Tag Archives: Stupidity

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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IPA=Ideological Propaganda Agency

White Hot Anger (With Emphasis On White-ness)

The rightwing libertarian nutjob policy echo chamber known as the IPA was the first to push for this business of changing the Racial Discrimination Act in order to allow columnists like Andrew Bolt to lay on slurs without legal repercussion. That was it in a nutshell; except when it really came down to it, the people in government are people who do things as governments do and the government is always in favour of snooping on its own citizens and making it illegal to preach jihad. Only last week I pointed out how it was contradictory for this government to be willing to change 18C on the basis of freedom of speech while at the same time trying to muzzle the muftis from sending their followers to do holy battle in the Middle East.

I admit, I said it more or less in jest but within the week it has come to pass that no, the government has to jettison the changes to 18C just so they won’t receive an even more fierce community backlash for the muzzling-of-the-mufti legislation they want to pass. As with most other things with this government, there is no given in a policy taking root just because they announce it – especially with the Senate they have, but it does surprise me that they were ensnared by the logical consequences that arose from their idiotic propaganda.

As for the IPA (not ‘Indian Pale Ale’) all I can do is laugh at their indignation.

Mr Roskam from the IPA urged the Coalition not to underestimate the “white hot anger” of the Liberal faithful in response to the “broken promise”.

“We have been contacted by many IPA members who are also Liberal Party members who have said they will resign their membership from the Liberal Party over this broken promise from the government,” he told Fairfax Media.

“The feeling from many supporters of the Coalition is a combination of deep sadness and disappointment and white hot anger.”

He warned the Liberal Party base was becoming increasingly unhappy about the Coalition’s decision to break key election commitments.

“This comes on top of Tony Abbott increasing taxes, not cutting spending and now implementing potentially a vast government program of surveillance of every Australian,” he said.

“What many people can’t understand is that he will compromise on a fundamental freedom but not an expensive, ineffective welfare scheme for the middle class.”

How’s that for a laugh? They have the easy job of banging on a principle of freedom of speech without having to face the consequences. It’s like they have a total disregard for reality or realpolitik for that matter. They’re so far gone, they don’t seem to understand the very society in which this freedom-of-speech as they see it,  should be allowed. The last bit above sounds positively unhinged. It also explains how the conservatives of this country really feel. It’s pretty sad that they have been so persuasive up to date.

I’ve said this before and it bears repeating: The IPA is so far to the right, it should be considered the fringe. I know there aren’t readily available right wing institutions that discuss policy that are closer to the centre, but that doesn’t justify giving this bunch equal airtime as if the radical right agenda is a legitimate alternative to the centre or the fairly softly-spoken centre left. The media – starting with the ABC give spokespeople from the IPA way too much credit by inviting them on shows like ‘the Drum’ and ‘Q&A’

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18C Changes Dropped

What Starts As Bad Politics Ends As Bad Politics

I don’t know of many governments that come to power as out of touch with community values than the government we currently have in Canberra. This week they have finally abandoned plans to change 18C of the Racial Discrimination Act. Having taken this idiotic policy to the election and won the election, it must have made sense to them to push this agenda, but I can’t think of a more egregious example of having misread the electorate. Having whipped up a shitstorm of hysteria about broken promises over carbon pricing and the mining tax, it was conceivable that the Coalition had some claim to having an electoral mandate to repeal the carbon pricing system – as stupid and counter-to-history as it is – but the Racial Discrimination Act has been around for a long while now. Pushing for changes to it was not really something the electorate might have considered an important policy platform. Especially when the sole beneficiary seemed to be Andrew Bolt and people who want to be bigots.

