April 29, 2013

Horse 1473 - There Needs To Be An Increase In Tax

“We will deliver a surplus in our first year and every year after that,” Mr Hockey said on January 28, almost a month after Mr Swan abandoned the government’s promise of a $1.1 billion surplus in 2012-13.
Since then, the government has steadfastly refused to detail when it expects to return to surplus, saying only that it would balance the books over the economic cycle and place a priority on jobs and growth.
Mr Abbott said: “We are confident that we will, at all times, deliver more prudent and responsible financial management than the current government because it’s in our DNA to deliver surpluses and pay back debt. Just look at what the Howard government did.”
- Australian Financial Review, 20th Apr 2013

It doesn't matter which side of politics you stand on (hooray, boo, hooray, boo - at least Celtic and Rangers' fans go home after they've yelled at each other for 90 minutes), sooner or later there will be a greater call on the public purse and I just don't think that either side of the parliament has anything like the required amount of courage to do anything about it. Ms Gillard and Mr Abbott are both political cowards in this respect.
Quite apart from any extra strings which are being pulled tighter as a result of the NDIS or the Gonski education reforms, the simple fact is that expenditures are going to increase and any promises to bring the government books back into surplus, must be funded by increases in taxation; there is quite literally no other way around this. It doesn't even matter which way you look at it, even if all new programs which have been slated, there would still be corresponding increases relating to pensions which will start to be drawn on in increasing numbers as more Baby Boomers reach retirement age and there will be increasing amounts which will be required to be paid out, merely to keep the health system going - unless someone is prepared to simply abandon them.

Especially over the past 15 years, there has been an increasing tendency for political parties to buy votes at the expense of any planning for the future. The usual method of doing this is through successive cuts in rates of taxation; both through individual and company tax; superannuation rules were relaxed such that once a superannuation fund reaches the pension phase, the income generated is tax free. Obviously at some point, someone is going to have to consider raising taxation rates, or at very least letting bracket creep surreptitiously do the job for them because to actually raise taxation rates would also be seen as incredibly unpopular.

The thing to remember above everything else when it comes to taxation is that fundamentally people are selfish. Not only do they not want to pay any tax at all if they can get away with it, but they'd rather other people pay for it. The GST was Mr Howard's method of making poorer people pay for government services and it works to some degree but the fact remains that income tax and company tax are still the most effective methods of extracting revenue.

You will hear of people often reciting the words of Adam Smith when they say that there is an invisible hand of the market in operation, which is used to justify selfish profit as it in a roundabout way contributes to the overall interests of the nation and society as a whole. What you will almost never hear though are his thoughts on taxation; seemingly as though they never existed:

I. The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.
II. The tax which each individual is bound to pay ought to be certain, and not arbitrary.
III. Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it. 
IV. Every tax ought to be so contrived as both to take out and to keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the state.
- Adam Smith, Wealth of Nations, Book V, Chapter II, Part II (1776).

These four principles make fairly good sense. The biggest stumbling block though is that people and companies think that they are already being taxed too much. We saw this when the media May of 2011 proudly yelling that families were on "Struggle Street" even though they had earnt more than twice the average more than twice the average wage; people still cried poor... crocodile tears.

I - Quite obviously someone on $150,000 a year is able to contribute more towards the support of the government than someone on $50,000 a year. It's also obvious that they also derive a greater proportion of protection when it comes to the matter of the economy of the state being stable.
II - When Adam Smith wrote this, governments were inclined to impose arbitrary taxes. One of the most famous disputes about taxation occured in Boston, Massachusetts (which was at the time a British colony) just three years earlier.
III - One could hardly argue with the modern system of taxation that we have that ample warning is not given  to people when it comes to matters of taxation. I can tell you for instance that the Third Quarter GST 2026/27 will be payable on 15th May 2027. Adam Smith would positively love to see as definite a system as we currently employ.
IV - The key words here are "little as possible over and above what it brings into the public treasury". Smith is talking about the efficiency in actually collecting the tax. This has also improved immensely with the introduction of electronic payments systems.

I found this to be noteworthy of late:

You don't grow richer by ordering another cheque book from the bank; and no nation every grew more prosperous by taxing its citizens beyond their capacity to pay.
- Margaret Thatcher, Speech to Conservative Party Conference, 14th Oct, 1983

Apart from the fallacy that the " fundamental truth" in question that  "the State has no source of money other than money which people earn themselves" is an outright lie because this assumes that Government is a consumer as opposed to a giant system of collective purchasing arrangements (see Horse 1458), the statement above is nominally true.
This speech is also oft quoted as though it was something special but take particular note of those last few words "taxing its citizens beyond their capacity to pay". In Australia, we now have the lowest taxation take since federation and the lowest marginal rates in taxation since the mid 1940s. Company Tax fell from 36% pre 2000, to 34% for 2000/01 and since 2001/02 has been at 30%. I find it somewhat strange that people talk about the ability to pay when effective rates of taxation are lower now than they have ever been.

What's really strange is that sentiment is starting to appear in serious media. It's as though the obvious is staring people in the face and that they're only just walking up to the fact, like some incredibly horrible nightmare:

Politicians and sections of the media undoubtedly feed such dissonance. The ethos of aspiration is, in many cases, little more than economic narcissism. All Australians, however affluent, come to believe they are genuine battlers entitled to government handouts, be it family tax benefits or subsidised private education for their children. Any effort to maintain the progressive nature of the taxation system, or to redistribute income, is decried as ''class warfare'' - an expression of the new conservative political correctness.
But how long can this unreality be maintained? Hetherington argues that a reckoning must come soon. There is structural gap in Australia's tax revenues, created by years of income tax cuts and a failure to reap the full rewards of the mining boom. If future governments are to support the kind of public services and investment that Australians appear to want, taxes will need to rise.
- Tim Soutphommasane, Sydney Morning Herald, 22 Apr 2013


See the spin? So what's their motive? Probably a combination of the editors' personal ideology, self-interest (I pay too much tax already, don't ask me to pay more) and a belief that tailoring your reporting to fit your readers' prejudices will sell more papers.
But it is not just the media that take such a one-eyed approach to budgeting. Most business lobby groups do, too, plus a lot of economists. Many economists believe the answer to budget deficits is always to cut spending and never to raise tax collections, because of the libertarian political ideology implicit in their dominant ''neoclassical'' model.
- Ross Gittins, 29th Apr 2013

If I was Grand Poobah and Lord High Everything Else, I'd seriously start to look at increasing taxation in ways which offered the least amount of objection.

The first way would be to impose a freeze on current income taxation rates for about the next 15 years. This would allow "bracket creep" to push people into higher tax brackets. This is relatively easy to achieve because it can be done with little more than political apathy.

I'd also consider raising the Company Tax rate to 40%. Now I know that this sounds heinous but a lot of investors would enjoy the fact that they would no longer have to pay as much of an excess on their personal incomes because their own marginal rates were higher than the corporate rate; people on lower incomes would receive a net refund on franking credits.
Accountants and small businesses would merely relook at the positions all over again and still determine what the best net position is based on both personal and marginal rates and whether or not income should be paid as wages or dividends, just like they've always done.
I'd also seriously look at removing all deductions for motor vehicle expenses except for purely commercial vehicles. Deductions for motor vehicle expenses allow wholescale rorting, I think. Such a policy might also encourage a greater use of public transport, which would reduce carbon emissions due to it being more efficient to move greater numbers of people, than to do so individually.
Negative gearing on property also seems like a specific subsidy on property holders, which given the squeeze on rental properties, is clearly irrelevant since the private sector obviously wants to keep the rental market tight and closed.

