Julia Gillard is to the left…of Attila the Hun

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Great piece at En Passant

Spot on this stuff. Gillard, like her factional soul mate Mar'n Ferguson, act solely in the interests of the big end of town and devil take the hindmost. They would do the H.R. Nicholls Society proud. Ferguson was in the Sydney Morning Herald saying we needed more immigration or, shock horror, wages might go up! Can't have that old chap, think of what it would do with dividends! Send a bad signal to the market and all that.

The structural problem is the luvvies in the union movement share Gillard's understanding the reality for most Australians, i.e. none. Most union officials and Julia have never had a real job in their lives (and no, being a lawyer is not a real job). Gillard's laws slash take home pay for aged care and hospitality staff (real jobs) - the ACTU's response? They run a campaign against Tony Abbott. Cde Burrow is about to swan off to Brussels and is so star struck by Gillard that the union movement has reverted to type: acting like a beaten dog that keeps coming back for more treatment from its "master", in this case the ALP. 

Meanwhile the rest of us that live in the real world are left to our own devices in order to survive.

Electoral politics is a joke. We live in a corporate and technocratic totalitarianism that is so seamless that most people cannot even think outside it. Orwell would marvel at how cleverly it all works to enrich so few.

And it will continue to be such, especially when most media commentary is such a craven repetition of the status quo see Kohler, Grattan, Oakes, et al - useless, the lot of them). 

My advice? Take to strong drink.

The idiots have won

Signs that these are surely the last days are not new.

People have been predicting apocalypse being upon us since, well, St John wrote Revelations.

Not being someone to believe in imaginary friends - I've never traded in that guff - I've never placed much faith (pun intended) in religion.

But whether you believe Christ is god and saviour, or Muhammad is the true prophet, or in the Giant Spaghetti Monster, Australians are hell bent on making life harder for themselves; mainly because we valorize gross stupidity to the point where much public discourse has become a carnival of ignorance.

Even in a country as 'free' as Australia, far too many areas of our existence are now observed and regulated to the point of obeisance against evidence. From abseiling to zines we are told what we can and can't do. We are micromanaged to within an inch of our lives.

I never thought I would find myself evangelizing a libertarian position, but things are getting beyond a joke. We live in a censorious age. And much of this censoriousness is fed by the zeitgeist, that impressions are more potent than fact.

Although bike helmets protect the skull but not the face or limbs, where more biking injuries occur, they are compulsory. Australia being, along with New Zealand, one of the few Western countries that actually impose the ineffective nuisance of helmets on the bike riding public.

Marijuana is banned and, as regular as the passing seasons, someone pops up in the media claiming that marijuana makes crazy people crazier. Well, derr! So the rest of us that are merely exasperated are not allowed to play. Its just grim faced Calvinism pushing a barrow that never works; prohibition.

And so on and so forth until having a fire when your camping, sleeping on the beach, traveling in the back of ute on an empty country road are all verboten in the name of keeping us all safe from ourselves. Paternalism rampant.

Yes, these things cause trouble and can be lethal. Life is, by its very nature, deadly. The solution is to censure idiots and crazy people, but this is not fashionable. Our post-modernist equivocation of values, which is passed of as equality, is in actuality a matter of making life easy for the dumb and the mad. Somehow this has led to being dumb and mad as being all the fashion.

Take smoking. More people smoke than go to church, Going to and working in hotels is an inherently unhealthy act. The best argument proffered by the proponents of blanket bans on smoking in licensed premises is that people who work in hotels should not have to ingest second hand smoke. I agree. Non-smokers should get another line of employment. Who in their right mind wants to work in a bar? Staying sober around drunken people has to be one of the more depressing visages of humanity. Smoke and be damned.

Two discreet problems exist: First, regulation of public life has fallen into the hands of obsessive control freaks; secondly, this overarching need to control human behaviour reinforces and rewards a mixture of stupidity and madness.

I fully accept that there is a role for health and safety in employment. Commonsense would dictate that in other areas prudence and caution should take precedence over individual standards for the general good. The accent here is on general good, not how you'd like others to live - but how others living impacts on you. Then there is the problem of how commonsense evaporates amongst the stupid and the mad.

This is about risk management. It is also about power, but more on that later.

I am not risk averse, but most people are. As a result I am subject to the same risk assessment as all others, including the stupid and the mad. Effectively the state is treating me as if I'm stupid and mad.

What if I want to measure the value of existence by living my life as I see fit? Surely that is my prerogative? After all, it is me that is in the box at the end of the day.

But this is no longer the case.

How did all this start?

Modern government was well summed up in a speech by Kelvin Thompson to Sustainable Population Australia:

"In the modern era, with its twenty-four/seven media cycle, it is possible to get elected without solving problems provided you can use the media to get across three messages - first, that your heart is in the right place, second, that you're working as hard as you can, and third and most importantly, that the other mob would be worse."

Which is why having to fix things takes second place to pretending the problems aren't there and creating this parallel universe where reality is created by ministerial announcement, press release and stage managed media event by governments, corporates and the usual roll-call of NGOs.

Unfortunately, once the cameras roll on messy reality takes hold once more.

A lot of this spin is underpinned by useless scholasticism designed to impress funding bodies with polysyllabic tinkering at the edges. This rolls out sound bites peddled as authoritative voices and 'take-home' messages for a public that has been plunged into a cloud of ignorance. The prescription then becomes a simplistic sloganeering that is even at times at odds or at least antipathetic to evidence gleaned from serious research.

This is the nut of the problem; the one-size-fits-all approach to regulation that looks good on a tabloid front page, but doesn't work or is prescriptively onerous in reality.

