October 31, 2011

Horse 1241 - The Point of the Commonwealth

With the Commonwealth Heads of Government Meeting being somewhat spoiled by the industrial actions of Qantas and the Unions, I thought I'd ask the wider question of "Just what is the Point of the Commonwealth anyway?"
In the 21st Century, the Commonwealth of Nations appears to be little more than an historical accident, it would appear that the only common thing linking the Commonwealth is the freak of history of all being ruled by one small dinky island at some point. Is there more to it than that? Should there be?

If I take a potted look through history to find the longest continuously sitting parliaments, I find in order:
The Isle of Man which has been sitting since 930, Newfoundland 1855, New South Wales since 1856, Victoria 1856, Tasmania 1856, South Australia 1857 and Queensland 1859.
I do realise of course that Britain herself has had its Parliament in its current form since 1701 with admissions and modifications but it didn't sit during World War II, and the United States and every State within the Union which I've found, either ceased sitting during the Civil War from 1861-1865 or held erratic sittings and a situation of martial law existed.
Given that the children of Westminster ("the Mother of all Parliaments") appear to be the most stable forms of government in the world, surely there is a common underlying reason for this. What is it exactly? I think that it's Common Law and the Law of Equity.

Common Law which is also the law of precedence or case law, assumes that the decisions of judges, courts and similar tribunals are binding on future decisions. Common Law says that it is unfair to make differing decisions if the facts in a particular case are similar to something which has gone before. The law itself assumes and tries in spirit to be consistent and more important just. As far as Common Law is concerned in all countries which have an English Common Law tradition, Common Law begins on 6 July 1189 which is the end of "Time Immemorial"

The point of Common Law as it applies to the Commonwealth and why it appears to be such a stable basis from which to run a legal system, is that it does not change. There is something to be said about the benefits of a Westminster style legislature, but given that the UK doesn't elect the Upper House, Queensland and New Zealand don't even have an Upper House, and Ireland and India (the latter which somehow amazingly manages to hold together 21 major languages and 212 major tribal groups), I don't think that it is the defining feature which causes stability within Commonwealth countries.

Britain's Secretary of State for Foreign and Commonwealth Affairs, William Hague in a speech to CHOGM said that:
"The case for reinvigorating the Commonwealth is abundantly clear and Britain whole-heartedly supports the recommendations of the Eminent Persons Group.
In particular, we welcome their focus on promoting the values of the Commonwealth."

It's curious, but the thing which most closely binds the Commonwealth isn't the style of parliament (even though I like Westminster parliaments) and it isn't even the monarchy. I think that it's the tradition of Common Law, and the stability which flows from that.

October 27, 2011

Horse 1240 - The 1% Must Win

The Occupy movement which has manifested itself around the world (and in some cases in violence), I fear has overlooked one rather important detail as to why wealth with always concentrate into the hands of the few; that is the whole process of Wealth Condensation.

Wealth Condensation is the phenomenon which causes wealth to naturally accumulate into the hands of the few because ultimately, the economy performs a positive feedback loop and will always reward those people who are already wealthy.

If we look at the basic factors of production, namely Land, Labour, Capital and Enterprise, we also note the rewards for controlling those factors - Rent, Wages, Dividends and Profit. It's worthwhile to consider the conditions of the people who control those factors.

Poorer people tend to control only their Labour and as such, the only reward from production that they receive are wages. As people become richer, they tend to proportionally spend less of the rewards on keeping themselves alive. As people become richer, they have a portion of their rewards left over and naturally they want to put those rewards to work in the form of investment.
The thing is though, that investment really is nothing more than purchasing more Land, Labour, Capital and Enterprise; so we'd expect that as people become richer then they're deriving rewards from more than just Wages. Richer people also start to begin collecting rewards in the form of Rent, Dividends and Profits; naturally they want to put those rewards to work in the form of investment which purchases still greater Land, Labour, Capital and Enterprise.

You also need to remember that ever since about 1978 when real wages peaked, there have been two rather largish shifts in Western Economies.
Firstly there has been active steps taken to punish Labour through the  destruction of workers ability to campaign for higher wages. One only needs to look at the policies of Thatcher and Reagan to see that. In Australia we had the Price and Incomes Accords under Hawke and Keating and finally under Howard there was the Workplace Relations Act 1996 and the Workplace Relations Amendment Act 2005, which was deceptively called "WorkChoices".

