Lock ‘Em Out

Aug 6, 2012

A quick update on something I pointed out three weeks ago — union workers know a lot more about how to stop alcohol-fuelled violence than most politicians because they are on the front lines.

Two years ago– TWO YEARS AGO — a coalition of unions representing doctors, nurses, paramedics and police officers demanded that politicians act to stop alcohol-fuelled violence. You don’t have to be a rocket scientist to understand why: those front-line workers have to deal with the violence and it’s an occupational hazard. Union workers have to transport injured people to hospitals, stitch up the wounds, and restore order in the streets.

So, today’s news vindicates the campaign being run by the Last Drinks campaign:

PUB lockouts that ban patrons entering licensed premises after a late night deadline but allow those already inside to keep drinking could be the answer to curbing drunken violence in Kings Cross, Police Commissioner Andrew Scipione believes.

Save lives. Sign the petition.


Who’s On Top?

Aug 6, 2012

This is a head scratcher. Is Ross Gittins living in the same world as the rest of us?

This morning, Gittins, who doesn’t hail from the Fantasy Review (better know in the banker world as the Financial Review) world of seeing things, wrings his hands about the review of the Fair Work Act, ending with:

My guess is a few big, militant unions are taking every advantage of Fair Work to make unreasonable demands. And they’re being vigorously opposed by a few equally militant, unreasonable big businesses.

But we shouldn’t allow people with a vested interest in conflict to misdirect us. The real problem with Fair Work is that it’s not doing as much good as it could be at a time when bosses and workers need to pull together.

Actually, as I pointed out last week, the key part of the review found:

After considering the economic aspects of the Fair Work Act the panel concludes that since the Fair Work Act came into force, important outcomes such as wages growth, industrial disputation, the responsiveness of wages to supply and demand, the rate of employment growth and the flexibility of work patterns have been favourable to Australia’s continuing prosperity,” it says. It also criticises Work Choices. ”Of the four bargaining frameworks over the last 20 years, Work Choices is least like the others. Its period of effective operation was relatively brief and during that period it was significantly amended.” [emphasis added]

It’s fine to call for employers and workers to “pull together”. But, when you have the Empty Suit, leader of the Coalition, leading a full-throated assault on basic working conditions and wages, the balance of power is not equal. It is, indeed, a false equivalence to pit unions fighting for members rights versus corporate leaders trying to preserve their own huge pay packages and profit margins. They are not the same.


RailCorp Managers Veer Way Off The Track

Aug 3, 2012

Let’s say you wanted to solve climate change. You’d probably focus on, say, carbon emissions. But, if you were RailCorp management, you’d likely come up with the genius idea of handing out sun visors because, well, that’s really keeping your eye on the ball. Because RailCorp management really is brilliantly clueless about what matters.

If you asked the average rider what are the main challenges facing the rail system, she’d probably immediately say…proper grooming of rail way workers. Right? First thing on your mind. Well, while you suppress your giggling, just know that that is exactly what RailCorp management thinks, and is spending critical funds on enforcing:

RAILCORP’S ”First Impressions Count” initiative claimed its first four scalps this week, as the train operator’s management began refusing to allow employees to start work if they were unshaven or unkempt.

The Transport Minister, Gladys Berejiklian, has set herself the task of overhauling Sydney’s train system. And while the trains and service levels remain largely as they were, RailCorp has launched a blitz on grooming, rigorously enforcing standards first set in 1999.

Let me leave it to the rational person to react:

”They are just going ridiculous,” said Bob Newham, a passenger organiser in the locomotive division of the Rail, Tram and Bus Union yesterday. ”They’ll need to start issuing underwear soon because crew have been told they can’t wear T-shirts under their shirts any more to keep warm.”

Ridiculous? I’d say insane.

