Tag Archives: United States of America


Hard To Identify With Anything

I’m keeping it simple today. I was reading some magazines from Japan in the last few days and surfing blogs in Japan. And I have to tell you I just don’t identify with the tenor or spectrum of politics over there at all. I don’t know if I ever did, but I used to have a handle on it. Now it feels like the children are running the kindergarten, and there are a lot of emotionally immature people in charge of institutions both public and private. And it’s really quite alienating.

Be that as it may, I feel really alienated by Australia as well. I know I’ve tried to just live with it and get on with it, but this Abbott Government has to be the most alienating government in Australia I’ve ever experienced. I thought the John Howard years were pretty awful, shameful, pathetic and on the whole hard to bear, but 7months in, this Abbott Government just creeps me out. And with that comes my deep alienation from the idiot mainstream that thought voting for this was better than voting for Kevin Rudd’s ALP.

So here’s the thing. I’ve tried to be a grown up and talk about things that matter in between writing about movies and music and whatnot, but I just can’t get my head around how bad politics has become around the world. Even the USA has turned into a place I can hardly relate to, and so even pop culture has become a spent refuge. I can’t hide there any more. I’ve tried the bread-and-circus routine, but I don’t want to spend the rest of my life in the bread-and-circus tumble-drier of cultural flotsam.

But today, is the day I’m saying I don’t know what to tell you that is both meaningful to me and meaningful to you. It’s insane. I don’t know how I’ve ended up here. I don’t know how the world has ended up here. It’s seven years from the GFC, employment growth is returning but we keep exporting jobs to Asia, the government keeps lying to us about inflation; real wages are not going up, they’re stagnant or going down, but the government wants us to believe our productivity is falling so we should all take pay cuts; but they’ll go into debt hard even while they vilify debt; they’ll print money and make it easier for the rich to do business but they’ve locked a generation out of housing in many parts of the world; there is no future, there is no revolution, we’re sort of at the precipce where we go from ‘Brave New World’ into Orwell’s ‘1984’ (I kinda wish it was Van Halen’s ‘1984’ – at least that would rock).

It really is a terrible world, and these politicians really do suck hard. I’m surprised we’re not occupying places and throwing up barricades. I’m not advocating it, I’m just surprised we’re not there.

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The Money That’s Not There

Deficits? What Deficits?

A few weeks ago I made an observation over elsewhere on the interwebs which I forgot to note over here. Once upon a time in the 90’s when Pauline Hanson was a tyro crank politician, she was much ridiculed for her views. They were in most part totally outlandish and powered by a kind of backward looking xenophobia that made your skin crawl, but in particular she had a solution for Australia’s debt problem, which was “print more money.”

The press went to town on this statement as a clear indication that this would not work because printing money wold cause a massive outbreak of inflation; the likes of which crippled the Weimar Republic, so clearly this was a stupid idea born out of a stupid person. So the narrative went. And who amongst us who bothered to study modern history didn’t know of the crazy inflation that engulfed inter-war Germany as the Weimar Republic busily printed money to pay their reparations for World War I? Print money, you get Weimar Republic.

Fast forward 15 years and 5 years on from the GFC we find, in fact that is exactly the US Federal Reserve Bank is doing in its guise of Quantitative Easing, and even the Bank of Japan has joined the ranks of central banks ‘printing money’ with the celebrated ‘Abenomics’ in progress. The interesting thing is that inflation – the kind we read about in history books about the Weimar Republic – hasn’t exactly broken out in neither the USA nor Japan. In fact the Bank of Japan is running the printing presses much faster than the US Fed, and it might not make its inflation target of 2%. Go figure that one out.

No Inflation. All that money printed, and still no inflation. If anything central banks in the advanced economies are scared shitless of a collapse in asset prices.

I hate to say all this because I really dislike Pauline Hanson, but if the amount of deficit of the Australian Government was the size that it was – such that it could be paid off by the selling of assets under John Howard – maybe the Hanson plan of printing money back then might have been better? That way, the Federal Government, and by extension we the people would still have those assets.

