Saturday, July 27, 2002



Nathan Newman provides some more support for the idea of natural monopolies within the telco industry and why phoney competition is bad economics.


Following on from a couple of posts ago (AND THEY RECKON THE DEMOCRATS ARE THE FAIRIES AT THE BOTTOM OF THE GARDEN), here's another little example of corporate featherbedding via the legislative process.

Congress has just passed tougher bankruptcy laws, making it harder for people to declare bankruptcy due to credit card debt. All very well and good--personal responsibility and all that--but what about the credit card companies? As the NYTimes points out in today's editorial:

The basic outrage here is that creditors want to have it both ways. One reason that borrowers are being pushed to default and bankruptcy is that the financial companies keep pushing more and more lines of credit on people who are barely living from one paycheck to the next. The high risk inherent in this strategy is already accounted for in credit card companies' business model, in the form of steeper fees and higher interest rates for borrowers with poorer credit ratings. It's a free-market model that works for the companies. Credit card issuers have seen their profits soar in recent years.

Nonetheless, they insist on acting as if they were a utility forced to provide universal service on equal terms to everyone instead of what they are — mass mailers of five billion unsolicited credit card offers a year. They are therefore arguing that Congress is somehow obliged to protect them from the risks associated with their behavior. The Senate still has time to recognize the absurdity of this claim, and to turn them down.

Another example of free enterprise for the ordinary bod and socialism for the rich. When will we ever wean these capitalists off government supports?



Gareth Parker makes a good point about my post on Steve Earle's song about American Taliban, John Walker Lindh. The point in regard to this song, I guess, is less to do with direct censorship--though Earle will clearly suffer censorship at some level--than the knee-jerk response that emerged that presumed the song was supportive of Lindh and the Taliban.

Yeah, no-one seems to have seriously offended Earle's first amendment rights. Though I should point out that living here as I do, you get a very clear sense of what you can and can't say in regard to these matters. In fact--and this might be of interest to all those pushing for a bill of rights in Australia--my sense is that such a formal document, which theoretically guarantees a maximum of personal freedom, has paradoxically bred an incredibly conservative and conformist society.

Various freedoms might be better defined here in a legal sense, but informally it seems the existence of such rules (rights) breeds, in general, a much more stifling culture than I find back home in bill-of-rights-free Australia. The Earle case is a small example.

Then again, maybe it's not a causal link.

Friday, July 26, 2002



Just to prove that the free-market right can be just as loopy, self-deceiving and ideologically blind as the left, Jacob Sullum at Reason Magazine produces this piece of nonsense, evoking the hallowed name of the fast-fading Milton Friedman in regard to the ridiculous crowd-control charade known as the "war on drugs"

Friedman said "the war on drugs and the harm which it does are simply manifestations of a much broader problem: the substitution of political mechanisms for market mechanisms in a wide variety of areas." He estimated that "the United States today is a little over fifty percent socialist," as measured by the resources the government commands through taxes and regulation.

Friedman emphasized that "the problem is not the kind of people who run our governmental institutions versus those who run our private institutions. The trouble, as the Marxists used to say, is in the system."

In particular, he explained, the ability to spend other people's money at will means that government programs do not face the discipline that private businesses do. "When a private enterprise fails, it is closed down," he noted. "When a government enterprise fails, it is expanded."

Friedman cautioned reformers against trying "to cure a problem created by socialism [with] some more socialism" by putting the government in charge of drug distribution. He urged them to "recognize that repealing drug prohibition is part of the broader problem of cutting down the scope and power of the government and restoring power to the people."

This is priceless. Particularly this bit: "When a private enterprise fails, it is closed down...When a government enterprise fails, it is expanded."

That would explain, say, the Howard government's $2 billion a year support of the private health insurance industry? Or maybe the current prop-up of the US steel industry? Or how about the $200 billion bailout of the Savings and Loans industry? The farm subsidy bill in the US, 70% of which goes to the richest 10% of producers - in other words, agribusiness. What about the $40 billion bailout of the US airline industry post 911? How about all the bad loans from the Asian crisis that were renegotiated with help from the US and other governments and the IMF and that are ultimately paid for by the people of Asia through reduced services and higher taxes?

In fact, it might actually be easier to name the "private enterprise" that hasn't at some stage been propped, supported, rescued, or bailed out by good old taxpayers money.

No-one actually believes this nonsense do they?


The Government doesn't want to sign the United Nations protocol against torture because, according to Alexander Downer, "We think UN officials should seek the agreement of the federal, as well as in this case the state governments, to have access to our prisons, not just get off the plane at Melbourne airport and get a cab to Pentridge and walk into the prison," he said.

Well, let's forget the fact that Pentridge is now an upmarket housing and retail area - a sort of criminal chic that might only have resonance in a former penal colony. (The UN inspectors might get a very interesting idea as to how we treat our prisoners if they showed up at Pentridge.)

The issue, apparently, is sovereignty. Yes, imagine: let UN inspectors into our gaols unannounced and the next thing you know you'll have us signing up to some trade agreement that forces us to accept the decisions of non-Australian arbitrators on local workers' conditions or environmental standards.

Besides, what is it that the sanctimonious Right is always telling us pathetic lefties when we complain about more surveillance cameras, or ID cards, or increased ASIO powers or all those other little slices the freedom-loving Right likes to take from our liberty? They say, all most in unison: "if you haven't done anything wrong, you have nothing to fear."

Well what's good for goose is good for the Downer, no?


I know why people send anonymous emails, I just don't know how - the latest one I got seems stripped of all identifying information. How? Is it just through sites like this?

Anyway, the latest act of email bravery took objection to this line from this post: "Yes, imagine: let UN inspectors into our gaols unannounced and the next thing you know you'll have us signing up to some trade agreement that forces us to accept the decisions of non-Australian arbitrators on local workers' conditions or environmental standards."

Doesn't happen, according to my secret admirer.