Which, for a moment brings us to Andrew Bolt who is still smarting from his court case, whose open support of the Coalition  led to the Coalition government trying to open up some space for Andrew Bolt to essentially say bigoted things under the guise of freedom of speech. Freedom of speech is not the victim in this – it’s George Brandis’ ‘right to be a bigot’ that essentially found a lot of hostility. It only takes a moment to consider that what the Coalition was asking Australians with non-white backgrounds was that Andrew Bolt should be allowed to bad mouth people from his bully pulpit and propagate views that are hurtful to their pride because this was freedom of speech. It’s bizarre that they thought this was going to fly with the electorate. It was asking Australia to go back to ‘Kingswood Country’ with Ted Bullpit calling every immigrant a wog for laughs. You wonder how these people thought this was going to make them look good.

It’s worse than that now. Having proposed the bad changes and explained it badly, it has given the electorate a “goes-to-character” assessment of the government. the assessment would include the notion that the Coalition government, on some level, wants to protect bigots if not wanting to be bigoted racists themselves. they’re right back at when John Howard went and slammed the Asian community back in the late 80s, which is to say they haven’t changed their stripes one bit. It’s notable that the people wanting to do the change and are spitting chips about it today are white, middle aged, and private school educated. You wonder how they’d respond if you gave them the medicine of their own freedom-to-be-a-bigot asked them how many Jewish forebears they have hidden in their family tree, and if they felt tainted by that.

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View From The Couch – 31/Jul/2014

Even More Things Wrong With Work-For-The-Dole

When you think about it, all the things described as ‘work’ under work for the dole is…work that other people would ordinarily get paid to do. Heck, some un-ordinary people like people deemed guilty of offenses and hence must do community service might be working right along with the work-for-the-dole crowd.

”There’s nothing that would prevent activities being conducted by both community-service orders and work for the dole at the same premises,” the spokeswoman said.

”But work for the dole is preserved for people on income support.”

But Ashley Geelan, 36, says when he heard about the government’s proposed work-for-the-dole activities they sounded exactly the same as activities he once had to do to complete court-ordered community service for a number of traffic offences.

Mr Geelan, from Victoria, said after he completed court-ordered community service in 2009, he joined a work-for-the-dole program but he wound up back at the same place, doing the same thing.
He also said he worked on three separate projects – sweeping the car park at Reservoir railway station, working at a Salvation Army store in Doncaster, and helping repair the Kinglake Ranges Neighbourhood House – that had a mix of work-for-the-dole workers and those doing court-ordered community work.

This would suggest that the Abbott government sees the unemployed as criminals. it’s one thing to champion the protestant work ethic but it’s entirely another to stigmatise the unemployed.

The crappy thing is that work-for-the-dole projects would go to the non-profits sector meaning charities, who get a tax exemption. So it’s essentially creating slave labour for the charity sector i.e. giving away free labour to people who already get a sizable break from the government. If this is giving back to the community, I say on behalf of the community, just let them keep whatever it is that they got.

But here’s the fundamental point that the Abbott government is ignoring: If you pay somebody to do ‘work’, then that’s called ’employment’. Like it or lump it, the moment the work-for-the-dole takes an unemployed person and makes them work for their dole money, the government has expanded its payroll, except it’s doing it of the books. If even a fifth of the 830,000 or so unemployed people were sent out to do community service style projects, it might be the biggest expansion in the Federal government payroll since the time the Howard government tried the work-for-the-dole scheme.

Worse still, these unofficial-workers would not have union protection or rights as properly employed workers. They’ll effectively be working for much less money than an equivalent person in the private sector would be earning for doing similar work. Furthermore it’s arguable that it may put some low level cleaning companies out of business should the scheme reach 100,000 workers. It’s up to the government to decide where it sends workers but work for the dole workers would need to be protected with professional indemnity and public liability insurance as well as Work Cover, so you have to ask just who is footing that bill, and if those calculations have been made. Knowing this government, probably not.

It’s amazing that a government that allegedly champions the cause of small business could be so inept at understanding how these things work.

The Land of The Un-Free

Forget the MH17 Ukrainian brouhaha, here’s a bit of eye-catching news.

As part of the review, it is understood that Mr Forrest has recommended that the government radically expand the current income management system.