Or maybe government debt isn’t as big a deal as the private sector is making out. What’s really bad about Greece and the other distressed euro economies probably is the fact that they can’t devalue their currency by printing their own money. But if we go by the – ahem, *gulp* – “Hansonomics”, Greece ought to quit the Euro zone and just print whatever money it likes to pay its freaking debts. And as crazy as that sounds to educated minds the evidence seems to be the case. Stick that into your objectivity pipe and smoke it.

This brings me to this article here.

In a 34-page review for clients of how a Coalition government might change economic management, Mr Eslake, chief Australian economist for Bank of America Merrill Lynch, also highlights the potential for “significant and ongoing tensions” in an Abbott government between its “genuine economic liberals”, such as shadow treasurer Joe Hockey, and those who are “more sceptical about markets … including in many cases Tony Abbott as Prime Minister”.

He predicts that the Coalition will ultimately adopt all of Labor’s proposed budget savings measures, except for ending the tax break for cars bought through salary sacrifice.

Even so, Mr Eslake estimates, the Coalition has so far committed to $28.4 billion of tax cuts and $14.8 billion on new spending in the next four years, a total of $43.25 billion. But he estimates the nine savings measures the Coalition has announced so far would save only $13.44 billion over the same period.

“By our reckoning, over the remainder of the election campaign, the Coalition needs to announce additional savings measures totally in the vicinity of $30 billion over the four years to 2016-17 in order to be able credibly to claim that it would produce better bottom line outcomes than those projected (by Treasury and the Department of Finance), he said.”

“That is a substantial sum, although it is considerably less than the $70 billion ‘black hole’ suggested by the government.”

And that ought to give you a bit of a scare. If the polls are to be believed the incoming Liberal National Coalition Government is selling itself on being fiscal hawks and that 30billion will come out of something somewhere along the way in a fit of austerity worship. I don’t know where it will come from, and by the sounds of it, neither does treasurer-to-be Jolly Joe Hockey, but knowing their political persuasion it’s likely to come out of welfare cheques and education budgets.

Yet in a bigger picture sense, all this pain it will inflict on millions of people will basically hurt the economy anyway while doing not much good. It’s almost enough for you to endorse Hansonomic Printing Presses and ask them to simply print the money to pay the freaking debt. It’s what grown up countries do.

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The Joy Of The Known

The deal on ‘Argo’  was that it won ‘Best Picture’ at the Oscars without even getting nominated for ‘Best Director’. I don’ often agree with the Motion Picture Academy, but in this instance I could see the good sense in the outcome.

Like it or lump it, the singular beneficial feature of this film is that it is an ode, a love song in praise of Hollywood. How can the Academy not lavish praise on a film that praises Hollywood so? It’s hardly artful in its direction, so it is no surprise it didn’t get nominated in the directing category. The Academy it seems retains a little bit of pride about what it does.

What’s Good About It

Alan Arkin, John Goodman, Dire Straits, Van Halen, Led Zeppelin. Pulling one over the Nasty Iranians.I believe the Iranians are particularly insulted by this picture. Clearly they don’t understand that they’re not meant to like it seeing that they are the butt of the joke. In some ways, anything that gets up the nose of that horrible Theocracy is good fodder.

What’s Bad About It

The suspense is hardly exciting once the premise gets under way. We know they get out, so it hardly seems the process is all that suspenseful. It seems to be missing a couple of really difficult obstacles to make it a truly riveting film.

What’s Interesting About It

Watching this film was like getting plugged in the Gen-X memory machine. I remember the days when the Iranians stormed the US Embassy and held those hostages fr 444 days. I’m sure it s a proud moment for the likes of Mahmoud Ahmedinejad – who it turns out wasn’t there after all – but it’s one of those moments for which Iran has not paid its price. So it seems fitting that they cop a bit of retcon-humiliation from Hollywood. There’s nothing like the ridicule from Hollywood as Saddam Hussein found out.