And, just to top it off, Railcorp has gone into the music producing business…creating a CD of  songs to — are you ready? –deal with drivers’ fatigue. It’s called Fatigue Busters. No, this is not a joke. On that one, Loco Express observes:

A musical medley is an interesting attempt at dealing with the very serious issue of fatigue, and an interesting use of the time and resources in Railcorp. Just imagine what could be achieved if they put as much effort into thinking about rostering, breaks between shifts, allowing for regular breaks for toilet relief instead of trying to chain drivers to the seat, reducing turn around times and fixing staff moral.


The Fantasy Review Goes Off Into La-La Land

Aug 2, 2012

Why I spoil my appetite — a good lunch salad is a sad thing to waste — by reading drivel is always a mystery. But, if you make the mistake of reading the Fantasy Review — among bankers it’s known as the “Financial Review” — you run that risk. Today, it was Jennifer Hewett’s fault. While we live on the planet of reality, where actual facts matter, Hewett inhabits the world of mystery and alchemy, where things get mixed together and stuff just happens.

Hewett is annoyed, as anyone can tell from her tortured column today, by yesterday’s speech by Wayne Swan, which I previewed yesterday with a modest observation that Swan was simply stating the facts that about Clive Palmer, Gina Rinehart and Andrew Forrest: “One tycoon is using his money to challenge the principle of fair taxation through electioneering; a second is using his money to challenge it through the courts; and a third is using her money to challenge it by undermining independent journalism”.

Hewett is entitled to disagree. But, the problem is that  she — and a whole host of transcribers of press releases (what we formerly used to called “journalists”) — don’t bother to connect with the reality-based world when making arguments. They pretend as if shit just happens, as naturally as the sun rising in the east and setting in the west.

Let’s look at a few examples from the column (subscription to the Fantasy Review is required). First:

It is true that manufacturing jobs in both countries have been in long-term decline and are being hit particularly hard now. Those changes are partly due to a changing global economy and the rise of Asian manufacturing, partly due to the excesses of a debt-fuelled consumer and banking binge in the US and Europe.

Aha. “The changing global economy”. Well, wait a minute. The”global economy” changes because rules change. It isn’t a natural phenomena, nor magic. Those rules that were changed, mostly via so-called “free trade” agreements, set up a new regime based on one thing, and one thing only: where could companies find workers who could be exploited by paying them the lowest wage and forcing them to work in the least regulated, most dangerous conditions. The decline, then, was in wage standards, which, then, triggered the “rise” of Asian manufacturing.

Then, Hewett goes on:

Adapting to this inexorable shift and being able to ride the waves of change without falling off is the hard part for any country, any government, any company.

“Inexorable shift”. What utter nonsense –it isn’t a natural phenomena. It’s only inexorable, ironically, precisely because of the point Swan made, which Hewett hates: tycoons set the rules. Their rules say: we reap the money, we set the terms, we drive wages as low as possible.

Well, of course, like all good “free market” idealogues, you knew this one was coming: when all else fails, blame Europe:

Nor does he reflect on the rather elusive economic benefits of that model of government intervention – high taxation and economic and political paralysis in Europe. That’s equality of a different sort.

It’s almost boring to have to point out that the austerity destroying millions of jobs and the livelihoods of millions of workers, impoverishing generations of people and threatening the stability of at least Greece and Spain, has almost nothing to do with taxation — actually, that’s not exactly true since part of the crisis has to do with rich people refusing to pay higher taxes — but actually the problem is that the financial implosion created by greedy bankers wiped away trillions of dollars in wealth, triggering an economic meltdown.

Lastly, and this is Hewett’s dumbest point:

Yet this Treasurer is not at all taken, for example, by America’s extraordinary capacity for innovation in a range of industries, its economic flexibility and its ability to generate new sources of growth.

If this country wants to adapt the American Disease, which has killed the middle class, diverting 30 years of wealth growth from the people who created the value into the hands of the few so that more people live in poverty in the US – 46 million – than at any time in the half-century the US government has measured that figure, well, fine. But, deal with the facts of what the American model accomplished — not some fantasy version of what you’d like to happen.