Whatever happens, the bottom line is that taxes will need to be raised. Unless the option being considered is to make future pensioners suffer; that might be a very real position by default.

April 27, 2013

Horse 1472 - Independent Scotland and its Currency

Among the many issues facing Scotland should it decide to leave the United Kingdom, is the vexed question of what to do about the currency. Currently, Scotland as indeed the rest of the UK uses the Pound Sterling; nominally issued by the Bank of England. Owing to legal allowances, left over as a result of the Act of Union in 1707, Scottish banks retained the right to issue currency and that in itself creates all sorts of issues.

George Osbourne, the current Chancellor of the Exchequer pretty succinctly states four options which Scotland could choose, should they become independent. This is taken from the UK's Press Association:

These are the four options:

1. Adopt the Pound Sterling Unilaterally
This has all sorts of underlying issues; most obviously that Scotland would be at the mercy of a another country's central bank (in this case the Bank of England) and wouldn't really be able to make major changes with regards monetary policy. It couldn't for instance either restrict the money supply to sure it up or if it wanted to promote the velocity of money, it could not suddenly issue new money.

2. Seek To Form a Pound Sterling Currency Zone
Admittedly it would then still be subject to the decisions of the Bank of England, but at least it might be able to arrive at some degree of control. I very much doubt though that the Bank of England would want to pursue this option because it would be like trying to invent a mini version of the Eurozone; this leads me nicely to option 3.

3. Agree To Adopt The Euro
I'm reasonably sure that an independent Scotland would have no trouble meeting the fiscal requirements to join the Euro but would it want to? Given that members of the Euro (especially Germany and France) resent having to bail out nations like Greece and Cyprus, would Scotland also want to share in the troubles of 2000 miles away?
I'm also reasonably sure that the European Central Bank would most certainly not allow the three Scottish trading banks which currently issue physical currency in Pounds Sterling to issue notes denominated int Euro. I'd assume that the banks themselves would probably be forced to engage in some sort of buy-back scheme of their own currency which would take existing cash out of circulation; to be honest, I'm not really sure that the banks themselves would want to agree to that as it would mean an immediate loss in liquidity.

4. Introduce a New Scottish Currency
It's interesting that Osbourne doesn't really expand on this because quite frankly, I think that this scares him deeply. I don't really know to what degree that the Pound Sterling is held aloft by the revenues of North Sea oil but Scotland by itself would no longer be paying those sorts of royalties to Whitehall but to Holyrood.
Almost overnight, the new Pound Scots which I assume would be initially issued at parity to the Pound Sterling would become the hardest currency in Europe. The three issuing banks, Bank of Scotland, Royal Bank of Scotland and Clydesdale Bank, would continue to issue currency on precisely the same basis as they do now. There wouldn't even need to be any change over from one fiscal year to the next.
The obvious thing to do would be to set up a Central Scottish Bank and issue replacements for the notes taken out of circulation and the coins. It would make sense for coins of the new Pound Scots to be a different weights and sizes to the coins of the Pound Sterling, just to emphasize the difference. Plenty of mints around the world would be capable of doing it too, the Royal Canadian Mint or the Royal Australian Mint for instance.

Of the four, option four seems like the most sensible and in the best interests of Scotland. A floating exchange rate would allow an independent Scotland to have its own independent monetary policy and flexible exchange rate adjustment; it could raise taxation and spend in order to enact proper fiscal policy. And from a numismatists' point of view, it gives us something new to look at - maybe bring back the Merk and the Noble.

April 26, 2013

Horse 1471 - I Bite My Thumb At You

Whilst walking to the railway station; after getting off a bus, I got caught on a traffic island and was standing patiently for the little green man to show, when a stretched limousine came through the intersection; honking and flashing its lights. Clearly the driver was both very angry indeed and in a hurry.
In turn this made me quite cross indeed and so rather than give him the one fingered salute, I did that most quaint of things... I bit my thumb at him.

Gasp! Shock! Horror!...other things with too man exclamation points!

Of course to a modern audience, biting one's thumb really only comes to use via the opening scene in Romeo and Juliet. Sampson of the house of Capulet even pauses to explain what it meant., sort of:


Nay, as they dare. I will bite my thumb at them;
which is a disgrace to them, if they bear it.
- Scene 1, Act 1, Romeo and Juliet

Apart from rumour and wild mass guessing which is what the internet abounds in, you won't really find much to explain what it's about. There is a similar gesture in modern Sicily in which the thumb is placed behind the incisors and flung forward, which still conveys a great deal of venom but it's worth remembering that not only had Shakespeare never been to Italy, that Sicily is more than 1100km from Verona where the play is set, but that in 1597, Italy wasn't a unified kingdom and barely had a unified language; even now Italy is less homogeneous than other European nations.

Curiously, I found an entirely satisfactory explanation of what biting one's thumb meant, not in the works of any Italian but that "most distinguished man of letters in English history", none other than Dr Samuel Johnson. He recounts that biting one's thumb is not about being rude at all but precisely the opposite.
The act of biting one's thumb prevents one from speaking any words offensive or otherwise; thus biting one's thumb is actually a gesture more along the lines of:
"I have something despicable to say to you, and about you, but I shall not because it would cause an offence to hear it".
In the grander context of Romeo and Juliet, which is a play as much about mixed messages and the misinterpretation of them, such an act not only fits perfectly within context but in the wider society of Elizabethan England.

I personally like the act of biting one's thumb precisely because it is archaic. People think that it is highly offensive even though they have no idea why, yet in a weird sort of way because it is so well known to have appeared in "high" literature, it almost makes you stop and think "well played, sire"... and because simply flipping the bird at someone is vulgar.

Horse 1470 - Making Donations To "Win On Principle"

Sometimes I get asked via email to make comments on other articles. Sometimes, those articles come from odd places.

Today in the Senate, a funny thing happened.
We fought on principle, and we won on principle. You know why?
... Because 3 U.S. Senators didn’t listen to the “do something” caucus and the hand-wringers parading as leaders in Washington. Instead, Senators Cruz, Lee and Paul circulated a warning prior to the last recess saying they would (gasp) filibuster any legislation that would undermine our God-given, fundamental right to bear arms. It just so happens that this God-given right is enshrined in the Constitution.
... We have a play book, ladies and gentleman: fight and win.
Thankfully these fresh faces in the Senate get it.
You know who else gets it? The Gun Owners of America. From the beginning, GOA was standing up tall to defend the Second Amendment on principle – not in a game of political gamesmanship and endorsements of Democrats. They were crystal clear the whole time and led other groups, some of whom get more attention and prominence in the debate, in their direction.
-  Erick Erickson, Red State, 17th Apr 2013

Firstly, it's worth noting that RedState makes no bones about the fact that it is a right of centre website. It even states that it is "conservative" in the primaries and Republican in general elections. That is not at issue here.
I'm even willing to lay aside the fact that I really hate the Second Amendment because the consequences of its continued existence, ie. the number of people killed and injured as a result and all the associated costs, both economic and social, far outweigh any utility it might confer. However, to purport that defenders of the Second Amendment "won on principle" is going a bit far - not when other things prove otherwise.