Still, the Iranian complaints seem entirely motivated by hurt pride that they should be portrayed as being so backward and craven and abusive masters of torture. Their claims that the film distorts history is probably true but I’m yet to see any film that doesn’t distort history so that’s not saying anything special in the context of this film. You accept that it probably didn’t go down the way Ben Affleck directed it (and thank goodness for that).

Fortunately, they’re not the only ones put off by the movie. The Canadians are also upset that they don’t get a good enough credit for their role. What’s really interesting about the outrage about the rewritten history is that New Zealand gets a mention in the list of people upset by the picture. Anything that upsets so many people must have something artistic going for it.

All The Best Lines Go To LA (and so do the chicks)

The most insightful lines in the film pertain to Hollywood and not the real world at all. The best character for the best lines was the fictional producer Lester Siegel played by Alan Arkin, followed by John Goodman’s John Chambers. The line about the bullshit coalmine and fitting right in with the superficial and fickle LA set pretty much define the tone of the film: Hollywood is *it*.

In some ways this is a film that probably belongs in the genre of films about film making, without there actually being a film. The way they get the diplomats out of America almost is an adjunct to the story of faking a film production convincingly.

This is what the Iranians don’t get. Young, beautiful women don’t exactly travel to Tehran to become good Muslims anywhere near the same rate as they go to Los Angeles hoping to become a superstar. Los Angeles might be a toilet of a city but its allure is still streets ahead of Tehran, the capital of a country that is in massive deficit of Gross National Cool. All the great films they make are not going to change this international perception.

Is it really Zionism? Or is it that Iran has made itself firmly into an unattractive nation? ‘Argo’ hardly seems to be the problem.

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Obama Wins

Not Even Close

Keep Calm

For some weeks we’ve been hearing that the race was neck and neck and that the popular vote reflected a deeply divided America. Of course, I’ve been following Nate Silver’s FiveThirtyEight.com for a long while and it’s been clear for some time that Obama’s actually been ahead.

The little dip you see is after the first debate where Romney beat Obama, but even then the electoral college count never went below 285.

Nate Silver’s tracking of polls

As you can see in the third graph, the popular vote was tight, but then that’s been what most pundits have been focusing on, saying it’s neck and neck. If anything, Nate Silver’s charts clearly show that Romney was doing a bang up job securing his base without making any headway into the crucial swing states of Florida, Ohio and Pennsylvania.

That brings me to this bit in this coverage here:

The Republican failure to topple a president who was perceived as weak and divisive is expected to provoke a blood letting in the party.

The battle lines between those who say the party became too moderate and those who believe it is too radical are already drawn.

“If I hear anybody say it was because Romney wasn’t conservative enough I’m going to go nuts. We’re not losing 95% of African-Americans and two-thirds of Hispanics and voters under 30 because we’re not being hard-ass enough, ” the Republican senator Lindsey Graham told Politico, last week.

That’s really interesting right there. If the Republicans thought they were in it since the moment they nominated Romney, then they were very misguided; and the reason they were misguided is because they took the popular vote to be more important than what the distribution of the electoral colleges were going to be.

It’s surprising that these people who are in a political party and therefore should understand how the election works, should have looked at the numbers Nate Silver was looking at. Silver had Obama beating Romney in a fluctuating zone of 59%-91%. Amazingly, some people thought Silver was pumping for the Democrats but right now as of this writing, Obama has 302 of the college votes, which means Silver has been as accurate as he was last time in 2008.

Which leads me to the point. How can these Republican types even be in politics if they don’t understand how their own system works? It’s not the raw popular vote. It’s how the votes are distributed across electorates that matters.