Which brings us to the question of power. In this entire regulatory milieu, who benefits?

The usual suspects; the state, which finds a cheap and easy solution that makes it look good; insurance companies, who are by nature risk averse; the rich, who can afford to ignore regulation and buy their way out of it; and dickheads, people that have an anally retentive view of life and don't like the 'messy bits' that are innate to human existence.

Unfortunately the dickhead's obsessiveness drives an eagerness and zealotry to impose their worldview on the largely apathetic rest of us.

Regulation happens by default. Makes good copy. Takes fun out of life. Bring on the apocalypse.

Building the mortgage revolution

Most Australian households take home less than $50K a year. That’s not average wages, that’s average income per household. There are plenty of households, and people, that don’t pull a wage. See ABS stats if you’re curious.

Despite this, the vast majority of those households manage to acquit themselves financially. It’s called surviving, and the alternative is homelessness.

This is in stark contrast to the recent track record of the well-rewarded employees of some of the world’s largest banks during the global financial crisis.

I don’t capitalize the global financial crisis, because logic is hardly a proper noun.

It’s a banking crisis. It started when a whole bunch of people, a lot of them coked to the eyeballs, played pass-the-parcel with a whole lot of other people’s debt. They bundled these debts up and sold them as a bet – that the debts would be paid off.

Some very large banks bought into the bet and did their dough big time.

Corporate culture is wholly set against bad news. Bad news meant the sack, or at best, a transfer to somewhere harmless, and less lucrative. At the very least you were risking your bonus, which, as IPO shares picked up in contra deals with institutional investors – our superannuation, were almost certainly going to be a cashable asset, at a profit; certainly worth more than $50K a year.

So we leave a bunch of overpaid junkies in charge of this section and they all smile and nod and rake in the cash – then it all goes to shit.

The commodity was fundamentally flawed. It came from a drive to raise a whole pile of debt, and pass it on. It was a scam; a Ponzi Scheme (now there’s a proper noun!); a screw-up, and most certainly a poorly researched asset.

It came off the back of an explosion in credit for people previously considered a marginal security proposition, which morphed from easily available credit cards to mortgages on marginal housing acquisition; marginal in the sense that it relied on a housing bubble for people to make money and repay their mortgages. Joe Bageant was writing about it 2005. It was hardly a secret.

So the US housing bubble bursts and a chunk of assets are worthless. The debtors walk away from the wreckage and move to a trainer park outside Toledo. The banks stop giving each other money to get people into debt to make money to get people into dept to make money..,

As Kurt Vonnegut Jr. was wont to say: and so it goes.

In Australia we have four main banks. Outside of them there are a range of outfits from credit unions (some of which have aggregated over the last decade), community banks (which are more than Jimmy Stewart in It's A Wonderful Life telling everyone that their money was invested in their lives), to payday lenders and swarthy chaps in dark cars in supermarket car parks.

When the money dried up internationally the Rudd Government moved quickly to shore up the four main banks, the spine of Australia’s financial system. Our money.

Some people thought we would hit the wall hard, Steve Keen the most celebrated example. Australia was a country that has slashed employment in traditional primary industries, let its manufacturing industry roam free across Southeast Asia and kicked on with digging up rocks and a service economy which relies on the money churning around.

The Australia’s big four banks injected a lot of money into the Australian economy by borrowing quick money, and lots of it, and lending it to people. That was where the American banks came in. Problem was the American Banks had run out of dosh. Unless the Australian banks got money, and got it fast, the whole joint was going to end up like a Steinbeck novel.

The Rudd Government, or more accurately Treasury, put together a plan that was equal parts devious and genius.

The Rudd government couldn’t give the banks cash, because this was a free-market economy and the banks were at the epicenter of free-enterprise through offering credit. At the very least they were creating money that people needed to pay the bills and make Gerry Norman richer, etc.

The government gave the banks a AAA credit rating, underwriting them and making them a safe haven for what money was still in circulation internationally, which was still substantial despite its epicenter, Wall street, watching its assets diminish daily.

And they gave a lot of money, something around the size of the entire NSW budget, to households.

Ken Henry said go big, and go households. And they did, and why wouldn’t they, politicians love to spend money, but for the last thirty years they’ve been no good at raising it.

Most Australian households earn less than $50K a year after tax. They get along by running a continuing line of credit with financial institutions. In recent years it has ballooned to over 100 per cent of disposable income. So the households gave it to the banks.

We are a service economy. A lot of people run around in white vans with ladders, and utes, while a whole pile of invisible others cram into trains and buses from 6am onwards in our capital cities. It has been pretty much business-as-usual for this part of the economy. The concerns they had in 2007 are pretty much the same concerns they have now.

The Rudd government decided to call this Keynesian act of largesse to the major banks names like The Building the Education Revolution, and the Home Insulation Scheme, and so forth. There’s probably a pile of others – all with the same object, getting people who have mortgages paying their mortgage. By a good old-fashioned bit of pump priming, jobs for blokes with utes and ladders popped up like mushrooms.

Even those that don’t have mortgages have helped by creating a jobs boom at our retail oligopolies. And those people with the name badge at K mart certainly have a mortgage, or want one. You must really need money if you’re prepared to work retail for it.

This explains why the Rudd government has seemed distracted about the detail of the implementation side of all this spending, because its not about the project – it’s about making sure the money go round continues, with the bottom sink, or sump, being the banks.

It’s the reverse trickle down effect and it has worked a treat. It’s objective was to shore up the financial sector, and its done that in spades.

Meanwhile, the structural problems – infrastructure bottlenecks, skills shortages, overpriced housing, bubble merrily along as if nothing has happened.

And for people on $50K a year and less, nothing has.