Smith & Wesson and Sturm, Ruger & Company are the two largest publicly traded gun manufacturers in the United States. When President Obama took office, their aggregate market capitalization was about $230 million. Today, it’s nearly $1.5 billion, an increase of 552 per cent. There have been dips along the way: drops in value followed Aurora, Tuscon, and Newtown. But the trend upward has resumed—since Newtown, their aggregate market capitalization has increased by 7 per cent.
- The New Yorker, 18th Apr 2013

All but three of the 45 senators who torpedoed gun control measures in Congress on Wednesday have received money from firearms lobbyists, according to new analysis by the Guardian and the Sunlight Foundation.
Documents also show the NRA saw a surge in donations to its lobbying arm in the months following Newtown – registering a record $2.7m in cash during January and February. Further disclosures showing the scale of its recent donations, particularly to politicians in the House of Representatives, are expected on Saturday.
- The Guardian, 18th Apr 2013

It's pretty telling about what sort of "principles" are in operation here. If all but three, ie 42 senators have been paid off by firearms lobbyists, can the United States even be held up as a democracy?
"Democracy" comes from two Greek words: Demos meaning people and Kratos meaning power or rule. Democracy should mean rule by the people but clearly something else is at work here.
Of course, it would be incredibly naive to think that politicians aren't bought off and/or wooed all the time by lobbyists. No doubt there is probably an anti-gun lobby (though probably not as fervently backed or as cashed up) which also engages in paying off politicians via "donations" but again, this is scarcely what you call a democracy is it?

If anything, the fact that people can openly buy the votes of politicians should be seen as downright scandalous. Call it a donation if you will but even a quick glance of Black's Law Dictionary gives the definition of bribery as the "offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or other person in charge of a public or legal duty" which is precisely what's gone on here.
The thing is that it's no secret that this is how Agriculture subsidies work in the US, how manufacturing works, how defence contracts are awarded; it just goes on and on.

If such a thing were to happen in Australia, I'd like to think that something were done about it. Rightly or wrongly the fact that The OzCar affair came to light, at least gives us the illusion that this might be cleared up here. We'd hope that the Australian Federal Police or someone like ICAC would look into this sort of thing, though really to what extent there are kickbacks and donations made to political parties is more likely cloak and dagger stuff.
If you hand over a brown envelope with cash to a Minister of the Crown, then that's bribery. If however you were to give your money to an official of a political party, then that is not.

It's scary when you consider that roughly $10bn a year, flows from Government coffers at both Federal and State level to corporations. It's not a difficult leap to suggest that power is linked to the size of one's wallet; I think we're all perfectly aware of this when we saw the Mining Companies bully the Federal Government when it came to the Resource Super Profit Tax, which was changed, and the demonstration of that bullying power with a $22m ad campaign.

One person; one vote. It's a nice ideal. Sadly, I don't think that it exists in Australia; it's just that we're not as brazenly public when it comes to the largesse bestowed on "Honourable" members of parliament as they are in the United States; but don't worry, we're probably not that far behind.  Maybe the word we're looking for is not "Democracy" but "Argentocracy" or, rule by money.

April 22, 2013

Horse 1469 - Vettel Dominates, Rosberg Deflates, Massa's Tyre Disintegrates (Rd.4)

When Nico Rosberg put his Mercedes on pole on Saturday, it was the first time since the Italian GP in September 1955 that Mercedes had scored back to back pole positions. His brief stay at the front of the race, lasted all of three laps when his car as indeed team mate Lewis Hamilton's, started wiggling its rear end around in a way which would make a Top 40 diva proud. The two Mercedes showed brief bursts of speed but after about four laps on any given set of tyres they cooked them.

Fernando Alonso's Ferrari was also excellent for two laps, right up to the point when his DRS flap failed to close. Two trips to the pits later, Alonso had to run the rest of the race with his rear wing permanently closed which meant that he was a sitting duck in the DRS zones and couldn't fight back if he was close enough to make a pass. Alonso could only salvage a rather measly eighth, which meant that he fell to fourth in the championship standings.

The two McLarens of Perez and Button had their own little fight during the race which several drivers became entangled in either moving forwards through them or falling backwards through them. Button would accuse Perez of "dangerous driving" after the race but really this was a no holds barred fight with no quarter given or asked.

As this was going on, pole sitter Rosberg sailed backwards en route to oblivion. He was tangled up in the Perez-Button argument for a while but eventually Perez and Button both sailed past him, as did Alonso and Rosberg's pole was converted into a ninth.
In contrast, Romain Grosjean who started 11th and didn't even make Q3, pushed forwards through them to meet Raikkonen on the podium, whilst Felipe Massa's rear tyre decided that the responsibility of being a tyre was too great and so ripped itself to shreds. Paul Di Resta had a disappointing afternoon by finishing fourth, after being unable to hold up Grosjean; although fourth is equal to Di Resta's best finishing position, to lose third is still painful.

Apart from the two black Lotii who are showing remarkable consistency, only Vettel's Red Bull showed any real lasting speed. After Alonso and Rosberg fell away in front of him, Vettel drove a fairly dull yet fast race, often knocking over fastest lap times for want of something to do. Not surprisingly, he's leapt forward into the lead with Raikkonen who admitted that the Lotus simply didn't have the car speed in Bahrain, second in the overall standings.

April 19, 2013

Horse 1468 - Possible Penguin Plague of Prodigious Proportions


In Horse 1356, in a piece about Bag Sitters and mentioned in passing, Platform Penguins. I feel though, that I neglected to properly mention of classify what Platform Penguins actually are. This then, is an attempt to rectify that horrible oversight and to document a few sorts of Penguins out in the wild.

Exhibit 1 - The Platform Penguin (the original)

Penguins in the wild are noted for their distinct black and white plumage and because they tend to huddle around in groups. The Platform Penguin is specially adapted to huddle around open doors of train carriages and buses, even when they have no intention of getting on them. Platform Penguins are at their most annoying when you've made a dash like a mad thing, as fleet of foot as Mercury, only to find three or four penguins huddling around an open door - at worst, the doors will close unforgivingly and you'll be left stranded, whilst your hopes and dreams steal out of the station on the departing train.
I have noted recently, that a good many Platform Penguins have suddenly sprouted iDevices and now stand around like the Statue Of Liberty except without the arm raised. The sounds of bombs bursting in air is out of place but the electric sound of "nyuk-nyuk-nyuk-nyuk-nyuk" would be perfectly reasonable.

Exhibit 2 - The Inside Door Penguin (the upgrade)

There is an interesting development in the world of Penguins. Not content with impeding people's progress to board a train, they've also taken to impeding people's progress when alighting from a train as well.  This particular breed has been spotted in the wild with all sorts of different plumage; so is more characterised by its behaviour than how it appears.
Standing perennially on guard at the door, they wait silently as if some mass apocalyptic event is about to occur. Not even the opening or closing of train doors is enough to upset them from their task. They may be facing either forwards or backwards relative to the direction of travel but they will not move under any other circumstance save for arriving at their own diabolic destination.
Often a crowd of dismayed travelers will form behind this breed of Door Penguin, for the poor unsuspecting saps mistake them for a regular Commuter. They very quickly find out though that getting around a Door Penguin is almost an exercise in futility, for not a small number of them will miss their stop and end up travelling on, on, and ever on.

Exhibit 3 - The Mechanical Penguin

From the outside this looks like any other bus but rest assured it is yet another penguin.
These buses which are controlled by penguin forces, will stand aimlessly in Clarence St and blocking traffic. By virtue of them being buses, they are free to stay in the bus lane. However, they will stand about going nowhere, up to seven at a time; thus rendering the very point of a bus lane useless.
Government buses, of which there are many in peak hour, are forced to deviate around this sulphurious saffron huddle and in turn block regular traffic. Of course this has a knock on effect and pretty soon, just the presence of one or two Mechanical Penguins will result in total and gridlock. By 2113 it is expected that simply because of  Mechanical Penguins and the ensuing gridlock, people will be born, live their entire lives in the jam and die, without even moving four city blocks.