Which leads me to the next thing in the live coverage that got my interest:

If you want to get a strong feel for the demographic current underlying this election I strongly recommend Ron Brownstein from the National Journal who has been reminding readers for months that this will be the last election that the Republicans can attempt to win with a majority of white votes alone. It was a big risk that Obama took when he decided to embrace gay marriage, push back hard on efforts to restrict abortion and contraception (including a very public stoush with the Catholic Church) offer up a partial amnesty to young illegal immigrants and effectively concede non-college educated white men to the GOP. Instead of a coherent national message, the Obama campaign has stitched together a rainbow coalition.

So far tonight, it is looking like the risk paid off.

That’s a really interesting point about the demographic right there. It goes hand in hand with Bill O’Reilly – he of the awful, awful, awful, spin-ful Fox News – having a whine about the death of the White Establishment. The 2008 election was a watershed because there were more urban voters than rural voters for the first time. This time, it became the election that could not be won by appealing to the White voters’ racism alone.

And so the Republican Party clearly is at at the crossroads. They’ve got the wrong end of the demographic and going harder to the right and more conservative and more ideological is not going to get it done for them in coming elections. The curiosity now is how long they are going to persist with their dalliance with the irrational, Ayn-Rand-ist, racist, retrograde, ignorant and fearful Tea Party.

Judging from the number of Senate seats lost by Tea Party, it seems clear that the Tea Party is not going to come out of the 2012 election with any amount of credibility within the Republican Party. This is where it gets interesting. Fox News was already denouncing the Tea Party blaming them for Romney’s loss – which is ironic because they’re the very same people who gave so much air time to these crazies. Fox News may have successfully polarised the electorate through misinformation and propagandeering and generally misrepresenting arguments; but this has not translated one bit in to votes that mattered. If the way the swing states voted for Obama is any representation, then it is clear the biggest disservice done to the Republican Party might have been the blatant partisan-ship of Fox News. And if the demographic shift says anything, it is clear that Fox News’ own viewership is a shrinking demographic. I wonder how Rupert likes the sting in that tail.

UPDATE: Obama finished up with Florida, winning 332 electoral votes in the end.

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The American Psyche?

Revenge Tragedies

Goodness, sometimes I really detest the opinion pieces the SMH puts out there. This one here by Waleed Aly about an episode of ‘Newsroom’, trying to anlayse the so-called psyche of America just takes the cake.

This episode isn’t really about broadcast journalism at all. It’s about America’s relationship with bin Laden and the September 11 attacks. It’s an artefact of our age that helps us define September 11 as a social, cultural and psychological landmark.

And if Sorkin’s world is as accurate on that score as I think it is, the take-home message is this: that for Americans, or at least the American mainstream reflected here, September 11 was deeply personal. These characters are scarcely interested in bin Laden’s death as some kind of strategic gain. They barely discuss anything that approximates the consequences of bin Laden’s killing. But they very clearly exude a spirit of revenge finally being secured.

The newsroom cheers raucously when the news editor announces the news; news anchors jostle for the right to share the triumph with the American people in a manner that seems about more than professional ego; a peripheral character whose father was killed in the Twin Towers withdraws from the celebrations feeling hollow rather than elated, but even she agrees this is a moment for festivity.

And in perhaps the episode’s cheesiest moment of patriotic triumph, a producer trapped frustratingly on a United Airlines plane stalled on the tarmac while his colleagues enjoy the exhilaration of going to air, looks the captain in the eye, then fixes on his badges and stripes, and declares solemnly that “our armed forces killed Osama bin Laden for you tonight”.

Hmm. the article then goes on to argue that the killing of Osama bin Laden was mere revenge, and somehow this makes the act of slaying Osama bin Laden, somehow lacking in greater legitimacy. Well, I hate to break it to Waleed Aly, but the brokerage of revenge is actually one of the most important functions of state. The reason we have states and the judiciary predates the power of kings in Germanic tribes – and many of our law codes come to us out of those kinds of laws.