Secondly, because firms naturally want to decrease input costs for their products to increase profit, there have been active measures to shift production to countries where wages are less. Consequently and as markets have been freed up due to deregulation, there has been an improvement in the Financial Sector at the expense of most other sectors in the economy. Apart from mining which is experiencing a boom because really it does little than to help production in countries where wages are less (specifically China), the area of the biggest increase of wealth in Western economies is the Financial Sector. Guess what? The Financial Sector mainly  derives its income in the form of the rewards of Dividends and Profit.
The Financial Sector like everyone else wants to put those rewards to work in the form of investment which... you guessed it, purchases greater Land, Labour, Capital and Enterprise. Ho Hum.

So then to the 1%, because Rent, Dividends and Profits naturally flow to them, they'll continue to re-invest that wealth into more Land, Labour, Capital and Enterprise and generate still further Rent, Dividends and Profits. That's more or less why they got there in the first place and why the 1% must win.

Whoever has will be given more, and he will have an abundance. Whoever does not have, even what he has will be taken from him.

October 26, 2011

Horse 1239 - What Happens When a Club Disappears?

A thousand people met at the Campbelltown RSL last night to attend a rally on the subject of the Federal Government's proposed Mandatory Pre-commitment Scheme for Poker Machines. Also in attendance were 2GB Radio's morning talkback host Alan Jones and the Leader of the Opposition Tony Abbott.

Having heard the news on both the ABC and 2GB this morning, I frantically scribbled down some notes.
Alan Jones asked the question:
"What happens when the local club is gone? The social repercussions of mandatory pre-commitment are enormous."

I wonder what would happen if a local club disappears... If you logically think this through and use the same social benefit analysis which the clubs themselves seem to be using, I think that the community might be better off.

Ostensibly the clubs suggest that social programs and sporting teams would be in jeopardy. Is that really true? Maybe sporting teams which are directly attached to the Clubs might suffer but is the community going to be worse off?
Maybe without a local Club, people might have extra money that they wouldn't have ploughed through poker machines in the first place and actually use that money to fund sporting teams.

What of the cost that comes about due to extra police which have to be employed as a result of alcohol fueled violence at the weekends? If a local club disappears then that is a net saving to the community.

More importantly, what about the children of people who otherwise would have been problem gamblers. Without the encouragement to needlessly waste money for zero return, we might see a marked improvement in family life. Without money being wasted on nothing, suddenly the children of those people would find themselves comparatively better off; if that happens then the knock-on effects are enormous. How many of those children when they grow up, would be more productive in society instead of being socially dysfunctional. We as taxpayers pay for that socially dis-functionality through increased welfare payments, not the Clubs; I don't see them apologising to me for paying for the social mess caused by them.

I bet that if you were to do a serious analysis of Clubs actual Cash Flow statements and Profit and Loss accounts, the actually net benefit to the community pales into insignificance as compared with the revenues taken in by Clubs and the social costs paid for with real money by the rest of the community.
Of course Clubs won't allow their books to be scrutinised that closely, and being "not-for-profit" organisations, they're under legal protection from that scrutiny.

To suggest that the Clubs provide social programs and sporting teams as a defence to them benefiting from taking the food from people's tables is a little like pouring water into a glass and then offering people a drink by running around and spilling the water in the process.

Personally I think that an organisation which only survives because of the revenues from poker machines, is a social disaster and morally bankrupt; such an organisation is pathetic.. I wouldn't feel sorry for them if they were forced to close because of a Mandatory Pre-commitment Scheme.

The ABC have published a news report on this: http://www.abc.net.au/news/2011-10-26/abbott-predicts-pokies-repeal/3600604/?site=sydney

October 25, 2011

Horse 1238 - TV and Old People

As the days of my youth quickly retreat into an obsolescent format for which the player which could have played them either is no longer available, or now appears in a museum as an antique or curio, I thought I'd look at the abuse of Old People on Television.

Not content with treating children as mindless idiots which have to have a parade of colours pass before them as though there was an explosion in a sweets factory, television seems to take the opinion that anyone over the age of about 45 is either doddery or mournful.

TV companies should be mindful of the fact that during the day whilst the majority or people aged 22-62 are probably at work running on the treadmill of monotony which keeps the economy ticking over so that men in suits can strip cash from the wallets of people and at the same time slowly drip feed the same wallets just so those same people go back to work to continue the cycle, the remainder of TV audiences are either the unemployed, mothers who are run off their feet (and arguably who work far harder than the rest of the population) and older people who quite frankly have earnt the right to take a rest and live their retirement in peace.
How does TV view these people? Well... it doesn't.