Parking a car in a bus lane is bad form; parking a bus in a bus lane is annoying; parking seven in a row is downright penguinacious.

Exhibit 4 - The Stair Penguin

This fine specimen on the 06:50am train to Berowra (carriage 3887) was so well insulated from the world via a hoodie and iDevice, that it (I never did find out what was under there) successfully blocked one elderly gentleman from getting off the train at Westmead, impeded one person alighting at Parramatta and grunted when tapped on the shoulder by a third irate traveler at Granville.
Stair Penguins are rare at this time of the morning, preferring the fug of the weary afternoon and evening. In a few notable cases, Stair Penguins are hybrids with the Longneck Shrieker, issuing forth the aroma of stale fermented vegetable products and outbursts of an as yet indecipherable nature.
This Stair Penguin was consoling itself with what sounded like the electric rythyms of enmeshed banshee chainsaws; for what purposes, I know not though.


There are Penguins out there and you do not have to work hard to find them. For conservationists they have the IUCN status of Least Concern and are quite abundant. Attempts have been made in the past to domesticate them but thus far, all have failed. Unless attempts at proper management are made, they are likely to reach plague proportions in the not too distant future.

April 17, 2013

Horse 1467 - Driverless Cars?


As automakers like Ford and internet giants like Google all push for technology advances that power the driverless car, the economy of each region could hinge upon their comparative success.
"Everyone has a little piece of the puzzle right now," said Ryan Eustice, a professor at the University of Michigan's College of Engineering. "Google and others are on the West Coast trying to pull it there, but Michigan also has a good chance at being the center of gravity."
Michigan is trying to take steps toward that goal – or at least staying on par with its California competition. State lawmakers have introduced a bill that would set the stage for more autonomous vehicle testing on Michigan roads.

- Pete Bigelow, AOL Autos, 16th Apr 2013

General Motors, Ford and Volkswagen have all been working on cars which drives themselves. I was reading about tests in the United States when I also came across several objections by legislators who thought that a driverless car creates all sorts of legal problems. Maybe, but to suggest that technology wouldn't eventually reach the point where computers could do the job of driving as well if not better than people? What Madness!
80% of all air accidents have been due to pilot error. I bet that if this was studied in motor accidents, that 95% would be due to driver error as well.

The London Underground has had driverless trains on the Victoria Line since as long ago as 1967. The Docklands Light Railway only has people who open and close the doors on every train. The Jubilee Line even has platform screen doors which do not open unless a set of train doors open in concert with them.
I was on an Air New Zealand flight in 2007 from Auckland to Los Angeles when after we'd landed, the pilot cheerfully announced that the plane had been on autopilot since it left the deck in Auckland, and it had flown across the Pacific, flown through a storm and landed so that the front wheels lined up perfectly with the lines on the runway. I suspect that this is modus operandii on just about all passenger aircraft.
If we trust ourselves to trains and aeroplanes to drive themselves, then why can't we do the same with cars? Instead we'd prefer to live with drivers who are distracted by kiddiewinks in the back, or by texting on their mobiles, or worse, drivers who are drunk, stoned, or overly tired. Tell me again how that makes sense?

I rather like the idea of electric cars because I also like the idea that safety can be built into them so easily. If cars had a slot guide like a slot car, we could have thousands of electric cars being recharged as they went down the motorway. If you were asked for an exit code before you got on, you could literally let the car find its own way whilst you nodded off or looked at the scenery. Best of all, if there was an accident, the controllers of the motorway could switch off the power so that there wouldn't be a pile up and even turn down the voltage to get cars around the incident with safety. Think of those bumper car rides at the funfair - at the end of the ride, all the cars glide to a stop. Cars are now fitted with parking sensors, so adapting that technology can't be all that difficult surely?

You'd still have racetracks and country roads for people who like driving but the sad fact is that as it stands, the vast majority of trips are made by people getting to and from work and complaining about traffic. A car that drives itself would be like having one's own electric chauffeur. Combining these technologies of driverless cars and slotway motorways, I think would dovetail quite nicely together. I'd like to think that the future of yesterday would be here tomorrow.

April 15, 2013

Horse 1466 - The Wheels Come Off (Rd.3)

Sometimes the saga off the track is more entertaining than the one on it.

Part of the fallout from Round 2 in Malaysia was that Vettel was unrepentant and unashamed of overtaking Webber and that he'd openly defy orders and do it again. Webber on the other hand was visibly annoyed; plagued with fuel troubles before the start of the Chinese GP which meant that he started from the pit lane. When he was on track, he jammed his Red Bull into the back of Jean-Eric Vergne's Toro Rosso and suffered the perfect completion to the weekend when a wheel fell off; almost taking out either eventual winner Alonso and or Vettel.
Rumour now has it that Webber may have signed a five year deal with Porsche in their Endurance Racing tilt which ultimately means the Le Mans 24 Hour Race.

Sergio Perez again put forward evidence that maybe McLaren picked up the wrong replacement for Hamilton, when he cut across the front of Kimi Raikkonen's Lotus, finding Raikkonen's front wing jammed sharply into his rear wheel.
Up front though, former McLaren drivers Alonso and Hamilton had a relatively trouble free afternoon and finished first and third. Only a late charging Raikkonen ever looked like splitting them, which he did.
Alonso's drive was neither particularly spectacular nor all that exciting, which doesn't really matter when you've done enough to win a GP. It was though incredibly dominant and he finished 11 seconds ahead which in Formula One is as good as an eternity.
This is the point though.

In order to win a GP, you need to do "enough" to win it. In order to win a World Championship, you need to have the ruthlessness of a tyrant.
Alonso, Hamilton, Button, Raikkonen and Vettel have all been World Champions. Webber has had the same car as Vettel and so he can not exactly blame the equipment. As Vettel pointed out before the GP, he'd have broken team orders again, given the chance. That probably explains why he's been a World Champion thrice and why Webber hasn't... at all... ever.

It's interesting that the top four slots in the standings are filled with cars from four stables. Tracks are suiting different cars to varying degrees and so it will be quite sometime before a pattern starts to emerge. Still, all four of them have been World Champions. The McLarens still look not quite sorted which even this early in the season, means that they have to start finding answers and quickly.

April 13, 2013

Horse 1465 - Judge On Character and Actions

No man is an island,
Entire of itself.
Each is a piece of the continent,
A part of the main.
If a clod be washed away by the sea,
Europe is the less.
As well as if a promontory were.
As well as if a manor of thine own
Or of thine friend's were.
Each man's death diminishes me,
For I am involved in mankind.
Therefore, send not to know
For whom the bell tolls,
It tolls for thee.
- John Donne (1572-1631)

Each man's death diminishes me,
For I am involved in mankind.

Whilst I don't think that celebrating someone's death is particularly brilliant (to be honest its gauche), I also don't hold much sway with the idea that you shouldn't speak ill of the dead. Obviously tact leads you to otherwise temper what you intend to say but the awful truth is that someone's opinion generally doesn't change about someone else just because they happen to die. If you held an opinion yesterday and I die, it would be fraudulent of you to suddenly change your opinion unless that event of death really did make you reevaluate your position. If you were genuinely going to speak ill of someone yesterday, then there's not really a good reason why you should not today.