It pays to understand this a little bit more. Historically speaking, the need to broker the act of revenge exists so that society does not fall into a chaotic feud. If one reads Icelandic sagas such as Njal’s saga, it is pretty clear the purpose of most laws in the Icelandic ‘Althing’ are to do with “making settlements” and by that, we mean brokering peace deals. Revenge is not condoned because going it alone without the wider understanding by society renders the act something that sets off a cycle of violence. This is why the law brokers settlements, and by way of brokering settlements, revenge is also brokered.

The more sophisticated our society has become through history, we have constructed elaborate narratives for what crime and punishment are, and what the point of the penal system might be; but at the heart of the function of the law in the state apparatus is to administer justice, and justice is in most part brokering settlements for grievances and revenge. This is why capital punishment still exists in parts of the world we consider otherwise civilised – like, say, America.

That the point of going after Osama bin Laden and killing him is revenge is not particularly insightful, given that we know how many perished in the 9/11 attacks (and I say this putting aside all the conspiracy theories for a moment). If the United States Government did not exact vengeance on the man who claimed responsibility for the attacks, it would be amiss in its duty of brokering the revenge. After all, it would be illegal for the aggrieved kinsmen to go after bin Laden on their own, seeking to kill him. That’s called a lynch mob.

So it goes without saying that Waleed Aly is willfully misrepresenting what state-sponsored revenge actually is, in order to come at his pithy conclusion:

…Sorkin doesn’t employ the explicit good-versus-evil terms that, say, George W. Bush did. There’s no need. It’s simply assumed. It’s not in the content of the script because it’s in the underlying grammar of American public culture. The Newsroom’s treatment is an artefact because it does nothing more than faithfully reproduce the mythology of bin Laden that prevails amongst its audience.

That is to say, Sorkin treats bin Laden as an icon. Almost in the religious sense. As the show’s star anchor Will McAvoy takes to the air to break the story, the production staff rise to their feet and look on in solemn reverence. Hereabouts it is clear this is not a news broadcast. It’s a rite. A sacrament.
“For the first time in almost three decades the world has no reason to fear Osama bin Laden,” begins McAvoy’s eloquent monologue. It’s powerful. It’s moving. It’s also wrong.

Bin Laden remains potent in death. He is more powerful as a symbol than a field commander, and as such lives longer than himself. That’s the nature of icons.

Now, what is wrong with this? Waleed Aly is in effect complaining that Osama bin Laden has been made into a kind of straw man cipher for Islamists, while mounting his own straw man argument against America’s satisfaction at having had Osama bin Laden killed.

The real complaint we should be leveling is that Osama bin Laden was killed and not captured alive; that his body was disposed at sea without so much as an autopsy. The physical being of Osama bin Laden was sent into the shadows of history pretty much the same way he came into our consciousness – through the murk of Afghanistan and Pakistan local politics and local history.  The real complaint that I for one have about the slaying of Osama bin Laden is how long it took, and the damage it has done in the mean time to our own cherished democracies. In fact it didn’t get done during the tenure of George W Bush as POTUS, which leads us to wonder about all those conspiracy theories out there on the internet.

Be that as it may (as they say in Mafia movies), complaining that Osama bin Laden is understood to be ‘not even political’ but merely ‘evil’ is a bit rich coming from a muslim apologist (who only a couple weeks ago wanted to lend legitimacy to those rioting in Sydney’s streets over some stupid Youtube video). The adage about living and dying by the sword fits Osama bin Laden perfectly – He chose to live by terror. That his death should be shrouded in the state sponsored terror of Navy SEAL Team 6 is entirely appropriate, and complaining about the meaning assigned to Osama bin Laden in the wake of the hit is a bit like complaining that the term ‘monster’ overstates the wrongdoings of say, Stalin or Idi Amin or Kim Il-Sung and Kim Jong-Il after they’ve done all their killing and repressing and torture and hell-making.