Well, I guess nym could just read an actual agreement, but that might be a bit long. Try this NYTimes editorial:

The North American Free Trade Agreement allows investors to sue governments if they are subject to acts "tantamount to expropriation." A Canadian company is now suing California for $970 million because the state is phasing out a gasoline additive found to contaminate water wells. Companies have won such cases, and these special courts have even overridden a Mississippi jury. Just the threat of a suit is discouraging governments from imposing necessary environmental regulations. American trade officials acknowledge the problems, but the identical rules have popped up again in the draft text of the Free Trade Area of the Americas.

Such actions, it must be added, take place in secret courts, which are not to be referred to as star chambers under any circumstances.

No doubt my nameless, faceless, email-addressless correspondent would applaud such secrecy.



Toby Keith might get a pat on the back from blue-blooded patriots for the piece of war-mongering drivel quoted in the previous post, but in another example of conservative political correctness, you are just not allowed in the land of freedom to offer anything with a bit more complexity.

Just ask Steve Earle.

He's written a song which is kind of a ballad about "American Taliban" John Walker Lindh, and he has been abused from pillar to post by those freedom-of-speech loving patriots of the American right.

As this article explains, the song doesn't praise Lindh or Allah or Islam, but it has been interpreted as doing all three as well as being found guilty of Anti-patriotic sentiments and hate of America.

More stuff here, here and here.

John Walker's Blues' lyrics

By Steve Earle

I'm just an American boy raised on MTV

And I've seen all those kids in the soda pop ads

But none of 'em looked like me

So I started lookin' around for a light out of the dim

And the first thing I heard that made sense was the word

Of Mohammed, peace be upon him

A shadu la ilaha illa Allah

There is no God but God

If my daddy could see me now -- chains around my feet

He don't understand that sometimes a man

Has to fight for what he believes

And I believe God is great all praise due to him

And if I should die I'll rise up to the sky

Just like Jesus, peace be upon him

We came to fight the Jihad and our hearts were pure and strong

As death filled the air we all offered up prayers

And prepared for our martyrdom

But Allah had some other plan some secret not revealed

Now they're draggin' me back with my head in a sack

To the land of the infidel


This is a bit of a hit here at the moment: putting the count into country and western, as Johnny Cash's daughter once said.

Courtesy Of The Red White And Blue

Toby Keith

American girls
And American guys
We'll always stand up and salute
We'll always recognize
When we see ole' glory flyin'
There's a lot of men dead
So we can sleep in peace at night
When we lay down our heads

My daddy served in the army
When he lost his right eye
But he flew a flag out in our yard
Till the day that he died
He wanted my mother
My brother
My sister and me
To grow up and live happy
In the land of the free

Now there's places that I love
That's fallen under attack
A mighty sucker punch came flyin' in
From somewhere in the back
Soon as we could see clearly
Through our big black eye
Man we lit up your world
Like a Fourth of July

Hey Uncle Sam put your name at the top of his list
And the Statue of Liberty started shaking her fists
And the Eagle will fly
And it's gonna be hell
When you hear Mother Freedom start ringing her bells
And It'll feel like the whole wide world
Is raining down on you
Brought to you courtesy...
Of the RED, WHITE, and BLUE

Oh..Justice will be served
And the battle will rage
This big dog will fight
when you rattle his cage
You'll be sorry that you messed with
the U S of A
Cause we'll put a boot in your ass
It's the American way

Hey Uncle Sam put your name at the top of his list
And the Statue of Liberty started shaking her fists
And the Eagle will fly
And it's gonna be hell
When you hear Mother Freedom start ringing her bells
And It'll feel like the whole wide world
Is raining down on you
Brought to you courtesy...
Of the RED, WHITE, and BLUE

Brought to you courtesy...
Of the RED, WHITE, and BLUE


The Government doesn't want to sign the United Nations protocol against torture because, according to Alexander Downer, "We think UN officials should seek the agreement of the federal, as well as in this case the state governments, to have access to our prisons, not just get off the plane at Melbourne airport and get a cab to Pentridge and walk into the prison," he said.

Well, let's forget the fact that Pentridge is now an upmarket housing and retail area - a sort of criminal chic that might only have resonance in a former penal colony. (The UN inspectors might get a very interesting idea as to how we treat our prisoners if they showed up at Pentridge.)

The issue, apparently, is sovereignty. Yes, imagine: let UN inspectors into our gaols unannounced and the next thing you know you'll have us signing up to some trade agreement that forces us to accept the decisions of non-Australian arbitrators on local workers' conditions or environmental standards.

Besides, what is it that the sanctimonious Right is always telling us pathetic lefties when we complain about more surveillance cameras, or ID cards, or increased ASIO powers or all those other little slices the freedom-loving Right likes to take from our liberty? They say, all most in unison: "if you haven't done anything wrong, you have nothing to fear."

Well what's good for goose is good for the Downer, no?

Thursday, July 25, 2002



Was interested to see that The Hampster has Kevin Phillip's Book Wealth and Democracy on their recommended list.

Phillip's is the lefties righty of choice at the moment, and with good reason - he tells the truth.

There's a pretty good review of the book here, and it includes an especially critical account of the increasingly unpopular George W.


Corporate Fraud:
Accounting Industry Contributions to the Conference Committee

By Vikki Kratz

Members of the House-Senate conference committee that drafted
the final version of the accounting reform bill before Congress
today have received more than $770,000 from the industry since
1999. To see a complete breakdown of contributions to members of
the committee, click here:


In a warm reminder of the heady, fun days of mad cow disease in Britain, US food authorities have in the last couple of days ordered a recall of beef, the second largest such recall in US history.

Seems some people got a bit sick from ecoli in the meat. Whoops. Had to go to hospital.