Martin Luther King Jr had a dream, that his four little children would grow up and not be judged on the colour of their skin but in the content of their character. I have heard at least two of them on the radio and they both sound like gracious people, whilst what I've actually read about Martin and his affairs, not quite so much.
Character usually manifests itself in action. That is to say that someone's actions are the outworkings of their character. If this is indeed true, then it makes perfect sense to judge and evaluate what people have done before making value judgements about their character. If you do happen to arrive at the conclusion that someone is not a nice person, then it is more than likely because of something that they have done and maybe done repeatedly which led you to draw that conclusion; it isn't particularly rational to make judgements about people until they have done something - such thinking can lead to outworkings of other serious character flaws with dire and horrible consequences.

After someone has died then everything that they were ever going to have been doing done (in the past-future-present tense) has been done done. Admittedly as the distance in time between someone dying and the present increases, then we also rely on second hand information more; eventually we reach a point where the only accounts we have are those which have been recorded by witnesses or even researchers. For instance, not only we can get something of the character of Winston Churchill because of the video and audio recordings but also he also wrote many words including an autobiography. For someone like Henry VIII there are only witness accounts of his life and actions.
However, in the immediacy of someone's death, the likelihood of finding people who have been affected by someone's life and the actions and decisions that they made is still quite high. What happens for instance if the actions and decisions that someone took, still has adverse effects on other people? Do they suddenly not have the right to pass judgement? In such cases it almost seems as if people are saying that death is the ultimate "get out of gaol free" card; by inference you may as well be horrible to people if for some hither to unwritten code of conduct, that the people who you affect adversely cannot speak ill of you afterward.

Now then...

Margaret Thatcher
If you want to get an idea of why Margaret Thatcher's death has been marked with so varied reactions, then we need to look at how people were directly affected by her decisions and those of the government she led:

The number of people out of work in Britain has risen above three million for the first time since the 1930s.

The official jobless total, announced today, is 3,070,621. It means one in eight people is out of work.
Rates of unemployment vary across the country - in Northern Ireland it is nearly 20% and 15 or 16% in most parts of Scotland the North East and North West - only in the South East does it drop below 10%.

- BBC Website, On This Day - 26th Jan 1982.

Of course pit closures get most of the headlines because of Thatcher's verbal battle with Arthur Scargill, but it's worth noting that in just 3 years, Britain went from an unemployment rate of less than 3% to more than 10% in 1982. Couple that with inflation running at more than 20%, and a manufacturing sector which accounted for more than 20% of GDP in 1979 to less than 8% at the end of Thatcher's tenure and you start to see why the vitriol exists.

No referenda was ever held for the sale of any of the following either:
Oct 1979 - British Petroleum
Feb 1981 - British Aerospace
Oct 1981 - Cable & Wireless
Feb 1982 - Amersham International
Feb 1982 - National Freight Corporation
Nov 1982 - Britoil
Feb 1983 - Associated British Ports
Jul 1984 - Enterprise Oil
Aug 1984 - Jaguar
Dec 1984 - British Telecommunications
Jan 1985 - British Shipbuilders
Dec 1986 - British Gas
Feb 1987 - British Airways
May 1987 - Rolls-Royce
Jul 1987 - BAA
Dec 1988 - British Steel
Dec 1989 - The Water Companies
Jan 1990 - National Grid and Electric Boards

How many people directly lost their jobs as a result of Thatcher's wave of privatisation? How many people became institutional welfare recipients as a result? How many people are now second generation institutional welfare recipients as a result? Moreover, how many towns had their livelihoods kicked to pieces and I just don't mean as a direct result of closures, but all the knock-on effects in related industries.
Then you've got the events relating to the "sus" laws; the riots in Toxteth, Brixton, Bristol, Handsworth, Birmingham, Chapelton; The Met also covered up the causes of the New Cross house fire, South Yorkshire Police were "close to deceitful" in their handling of the Hillsborough disaster and yet whilst at the helm, the Prime Minister of the day approved of their actions.

Maybe you could say that a few isolated incidents might lead someone to conclude that Thatcher's Premiership wasn't perfect but there's wholesale evidence which points to something far worse.

This surplus comes from Britain's North Sea oil sales, taxes on a massive expansion of household credit debt, and the once-and-for-all selloff of national assets.
-  Neil Kinnock, in the House of Commons, Leader of the Labor Party, 15 Mar 1988

She led a government which was collecting 16% of its revenues from the North Sea; sold off the silverware and still in 11 years in the Premiership, only managed to deliver a single budget surplus. Quite simply, once she'd successfully overseen the mass destruction of British manufacturing, the tax base dried up.


I don't think that celebrating the death of Margaret Thatcher or anyone for that matter is appropriate. The truth is though that whilst she was Prime Minister, a lot of people were directly affected and hurt. Judge her on content of her character and arrive at your conclusions based on actions.

April 12, 2013

Horse 1464 - Prime Hunting

If you were to look at all the primes in Base-10 then we very quickly find that after 2, there is no such thing as an even prime, for all even numbers are divisible by 2;  after 5, there are no numbers ending in 5 which are prime, since they're all divisible by 5 (35, 965, 1258785, 215687068176765 etc)

I took a sample of the first hundred prime numbers and looked at their end digits and found this:
1 - 24
2 - 1
3  - 26
5 - 1
7 - 24
9 - 24

Of course this doesn't exclusively work, as applied to Base-10. A prime number is still prime what ever base you choose to use. In Base-2 (binary) just as in Base-10,  there is no such thing as an even prime, for all even numbers are divisible by 2. The thing is though, that ALL even numbers including 2 end in 0.

Again, I took a sample of the first hundred prime numbers and looked at their end digits and found this:
0 - 1
1 - 99
Actually I didn't really need to since it was obvious, but it was still useful in testing the functionality of Excel. The eighty-first prime of 419 works out to be 110100011 for instance.

I took those same numbers using Excel, converted them all to Base-8 and found these end digits:
1 - 21
2 - 1
3 - 26
5 - 26
7 - 26

In Base-16, they fall into these end digits:
1 - 11
2 - 1
3 - 13
5 - 13
7 - 13
9 - 10
B - 13
D - 13
F - 13
B D F? Well in Base-16 our standard number set doesn't extend far enough. The symbols B D and F stand in place for 11, 13 and 15. 16 in Base-16 of course is one lot of sixteen and no ones and therefore is written 10. 503 which is the ninety-seventh prime comes out to be 1F7 in Base-16.

I didn't really find what I was looking for and to be honest a sample size of only 100 primes didn't really help me much but a sample size up to 1,000,000,000 yields the following results for the end digit in Base-10:

1 - 12711386 (24.999%)
2 - 1               (negligible)
3 - 12712499 (25.001%)
5 - 1               (negligible)
7 - 12712314 (25.001%)
9 - 12711333 (24.999%)

I know that this sounds dumb but I suspect that for all Bases-N, there is either no preference for the last digit towards infinity or that for all Bases-N there is an exceptionally weak tendency for the spread of the last digit to display a normal distribution across all the end digits of the base (or odd ones if it's an even base).
My problem is that I don't have the mathematical tools to be able to prove either case for all bases-n to infinity and I don't know if anyone has even written a paper on the subject. Does this have something to do with general number theory or is something else going on?

I hope that this post acts as a fly trap and people leave me some answers.