This would see everyone on a working age payment – which includes those on Newstart and the Disability Support Pension – have 100 per cent of their payments managed by the government, preventing them from using payments to buy items such as alcohol and cigarettes.

The recommendation follows the interim report of the McClure welfare review, which last month said that ”consideration should be given to incorporating income management” in services for job seekers ”who need to stabilise their circumstances”.

On Thursday, a spokeswoman for Prime Minister Tony Abbott said the government had no current plans to expand the income management system to all welfare recipients, pointing out that Mr Forrest’s report was only a report to the government.

Aha. So Andrew Twiggy Forrest is moonlighting again as the resident right wing nut job adviser saying the money the government pays to you is still not your money. I’ve pointed out that the people who complain about the government “spending our money” are misguided in thinking they have a bigger say in how money with which they have parted, than the government that taxed them. Similarly, if the said money takes that money and gives it to a disabled person or a homeless person or simply an unemployed person, it’s really not their business to say how that money should be spent. It sounds blood simple doesn’t it? Except here’s Twiggy saying that people should have no control over that money.

This is the kind of nutbar the government pays to give them advice. It kind of shows you how desperately out of ideas this government is already.

Corporate Shills And All Its Ills

The Abbott government also wants to water down laws on company directors and their liabilities.

The group representing Australia’s most powerful boardrooms will on Thursday release a proposal to water down the Corporations Act and ASIC Act, saying corporate directors need a ”safe harbour” from personal liability.

The Australian Institute of Company Directors has been lobbying Finance Minister Mathias Cormann, benched Assistant Treasurer Arthur Sinodinos and Attorney-General George Brandis for a new ”honest and reasonable director defence” to be inserted into existing laws designed to protect shareholders and consumers from boardroom negligence.

If adopted by the Coalition, the new defence would shield directors from prosecution where it cannot be proved they told a lie or failed to act with ”integrity and commitment”.
The new provision would apply to directors facing alleged contraventions, including offences around financial reporting, continuous disclosure rules and misleading or deceptive conduct.

It’s as if every idiot vested interest group has come forth with their incredibly unwanted and deeply undesirable ideological hobby horses. Of course these people would say that they don’t like personal liability. The whole point is so that they won’t jeopardise other people’s lives. It’s not surprising this government would even lend out a forum for such views. if anything there should be ways to get at company directors who use shell-games with paper companies to shield their personal stake from creditors. What we need is a way to get at those directors and make them personally accountable for the damage they wreak.

Just as the article says I’ve never seen anybody treated unfairly as a result of personal liability. The vast majority of instances  where directors’ liabilities have been an issue that I’ve seen, have resulted in directors walking away scot-free without really losing anything, That, seems far more unfair than anything that’s actually written into law covering this point.

There You Go Using That Word Mandate Again!

Tony Abbott is still, to this day, one of the least popular Prime Ministers in the short history of Australian Prime Ministers. What makes him even less popular is his insistence that he won some kind of mandate in the last Federal election 10 months ago. His personal popularity that languishes in the low 30s says ‘no’ to this fanciful notion.

Yesterday Clive Palmer challenged Tony Abbott to go for a double dissolution. Somehow we kind of expected things to work out this way. Today, Tony Abbott served back his own take  right at Clive Palmer, and so he used that word ‘mandate’. It’s hard to argue you have a mandate when you are so unpopular, heading up a government that produced the leas popular budget since polling began. I mean, yeah, sure, whatever you say Tony. It seems to me this whole Abbott government might disintegrate if any more scandals come to light. Hardly a government that could claim having a mandate.

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More On That New Work-For-The-Dole Plan

“Dealing With Centrelink IS A Full-Time Job”

So sayeth a graffiti down in Victoria somewhere where everybody driving can see. It’s most likely true. The dole being what it is – money for not working- the government sort of has to have scary gate-keepers to make the experience miserable enough so more people don’t want to be come dole recipients. The Centrelink experience is the big stick, to the tiny carrot of disincentive to work that is the unemployment benefit payment. Gone are the days of the “non-specific arts grant”.