In a case of deja vu all over again--and we've been telling you market fundamentalists this for years--a consumer-group spokesperson told The Washington Post:

"USDA has really taken the teeth out of the meat safety program because they seem to be unwilling to close plants that continually violate the government's food safety standards," said Caroline Smith DeWaal, director of food safety at the Center for Science in the Public Interest, a consumer advocacy group. "USDA has a history of being a cheerleader of the meat and poultry industry rather than a watchdog."

A meat industry spokesperson blamed consumers for not cooking meat properly. "Six or seven hours at 450F is generally enough to kill most of the unregulated germs in our product," he was not quoted as saying.

In what can only be described as an ill-timed comment bordering of faux pas of the year, Janet Riley, a spokeswoman at the American Meat Institute, reassured Americans that: "The U.S. meat industry is more heavily regulated than any other industry."

What, even more than the finance sector??

Anyway, it's just lucky American's don't eat many meat products like, say, um, hamburgers or something.


On some cable audience-participation show last night, many people were wondering out loud why, if they stole a few bucks from the tea money tin at work they'd be hauled out in handcuffs, while the corporate crooks who steal millions and billions and maybe even trillions by moving magic numbers around a balance sheet are allowed to surrender quietly at courthouses (that's if they're even charged).

Well, the people speak and the authorities answer. On the front page of the NYTimes this morning, there was John J. Rigas, 78, the founder and former chief executive of Adelphia, being led off (though not in handcuffs) for what the paper called using his company, one of America's largest cable companies, as "his personal piggy-bank".

And then, turn over to the business section, and there on the front page is John J's son, Michael, in similar pose for similar crimes.

Believe me, don't swallow the vaguely soothing tones of the media that this is all nicely and inevitably sorting itself out:your "ordinary American" here is pissed off and they want to see some action. Forget the crap about markets correcting themselves and capitalism punishing people by lowering stock prices: it's going to be good old fashioned grassroots democracy that drives this issue along. If not your actual money-lust brand of revenge.

If the Democrats ever wanted to make a pitch for middle America, this is the time to do it. Trouble is - well we know what the trouble is, don't we?


Full marks to Jack Robertson for his logical appraisal of the illogical rantings of Miranda Devine. Sure looks to me like he's found a contradiction in her efforts.

But Jack, she'll never admit it and neither will any of the other touts for the genius of the free market system. A handful of people abuse social security and we have to end "welfare as we know it": a bunch of corporate crooks fleece the punters, manipulate markets for years on end (especially in electricity), pay off the legislators, fund the think tanks that provide the intellectuals who write the philosophical justifications for the whole cess-pit (by saying freedom a lot, saluting the "individual", and saying Stalin occasionally to scare the waverers) and then willfully and systematically collude to cover it up and this is just a few bad apples and the market correcting itself.

Jack, these people have the distinct advantage of arguing from the conservative position of "whatever is happening now is right isn't so bad" even if whatever is happening now is the complete opposite of what they said was right six months ago. How do you argue with "well it's not perfect, but it's the best we can do"? It's like the "if it's not broke" argument of the republican referendum: it is self-servingly effective because it holds up an unknown alternative future and says, "but what if it all goes wrong? Safer to stick with what we have, even if there are problems with it."

But even if they themselves won't admit their mistakes, if you keep pointing them out, then just maybe enough people will stop listening to them.

But the argument will only be won one slow post at a time.

Wednesday, July 24, 2002


"Recessions catch what the auditors miss."

Nice interview with JK Galbraith the elder. Small extract:

"I've been tracking this matter for a lifetime, and my greatest surprise was the sheer scale of the inadequacy of the accounting profession and some of its most prominent members. I've been looking at auditors' signatures all my life, but I will never again do so without some doubts as to their validity. There must be the strongest public and legal pressure to get honest competent accounting." However belatedly, Galbraith believes that may happen. Indeed, the whole philosophy with which he is identified, of corporate regulation and greater public control of the private sector, may be edging back in favour, two decades after it went out of fashion under Ronald Reagan.


There really is something called the Citizens for a Sound Economy, and here's how they describe themselves:

What CSE does:

Citizens for a Sound Economy recruits, educates, trains and mobilizes hundreds of thousands of volunteer activists to fight for less government, lower taxes, and more freedom.

Why we do it:

CSE believes individual liberty and the freedom to compete increases consumer choices and provides individuals with the greatest control over what they own and earn.

How we do it:

CSE’s aggressive, real-time campaigns activate a growing and permanent volunteer grassroots army to show up and demand policy change.

Good to know they work in real time and not, like so many organisations, pretend time.

Anyway, one of their campaigns is to change textbooks, and their 'real time' campaigns have a lot of real publishers real scared. Lefty dinosaur Donahue had one of their freedom loving number on last night and revealed as amongst their successes these blows for freedom:

Changes to a environmental science textbook:

It used to read: “Destruction of the tropical rainforest could affect weather over the entire planet.”

It now reads: “Tropical rainforest ecosystems impact weather over the entire planet.”

Isn't this the very sort of political correctness conservatives have been whingeing about for years and years? Up to and including the mangled syntax and dubious verbs. Wasn't this the very sort of "damage to our language" that conservatives hated?

That it changes the meaning of the sentence is the point of the exercise.

Other things they'd like changed include this quote from a social studies textbook: “In a communist system the central government owns all property such as farms and factories for the benefit of its citizens.”

The spokesperson explained:

Communism is not for the benefit of its citizens. As a matter of fact, we are a free market state and if that were not all that’s said, if there were more added to that, I might not have a problem with it, but these are sixth graders. These are sixth graders that we think that is basically instilling in them the sense that communism is the right way to go. It’s for the good of all people. Communism is not. It is a failed system. We need to be teaching that there are problems with communism and this is why. You don’t own property under communism. You don’t have the freedoms we enjoy today under communism.

She's seems to have missed the point that the book is talking about theoretical communism, not Soviet communism.