Horse 1463 - The Stuff Dreams Are Made Of... or... The Cup Of Life, Allez Allez Allez

As I write this, men in suits and ties sit around large boardroom tables with profound looks on their faces, deciding the fate of the soon yet to named Cup competition in Australian football (presumably to be called the FFA Cup).
I hope "for the good of the game" that the men in suits inside these FFA meetings remember their youth; remember the magic of the English and Scottish FA Cups, for these are the trophies and competitions which even through wartime inspired the world.

If the FFA Cup (Football Federation of Australia Cup) is even part way like the rumours suggest, then it will lock out thousands of clubs from ever competing. The suggestion is that circa 700 teams will be chosen from the A-League and the state leagues. By my reckoning, that's only about 115 from each state, as well as the A-League. Those figures only give you about six or so tiers down the football  pyramid at most and even just in NSW, that completely eliminates all District, Church League and Country Regional football before a single ball has been kicked.

Ideally (and I hope that sufficient numbers of interested fans write to the FFA about this), any Cup should be completely Open. Part of the magic of the English and Scottish FA Cups is that being open competitions, any eligible side in theory could win, though realistically most sides have as much chance as 1990 Melbourne Cup winner Kingston Rule has of winning The Voice (Makybe Diva has a record coming out in July on the Polydor label).
In the past, the legend of both FA Cups on that sceptred isle has been built on the occasional story of some "minnow" defeating one of the giants of the game or even holding one them to a draw. Most recently this was best exemplified by then Conference side Exeter City who in 2005 held Manchester United who were 118 places above them in the league system,  to a scoreless draw. They were of course duly beaten 2-0 a fortnight later but not before they'd picked up £750K in gate takings and cleared the club's debt on the process.
Even further down the pyramid and it becomes less about beating giants and more about simply pushing as hard as you possibly can. For some sides whose usual attendances are less than two dozen including a dog called Kevin, to suddenly one day make it and be able to play on an enclosed field, with actual grandstands and a crowd of a couple of hundred is like winning the Cup itself.
Team Bath F.C. in the 2002–03 FA Cup became the first university team since 1880 to reach the first round proper of the competition and although they were squarely beaten 3-0 by Mansfield Town, is wasn't a bad effort for Team Bath who were nothing more than university students.

Of course there are sides like Manchester United, Chelsea and Liverpool who arrive at the English FA Cup with alarming regularity and in Scotland, Rangers and Celtic play their inevitable tussle like two children fighting over a stick. In Scotland, excitement brews when anyone can knock either of those two off the pedestal and in England, the FA Cup from 90 years ago, now dusty, might be the club's greatest and only piece of silverware.
In Australia we have the opportunity to start right at the beginning and I think that it would be utterly brilliant if someone like Wee Waa United Football Club could take the Cup from under the nose of Melbourne Victory. Such a Cup win would go down in legend and still be talked about more than a century later.

That's the where and why of how legends are built and that also explains why I think that limiting the FFA Cup to just the exclusive few tiers in the state leagues, sells the whole concept so very very short. Australia which sort of prides itself in its own legend of the fair go, would be turning its back on that very same concept. By opening the FFA Cup to the vastness that is every single club in the country, the FFA would be giving people the chance to dream the impossible dream which in most cases is genuinely impossible... but just the tiniest bit maybe.

April 11, 2013

Horse 1462 - What's Good For General Motors Is Good For General Motors

General Motors' decision to sack 500 workers in Australia, despite the more than A$2bn worth of subsidies thrown at them over the past decade, despite Holden being the only profitable division during the height of the Global Financial Crisis and GM's own Chapter 11 bankruptcy woes, smacks of a corporation which is ungrateful. Then again being a corporation, in its rather overpaid opinion, its bottom line is the only thing that matters and so it would only argue that it was only acting in the interests of its shareholders, or increasingly, the board of directors, so the concept of being grateful must be an alien one.
Especially considering that the few remaining GM "workers" in the United States have been recently handed a "loyalty bonus" (94% went to upper management), its easy to see just where GM's loyalties lie; it ain't here.

Mike Devereux, Holden managing director among other reasons said that the strong Australian Dollar and currency devaluations overseas were mainly to blame:
“Importantly, the currency plays being made by other countries mean that were are not competing on a level playing field, not even in our own backyard.
While Holden has made significant productivity gains and will continue to do that, we are witnessing a structural shift in the market not just for cars but for anyone or any company that makes things in this country."
- Mike Devereux, 8th Apr 2013.

Never mind the fact that General Motors often shift millions of dollars worth of currency in a day to their own ends. China and Russia also have been buying up Australian Dollars in an effort to harden up the currency so that their markets can compete overseas. Coincidentally, the Cruze is built in both Saint Petersburg in Russia and in Shenyang, Liaoning Province in China.
The Cruze in particular is a "global" car; that is, it is sold in many markets all over the world and parts can be manufactured in equally as many factories all over the world; one such factory is in San Luis Potosí, Mexico. What's curious is that as long ago as 2003, General Motors was being looked into by Human Rights Watch (web: http://www.hrw.org/) and made an explicit statement that would not "hire female job applicants found to be pregnant" to avoid "financial liabilities imposed by the Mexican social security system". Helpfully, the Mexican government has expanded the use of "maquiladoras" or what the UN likes to call Export Processing Zones, inside which, factories are able to negotiate special conditions to avoid paying such annoyances as taxation and avoid paying as much in wages than they would do outside the Zone.
In a maquiladora, workers across Mexico can be paid as little as $1285 a year and thanks to NAFTA, their produce can be shipped into the United States without tarrif. Owing to the quirks of Australian trade law, their work can even be included as Australian local content.
Australian car workers like the few industrial workers still left in the country, find themselves competing for wages against women and girls in their early 20s and in some cases as young as 14. They do not receive anything as extravagant as overtime, holiday pay, sick pay and if they get injured on the job, they may as well be living on the moon for all the assistance they'll get.
General Motors' once proud promise that a worker in their factory could earn enough to support a family of four and buy a pick-up truck or car within a year, rings oh so hollow now, with many workers in Mexico and migrant workers in countries like Poland barely being able to afford rent and seven meals a week after working hundred plus hour weeks per week. Of course you could shut assembly plants down but equally when GM can ship in parts to make front consoles and even ship a whole factory into Laos in just 22 days, they can just as easily ship it back out again to some other accommodating country.

Unfortunately as a company, treating people and nations with disdain is part of their history. General Motors is at least partly responsible for the dismantling of a lot of public transport systems across America. They along with Firestone Tyre, Standard Oil, Phillips Conoco, Mack Trucks, and the Federal Engineering Corporation bought more than 100 tram and trolley-bus networks in 45 cities. Following an anti-trust case in 1949, GM in particular was convicted and then fined the utterly pathetic sum of $5000; the then treasurer of GM, a Mr  H.C. Grossman was fined the princely and immensely burdensome sum of $1 for his actions.
If that wasn't bad enough, just seven years later, their former CEO Charles Erwin Wilson persuaded Eisenhower to build the world's biggest system of expressways so that his shiny new cars could use them; then went back to GM. The phrase "what's good for General Motors is good for the country" also originated around this time.
So forgive my cynicism at a company which being too big to fail, coerced the supposedly biggest and most powerful nation on earth to bail it out, and after being paid more than $275m by in bonuses (mainly to upper management) in another country, sacks Australian workers and yet still demands to be given handouts. Just who is the Australian Government subsidizing anyway? My tax dollars are going overseas to fund the profligacy and extravagance of clearly incompetent management, that's who.