What’s even scarier is that under the ALP government, the ranks of people who had some kind of Centrelink payments swelled to 6million, which is roughly a quarter of the population. You can see why the Coalition government wants to do something about Centrelink payments to people except it also means kicking a lot of dust into a lot of faces. It’s not going to win them votes. It’s all very nutty and you wonder exactly how the numbers are stacked. Fortunately Guy Rundle over at Crikey has done some maths (thanks to Pleiades for the heads up):

Australia currently has around 830,000 people currently receiving unemployment benefit, which would suggest a raw figure of 33.2 million job applications being made per month under the new scheme.
However, a yet-to-be specified number of people will be exempt from this requirement because they are undergoing training and there will be a certain amount of non-fulfilment — so let’s bang this down to a mere 25 million applications. Let’s now assume that people send these far and wide — full letter and CV applications as required by the new conditions — to all employers.

There are around 2 million registered businesses in Australia, but many of these are sole proprietors billing as companies or multiple shell companies around a single real business. Let’s assume 1 million employment entities. By this absurdly abstract raw count, every business would receive 25 extra applications per month.
If we assume that every application will be taken seriously — and that is surely part of the social contract the government is proposing — then every application will take, say, 20 minutes to process, or 8.3 hours a month, a full working day. Assuming these are being handled by an HR staffer on $50,000, that would be $200/month, or $50/week in extra business costs.

But of course, these things won’t fall equally. Many of these applications from minimally qualified applicants with little work experience will go to the entry-level service sector, dominated by small (under 19 employees) and micro (under four employees) businesses.

Let’s look at Tasmania, with the highest unemployment rate. The state has 18,500 unemployed looking for full-time work, who would generate 740,000 applications per month. It has around 25,000 businesses in the service sector — but assuming sole traders and shells, we can bust that down to 15,000 companies. Since small businesses employ 45% of the overall workforce, let’s say they’ll receive 300,000 of these applications (in reality, it will likely be more).
Thus by this reckoning, every operating small business in Tasmania — whether it has advertised or not — will receive an average of 20 job applications per month, generating, by the implied social contract, 400 minutes, or 6.67 hours of extra work per month. That is less than the nationwide business average, but we’re talking about companies with one or two employees. Even if they don’t spend a great deal of time on these applications — and many, being decent people, will give them a read — the actual task of processing them will chew up time in a business day.

But the position gets terrifying when you limit this process to companies that are actually advertising vacancies. Seek.com.au currently has 78 vacancies in various service and unskilled sectors for the whole of Tasmania. Let’s multiply that by three for other sources — local papers, word of mouth, milk bar windows — and assume that those 234 vacancies receive two-thirds, 67%, of the applications. That is half a million applications per month for 234 jobs, or 2136 applications per job.

That’s pretty scary. Being somebody who has to read job applications, I am just dreading seeing a load of job applications where I can’t tell if they are keen or not at all. Just as night follows day, if the Coalition get their way on this idiotic idea, I will be reading a lot more resumes than I need to or want to – and that’s just my own selfish take.

The somewhat bigger picture is this: If you are in a small industry, there won’t be more than 40 companies in your sector of work. Once you’re applied to all of them, you’re done. It’s one thing to imagine an infinitely interchangeable unemployed person going into a workforce with unlimited flexibility in how it handles skilled positions in the workplace but the reality is nothing like this.  Certainly if it was a small sector with only 40 or so companies, you would be sending in a resume every month to the same companies knowing full well they won’t even read them because they know you’re only doing it to get unemployment benefits.

As policies go it’s pretty crappy because it cynically assumes that people won’t get jobs, but they have to keep trying. And if everybody did do as assumed by the government says, the numbers say it can’t work. The scheme also floods the HR departments of various companies with garbage data they didn’t ask for, but must be processed anyway – which is costly as well as time-consuming and aggravating. And it also ignores how jobs are distributed across the country. I’m actually scared of how this one is going to turn out.