And I wonder what she thought of President of the World Bank, James Wolfensohn's comments about Cuba?: ''Cuba has done a great job on education and health,'' Wolfensohn told reporters at the conclusion of the annual spring meetings of the Bank and the International Monetary Fund (IMF). ''They have done a good job, and it does not embarrass me to admit it.''

Methinks it would embarrass the CSE, to the point of conniption. No doubt their freedom-loving real-time activists will start calling for Volfie's resignation. (Though they might want to be careful protesting outside the WB: they might be mistaken for anti-globalisation types.)

They also didn't like this line from the same book and it led to this exchange with Phil:

DONAHUE: “Another advantage is that people do not have to worry about what they will study or where they will work or if they might lose their job because these decisions are made for them.” You don’t like that?

VENABLE: Absolutely not. I think the bottom line is if it said more, it simply says that these decisions are made for them.

DONAHUE: So the kid will think, boy, this is wonderful.

VENABLE: Some lazy kid might think that sounds just great.

Of course, no-one in a free-market system ever gets told what to study or where to work. Next time your boss at IBM tells you to move to the Seattle office, you ring up the CSE and tell them you are being hounded by communists. They'll be there in real time.

Just like the PC lefties of yore, these new PC righties are as afraid of personal freedom and freedom of expression as any control-freak can be. They don't want free speech: they want right talk. And they're pretty successful.


Not one to waste his immense influence and standing in the world of journalism, Tim Blair is going after the big end of town. Read his devastating critique of some people who sent letters to The Age! Who says guts in journalism is dead?


Nearly everyone in the country might be calling for Harvey Pitt's resignation as chairman of the Securities and Exchange Commission here in the US, but Harvey--in best CEO fashion--has decided that the worse things get, the more he should be paid. So he's asking Congress for a pay rise.


Warren Buffet is probably the richest and most successful stockmarket player in history. And he reckon's the system is crooked and it is mainly CEOs to blame:

For many years, I've had little confidence in the earnings numbers reported by most corporations.
I'm not talking about Enron and WorldCom — examples of outright crookedness.
Rather, I am referring to the legal, but improper, accounting methods
used by chief executives to inflate reported earnings.

The most flagrant deceptions have occurred in stock-option
accounting and in assumptions about pension-fund returns. The aggregate
misrepresentation in these two areas dwarfs the lies of Enron and WorldCom.

Sounds like your working definition a systemic problem, even if it manages--through manipulation of laws and regulations--to stay this side of legal.

Also interesting is his take on stock options. As things currently work, these are generally not counted as an expense, one of the accounting "anomalies" given most attention lately. For some, fixing this one up seems like an easy an obvious first step. Others have resisted. For instance, Michael Lee over at Online Opinion thinks that there is some problems with the idea and gives an explanation.

Warren Buffet offers the CEOs of the world this challenge:

For these C.E.O.'s I have a proposition: Berkshire Hathaway (Buffet's investment company)
will sell you insurance, carpeting or any of our other products in exchange for options identical to
those you grant yourselves. It'll all be cash-free. But do you really think
your corporation will not have incurred a cost when you hand over the
options in exchange for the carpeting? Or do you really think that placing
a value on the option is just too difficult to do, one of your other excuses
for not expensing them? If these are the opinions you honestly hold, call me collect. We can do business.

I don't think he's expecting too many takers.

Tuesday, July 23, 2002



Being away from Canberra and not having seen the finished product, I was curious as to what Reconciliation Place actually looks like. Being a bleeding heart, black-armband carrying lefty, I was genuinely curious as to how it all turned out. I went surfing, of course, and found this description of the site from the winning designer. I hope his design skills are better than his English:

Reconciliation Place offers a diverse, compelling and positive experience. It will be a place where both Indigenous and non-Indigenous Australians want to be.

Well, let's forget the little problem of the tenses, but this isn't getting off to a good start.

The design approach has been to provide a framework— a potent structural, spatial and experiential environment, with the potential to receive meaning over time.

I think he means the idea was to do a good job, create something relevant, and he hopes people will like it and have their own ideas about it. Either that, or he thinks it is a relay station for alien communications. Which might explain his English.

Surrounded by the vertical mass of the National Institutions, Reconciliation Place lays a myriad of forms stretching horizontally as a transect along the ground plane, linking the National Library to the National Gallery, establishing the East–West Promenade.

I suspect that "the vertical mass of the National Institutions" are buildings. "Stretching horizontally as a transect along the ground plane" probably means lying on the ground. But is anyone getting much of a picture here yet?

Large fragmented slivers of glass, stone, steel or concrete extend across the Parliamentary Zone. They are irregular, but generally form a grain on the length of the promenade. The slivers are added over time and carry inscriptions or artwork that, through teaching, learning and experience, further the process of reconciliation.

The only zone this guy is in is the Bad English Zone. I'm intrigued by that "or" in the first sentence too. Doesn't he know what the "large fragmented slivers" are made of? And they can't be very big because they only "form a grain" and they do this, apparently, "on the length of the promenade", which I guess means on the promenade, which I guess means on the ground. And I don't know about furthering the process of reconciliation, as I can't reconcile the words with their meaning. BTW do you know what it looks like yet?

From elevated positions at either end of the promenade, the slivers establish a datum across the land, but from within, the composition comes alive. The slivers are adorned with colour. The slivers create spaces for events, fire and water. Outdoor rooms blend into narrow corridors, inscribed with detailed writings or from which sounds are percolated.

I can't remember the last time I established a datum. And is that my latte percolating?

At points along the promenade, views of surrounding spaces and buildings can be glimpsed, connecting them laterally to the promenade, and to each other. At the midpoint of the East–West Axis, the slivers splice the mound, a broad convex landform, centred on the Land Axis. Rising effortlessly, emerging from the enclosure of the promenade, new horizons are revealed. The mound is a contemplative space. It is outward looking—each position suggests an individual perspective.

The slivers splice the mound? Wasn't that a Sharon Stone movie? And yes, the mound IS a contemplative space. The mound just is, really. Om.

