I’m Moving Back To Blogger

Not A Good Bye, Just, Changing Places

Hi All! I’m moving my blogging back to Blogger. I’ve been thinking about it for a while and maybe it’s not even good thinking as such, but I’ve discovered I want to go back to Blogger.

So ‘the Art Neuro Weblog’ is moving back to artneuro.blogspot.com.au where it all began a decade ago. I’ve moved over all the stuff from this blog so if you need to, you can search right back into time. I’ve even moved ‘Flaming Horses’ and ‘Spacefreaks’ stuff into the old blogger site.

See you there!

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Science In Australia

The Cause Of Science

This one came in from Pleiades, and I’d meant to post it up but I’ve been mightily distracted. It’s basically a rebuttal to all the people who run around with economic rationalist notions that science budgets should be cut.

There is a view in this country that too much thinking about the sort of Australia we want gets in the way of the “market signals” – the invisible rays that persuade 15 year olds to study physics, or not, that attract graduates into science teaching, or not; and convince the market to wear the risk of bold new ideas, or not.

It adds up to the message that she’ll be right. And it would be an easy message for a chief scientist to sell – if it wasn’t contradicted by the evidence.

Yes, logic says Australian businesses have an incentive to innovate. Three in five of them still say they don’t, while just one in five say that they have introduced new or significantly improved goods or services. Yes, all the research demonstrates that industry and researchers benefit from working together. Our record on collaboration is now one of the poorest in the OECD.

Yes, it makes sense to study a science at senior levels. Australian schools show a decline in the rates of participation in “science” subjects to close to the lowest level in 20 years.

If you really want an in-depth look, here is the actual recommendation tabled. I’ve spent most of my working career in the arts, and it still incenses me that this government has made very little provision to keep R&D going or for the CSIRO to continue doing the important things it does. I know the government wants to cut everything, but it’s clear they have been much too cavalier about the cuts they’ve made to science and technology. Starting from the disavowal of the NBN down, this government has been a disaster when it comes to developing anything cerebral as a future direction for this country. Instead they’ve fixated upon more roads.  That, and doing he bidding of whoever lobbies with the most dollars.

 

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News That’s Fit To Punt – 08/Sep/2014

ICAC Is Still The Gift That Keeps Giving

This is good. Turns out the tentacles of developers and other business interests trying to directly influence the outcomes of policies through donations and bribes, goes right through the office of Pete Credlin, Tony Abbott’s chief of staff. A few days ago, I blithely wrote that we’ve come to the point where vested interests just walk right in and tell the Government what they want, and the Government just writes up policy the way the political donors want it. It wasn’t an ambit claim; it’s pretty much borne out in the emails as revealed at ICAC.

The ICAC has heard that Brickworks used the Free Enterprise Foundation, a shadowy Canberra-based organisation, to channel $125,000 in illicit donations to the NSW Liberals for the March 2011 state election.

Since 2009, property developers have been banned from donating to NSW political parties, but it is legal for such donations to go to federal parties.
One of the previously suppressed emails reveals that, on March 1, 2011, Mr Nicolaou sent Ms Credlin an email titled

“Re Carbon Tax” advising that Brickworks was “a very good supporter of the Party.”
Mr Nicolaou attached an earlier message from the company’s managing director, Lindsay Partridge, which read:

“Paul, Tell Tony to stick to his guns on no carbon tax.
I am running an internal fight with the BCA [Business Council of Australia] who seem to be driven by a few companies who will make bundles out of the tax.”

Ms Credlin replied enthusiastically to Mr Nicolaou’s request.

“Lindsay provided a great line for Question Time. Do you have a number that I might be able to contact him on and see if he was happy for us to use it … ” she said.

I wasn’t kidding. The joke is that people keep turning a blind eye to this stuff and saying “we’re just good friends.” or whatever plausible deniability they can issue. That’s the problem with plausible deniability: it breeds contempt faster than familiarity. It’s like anything else.

If That Wasn’t Skullduggery Enough, There’s Always Christopher Pyne

The hung parliament that Julia Gillard presided over was a terribly difficult thing. power hung so close and yet so elusively far from the opposition of the time. Naturally, people would push hard to get things to happen, and perhaps change the very government.

Such intrigue would have been irresistable to the like of Chris Pyne, and so today we find that Chris Pyne offered James Ashby a  job and a lawyer to go after Pete Sipper, the Speak of the House at the time. What a guy!

It’s grubby, it’s scandalous, and it probably won’t bring down this wretched government. Oh well, such is life in the antipodes.