We Need To Reconsider Education, Work, And Pay

This isn’t a popular notion but it bears mentioning anyway. Our society runs a kind of Darwinian race for our kids as they grow up. The rules don’t stay the same and fads come and go, but in general, the 12 years of junior school and high school is to pick out the best students and send them to university. It also selects the group who are not as good academically, but kids with aptitude towards various trades. It really isn’t interested in kids who are neither academically brilliant or have little sensate skill they can parlay into a trade. Unsurprisingly the dregs of this process end up as adults without a future of any kind. And it’s this population that ends up on the long-term unemployed list, or ends up in a life of crime.

You know those kids. You know those people. You know they exist.

The point is, schooling spends a good deal of time picking winners and losers, and some of the losers lose big, and lose early.  Some of them get a second chance and find some kind of career, but more often than not, the pure abject losers end up as the long term unemployed. It’s a brave employer that gives those people a chance by hiring them. Living at home with one’s parents into one’s forties is not a dignified way to be; living like a homeless person or actually becoming a homeless person is even worse. Doing it on welfare payments likely isn’t exactly the lap of luxury.

Having created winners, the winners go into medicine and law, and some even become politicians and make laws; and this is where it gets really unfair. The people who never lost in their lives get to tell the losers who lost early and lost big that somehow their own fault for not having the right dedication when likely it has a great deal to do with circumstance and environment. Arguably, the winners get to corner the market for high-paying work and the benefits that accrue from such work over the less successful, and then press home the advantage at every turn.

Thus inequality in our society necessarily starts with our concept of education, work and payment. Inequality can only be addressed by governments that are willing to admit that part of its job is wealth re-distribution from the overly successful to those in need – that is to say, the successful lawyer or doctor or banker can afford to pay a little extra to help the people they left behind. To turn around and scorn the losers and cut the benefits seems like an incredibly ungracious thing to do. It’s really not that difficult to understand. Hence a Coalition government that seeks to cut the welfare payments and cut taxes is a government that seeks to increase inequality in our society. There’s really no two ways about it, and it’s pretty deplorable.

 

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View From The Couch – 29/Jul/2014

Who Asked You, Peter Reith?

It’s interesting Peter Reith has taken this moment to tell us he thinks the future Liberal Party leader has to be Julie Bishop. Peter Reith, an awful character at the best of times, did have a big mouth so it’s not surprising he’s chosen to speak out of turn; and yet he’s basically sending up a weather balloon to see what happens when he nominates Julie Bishop. It’s weird because it’s hard to think of an equivalent happening right now where maybe a retired former minster like say Lindsay Tanner randomly nominating Tanya Plibersek to be the next Labor leader. Its hard to get my head around. basically, he’s answering a question that hasn’t been asked with an answer that probably isn’t wanted by anybody. It might be true that Joe Hockey isn’t the next best candidate after Tony Abbott – but why are we even talking about this now, when Tony is making his best impression as an international statesman?

I am not saying there is likely to be any leadership change in Tony Abbott’s first term or even his second term. Gillard’s knifing of Rudd with the support of Bill Shorten and others is not about to be replicated by the Coalition. However, of Australia’s 28 prime ministers, only seven have been in office for more than four years so it’s not unreasonable to suggest that after Abbott has had the job for at least four years or more, anything could happen.

Really now, Mr. Reith? Do tell!

We’re Not Talking About The Band Severed Heads Here

The headline reads: Sydney man pictured with severed heads. It sounds like the guy is having a whale of a time.

However, a friend of the pair told Fairfax Media they have no intention of ever returning.
“They say they’ve never lived a better life than what they’re living now and ‘you don’t know what youse are missing out on, especially with the turn of events happening now [with the establishment of a caliphate in Iraq],” said the friend, who didn’t want to be identified.

“People say they’re worried these guys will come back but they understand that if they leave the country to go to Syria or Iraq they’re not coming back. They’re after two things – victory for Islam or martyrdom.”