The immense passage of open space defining the land axis crosses the promenade and leads down to the lake and beyond to the War Memorial. To the side, offering a place to rest is a notch scalloped from the broad surface with local gums and native grasses. A ramp around the base edge of the mound extends seamlessly to link Reconciliation Place with Commonwealth Place.

An "immense passage of open space defining the land axis" is, I think, something like a footpath. Or a track. And if you follow it, you pass the War Memorial. And I'd really like to know how they scalloped that notch "from the broad surface" (I think this clause needs an indirect object) "with local gums and native grasses." They must be really tough grasses.

In the other direction, the top of Capital Hill is visible over Old Parliament House. A slice from the edge of the mound provides a podium for large gatherings on the great lawn for concerts or protests. The composition for Reconciliation Place offers a diverse environmental framework for the possible interpretation and representation of Indigenous cultures in the form of spaces for art, surfaces for stories, forums for events and places of celebration. The slivers, mound and pathway offer opportunities for many personal journeys and different paths toward reconciliation. It is both vibrant and challenging.’

Yes, I will be taking many personal journeys, my sliver and mound in hand. And I don't know about vibrant, but it sure sounds challenging.

But what does the fucking thing look like!!!!!!!!!!!!!!!!!!!!!!!



Somewhat intrigued by this little comment in the middle of John Howard's opening address at the new Reconciliation Place in Canberra:

People will have different views as to how to advance the reconciliation process
and there will be a legitimate further debate about the contributions that will need
to be made to Reconciliation Place. But there will be no debate about the desirability
of placing at the symbolic national centre of the constitutional life of this nation,
a special area which not only honours the contribution of indigenous people to this
country and their central role in our being as Australian, but also honours
the importance of the process of reconciliation.

What does that bit about "their central role in our being as Australian" mean?


Here's an extract from an article that provides one teeny example of why the "we can't regulate business" line is a nonsense and why what happened with Enron was to some extent avoidable and why big business shouldn't have this sort of access to the legislators and regulators:

A few days after the 1992 election, Enron and several other companies began
petitioning the Commodities Futures Trading Commission for an exemption
from regulatory oversight on energy derivatives contracts. A few weeks later, lame-duck
chairman Wendy Gramm and one other commissioner (the commission was
short two of its five members) exempted the energy companies from CFTC's
authority. And Bryce reports in his book that the companies were exempted
even if the contracts they sold were designed to defraud or mislead buyers!
The then-chairman of the subcommittee with jurisdiction over the CFTC,
Rep. Glen English, said, "In 18 years in Congress,
this is the most irresponsible decision I have come across."
Give that man the Cassandra Award.


The nearly invisible Aden Ridgeway, rumoured to be the deputy leader of the Australian Democrats, has come out of his cubby-hole with boss Natasha os and pronounced that the Democrats should move to the right to pick up disaffected Liberal voters.

Geez, it was worth waiting for that one.


A note to say that while Max of Maxspeak is away for a week, his blog is being run by the Sandwichman, who is promising a week of "a series of runs at the work ethic -- as ethic, as myth, as nostrum. Occasionally, it may seem repetitive as I rework material I have already presented. Some of what I write may be baffling. My excuse is, "we're going on a baffle hunt." The only way past the baffle is through it."

Could be good.


Never cease to be amazed how many free-trade advocates are also border-protection freaks.

Greg Palast once wrote:

As an American, I couldn't get my head around Britain’s 'asylum' hoo-hah. At the last election, Tony Blair and William Hague seem to be competing for the post of Great White Hunter, stalking 'bogus' asylum seekers among the herd of 'legitimate' ones.

In America, we don't have asylum seekers; we have immigrants. Lots of them - 29 million by the low-ball official census, with 1.2 million more coming in each year. US cities compete for prime-pick foreign workers as they would for a foreign auto plant.

To prove the point, and in a move that would probably go down like a cup of cold sick with the Howard Government, House Democrats are preparing legislation that would grant permanent residency status to millions of illegal immigrants.

The story is followed up on by the Cato Institute, free marketeers who have the courage of their convictions:

It would be a national shame if, in the name of security, we were to close
the door to immigrants who come here to work and build a better life for
themselves and their families.

They refer us to an article by one of their number with the very unHoward Government title of "Don't Blame Immigrants for Terrorism."

They also cite a couple of other pieces they've produced on a similar theme:

In the latest Cato Handbook for Congress, Griswold calls for easing
immigration laws
and expanding quotas for immigrant workers.

In "Keep Giving UsYour Best and Your Brightest," Stephen Moore argues that "immigrants are generally assets to our economy and our culture."

Okay, so it all tends to commodify them, and singles out the ones who can be "useful" to "us" - but it seems better to me than locking them and their children in prisons in the desert.


This piece is copyright from The Washington Spectator a monthly, subscription only newsletter.

Despite some hefty stock market losses among members of Congress, as revealed in their annual financial-disclosure statements, there are still 40 millionaires in the Senate - 23 of them Republicans, 17 of them Democrats. Seven of them are women.

The rules controlling the financial statements required of members of Congress allow them to make very flimsy income estimates, listing their assets in broad ranges, such as $15,000 to $50,000, $1 million to $5 million, or over $50 million. For example, both Senators Bill Frist (R- TN) and Dianne Feinstein (D-CA) reported holding between $5 mil-lion and $50 million in blind trusts, which they do not control. That's quite a spread.

Twenty-six senators have revealed that they are multi-millionaires, and 10 list a net worth of $10 million or more. At the top is Senator John Kerry (D-MA), reporting assets of$139,742,000.

The poorest senator is Tim Hutchinson (R-AR), who reported $2,000 in assets and $15,000 in liabilities.

Of the Senate millionaires, the top 10 are Kerry of Massachusetts, Herb Kohl (D-WI), Jon Corzine (D-NJ), John D. Rockefeller (D-WV), Lincoln Chaffee (R-RI), Dianne Feinstein of California, Bill Frist of Tennessee, John McCain (R-AZ), John Edwards (D-NC), and Ted Kennedy (D-MA).