"The current approach, and quite frankly the approach of past governments both Liberal and Labor, has been to not restrict the commercial decisions of the company.
Our current agreement with the federal government does not include minimum employment levels. (The assistance) is designed to generate the capacity to build things ... and jobs flow from that.
There are no guarantees in life, I don't know how many cars Australians will buy in 2016"
- Mike Devereux, via the Herald-Sun, 10th Apr 2013

Holden themselves have refused to guarantee the future of people's job in this country, so as far as I'm concerned, I don't see why any Federal Government should continue to bottle feed the poor ickle baby.
I'm actually seriously wondering if It might be more cost effective for the Australian Government to simply order Holden to leave forever, then to pay all the workers on full salaries. I suspect that in terms of raw dollars spent, it would still be cheaper than giving Holden hand outs. Of course the downside is that there wouldn't be Australian produced motor cars but considering that apart from the Commodore which is more than likely going to be axed in 2016 anyway and the Cruze, the entire of Holden's line up is already fully imported, so we won't miss much.

That also comes off the back of GM, promising to invest more than €4bn in Opel in Europe, who would also be building parts for GM cars like Holden in Export Processing Zones such as Gliwice in Poland and the same factory in  Saint Petersburg where the Cruze is built:

Rüsselsheim.  The General Motors (GM) Board of Directors used its meeting in Rüsselsheim to underscore its commitment to Opel and Germany. This commitment was also manifested in the approval of a comprehensive investment program: GM will invest 4 billion euros in Germany and Europe through 2016.

- GM, 10th Apr 2013.

It's just "business" isn't it? It's still a pity that we're paying for it.

April 10, 2013

Horse 1461 - EA Politik '13 - It's In The Game

EA Sports - It's In The Game - Because Politics is A Game

The big thing in Politik '12 was Major League Politics and the fight to get either Obama or Romney to with the Presidency. Winning with Romney would always be a challenge for the player, as Romney himself would keep on spitting out self-destruct barbs like the now infamous "47 percent" bomb, which would ruin your game almost instantly. Then there's always the bias that an incumbent President always has.

Politik '13 comes with a whole new suite of in game mechanics. You can have leadership coups and caucus spills, you can even try to get the Indies to help you to pull off a no-confidence option if you've picked the Coalition.
There appears to be a glitch though. If you try to run a leadership coups but haven't selected the candidate in advance, they won't run; not even if they are a former PM. 

Previous things like the Tea Party in Major League Politics and Occupy have been replaced with newer graphics, and options to instantly promote outsiders to the Senate if your party already owns the seat in the Oz-League. You can even download "classic" players to fill Senate seats, such as former State Premiers.

The wacky parties make a return to Politik '13 like Katter's Australian Party, Wikileaks and the Democratic Labor Party which you'd think aligns with the ALP but doesn't.
In the Brit-League, there isn't really much to do except try and force a Tory/Lib-Dem split if Tory policies become too cruel and there's a demo mini-game in which you run a campaign for the SNP to split Scotland from the UK.

There's a few Euro leagues like Italia which has four main parties but is still ungovernable (you're better off with a Democrat/Freedom coalition), and the Deutsche League whilst not as chaotic has six main parties but a CDU/CSU/FDP coalition will usually be enough to win, provided you sort out the strange currency puzzles in the game.

You still may wish to buy Politik '12 though. Whilst it's still on the shelves, most of the functionality of '13 is in  there and it's going cheap.

April 08, 2013

Horse 1460 - The Tonight Show with Joel Madden

Joel Madden, the lead singer of Good Charlotte has again reprised his role on Channel 9's The Voice. Whilst he doesn't have the cool temperament of Seal, the Latin flair of Ricky Martin, or even the bubbliness of Delta, I think that in a strange sort of way, he'd be perfect for a Tonight style program on telly.

In America, Johnny Carson ruled the Tonight Show format for the best part of 30 years. His logical successor, David Letterman was overlooked in 1992 and Jay Leno got the gig. In 2013, Leno is retiring whilst still outrating Letterman's Late Show.
Now I cite this story by way of background because I think it shows something interesting. A late night talk show host can have a spot on television which consistently rates well for several decades. By way of contrast, a rock star's career is usually only good for about a decade in most cases. Even Joel Madden by now would probably concede that Good Charlotte as a band has hit its peaks some time ago and equally the group of fans accumulated has also grown older.

Obviously being at the centre of the stage is hardly a problem for him but he said something last night that makes me think that he'd be very good as a talk show host. He mentioned that he tends not to coach as much as the other members of the panel on The Voice, and prefers to push his chosen team members into the spotlight and for them to find their "attitude"; this is also important for a talk show host. A talk show host, although their name headlines the show and they themselves are stars in their own right, needs to know when to stand aside and more importantly to let their guests say whatever they are going to.

The thing is that because Joel has been in a band as opposed to being a solo artist, he already possesses the skills to share a stage; that basically is what the cut and thrust of being a late night talk show host is about.
It is a little bit different to the art if being a TV journalist because although they ask a lot of questions, a late night TV talk show host engages in more of a dance of banter with their target. This explains why someone like Graeme Norton is so deft at the job he has, yet still comes off as a little silly.
I expect that neither someone like George Negus, Leigh Sales, Peter Overton or even Tony Jones who directs traffic on QandA, would have the necessary required sense of mayhem and silliness to host a late show, whereas Joel more than likely does.
Journalists ask questions to dig at information but rock stars and comedians set out to entertain, which is quite a different skill set. I don't think that Joel is particularly funny but then again, I also could say the same for a lot of comedians and that is their job. Rove McManaus is a reasonably successful talk show host but at the same time is unfunny - maybe that's just Rove though.

If Channel 10 can take Shaun Micallef and make a semi-quiz show work for four years, and Channel 7 can take an economist like David Koch and turn him into a morning show presenter, then I don't see why Channel 9 can't take Joel Madden and give him a Tonight show. He's already shown himself to be marketable, having landed deals with KFC and Vodafone and after winning the Logie for Best Male Newcomer on Australian Television, his celebrity if nothing else is bankable. On top of that, as an American, he is a little exotic and that worked in Don Lane's favour.

I just think that Australian television has been looking for a Tonight style show for a long time; if it happens, a strange set of circumstances might mean that Joel Madden is the perfect host for it.

April 05, 2013

Horse 1458 - Collective Purchasing Decisions

Let me say something which is so hideously terrible, it will make you think that I'm some sort of crazy person:
The Roman Empire produced nothing.
I'm now going to say something equally as terrible:
Nike, Mitsubishi, Apple, Heinz and BHP also produce nothing.
In fact, no government, no company, no mutual society, no club, no partnership and no trust foundation, has ever produced anything at all, ever, in the history of everything.
OK, this sounds incredibly bonkers and I will admit that I induce argument and discussion by saying so, but what I've said is not only 100% true but also fundamental to destroying other equally bonkers myths and rubbish that people like to spit forth.

In essence there are only two absolutely fundamental ways to make money - work and win. Of those, the latter of the two is actually just a fancy way of saying, benefiting from other people's work. Everything ever produced in the entire of history has been made because of people's work.
Economics 101 classes will tell you that there are but four factors of production: Land, Labour, Capital and Enterprise. In other words: the stuff that things are made of, someone's work to make them, any machinery used to make them and someone to manage the whole process of how things are made. Companies, government, mutual societies et al. are merely methods of organising collective decisions of how and what to produce.