Why bother with this? A fair point. The problem is that too many people have bought this idea of the “free market” and the notion that de-regulation is the way to happiness. Except the facts don’t support that fantasy.


Who Benefits

Aug 2, 2012

At least you have to give business credit — it is consistent. No matter what the actual facts say about how one builds prosperity and how an economy thrives, we keep hearing the same whinging and hand-wringing: the economy suffers from a lack of productivity and that is holding down growth. Uh, nonsense.

This is all going to be in the wind as the government rolls out its review of the Fair Work Act. Surprise, it’s been good for workers:

”After considering the economic aspects of the Fair Work Act the panel concludes that since the Fair Work Act came into force, important outcomes such as wages growth, industrial disputation, the responsiveness of wages to supply and demand, the rate of employment growth and the flexibility of work patterns have been favourable to Australia’s continuing prosperity,” it says. It also criticises Work Choices. ”Of the four bargaining frameworks over the last 20 years, Work Choices is least like the others. Its period of effective operation was relatively brief and during that period it was significantly amended.” [emphasis added]

This should not be a surprise. Let’s be clear: businesses’ complaints have nothing to do with productivity or growth. It’s about power and profits and greed. It may be dressed up in rhetoric but people in business want unilateral control over workers and they want to siphon off the lion’s share of profits into their own pockets. Those are just facts.
But, the facts also say that a society is most prosperous when the fruits of an economy are shared broadly…growth comes when real people make a decent living and can afford to spend on stuff like travel, clothes, education, cars and other goods. That’s why Fair Work has been, based on facts, a boon to society.


Swan Sings Bruce

Aug 1, 2012

Who knew? Wayne Swan hearts Bruce Springsteen. But, the main point here: Swan is singing the right tune.

The poor folks at the Fin Review are wringing their hands over Swan’s new digs at the wealthy and the powerful (subscription needed) :

Acting Prime Minister Wayne Swan will ramp up his verbal attacks on Clive Palmer, Gina Rinehart and Andrew Forrest today by accusing them of using their wealth to treat the courts, Parliament, and the media as personal playthings.

In a speech lauding the political messages of US rock star Bruce Springsteen, Mr Swan will argue the billionaires have run “blatantly self-interested” campaigns since he accused them in March of threatening Australia’s “fair go” ethos.

“One tycoon is using his money to challenge the principle of fair taxation through electioneering; a second is using his money to challenge it through the courts; and a third is using her money to challenge it by undermining independent journalism,” Mr Swan will say.

The comments are likely to reignite debate about whether the Gillard government is more focused on wealth distribution than wealth creation, and suggest Mr Swan is worried about the party’s loss of its traditional working class support base.

What we love about this is that the journalist, not surprisingly, doesn’t bother to observe — because he isn’t capable of either grasping this fact or isn’t free to actually write it — that Swan is right on the money. The Palmer-Reinhart-Forrest trio, along with other extremely wealthy people, do not care about the future of the country. As I pointed out yesterday, this is a matter of priorities: do you want to make the country healthy, prosperous for all and fair, or, as one mining baron has just done, are you more interested in buying an exclusive home in Singapore.

Instead, it is an entirely false, if predictable, premise to counterpose, as the Fin Review writer does, “Wealth distribution” and “wealth creation”. I could write a treatise on this (for example, pointing out how putting more money in peoples’ hands through wealth distribution creates more wealth by giving people the ability to purchase goods) but let’s just consider one point I made last week: investing in the National Disability Insurance Scheme–which requires public funds investment, which, by definition, is wealth distribution — actually will create billions of dollars MORE in wealth over the coming decades. So, actually, economically, factually, wealth distribution creates more wealth.

I hope Swan keeps singing this tune. The Prime Minister, I think, made a real impression on the public with her steadfast defense of the National Disability Insurance Scheme and her staring down of recalcitrant state premiers who didn’t particularly think much of looking after the rights of the disabled. People want to hear truths that connect with what they see happening. Admittedly, sometimes the electoral benefits might either be slow to catch up or do not align right away. But, I think voters reward people who are truthful and courageous.