Somewhere there is a gallery of history’s great assholes; and there is no doubt in most people’s minds that Osama bin Laden has earned his spot in that gallery, well and proper. The only quibble about that is whether he was actually some kind of CIA Black Ops operative blowback asshole as per the conspiracy theories; or whether he was an autochthonous Islamist asshole; but an asshole of historic proportion, I have no doubt that’s what he was. There really isn’t much mileage in arguing that Osama wasn’t an asshole but a projection of the embittered American psyche. You’d have more success splitting his beard hairs at the bottom of the sea where he sleeps with the fishes.

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Kick The Frog

A New Game In Town

The flurry of media reports surrounding both Dominique Strauss-Kahn’s situation and Arnold Schwarzenegger’s separation have been bordering on the absurd. Here’s Paul Sheehan’s idotic take for instance where he likens the two men and then goes to say that trial by media is just because these men are powerful men. Having read  it, what I want to know is how he keeps his job when he writes such idiotic rubbish, but the world is as it is and we must take it as we find it. I find myself in a world where Paul Sheehan gets paid handsomely to write idiocies in our broadsheet.

Yet he is not alone in conflating and judging both men as equivalents.

But in any event, the arrest of Strauss-Kahn in New York City for allegedly trying to rape a hotel maid has ignited a fierce debate over sex, law, power and privilege. And it is only just beginning. The night of Strauss-Kahn’s arraignment, former California governor Arnold Schwarzenegger admitted that the reason his wife Maria Shriver walked out earlier this year was the discovery that he had fathered a child more than a decade ago with a former member of the household staff. The two cases are far apart: only one man was hauled off to jail. But both suggest an abuse of power and a betrayal of trust. And both involve men whose long-standing reputations for behaving badly toward women did not derail their rise to power. Which raises the question: How can it be, in this ostensibly enlightened age, when men and women live and work as peers and are schooled regularly in what conduct is acceptable and what is actionable, that anyone with so little judgment, so little honor, could rise to such heights?

Umm, I know it’s Time magazine, once the bastion of WASP America, but this kind of moralism is a bit much. The marital infidelities of a movie star are not surprising. The fact that he subsequently became Governor of California notwithstanding, it actually is a long bow to stretch to stick Arnie’s peccadilloes with Dominique Strauss-Kahn’s alleged sexual assault. For a start, Arnie’s affair was between consensual adults, not an assault. Arnie is not accused of a crime, he’s been outed as an adulterer with a love child. Comparing the two men is a complete category error and conflating the two only muddies the waters.

The article then goes on to compare Dominique Strauss Kahn to Tiger Woods and Charlie Sheen, but again, you have to wonder if these comparisons are chalk and cheese no matter how chalky one of the cheeses might be; and if so then any argument built on such comparisons are really not valid in any way shape or form.

If it isn’t a free swipe at Arnie, then it seems the free hacks are aimed at French culture over at Time, which is having a field day with this stuff.

Even the well connected had qualms about confronting Strauss-Kahn. A regional Socialist Party official stepped up on Monday to say that her daughter had come under sexual attack during a 2002 interview with Strauss-Kahn. The official, Anne Mansouret, repeated the allegations made by her daughter Tristane Banon during a 2007 TV program about how a well-known politician [Strauss-Kahn’s name was bleeped out] tried to overpower her with a sexual embrace. What took so long for Mansouret to back up her daughter and name Strauss-Kahn? She told French TV that she had dissuaded her daughter from filing charges because Strauss-Kahn was en route to greatness — and derailing the ascent of a fellow Socialist Party official would be bad form. She also said that because Strauss-Kahn’s second wife was Banon’s godmother, blowing the whistle on the alleged attacker would create rifts within Mansouret’s circle of family, friends and intimates.

Worse still, the French are racists, apparently:

The case in New York City reflects another dimension of the problem in France. “If I try transposing the situation in New York on Sunday to France, I just can’t do it,” says Diallo. “Not only because the woman is black and apparently an immigrant. But also because she’s a housekeeper. Perhaps even more than her race, her station in society would probably prevent authorities [in France] from taking her accusations against a rich and powerful man seriously. Racism is on the rise here again, but class discrimination has never gone away.”