Hillary Rodham C1inton (D-NY) ranks 15th.

There are fewer millionaires in the House, but is does have Congress's one billionaire, Representative Amo Houghton of New York, a G.O.P. liberal whose family founded the Coming Glass Works.


Here's what their pacakage includes as a member of Congress:

Congress: Rank-and-File Members' Salary

In December, 2001, Congress voted not to block a scheduled pay increase raising the annual salary for a rank-and-file Senator or Representative by $4,900 to $150,000 per year. This increase, the third in the last four years, goes into effect on Jan. 1, 2002. Since 1990, congressional pay has increased from $98,400 to $150,000.

• Members of Congress are also allowed to make an additional maximum 15 percent of their salary from outside sources, like speaking, legal practice and consulting. In addition, they are allowed unlimited income from book royalties.

• Members are free to turn down pay increase and some choose to do so.

• In a complex system of calculations, administered by the Office of Personnel Management, congressional pay rates also affect the salaries for federal judges and other senior government officials.

Congress: Leadership Members' Salary
Leaders of the House and Senate are paid a higher salary than rank-and-file members.

Senate Leadership
Majority Leader - $161,200 (Sen. Thomas Daschle)
Minority Leader - $161,200 (Sen. Trent Lott)

House Leadership
Speaker of the House - $186,300 (Rep. Dennis Hastert)
Majority Leader - $161,200 (Rep. Dick Armey)
Minority Leader - $161,200 (Rep. Richard Gephardt)

• The same rules of income from outside sources apply to both leadership and rank-and-file Members of Congress.
Congress: Raises

• A cost-of-living-adjustment (COLA) increase takes effect annually unless Congress vote to not accept it.

Congress: Benefits

Members of Congress receive retirement and health benefits under the same plans available to other federal employees. They become vested after five years of full participation.

• Members elected since 1984 are covered by the Federal Employees' Retirement System (FERS). Those elected prior to 1984 were covered by the Civil Service Retirement System (CSRS). In 1984 all members were given the option of remaining with CSRS or switching to FERS.

• As it is for all other federal employees, congressional retirement is funded through taxes and the participants' contributions. Members of Congress under FERS contribute 1.3 percent of their salary into the FERS retirement plan and pay 6.2 percent of their salary in Social Security taxes.


Excellent, excellent response by Robert Corr to more anti-refugee ranting from Paul Wright.

This is what blogging can do, in the right hands.

Sorry Paul, round 2 to Robert.


John Quiggin joins the mini-exchange between me and Gareth Parker about the length of blog posts. Length is less of an issue than quality. The appeal of the individual blog lies in the unique framing and presentation of an issue or issues. The blogs I like are the posts that add a bit of value to the basic story, either through the bloggers genuine insight or a simply their personal take on a story. Sometimes it lies in simply an interesting juxtaposition of links, joined up with a bit of bridging by the individual blogger.

Don Arthur is very good at this, for example.

What I'd hate to see is norms established where blogging has to be one thing and one thing only.


The NYTimes notes today that:

Senior credit officers of Citigroup misrepresented the full nature of a 1999 transaction with Enron in the records of the deal so that the energy company could ignore accounting requirements and hide its true financial condition, according to internal bank documents and government investigators.

So another bad apple is added to the bunch, and, as Frank Rich said on Sunday, that malignant orchard is creeping closer to the White House:

But the hypocrisies of the Democrats, however sleazy in their own right, do not cancel out the burgeoning questions about this White House. Each time Mr. Bush protests that only a few bad apples ail corporate America, that mutant orchard inches closer to the Rose Garden. If there's not a systemic problem in American business, there does seem to be one in the administration, and it cannot be cordoned off from the rest of its official behavior. Compartmentalization, Republicans of all people should know, went out of style with the Clinton administration.

Meanwhile, Paul Krugman is pointing out the flaw in the Administrations' line that the "fundamentals" are fine: they aren't.

A good first step would be to stop trying to talk up the market by extolling the economy's fundamental strength. For one thing, it reeks of desperation. For another, stocks are still richly valued compared with earnings. Most important, the fundamentals aren't actually all that great. Doubts about corporate governance are growing, not fading away. State and local governments are in a desperate fiscal crisis. And even before the sudden plunge in the markets, the data were pointing not to a boom but to a "jobless recovery," in which the economy grows too slowly to make much if any dent in the unemployment rate.

Relatedly, in a confusing article, Lester Thurow warns that regulation is not the answer, that "scandals are endemic to capitalism", and that we have to just accept that most of the people involved in the stock market are crooks, sort of, and he warns off ma and pa investors:

So what can be done about the inevitable scandals of capitalism? The first and best solution is to warn all small investors that the game is rigged. No individual investor, no matter how well informed, can play on the same level as the major institutional investors, Wall Street firms and corporate executives, who receive more accurate information more quickly than the average viewer of CNBC. The major players talk all the time, and very little of what they learn becomes known to the general public; that is what the investment banker Herbert Allen's annual summer get-together of media moguls in Idaho is all about. Of course, such meetings are not illegal. But neither do they inspire confidence in the openness and honesty of the system.

And while he says that the "best any government can do is contain the damage, and the best any individual investor can do is get out of harm's way" and that "It is naïve to think that changing the rules governing the accounting profession is going to alter this culture", he also thinks that "what we mean by a basically sound system [is] one in which actions are rapidly taken to restore order and punish those who have transgressed the rules."

What I don't quite get is why he wants us to enforce rules already on the books while suggesting that it is useless to implement new rules. Does he mean that the old rules are the only ones that are any good and new ones are by definition not good? What about all the rules and regs that have been dumped since the time Reagan? They were bad anyway and the ones that were left were the good ones and we should just enforce them and not try to improve the system? I mean, if you argued his line from scratch, we'd never have any rules in the first place, so why is it so wrong to to try and respond now with some new rules, even if they find new ways around them?