A Matter of Priorities

Jul 31, 2012

My favorite philosopher, sometimes, is a US bank robber. A guy named Willie Sutton who, when asked why he robbed banks, replied, “That’s where the money is”. Which comes to mind when we think about the Queeg of Queensland’s refusal to come up with money for the National Disability Insurance Scheme.

There is no shortage of money. Period. We don’t need to be cutting government spending because money is cheaper than it’s ever been or worrying about obsessing about very small deficits, when the choice is whether we fund the NDIS or a whole host of other projects.

But, what really brings this into sharp relief is reading about the housing options available to a few:

Mining magnate Gina Rinehart has reportedly spent $S57 million ($43.8 million) on two units, off the plan, in the Seven Palms Sentosa Cove condominium project in Singapore.

A company linked to Mrs Rinehart’s Hancock Prospecting purchased a unit on the third floor of the four-storey complex for $S23.3 million as well as a top-floor unit for close to $S33.9 million, according to Singapore’s Business Times newspaper.

There is plenty of money, certainly, if the richest among the people pay a fairer share of taxes. While we have heard a lot about a mythical inability to pay to make sure people with disabilities are afforded fair treatment (we are in a country where a child is expected to wait two years to get a wheelchair), we have not heard — but certainly we’d be happy to publish — the Queeg of Queensland’s plea to the richest among us to pay higher personal taxes, or a fair resources tax, and perhaps forgo, uh, optional housing choices so that children who need wheelchairs get them quickly.

To channel Willie Sutton, if you want to know where to go to find money so children can have wheelchairs, we’re happy to provide the addresses of a few people who are kicking back in Singapore.


Money Is Cheap

Jul 30, 2012

The “serious people” in the political world, the media and a lot of “think tanks” (where, apparently, people do very serious thinking) keep telling you, day after day, that a very important goal right now — today, immediately — is to have a balanced government budget. Never mind the need for major investments that are needed in a whole host of things like infrastructure and social services. Balance. It. Now. Except they are wrong — and they are leading us down a quite foolish path.

I know this is a bit wonky but it’s actually quite easy to understand. Money for public spending is actually quite cheap right now to get. Nobel-Prize winning economist Paul Krugman points this out, speaking mostly about the US economy but the point is relevant worldwide, that government borrowing costs are lower than they’ve been in recent memory. Why?:

The main answer is that this is what happens when you have a “deleveraging shock,” in which everyone is trying to pay down debt at the same time. Household borrowing has plunged; businesses are sitting on cash because there’s no reason to expand capacity when the sales aren’t there; and the result is that investors are all dressed up with nowhere to go, or rather no place to put their money. So they’re buying government debt, even at very low returns, for lack of alternatives. Moreover, by making money available so cheaply, they are in effect begging governments to issue more debt.

And governments should be granting their wish, not obsessing over short-term deficits.

No one is happy with the conditions that are making money so cheap to borrow — the Global Financial Crisis has brought down a world of hurt on to the heads of tens of millions of workers, while the bankers have skated by.

But, if there is a silver lining here that governments should seize, it’s that the terrible mess opens up a window of time to spend money to make some serious, long-term investments that will make the economy better for real people. Of course, some day, you do pay back debts — just like one does in paying for a child’s education, or a home or another investment that makes sense. But, right now, at a time when money is so cheap it’s almost being handed to governments for free, we should not be wringing our hands over government deficits.

By the way, Australia’s deficit, as a percentage of gross domestic product (which is how you want to look at it — think of it: it’s like your personal income…you always wants to balance how much you borrow with your ability to earn enough to pay the debt back) is 0.7 percent — a tiny amount. By comparison, China’s annual deficit is running at 2.3 percent of GDP, Japan 8.1, Canada 3.3 and on and on. The only two countries with serious big surpluses are Saudi Arabia and Norway — thanks to oil revenues pouring in.

Anyway, spend the money.



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