But the Attorney-General emphasised that home-grown terrorism remains a significant domestic threat.

He will seek to introduce legislation to parliament to make it an offence to encourage terrorism.

“One thing no one should think is that this is a problem on the other side of the world,” said Brandis. “This is a problem that exists and germinates within our suburbs.”

Argh. It’s hard to tell who has the lower IQ – the guy who uses the plural of you as ‘youse’, or the Attorney General of this land – “Champion of Bigots” George Brandis – who thinks he can write a law to prohibit encouraging terrorism; especially when you consider the reason he wants to champion bigots is in the name of free speech and freedom of expression. The contradiction of his position had me in stitches of laughter until I realised he’s going to try it anyway and waste everybody’s time and money.

It’s not good that there’s some angry Arab-Australian running around chopping heads in Syria, but it seems the horse has bolted. The guy doesn’t want to come back anyway. Meanwhile the rest of ISIS/ISIL is busy getting medieval on people’s asses. They’re placing decapitated heads on spikes. I mean, that’s Vlad-Tepes-Krazy.

Work For The Dole Is A Kind Of Employment, No?

I don’t get the conservative mental fixation about the imagined dole-bludgers. It’s like they don’t understand that at a certain point some people are not employable. That could be a point in time, or a point in the person’s life, but being employable in the broadest sense, narrows so much that people cannot make the grade. They might be too old to do what is necessary; they might just be too inexperienced; or dare I say too stupid to do anything of value; and then there are some who are a combination of all sort of elements that make a person unemployable.

And at a certain point, society is better off just paying these people off in some way so they don’t turn to a life of petty crime or become destitute and turn to a life of violent crime. It’s not a difficult concept to understand but you keep meeting people who say, “but it’s our tax money being wasted” as if how that money was spent was their decision to make (it’s not, it’s the government’s) and ignores the fact that the money spent staves off enough desperation it probably is doing a lot of social good. This is why our society came up with a safety net in the first place. it really isn’t a whole lot of money, and anybody living on it, isn’t having a wonderful life unless of course they live at home with wealthy parents.  And yes, such people exist – I know a couple myself – but you still wouldn’t want to be them. It seems stupidly ungenerous to want to begrudge them the pittance and punish the long-term unemployed or the young unemployed with “work for the dole schemes”.

A burning question that ought to be raised is “do they work?” According to people who have made a study, they don’t.

But Professor Jeff Borland from the University of Melbourne – who conducted the only empirical study of the Howard government’s work for the dole scheme – says years of research show such schemes are unlikely to help people find jobs.

”The international evidence is overwhelming,” he said. ”It’s hard to believe that the government couldn’t understand that this isn’t the best way to improve people’s employability.

”I guess you have to conclude that there are other reasons for wanting to expand the program, and the title of the scheme [work for the dole] suggests it’s being done for political reasons.”

Labor has warned businesses will face a deluge of fake job applications under the government’s measures.

Employment Minister Eric Abetz said that could be a fair criticism.

”We as a government do not want box-ticking to take place,” he told ABC TV. ”We don’t want red tape and inconvenience to employers, but what we do want is a genuine attempt by the job seeker to obtain employment.”

No box ticking! It’s going to be hell from next year when all these companies are going to get their inboxes of their emails stuffed with resumes from people who don’t really want a job but are forced to put on a very good show of pretending to want a job. You wouldn’t want to employ any of them, and they don’t really want to be employed. The charade is going to be unbearable. And what good does the government think it’s going to achieve? Especially when we know it doesn’t do anything tangibly beneficial.

It’s just bullying by the government. If this business of having to apply for 40jobs per month for 6 months before they get the dole comes into play, it’s going to be unwanted-resume-hell for every company out there. It totally ignores the reality of the marketplace.

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Conversations Around The Traps

Who Suffers From Zero Interest Rate Policy?