TV broadcasts messages on an almost continuous basis that the ideal age is 22. Not content with parading actual 22 year olds and their vapid; ill-informed (and by ill-informed I actually mean "completely ignorant") opinions in front of the camera, it then proceeds to flog products to the rest of society to make them want to somehow recapture those days of youth either through the application of slimy goop, or through selling some other product.
If you happen to be aged 62 and older, TV more or less gives up entirely. It makes no effort whatsoever to produce intelligent programming and when someone older than the age of 62 actually appears on screen, they're either portrayed as doddery or mournful, and thus the cycle begins anew. The obvious reason for this is that apart from groceries, what can the medium of TV sell older people? Not much really. People by about their mid-50s are already pretty predictable when it comes to their spending patterns even on a case by case basis (largely because we are creatures of habit), and so as far as TV is concerned, bothering to produce programming for people aged 62 and older is a waste of time and more importantly money.

Maybe it's reflective of society generally that over the last 100 or so years we've lost the respect for older people and the wisdom which they've accumulated. Someone far wiser than me proclaimed that there is nothing new under the sun, and whilst I look across the Occupy movement which is basically a replica of the protests of 1968, or the "Global Financial Crises" which is a facsimile of the Great Depression (which by the way was also caused by idiots in suits who also didn't have to pay for it), I wonder whether or not something can and should have been learnt from the wisdom of older people, be it how to be thrifty, or how to capture a proper spirit of community or even how to act decently to other people; all three of which seem to be sorely lacking in society. Having said that, those things aren't very useful in selling products either.

Maybe that's why TV ignores older people. My advice would be... BUY STUFF!

October 12, 2011

Horse 1237 - Bank Fee Rage

Why do I have to pay to use an ATM? I'm essentially paying to get MY money back which I've lent the bank in the first place. When you bear in mind that they've already taken my money and pooled it together with other people's money into a giant clump and then collected the interest on it either by lending it out to other people or on the short-term money market, it seems slightly unfair that if I have the gall to try and get it back (and in most cases because they've closed a branch) they make me pay for it.

On that last note, once upon a time banks at least maintained the facade of being safe places with big stone buildings but now they've decided that the general public are patsies and their wallets are free for the taking, this is the justification for closing branches and instead of paying a teller a proper years wages, instead of assuming those savings they pass extra costs onto us.

Internet banking... sure the promise is that we can move our money about but in reality all the banks have done is made us do the same job that a teller used to do and because it's all on the internet, the whole thing is done at an implied reduced sense of security where we now are forced to assume responsibilty for security and are liable if something goes awry.

On top of all this the Commonwealth Bank's CEO was paid (and I shirk at the term "earned") more than $16 million, ANZ's CEO was paid $10.9 million, Westpac's CEO was paid $9.5 million, and NAB's CEO was paid $7.7 million.

Salaries in these ranges aren't determined by the forces of supply and demand and but because of the rules of corporate disclosure, want what everyone else has got (even in the case of the United States where they've even been bailed out by the US Government). Of course they'd merely point to the bottom line and suggest that the bank's "success" justifies the largesse.

Well I have a suggestion, I'll work for a mere 10% of the pay that the Commonwealth Bank's CEO is paid, and with the rest I'll employ 130 tellers at $75000 a piece. Better yet, start hacking out the obscene salaries of the rest of the executive and we can start putting back tellers into branches.

Of course it's all too hard. Last year the big four banks extracted $11.1 billion in bank fees in 2008-09 and only $4.0 billion in 2009-10.

And all of this so I can pay to get MY money back?

October 10, 2011

Horse 1236 - The Right to Free Speech

Under the Australian Courts Act 1828 which provides that all laws and statutes in force in England at the date of the enactment of the legislation shall be applied in the courts of New South Wales and Van Diemen's Land (Tasmania) so far as they are applicable (and which includes Victoria and Queensland), and the Statute of Westminster 1931 which provides a logical end to future British law applying, the Bill of Rights Act 1689 applies in Australia.

Admittedly the Bill of Rights Act only explicitly spells out that: the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament, it does reinforce that the right exists at law.