I find that hard to believe – And I’ve been likened to a dog by a French girl in my time. (As in “dating you would be like dating a different species, like a dog or something”.) I still don’t buy this bullshit they’re selling about the French being worse racists than Americans. Then there’s this piece of idiotica:

As Strauss-Kahn’s case moves forward in New York, the particular form of French “exceptionalism” that holds that men will be men and women will be women and no amount of political correctness can — or should — temper their natural desires will be on trial too. Like it or not, Strauss-Kahn and his supporters now have to play by our rules. These don’t stem from prudishness or Puritanism. They’re based on respect, on updated understandings of male-female power relations and on a desire to change the nasty little systems of complicity that have long kept them flowing in one direction.

That piece implies the arrest shut up France who have different sexual mores to America, but they can’t hide behind those mores because Strauss-Kahn is being accused of a sexual crime. The triumphalism is a bit rich too. Nobody in their right mind supports sexual assault in a civil society unless one is a devout follower of the Marquis de Sade – and such a human being is more likely to be in a French jail than being a commentator in the French press supporting Strauss-Kahn. Get a grip, lady. This is not some turning point in some war against French sexual mores. The mind boggles.

Really, no matter how heinous they paint his crime, I just can’t bring myself to judge French culture pertaining to sexuality, gender and race on the basis of the arrest of Dominique Strauss-Kahn. I sure as hell wouldn’t judge American culture on say, J. Edgar Hoover. No sane person would leap to such generalisations, but here it is in black and white in Time magazine no less. And it’s written by people – wankers, even – who probably still enjoy a visit to Paris and make out it’s really romantic to walk down the Champs-Élysees or something.

On a more genial note, the funniest entry perhaps was Schumpeter in The Economist, complaining about the French intellectuals and their weird abstruse Post-Modern rhetoric rallying to the defense of Strauss-Kahn:

BHL is a mere amateur compared with Luis de Miranda, a novelist. According to Anthony Daniels, Mr de Miranda penned a piece for Libération under the title “a philosophical hero”. Taking DSK’s guilt for granted (which we should certainly not do), the author says that “we bet that in his depths Dominique Strauss-Kahn is joyful. Perhaps he doesn’t admit it to himself yet. But behaving thus at this point in his biography could only have been voluntary. I add that it is heroic.”

Why heroic? Because DSK engaged in a supreme act of self-sacrifice, apparently: “If the cleaning woman has been attacked, the woman worker had violence done to her, then we are touching on the sublime, in the Kantian sense…A political suicide rather than the death of an automaton or the possibility of a reign unleashed.”

I particularly liked the use of the phrase “in the Kantian sense”.

Don’t we all?

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Vested Interests And Corruption

Why Things Stay The Same

I’ve been reading about corruption and money politics in Japan for the last 2months and I’m struck by how complicit the bureaucracy were in letting things get to where they got. The reason why they acquiesced so easily to the money was because of the very competitive nature of the bureaucracy internally. As the bureaus shed staff as they proceeded up the ladder, the discarded staff would have to find jobs in the private sector where they had few connections. Enter the politician who could help them in exchange for a favor here or favor there. Except it was played out more subtly; there was a tacit understanding that that is why a bureaucrat did favors for a politician, and in turn this was why politicians ferried money from private interests.

You can see that the entire government was captive to money simply because the bureaucracy functioned in a particular way. That’s not to say it shouldn’t have been as competitive. It is that the bureaucracy made itself vulnerable to corruption by being what it was.

The politicians for their part needed money. Money represented favours and therefore power, in a structure of quid pro quo exchanges. Money exchanged hands between politicians just so that deals could be made and the imbalances of the deals could be off-set by other favours and payments of money. In practical terms, it was the politicians’ jobs to placate the complainers and whiners with more money. In turn, private industry spent the money so they could shore up favorable positions against the competition, and they all assumed the competition was paying as much in bribe money as they were.