Seems to me he is right to an extent--there is a bit of regulatory musical chairs that goes on--but this is true of any law enforcement situation. It used to be legal (or rather, wasn't within the realm of law) to harass woman at work, for instance. On Thurow's logic, this was going to happen anyway, and we shouldn't have bothered trying to regulate it. In fact, the regulation defines the problem in the first place, and the role of law is not just to provide sanction but to provide the parameters of acceptability within a society.

So let's get some laws out there that say you can't cook the books more precisely than the laws we have now. Even if the clever dicks still manage to find new recipes for their accounts.


In the absence of satisfying work, the one true dream of many is to not work at all. Nothing reflects more badly on our current state of affairs than this hate of work, because it means too many of us do hateful work. Surfdom is definitely a place where work is voluntary, to be pursued only if you really want to.

Meanwhile, back on the long, hard road to surfdom, well, most of us have to work.

So it is with interest that we note that this new report by the Industrial Relations Commission on Working Hours Case - July 2002, (Hours of work claim by ACTU for test case standard - annualised wage rates and other matters - claim by ACCI).

The SMH gives it good coverage here, here , here and here.

Given that the entire system that we currently operate in is predicated on extracting more and more out of each input, including we labour inputs, and that this is considered by advocates to be the best system possible and inevitable, it is interesting to see an organisation taking a little step back from the precipice of eternal work, stilling the whip-hand.

The commission ruled:

"The evidence satisfies us that working time arrangements and patterns of hours worked have changed significantly in Australia over recent decades.

" Weekly hours worked by full-time employees have increased over the past two decades from 38.2 in August 1982 to 41.3 in August 2001. There has also been a substantial reduction in the proportion of workers who work what have traditionally been referred to as 'standard hours'.

"Extended hours are worked across a range of occupations, industries and income levels.

"A significant proportion of employees work overtime hours which are unpaid in the sense that the overtime is not directly compensated by a monetary payment linked to the number of overtime hours worked."

Employers didn't welcome it as small step forward but as a great, big, fat setback backwards (though there was tone of resignationintheir whinging), and, in time-honoured fashion, evoked the threat of overseas competition:

Australian businesses will find it harder to compete with foreign companies as a result of the IRC finding, a leading employers' organisation said today.

National Employers' Federation of Australia chief executive Garry Brack said: "To be competitive as a nation businesses need to know that when a customer comes in and says 'I need it by Thursday', and it means overtime to get it done, businesses can be certain that it will be done.

"The more we fail to respond to short-term demand the more people look for solutions elsewhere."

He also added that "This invites people to say no to overtime and makes it harder to employers to ensure the work gets done," he said.

And he said it like it was bad thing.

This is a big issue as far as I'm concerned and I've got a few follow up pieces to come, including some advice on how to become the most efficient corporation in the world, a title currently held by Wal-Mart.

Anyway, the road to surfdom just got a tiny bit easier. Take a minute from your busy schedule, break out the Snickers bar, and have a little think about that.

Monday, July 22, 2002



Heath takes exception to my claim that markets create winners and losers and says: "Markets don’t by their nature create winners and losers. Free markets are based on the idea of trading value for value. I give you money and you give me something I want (a book, an icecream, medical services) in return. Both parties benefit from the transaction as they both get something they want – a win/win."

Hmm. I should've been clearer, but Heath still makes a basic mistake. What he describes is more an exchange in a market bazaar than the complex exchanges of a contemporary market system. It is a common error, but an error nonetheless to equate that sort of market with the market system at the heart of contemporary capitalism. The latter is about extracting profit, not exchanging goods, and it is a reasonably modern development. To equate the market exchanges of pre-capitalism with the market forces of the contemporary world--as if one was the logical and natural development of the other--is to make a category error. Commerce and capitalism are not the same thing.

Despite the coercion implied in that expression "market forces", a market advocate like Heath is likely to stress the "freedom" involved in such transactions, with everyone involved entering into the exchange freely. They might concede that, for the exchange to be profitable (in the contemporary sense) the transaction "forces" the participants to act "rationally" to achieve an optimal exchange--the so-called "market discipline" of legend--but that might be as far as it goes.

Yer basic troglodyte socialist might add the concepts of labour commodification and even class exploitation--both good points IMHO--but even that is to miss the point a bit.

The key difference between the two types of "market" are that the pre-capitalist form is indeed an opportunity for exchange, and was not driven by the need to "improve" production or output for profit. The historical story of how one changed to the other is interesting, but not necessary here. But once the imperative of improvement, competition and profit-maximisation entered the scene, the market system ceased to be merely for exchange and became predicated on the extraction of profit. (If you watch the video of the growth of capitalism in rural England as it displaced feudalism, you can just about freeze-frame on the moment this happens.)

When society is organised on such "free market" terms the very continuation of life requires us all to operate within market and according to its logic of profit-maximisation and competition.

Thus the wonderful, creative productivity of the capitalist system, but also its awful relegation of any aspect of life that doesn't enter into profit maximisation, and thus its central tendency to create winners and losers.

So I stick by my claim: There will be winners and losers; that's what competition is.

But even on Heath's own terms, especially in regard to something like health care, there are going to winners and losers. As he says: "I give you money and you give me something I want (a book, an icecream, medical services) in return. Both parties benefit from the transaction as they both get something they want – a win/win." Um, but where do they get the money, Heath? And if you don't have the money to pay for the thing you need (not want), you lose.

He also doesn't like that I called health care a public good. He says I merely assert that it is such, and in a sense, he's right. I offer it normatively--it should be a public good. We all benefit from a healthy society, quite apart from the moral question of not letting people die or suffer just because they can't pay the going market rate.

Like I said before , if "marketisation" of health was the way to go, here in the US would have a system to die for. Which they do.