Consequently the Right to Free Speech exists at Common Law and this was given with a few caveats as defined in James vs Commonwealth of Australia 1936:

"'Free' in itself is vague and indeterminate. It must take its colour from the context. Compare, for instance, its use in free speech, free love, free dinner and free trade. Free speech does not mean free speech; it means speech hedged in by all the laws against defamation, blasphemy, sedition and so forth; it means freedom governed by law."
[James vs Commonwealth of Australia 1936 (2) AER 1449 at 1473 PC]

The right doesn't need to be spelled out in the positive because it already exists in Common Law and expressed in the negative - we have a right to say anything that is not prohibited.

The idea that there needs to be an explicit statement is nonsense.

Horse 1235 - Why "Occupy Wall Street" is Doomed to Fail

No doubt you will have by now heard of the movement called Occupy Wall Street. Their website can be found here http://occupywallst.org/ Although they have a pretty loudish sort of rhetoric and have even been likened to the "left's version of the Tea Party", I think that just like the Tea Party, the whole Occupy Wall Street movement will prove to be a poor player that struts and frets his hour upon the stage and will be heard no more; full of sound and fury, signifying nothing.

Duverger's Law suggests that in a plurality voting system, over time it should produce a tendency towards two-party politics (This makes for interesting reading). Really the only way to upset the system is to form a new party with sufficient clout to upend one of the existing two.
Especially in the United States where there is no direct opposition to the President in the mechanics of government (because he doesn't sit in the congress), it means that the job itself will only be a revolving door between two parties.

Small groups like the Tea Party and Occupy Wall Street although they might help to colour the political discussion and may on odd occasions might see their ideas adopted by the exiting two majors, never can do much beyond that unless there is a seismic shift in the political landscape. The Lib Dems in the UK could have done that if Clegg hadn't been such an ultimately weak leader; in practice in the short term they'll occupy the same niche as the National Party does in Australian politics over the next few election cycles.

Currently in the US House of Representatives and the Senate there are ZERO "third" voices. Third Parties do exist but they contribute virtually to political discussion without solid representation because they don't have voices on the floors of houses.
Seemingly the American Public even if they complain, are through their current voting actions fine with this. If they weren't they'd do something concrete.

Certainly the consequences of Duverger's Law and two-party politics is quite an adequate explanation as to why it's so rare for someone who isn't a Republican or a Democrat to be voted to the Congress, or why there hasn't been anyone but a Republican or a Democrat who has been voted into the Presidency since possibly Johnson.
The deck is currently stacked in favour of the existing two and the party machines and the rather drawn out process of the primaries more or less ensures that the status quo is maintained. I can't forsee anyone but a Republican or a Democrat taking up either the Presidency or a seat in the Congress for a very very long time.

That's why I don't see groups like Occupy or the Tea Party having very much influence at all. It's putting people into seats that actually changes real policy in the long run; since it isn't likely in the short term, I fear that the movement is futile.

October 08, 2011

Horse 1234 - Kewell is Still Rubbish

I have had a somewhat dismal view on Harry Kewell now for about 8 years after he whinged his way into Liverpool's No.7 kit in 2003, the same No.7 which "King" Kenny Dalglish wore.
Kewell proceeded to spend the best part of 5 years finding excuses not to play for his nation (including claiming that his foot would explode if he got on a plane) and the low point was in the 2005 UEFA Champions League Final when he was substituted in the 23rd minute for Vladimír Šmicer (who he stole the No.7 from) and who incedentally went on to score a goal and the winning penalty. But I digress...

Suffice to say, the Melbourne Victory is not my favourite team in the A-League. Sydney and Melbourne have had sufficient bad blood pass between them, that this "derby" for want of a better word has the potential to turn spiteful.

But turning back to Kewell, I imagine that he'll be playing up front and will be playing a similar sort of role to his days when he was back at Leeds Utd. Kewell's most productive season was back in 1999-2000 when he scored 20 goals, however that was 10 years ago and to be honest, Kewell's best days.

Kewell in the A-League will I think be playing out a similar sort of career as Juninho Paulista did for Sydney FC in 2007/08. He'll put bums on seats but probably fail to score even a single goal. Coincidentally, like Juninho he'll also be wearing the No.22 kit for Melbourne Victory.

As I write this the final seconds tick out on Melbourne Victory and Sydney FC in their opening match. Not suprising it is still scoreless in the 93rd minute and Kewell has failed to make an impact.