Scotland Might Actually Go Independent
The latest shock poll suggests the Yes vote is getting ahead of the no vote. It’s so strange to contemplate what this could mean in practical, financial terms. Can an independent Scotland issue a currency of its own? If so, how does it stop it becoming a basket case currency overnight? How will the independent Scottish Parliament stop Scotland from becoming a kind of economic basket case over night? Wouldn’t the wealthy south benefit greatly i it didn’t have to financially support the North? Doesn’t this suggest that the road of independence might be fraught with terrible risks and pitfalls? Will they be able to negotiate with the EU fast enough to join seamlessly? Can it even be done? What would England say? What happens at the border? Will England set up a customs gate near Hadrian’s Wall? All these questions make things incredibly interesting.

Of course, the monarch of the United Kingdom HM Queen Elizabeth II couldn’t possibly be countenancing all this with great majestic joy. one imagines she would be fuming hat things are going to be close, let alone, go towards Scottish independence. It’s so strange how this is coming about in the way that it is.

 

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View From The Couch – 06/Sep/2014

Lessons For A Saturated Economy

I found this commentary about the impact of the property bubble in the Sydney Morning Tabloid this week. it’s written from the perspective of the younger people who cannot get into the market. A lot of people seem to think it’ young people whining, but there are lessons in history from all this property bubble business (that all these banks are denying exists here). The experience in Japan in the late 1980s through to earl 1990s was pretty instructive. The Bubble and the aftermath of the Pop created economic havoc on the Japanese Gen-X who were coming into the workforce at the time. This resulted in high youth unemployment as well as low rates of marriage and birthrates – and effectively brought forward the peak population date of Japan. The resulting impact of that event was that all the projections the government had made about pension plans and how the labour force was going to support the retiring Baby Boomers went out the window. Much of the low growth and sluggish economy of Japan in the aftermath of The Bubble can be put down to a generation of working people essentially placed out of options and never finding the traction that earlier generations had.

I have friends who are basically economic refugees from Japan. They got out because there were no immediate options that were rewarding or befit their education. Many ended up without kids, others delayed having kids. The 90s and early 2000s saw a remarkable exodus of young, educated Japanese people, who are now not over there contributing to economic growth.

The process of writing off and paying down debts in Japan has been grueling, and worse still government intervention into what they called PKOs – price keeping operations for assets – has distorted the markets leaving what can only be called zombie companies.

The PKO money came out of the government to shore up the asset values of shares and property which is to say, they socialised the debts. The Japanese government under Ryutaro Hashimoto argued that this was necessary to stop a disorderly exit, which is to say, it allowed some investors to keep their bubble profits to pay off the bubble debts instead of getting wiped out. You wonder how those parties got to enjoy such favourable treatment, but then if you see how entwined Japanese heavy industry, banking and the old MITI was in its day, it was one of those things that people acknowledged tacitly without putting up a big fight. After all, what happens to Japan should Mistubishi or Sumitomo should fail? The option cost of bailing out those companies essentially ate the future of Japan.  And that’s just Japan. The GFC has exposed the same problem in advanced economies across Europe and North America as well as Australia and New Zealand.

The point of all this is to say, private sector debt has a way of becoming public sector debt, and “too big to fail” essentially eats the future. A few things are very clear from the property bubble in Australia is that the private sector debt is bigger than it has ever been, and should it get called in, it would wipe out our four major banks (BASEL II and III notwithstanding). Because those banks are still in the TBTF category, the government will socialise those losses by bailing them out, and then we’ll see our future spending go up in smoke to preserve the inflated prices everybody paid for their houses.

The finer point of all this is, if you don’t think there’s a housing bubble, then that’s one problem. If you do thing that there is a housing bubble but think it’s just a matter of the market correcting itself, then you’ll be in for a surprise.

Ross Garnaut Says There Is a Bubble – But So What? Cut Rates

This one‘s related but really interesting. Ross Garnaut thinks there is indeed a bubble going on in the housing market, and that the Reserve Bank of Australia is keeping a close eye on it. Basically, Garnaut is saying the rest of the economy outside of housing could do with the lowering of rates. The rates being as they are keeps the Australian Dollar too high, and makes Australia’s economy less  competitive. The only thing keeping the rates where they are, is this deep concern that there is a housing bubble going on, so the rates need to sit at as high a place a possible given the parameters. Instead Garnaut is saying if the RBA cuts rates, then the rest of economy would be able to compete and grow, and the housing bubble should be dealt with specific measures. He also says governments should stop favouring housing for the purposes of capital adequacy.