Me at the boys and girls over at Catallaxy all share an admiration for that other Austrian, Fred Hayek. We both pinched our blog names from his work and would roughly concur about the centrality of individual freedom in the scheme of 'the human condition'. Of course, I have more trouble with Fred's admixture of tradition and free markets than I think they do (maybe wrong) and can't be quite as blase about inequality as Fred was, but, hey.

Fred was genius, a great polemicist, and I wish I had half of his breadth of learning and even insight. He was also fearless in standing up to what he saw as the "centralist" orthodoxy of his day--not an easy thing to do. But then, as sometimes happens, Fred became the orthodoxy, which puts his contemporaries in the position of, unlike him and fighting against the mainstream, firmly on the side of defending it.

Fred wanted, justly, to be remembered for his economic work, but feared that it was his book The Road to Serfdom that would account for most of his posthumous fame. I fear he might have guessed right. As Ha-Joon Chang has pointed out:

The biggest contradiction in the Neo-Liberal research programme comes from the
fact that it was born out of a marriage of convenience between Neoclassical economics as
the source of intellectual legitimacy (given its dominance in the academia) and what may
be broadly called the Austrian-Libertarian tradition as the source of political rhetoric. The
gap between these two intellectual traditions is not a minor one, as those who are familiar
with, for example, Hayek's scathing criticism of Neoclassical economics would know
(e.g., see essays in Hayek, 1949). However, the marriage of convenience goes on, because
the Austrian-Libertarian tradition supplies the popular appeal that Neoclassical
economics can never dream of supplying itself (who's going to risk their lives for "Pareto
Optimality"? - but many have been willing to for "liberty" and "entrepreneurship"), while the Austrian-Libertarian tradition, given its lack of intellectual legitimacy in "respectable" circles, needs the aura of "science" that Neoclassical economics carries around.

Anyway, this is probably apropos of nothing. I just like talking about Fred.

So despite our mutual respect for said Fred, Jason and Heath take me to task for various predictable and unpredictable reasons.

Jason thinks I'm mean to John Howard, and that I was wrong to point out the gulf between his (Howard's) rhetoric about the evils of state provision and his entire public life as a, um, public servant - especially when it stretches to $9000 a night rooms in flash hotels. For godssake: Howard had two floors at the Willard in Washington. Surely that's a little OTT and perhaps sits a little uncomfortably with fend-for-yourself rhetoric Howard is not adverse to deploying?

Somehow, Jason thinks this means I'm against anyone starting "poor" and doing well. For a start, as if Howard used to be poor. Second, I'm all for the state helping the poor out, providing scholarships, free universities etc. That's what we lefties do - we steal your money and give to others. Tax and spend, baby - as out of date as Austen Powers. But I'm a little more circumspect about them (the good citizens) providing multi-million dollars tours of the US and Europe for politicians, and, I repeat, find more than a little inconsistency in the likes of Howard not batting an eye-lid at this public largesse.

Jason also thinks he can't find "any reference in the Howard quote...that Dunlop critiques to a frontiersman myth". The bit I quoted said "Our pioneer past, so similar to your own, has produced a spirit that can overcome adversity and pursue great dreams...."

Um.....?? This ref from the Bloomsbury thesaurus might help: forerunner, foregoer, herald, harbinger, messenger, announcer, crier, frontrunner, lead runner, leader, vanguard, scout, reconnaissance party, guide, pilot, explorer, pathfinder, trailblazer, avant-garde, avant-gardist, groundbreaker, pioneer, frontiersman, founding father, trendsetter, innovator, inventor, discoverer

Most odd is this leap into desparate unreality: "Tim's argument reminds me a bit of those patronising wealthy white liberals in the US who would point out with glee that black conservatives who had principled reasons for opposing affirmative action were themselves beneficiaries of affirmative action. To wit 'Shut up, boy!'."

Um, you go girl.

Geez, Jase, I thought it was we self-righteous lefties who threw around the 'racist' slur. Has it come to this; you're stealing our stupid tactics?


Woke to this story on the front page of the NYTimes on WorldCom's bankruptcy. The numbers are worth repeating - $107 billion bankruptcy claim and $2 trillion off telecommunications stocks in the last two years. As Prof Quiggin says, enough said. H'ever, there was this one intriguing comment a little way into the story:

Creditors and regulators are likely to ensure that the company's network operations remain relatively intact in the months ahead....If anything, long-distance customers may benefit from further price breaks, as WorldCom will be under less pressure to maintain its revenue to meet payments to creditors.

Stop forcing unrealistic profits out of a company and consumers benefit (I look forward to the Catallaxy apoplexy shortly).

Sting is in the tail of course:

But because price wars have contributed to the telecommunications industry's problems, further pressure on that front would add to the challenges facing other carriers, particularly the big long-distance companies AT&T and Sprint.

So here come the price rises. Dial 1 for surprise surprise.

Sunday, July 21, 2002



I'm beginning to see why bloggers I know end up with time for nothing else! Apart from generating some lengthy responses over on Graham Young's forum, to which I am trying to find the time to respond, I'm starting to get quite a few personal emails via this blog, as well as being picked up and discussed on other blogs. Gareth Parker displays a rare courtesy, for which I thank him. Others are Jason Soon and Heath Gibson who are kind enough to devote some serious blog-space to refuting some of my propositions in a serious, if a typically bloggy-testy way (one of the norms of blogging, Gareth?). These comments deserve respect and a response, and I will provide one ASAP. There's also the fact that the article Rob Schaap and I wrote for Margo Kingston is starting to generate its own bunch of long and short email responses, most of which we will try and address. There's probably others I've missed. In all, while it's great to be getting involved in these potentially interesting and important discussions, it's hard to get back as quickly as I would like. Especially as at the moment, my five year old son thinks he's a a spy and keeps "mysteriously" appearing at my feet, cuffing them together, or sticking me with sleeping drug syringes.