Assume for a second that there is a security guard standing outside of building. Also assume that this security guard is paid $75000 a year for their work.  Really it makes no difference if they are paid by the government and have the title of Policeman, if they are paid by a private company and have the title of Security Guard, if they are paid by a provident society and have the title of Footman, or if they are paid by a gangster and have the title of Hired Goon.
Same person, same job, same pay, same service being provided. The same amount of land, labour, capital and enterprise is being employed and really, although people might like to put a spin on it, neither the government,  private company,  provident society, gangster or whoever employs this person is producing the service, it's the person being the security guard standing outside of the building.
To take another example, the only real difference between a building society and a corporation is the legal treatment of the two. There are numerous examples where for legal advantage and taxation purposes, building societies have decided to incorporate and become banks but the actual difference between their business was precisely nil. They still performed the same function, produced an identical service and even carried the entire balance sheet of assets, liabilities, profits and equity over.

During the course of my job as an accountant I see all sorts of organisational structures and really the only difference from an accounting standpoint are the titles on the various documents and the amount of taxation due; hence the reason why people tend to favour one organisational structure over another to perform various functions.
We do the accounts for several gyms; all flying under the same franchise name. The various gyms are owned by companies, partnerships, in some cases individuals and in one odd case, local government. They all provide the same service and the clients have no idea and no care of the organisational structure behind them.
This is also a noteworthy thing. Clients of a gym, visit and pay their fees to use the equipment. Really the only reason they do this is that individually none of them would usually be able to afford the entire range of gym equipment for their use, but collectively their decisions to pay their fees is in effect nothing more than a complicated series of purchasing decisions. Taken to its most extreme, the only real difference between a gym and the government is the scale. When we pay tax, all we've done is enter into an even more massive and even more complicated series of purchasing decisions.

Really, it all comes down to, is a series of heated public argument as to how to make those massive and complicated series of collective purchasing decisions. Surprisingly, companies, government, mutual societies et al. are , not only produce nothing, they also consume nothing. Consumers, ie people consume things and although firms may make use of resources and even use them up in the course of producing goods and services, essentially it's still just a series of collective purchasing decisions designed to create outcomes.
The various forms of structural organisation do however make distinct differences. Not only do they determine the shape of the collective purchasing decisions as to which goods and services produced, they also determine the circumstances of entry and exclusion to those goods and services.

There was a rather embarrassing study commissioned by the components of the Dow looking into the level of waste in both government and the private sector. After looking at a large number of companies and counties, cities, state and federal departments, it found that the private sector on average was between 9-12% more wasteful than government.
So then, when I hear that government produces nothing I agree with people. I also tend to ask questions to prize open the level to which they believe that private enterprise is a panacea to cure everything.  Granted there are a considerable number circumstances where for certain reasons, the private sector is far better equipped to produce goods and services (mainly where the optimal sharing group is small), if the private can not, does not or will not produce goods and services, then a pretty strong argument can be mounted that government by inference is the only entity capable and willing to produce them; this usually occurs when the services and public goods in question are massive in scale.
Mostly though, the argument that "government produces nothing" is actually a cover for "I don't want to pay tax"; that in itself is an extension of "I don't want to pay for anything". Less often it's an argument for the deliberate exclusion to goods and services on the basis of wealth and class. Either way, I still tend to doubt if the person who makes it has thought much beyond their own immediate wants and desires.
Government produces nothing, private companies produce nothing - land, labour, capital and enterprise produce things - and I'd prefer it if you just gave me stuff.

April 04, 2013

Horse 1457 - Einstein's Unfluffy Idea

I have found a use for the free newspaper Mx. Near the back of the paper is a TV guide, so my total reading of the paper usually amounts to that and possibly the letters section; all done in the time that it takes me to walk from an entrance and down the pedestrian ramps, before returning it back to a rack closer to the railway station. In total, Mx can't spend any more than about 90 seconds in my hands before I'm done with it.
Mx as a newspaper just doesn't sell itself to me. As a reader I want to "purchase" harder and grittier ideas than the gooey marshmallow fluff that Mx has to offer. To wit, the most recent books I have read on the train have been by Hayek, Keynes (both economists), Spurgeon (a theologian), a biography on the life of Lewis Carroll and one of Conan-Doyle's Sherlock Holmes novels.
"Einstein's" letter of 3rd April, then, I found a little interesting. The lament about the sorts of dross in Mx is not without merit but I fear completely misplaced.

Mx is a commercial newspaper with a cover price of zero. This means that unlike the Tele or the Herald, the overhead costs to print it aren't even covered at all by the purchase price. It must be conceded therefore, that the product on sale is not the newspaper but the time spent in the hands of the readers. Since their time is obviously valuable enough to be purchased by people who put adverts in the newspaper, then the editors will try to ensure that the newspaper spends as much time in people's hands as possible.
What then does the readership look like? How do you keep the newspaper in their hands as long as possible?

My basic conceit here is that the vast majority of people are either disinterested in thinking at worst or very easily distracted at best. This is evidenced elsewhere by the sorts of television shows which are popular and by the most popular things on the internet.
Apart from people's need for food, clothing and shelter, people as highly social creatures have a need for validation and acceptance. Things like Facebook and to a lesser extent Twitter feed this need quite admirably.
A newspaper by virtue of being a hard copy and printed, doesn't quite satisfy this need. It can print celebrity gossip and sporting results which I suppose add to people's sense of community but messages on social media do this instantly.
The other thing I find interesting, is that although our trains and buses are awash with smart phones, tablets and laptops, people aren't necessarily using this great computing power to access stores of information or news services. No, they're firing Angry Birds into makeshift towers which green pigs have built, or trying to create words of no more than four letters with friends, or trying to match sets of jewels.

There is a reference book in the library near where I work called "The Art Of The Sermon" by Horace Milton; published in 1857. He writes that when preaching, you need to "shout to the bottom of people's souls"; adding that "parishioners tend to nod off after nine minutes, you need to put fire under their pews, lest they be cast into the fires of hell". People in 1857 had an attention span of nine minutes it seems. A half-hour television program will be interspersed with three sets of adverts, cutting a television show into eight minute blocks. Cartoon shorts in the cinemas were seven minutes long. Clearly there's something going on here which has been known about for at least 156 years.
The portable computer revolution has for the most part, been a method where tired people who have worked seven or more hours that day, are able to disengage their brains and dissociate themselves from their fellow travelers.
The bottom line is that people want cheap and instant gratification. If they have an attention span of no more than about ten minutes at most, then a newspaper needs to engage with them quickly or else its message and point if existence is missed entirely.

Herein lies the reason why a publication like Mx is so devoid of anything resembling an interesting idea.
The people on public transport are probably the same people who a decade or more ago, didn't know what an element was in a high school science class. These people probably wouldn't be interested in the vibrating Germanium crystals or Silicon powering the devices that they currently paw at. Nor would they care about time dilation with respect to gravity, which is essential to the function of mobile telephony and GPS systems.
If even basic science is beyond the scope of interest or care of most people travelling on public transport, then Mx quite rightly isn't going to include such a section in their publication because it doesn't sell advertising space. It probably goes without saying that people need to be spurred on intellectually but simple economics dictates otherwise.

It probably also goes without saying that "Einstein's" time isn't the commodity which Mx is trying to sell. If Einstein would prefer to be reading something more intellectually stimulating, then why don't they? Public libraries are massive stores of books which can be borrowed for free. You don't have to have your precious time sold to advertisers. If enough people started doing that, then Mx circulations would drop and they might have to reconsider what their market looked like.
As it is, people continue to pick it up and so Mx continue to print gooey marshmallow fluff instead of anything which would spur people on intellectually and/or bring about change. It pays to print fluff.