“It is ludicrous to be worried about lending risks in the housing sector on the one hand while at the same time requiring banks to put more capital aside when they are lending to BHP,” he said.

“And there are several reasons to do something about negative gearing. There are budget reasons, and reasons to do with keeping within reach the old Australian dream of widespread home ownership.

“It would also contribute to putting a lid on the housing bubble so we could reduce interest rates and the exchange rate as required by the rest of the Australian economy.

“But the problems can’t be solved by the Reserve Bank alone. It requires co-ordination of prudential regulation, monetary policy and fiscal policy.”

It’s an interesting idea that evokes the old definition of inflation. Inflation, is essentially too much money chasing too few assets. This explains exactly why housing bubbles happen. Given that housing is given a privileged position in measuring capital adequacy, banks are better off lending out mortgages than lending out business loans for capital expenditure. The money headed to mortgages become much easier money by dint of a definitions for capital adqaucy. This devalues businesses against property ownership, even though property ownership in of itself – especially home ownership – can’t contribute to the economy in the way that a productive business can. Things like negative gearing simply make it worse. So all the money goes into the property market but of course the overall supply side of the property market itself can only grow at a certain rate. As more money gushes into the property market, it can do nothing but create a condition where the prices of homes inflates. Too much money chasing too few assets.

Is China Finally Wobbling (Just A Little bit?)

It’s been like five and a half years since the market bottom following the Lehmann Shock which triggered the GFC. Since then the world has looked on… make that Australia… Australia has looked on to China to keep its economy afloat. China in turn obliged by doing massive stimulus spending, which resulted in it sustaining its 7%+ annual GDP growth rate. There are some who think China has been inflating its GDP figures for years to get more investment, and think there is a 30%discrepancy between what China’s real size as an economy is and what the stated size is. That would explain the vast lack of growth in consumer spending that China has so needed to move from an export-driven economy to a consumer driven economy.

China subsequently pushed all levels of government to take on debt and give stimulus to the market and that has resulted in a massive ballooning of debt in China to fund this 7+% growth. Since the GFC, year after year, economists, investors, traders ad analysts of all persuasions have pointed at China and said it is unsustainable. Somehow China never imploded or popped or collapsed. All those ghost cities built in the middle of nowhere with speculation money? No problem. All that re-hypothecated collateral minerals that went missing? No problem. All those companies that started going sour and failed to pay their bonds? Government intervention has saved the day. If you had bet on China to unravel in the last few years, you would have lost money on all those bets.  It would’ve been hard losses to take too, because rationally speaking, China had every reason to come unstuck. The proof was in the pudding, and the pudding’s been magic so far.

Now, there are signs the magic pudding isn’t going to hold up. I don’t know how China is going to kick the can down the road next time, but they may yet have a way of doing so. After all, one of the interesting aspects of the great recession has been the way things just keep going on in spite of the numbers. If China can’t kick the can down the road, this is going to be it for the 23 long years of economic growth in Australia. The cracks are already showing up in commodity prices. Iron ore – the biggest corollary to the health of Chinese industry has sunk to a five year low. This is going to hit our export figures. Falling commodity prices should bring the value of Australian Dollar down. Things are about to get very bumpy.

I can report to you that the money-go-around in Sydney has stopped to a snail’s pace. There are a lot of companies sitting on unpaid bills, the companies themselves waiting to receive payment to pay those bills. I have to say it hasn’t been this slow since August 2007, which was exactly the peak of the market before the GFC. I’d start selling shares this month if I had any to sell.

 

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Sydney Morning Jokers

Comic Sans, Furious Backlash

It’s only a font. But it is a seriously loaded-with-meaning font. After it made an appearance on the front pages of the Sydney Morning Herald, it has turned into internet fodder to mock the Sydney Morning Herald. Let’s face it, the SMH has been going down hill for some time, and really did itself no favours by backing Tony Abbott at the last federal Election (yes, that again, but it’s hard to forgive).

Since then Darren Goodser, the editor has come forth defending his choice of font saying he was trying to illustrate how comical the idiotic answers were by the corrupt politicians. That may be true, and it is not for us pretend to understand the motivations of an editor who opts to go with comic sans on the front page. One thing that is abundantly clear is that Darren Goodser clearly does not take the Sydney Morning Herald with all its history, prestige and standing all that seriously. For years the SMH tried to affect a dignified tone until it ran out of editors of a certain generation who could administer a high style. Through the 90s it gave way to a more vernacular, breezy style – so much so that when you read articles syndicated from the New York Times in the SMH, you’re struck by how far down the style hill the Herald staff has allowed themselves to roll.