Zero interest Rate Policy or ZIRP as it is known in some circles has been going on for two decades in Japan. It has also been going on for 7 years in the USA and Europe. The reasons have ostensibly been from keeping asset prices to stopping banks from toppling over due to lack of liquidity, through to keeping people employed. The extremely accommodating policy has been running parallel with the Quantitative Easing program in the US and Europe which have somehow helped to prop up asset prices in bubble condition around the globe, but also not spurred growth as promised.

The way the traditional/classical economy was supposed to work was that lower interests would fund capital investment for the next phase of economic growth. Instead the low interest rates have allowed speculators to place bets at lower cost, while the piled up debt has eaten into future growth in a big way. The point of all this is to say, the things the easy money has gone towards have not been exactly productive or helpful, while there are people who are genuinely suffering because interest rates have been kept so low for so long.

For instance retirees in America and Europe with some amount of money saved up during their working lives would be finding that they won’t be living off the interest of the money they saved, but be forced to eat into their savings just to survive. This sort of thing can be seen as a breaking of the social contract. There would be a whole generation of kids growing up without learning about the virtues of saving because  they’ve never seen interest payments on their bank accounts. I don’t think this is a good thing because we’re raising people who haven’t seen the benefits of saving and compound interest.

Worse still, with something like QE going on at the same time, Zero Interest rate translates into a situation where you cannot sit on cash because inflation is eating away at that value; and you can’t stay in bonds because whole countries have been threatening to default for the last 3 years. That leaves equities or foreign currency trades, and they’re no guarantee of a return.

In fact, it’s worth asking at this point in time why people who save should suffer at the hands of the Central Bank while it essentially rewards people who go into debt to buy into positions. Why is it that people should not sit on their earnings as savings? If deflation is such a threat, then why is it so bad if the man on the street is able to get more for less?

Frankly I think the world is getting ripped off.

Politicians Lie, But Must They Be Brazen About It?

I was in a conversation earlier tonight with walk-off HBP, and the issue came up about how the Murdoch press essentially insist on telling non-truths and heavily-spun tag lines, all of which amount to nothing but lies. It’s like an Orwellian thing where untruths are shouted out loud until everybody accepts it as the dominant discourse and acquiesces.

But then Tony Abbott gets up and celebrates the repealing of the Carbon Price, characterising it s this bug bear in the economy that was raising people’s costs of living while not doing anything at all for the environment, and that his government is a “conservationist” government. All of these things are wrong. The Carbon Price was hardly a blip in the rising retail power prices, it was contributing to the reduction of our emissions, and there is no way you can call a government that insists on dismantling the Carbon Price system a conservationist government in any dialect or accent of English.

It’s an astounding thing that we have a Prime Minister that stands there and spouts untruths as if they were truth, pronouncing white is black and black is white. I can accept that politicians will work the facts of the matter in their favour through spin, and that they sometimes get it wrong, making them liars after the fact. I just can’t recall a single Prime Minister of this land lying knowingly with a straight face and expecting the people to buy it. This isn’t “no child will live in poverty” things where a politician simply gets the scope of the problem wrong. These things happen and I don’t judge too harshly. Going right back to Malcolm Fraser and looking through all the NSW premiers, I don’t think I’ve seen a single head of government lie with a straight face as Tony Abbott does.

This is a person who knows the science but chooses to ignore it; understands the facts and chooses to deny them; and then acts on the worst possible advice for ideological reasons and then says he is something that that he has never ever been; and that the ignoring and denying of science and facts and going against them for ideological reasons represents something that is positive for this country when it clearly is not. For Abbott to characterise his government as ‘conservationist’, he may as well as be saying his is a ballerina government, or an artistic government, or a caring compassionate government, or a forward-looking government. These things are equally Un-true of his government as the expedient, idle, lunatic, conceited claim that his is a conservationist government, especially having repealed the Carbon Price legislation, and telling us this at the press conference to announce the repeal.

I’ve just never seen anything like it. And my mind boggles, my brain explodes… It’s like a never ending torture of our minds.

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