recession is still going on, causing great displacement in the major world economies, which will still poses challenges for Australia in the years ahead.

It is possible that a positive figure could be recorded for the March quarter, before a further decline in the following quarter, and so on, giving an overall decline in the economy over the year without actually registering two consecutive quarters in the red. It would still be a recession in overall trend terms, even if it isn’t actually called a recession. On the other hand, if there is no further decline in coming quarters then this current burst of positive news really would be the turning point, and the first indicator of recovery. But if you believe that, then perhaps you haven’t been paying attention to the bigger picture.

While there is good reason to believe that Australia will continue to avoid the worst of the fallout from the Global Financial Crisis, there will continue to be fallout. Much of the current good news comes courtesy of the government’s economic stimulus policies which have played a critical role in not just boosting economic activity, but also boosting confidence. But there is no shortage of dark clouds on the horizon, including the expectation of worsening unemployment, which in turn begins to undermine all other areas of economic activity, especially both retail and property.

As for the sharemarket, surely recent history should tell us that there is still a strong possibility of further volatility in the market for a while yet. The market seems to be super sensitive, responding positively to the new sense of optimism that some are detecting. But I believe it will be just as sensitive to bad news, so it would be appropriate to attach some caution to the optimism. The recession hasn’t been cancelled, it’s just been held back by a combination of good policy and a little good fortune. Whether that will still be the case after the current burst of positive news runs out, remains to be seen.

Monday, June 1, 2009

It’s Not Ben’s Fault. He’s Just Misunderstod.

We should all feel sorry for AFL player Ben Cousins as he is clearly unable to understand the world around him. Of course it is only to be expected. He never really had a chance. Suffering from an unnatural talent for AFL which has set him apart from ordinary people, it must have been hard dealing with all of the money and the adoration. The pressure, the scrutiny, the expectations have obviously all been too much for one individual to handle. And since life at the top was obviously so difficult for him to cope with, how much harder was it for him to find himself at the bottom after his misadventures with alcohol, drugs and wild partying women brought him down, although apparently not all the way down to earth?

Confused by the extraordinary belief that aggressive obnoxious discourteous self-aggrandising behavior is somehow a desirable attribute, Ben Cousins has found himself at the centre of attention once again because he made a one-finger gesture in front of a television camera. In hindsight it is obvious that on the planet where Ben Cousins comes from this is a sign of virility, of prowess, of confidence, and he just doesn’t understand that on this planet it means something else altogether. I’m sure it is an easy mistake to make when you lack sufficient brain cells to learn anything new from past misfortunes. But it’s not Ben’s fault. He’s just misunderstood. He didn’t intend to cause any offence whatsoever. We know this because he said so. After all of the kerfuffle, a bewildered and confused Ben Cousins said: “It was never my intention to cause any offence." The poor man is simply confounded by all the fuss and has no idea why people have become so upset. You really do have to feel sorry for him.

Of course, he’s not the only one. Even ordinary everyday people have become deeply confused over what is an acceptable form of communication and what is not. It’s remarkably similar to the phenomenon where otherwise kind considerate people signal each other on the streets using this one fingered salute. Somehow they have been led to believe that this is the appropriate way of dealing with minor misunderstandings and mistakes in traffic. I did not mean to make a mistake and accidentally merge into your lane, because I was distracted by the other driver with the luggage piled up to the roof who was reversing out onto the roadway without looking, but hey, I’m only human. Despite this there is no shortage of people who will respond by making the one figure gesture, screaming obscene accusations comparing me to sexual body parts, and sometimes even leaping out of the car to make a physical assault with or without a weapon. For some reason they believe it is justified. No wonder poor Ben is so confused.

So, for the benefit of Ben Cousins, all his footballing mates, the enraged drivers on our roads and pretty much everybody who thinks it is their God-given right to indulge their righteous indignation by embarking upon a psychopathic rage, here is a simple tip. If you don’t mean to cause offence, don’t do anything offensive. Don’t make what George W. Bush called the “one fingered victory salute”. Don’t use aggressive and obscene language in your day to day discourse, and above all, don’t make the pathetic excuse that you didn’t mean to cause offence when you know damn well that’s exactly what you intended to do. It really is simple… even simpler than Ben Cousins and his ilk.