It’s a shame, because the Sydney Morning Herald has already lost its important prestige paper size of being a broadsheet thanks to the decline of newspapers worldwide. In this context Darren Goodser’s choice is understandable but goes to show there really isn’t much left at the Sydney Morning Herald that is high-minded or that which takes itself seriously. And if this is the big paper that stands apart from the already-dreadful-and lowbrow Murdoch papers, then the outlook on print media reportage in this country is pretty damn bleak. It’s easy to see that Darren Goodser and his choice to put comic sans on the front page is symptomatic of a wider decline in journalistic standards. It’s not just his fault per se. It simply illustrates just how far things have fallen.

It’s really quite sad because they used to be the establishment. Now they’re pandering.

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News That’s Fit To Punt – 03/Sep/2014

Why? Because Fuck You

Everything this Federal Government does is tainted by a sort of grubby conflict of interest. Of course that’s not confined to the Federal Government, because the greater conflict of interest might actually be Clive Palmer who owns a dirty big mining company, gets to make deals where a tax like the mining tax can get repealed. It’s hard to imagine a more egregious and gratuitous case of helping yourself because you can.

The deal has meant that the government will halt the rise of superannuation. Naturally, with the sensibility of a cheesy movie villain, Tony Abbott tried to sell this as more cash in hand for employees which, frankly made me choke on my lunch. I’m sorry to tell you Mr. Prime Minister, but that’s money that’ll stay in the pockets of companies. Paul Keating has lambasted the government but honestly, if he wanted to still have a meaningful voice, he should’ve stayed on in parliament after 1996.

The repeal of the Mining Tax was of course one of the platforms of the Coalition so we ought not be surprised, but really, it is pretty disgusting how the Coalition are totally happy to sell out Australian citizens in favour of a gaggle of mining billionaires – Clive Palmer among them – and try to sell it as being good for the worker. Can it get any worse?

Yes it can. Here’s how.

An Inconvenient Ruse

The emissions for energy generation jumped the most in eight years, since the end of the carbon tax.

So much for Al Gore coming to lend a hand in fighting the good fight against global warming. Thanks to the repeal, polluters have gone back to a kind of burn-baby-burn mentality and now it’s out of control. Of course the plan by this government is also to smash the renewables industry, and directly pay these polluters to stop polluting.

It’s like government by stupidity. You’d never have guessed thing would get this bad. No sane mind would have guess it would get this bad. But this unrelenting awfulness – “Operation Ongoing Enormous Clusterfuck” according to FDOM – was their platform! Grin and bear it.

Pink Batts Coming Home To Roost

Pleiades swung this one at me today. The best bit of news might be how the Royal Commission into the Pink Batts has yielded interesting results. In as much as it was a blatant witch hunt, it looks like it delivered a result that was assumed by the proponents of the Commission. Here’s something from Crikey which is behind a pay wall:

 

First, Hanger found the training regime and regulations at the time of the first of four fatalities in October 2009 to have been seriously inadequate:
“With the exception of South Australia, which had a licensing regime for insulation installers, there was no insulation-industry specific regulation beyond the generally applicable occupational health and safety regulation.”
But here’s the thing: then-minister for the environment Peter Garrett and his staff had spent most of 2009 tightening regulations and procedures. Hanger listed more than 40 interventions to address safety deficiencies — all completed before October. So if the safety framework was still deficient by then, it must have been woefully, if not criminally, inadequate prior to 2008. Having presided over industry growth to the level of about 200,000 new and existing houses insulated annually, the previous Coalition government cannot escape culpability.

Secondly, Hanger opened wide the door to those wanting compensation for the program’s sudden termination:
“I find as follows:
“… the effect of the losses was to devastate many long-standing businesses … and to cause as well personal financial collapse and severe despair and emotional harm;
“that harm and such circumstances justifies pre-existing businesses being compensated.”
If compensation is won, it will be the Abbott government scrambling to find the funds.
This has a certain rough justice about it, of course. There is an argument that the scheme was not intrinsically dangerous and was not failing, rather that it suffered from extreme misreporting from the outset, by both Coalition MPs and a feral media.

Thirdly, the Commissioner was scathing about Abbott’s staff in the course of the inquiry:
“The Commonwealth did not suggest one witness that ought to be called. It did not generally volunteer documents that were not the subject of a summons to produce. It did not elicit any evidence of its own volition. All of this is despite the fact that it was the repository of the critical documents and the corporate knowledge of what had transpired.”