No wonder things went the way they did. If you looked at the structure of this corruption in Japan, it is clear that the construction industry ended up being the emblematic industry of Japan, just as the military has become that industry for America. The construction lobby was simply too powerful to stop, let alone oppose.

What this wrought was a system where politicians would have prior knowledge of where certain developments would be and they would either tip of their corporate contacts or go in there themselves and profit from the insider information. The net result was increasing land value for over 40 years right up until when the bubble burst; since then it’s been a deflationary spiral. Between 1945 and 1989, there was only 1 year where the mean property price went down.

What’s really interesting about this is that Japan has been in a deflationary spiral for 20 years. it is possible the deflationary spiral will continue until the full inflationary effect of 40-odd years of Liberal Democrat-led is completely wound back down.

Demographics That Say No

The further interesting thing about ‘the Bubble’ bursting in 1989 is that signs of stress were there right up to the point where it popped. As property prices rose, it was becoming evident that Generation X in Japan would not be able to live as their parents did and have children as their parents did. Adding in the effects of abortion and contraception, there was a collapse in birthrates, which continues to this day. The deflationary spiral experienced by Japan has greatly to do with the shrinking population.

With fewer people to consume, it has been virtually impossible to ignite internal demand. The prognosis is even worse. This diagram is from Naoto Kan’s prime ministerial blog:


Japanese population projections

That doesn’t bode well. The population peaked in 2000 and has been sliding down ever since. It’s amazing what a small kink World War II was in the scheme of things, but that is an entry for another day.

What this seems to indicate is how quickly a combination of an aging population and inflated property price can send a nation into a deflationary spiral. Does that sound familiar?

Yeah, I thought ‘Australia’!

This sort of curve is probably why the previous government brought in the baby bonus, shore up the upward curve of the population. It is also why immigration is active. There are a lot of people invested in property in Australia – and the prices are so high most of the major cities in Australia make the international list for least affordable cities – and this is being kept up by squeezing supply to keep up the demand. The question is, how long can this keep going before birthrates really crash? And when they do crash, doesn’t that imply there’s a deflationary spiral ahead?

So Who’s Vested Interests?

Back to the point of vested interests. Here’s the thing about the deflationary spiral in Japan. It’s all about the deleveraging, but none of the banks want to give up on the paper value of properties they’ve ended up owning. So they’re simply waiting for buyers who will buy these properties at an approximation of what the banks have rated them as, as opposed to writing them off. In other words, they want to maintain the fiction that the bubble era prices are somehow still relevant. And successive governments in Japan have been shoring up these banks at the expense of the tax payers, and these banks have not lent to small businesses. That part sounds familiar to what is going on in America in the aftermath of the GFC.

The politicians in Japan for most part since the bubble have been borrowing money to prop up moribund banks and construction companies, and now they’re running out of credit. There’s talk of increasing the consumption tax as well as simply printing money and hyper-inflating out of debt like the Weimar Republic tried. Given how the Weimar experiment ended, it seems like an idiotic move; which leaves only the hard option of raising taxes and paying off the debt with an ever shrinking workforce. Understandably there’s very little stomach to make that hard call, which is the same hard call they have been unable to make in Japan.

Which leads me to ask, to whose benefit are they persisting? Surely it can’t just be endless gormlessness? It seems again, it’s for the bureaucrats who need a place of employment after their careers in government, the politicians who need money to run elections, and general construction companies that need tenders to build more unwanted civil projects.

The thing about all of this is that if you substitute ‘general construction’ with say ‘mining’, you start to get a picture of the so-called two-speed economy in Australia. If our government keeps bowing to pressures from these industries, and keeps avoiding doing what is right for the rest of the nation, it’s going to eat the future. That’s the lesson of history we’re seeing in Japan.

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