Not even Peter Garrett copped such a shellacking:
“Furthermore, the Commonwealth hampered the work of those assisting me by the way in which documents were produced … Other than in response to a specific request from the Commission, there seemed no logic in the order in which documents were produced. The Commission asked that documents be produced chronologically, however the Commonwealth did not oblige.”

Finally, the Commissioner made it clear that if the federal government initiated the program, then safety is definitely its problem. Never mind the long history of state responsibility.
“There was much debate about whether workplace health and safety issues were a matter that was of any concern to the Australian Government, or whether it was more properly the concern of the States and Territories. It was said, by a number of federal public servants, that the Australian Government had no regulatory power in the field of workplace health and safety, and therefore that it was not a risk that the Australian Government could control. In my view, this attitude was deplorable.”

That means occupational health and safety is now firmly a problem for the Federal Government. Every time somebody dies in an accident, he article suggests a ministerial head is going to roll. Worse still, the responsibility for the failure didn’t just get sheeted home to the Rudd Government, it also got sheeted home to the Howard Government, and last I checked Tony Abbott was the health minister in the government. This thing is going to boomerang right back at him.

The Housing Bubble That Isn’t But Of Which We Must Be Wary

For months – no make that years! -we’ve been hearing that Australia does not have a housing bubble problem. All the economists who have come and pointed out the great anomalies of housing prices in Australia have been laughed out of the public discourse while the anomalies only get bigger. As late as last month Glenn Stevens of the RBA was talking down any possibility that what we had on our hands was an actual bubble! No, he simply reiterated that sometimes the property market goes down. This month he’s taking a different tack and saying there might be nasty shocks. Included in that link is a bit covering China where he cites a downturn in China might manifest itself as a nasty shock. If that wasn’t enough, David Gonski of the ANZ Bank told the Australian British Chamber of Commerce that booming prices cannot possibly continue forever (now there‘s a brave call).

And lo an behold there’s news that China’s real estate market is going screwy. Some might even say it is crashing like it was a Global Financial Crisis. Speaking of crashing, the commodities market in China is crashing. I wonder if those things combined would form this so-called ‘Nasty Shock’ Glenn Stevens is talking about? Or will Sydney’s housing prices simply just shrug it off and keep climbing?

Stay tuned for more fun!

 

 

 

 

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Corruption Is The New Governance

It’s Not “Corruption” If It’s Officially Sanctioned? Wow

Pleiades has been sending me material about Dick Warburton and his report. Naturally, as I pointed out yesterday, it is symptomatic of this government that it would appoint a climate change denier to head up a report on Renewable Energy Target. Predictably the Warburton report has recommended the we simply shut up shop on renewable energy. Of course he was savaged by Fran Kelly and promptly lost what little dignity he might have had in pretending he was somehow impartial.

I’ve been thinking about this a little more and it seems to me there is a much bigger problem than just the appointment of the eminently-wrong-person to review something that does not need to be reviewed, especially in the manner that an eminently-wrong-person may review such things. It’s basically handing out policy to be designed by the lobbyists – which is basically as corrupt an enterprise you can have, running a government. We saw this earlier in the year when they handed out the economic policy thinking to the likes of  Tony Shepherd and Amanda Vanstone. Basically, this government doesn’t have a thinking function, and glommed into government through nay-saying. Having put themselves in government it has dawned on them that they haven’t got any kind of coherent policy so they’ve decided to do the classic corporate thing to do and handed out the thinking to subcontractors who are lobbyists, as a company might subcontract out some tricky bit of business.

The problem is all these lobbyists are the most vested of vested interests and worse still are not accountable to the public in the way the politicians are meant to be accountable. So now, there is no denying that corporate lobbies pay money into parties to get access, and when they get access to the ministerial level, they return favours by saying. “look, you tell us what you want and we’ll just do it.” It genuinely is government by the lobbyists of the lobbyists for the lobbyists. And there’s no shame at all. There’s no need for corrupt little brown envelopes with cash in them because these Liberal Party government office-holders just want to openly do exactly what the lobbyists want and tell them. It’s like that joke: “what do you call a hamster with its own roll of gaffer tape?” – “A slut”. The only reason it’s not called corruption is because there’s nothing subterfuge about it. It’s a bit like how the hamster in the joke might not be considered a prostitute because it doesn’t take money.

It’s a classic case study in what happens when you substitute actual thinking with ideological slogans. It’s staggering, even if we knew this was exactly what we would get if this bunch of traitorous sell-outs got into power. Yet, that’s essentially what we’ve got – a government busily selling out the interests of its people in the name of doing and being open for business. They’re a truly repugnant lot.

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