Joint Strike Fighter and Ukraine Crisis

Anachronisms in the New Cold War

It’s Official – the Cold War is back-on. Putin has declared his doctrine that any place that has a significant Russian speaking population is “new Russia” and he reserves the right to invade and occupy any part of any country that has a substantial Russian speaking population. That includes all the old Cold War buffer States and their modern derivatives – Latvia, Estonia, Lithuania, Ukraine… Russia is no longer a country but the ‘greater protectorate of Russians speakers’ with fluid and flexible boundaries. It’s how you make friends and piss-off people.

So is Putin just an ego driven Tsar? Perhaps but….

In the early 1990’s Mikhail Gorbachev surrendered the Soviet Union, opened up the Soviet economy, freed his people, and ended the Cold War. He asked one and one condition only of the West – no Eastward expansion of NATO. Reagan promised that it would be so. It was not.

Essentially Russia wanted their own version of the Monroe doctrine – the right to meddle and be pre-eminent in their own back yard. However unlike the US they have genuine reasons. Western European powers have twice invaded Russia, on both occasions reaching Moscow. Accounts of Russian dead in WWII vary from 30-40 million. It is an oft overlooked fact of history that Russia won the Second World War in Europe. They did not and do not want NATO on their doorstep. They did want economic development and mutual respect. They got neither.

Western capital asset stripped the former Soviet Union plunging much of the society into poverty and creating a demographic crisis from which Russia may never recover. NATO courted the eastern states. Russia found itself surrounded by US/NATO military bases, while the US actively sponsored Islamic terrorism across the 20/40 window resulting in the Beslan massacre.  NATO bombed Yugoslavia then created a new Muslim state in Europe carved out of historic Serbia. The ‘Coalition of the Willing’ then went on a rampage across the Middle East liquidating Russian assets as they went. The ‘Project for a New American Century’ boldly proclaimed that the US would invade Iran after Iraq was dealt with, thus further encircling the Russian block. The ‘Great Game’ for the Eurasian pivot was back-on. Central to this Pivot is Crimea - home of much of Russia's Western Navy.

It didn’t go quite as planned however. Putin kicked out the oligarchs who ruled Russia, took control of Russia’s critical national resources, re-financed the military, and pulled his country up by its collar. The military adventure in the Middle East was halted by a concerted insurgency in Iraq and resistance among Western populations. Western oligarchs then raided the US and European banking systems creating a systemic crisis which is still playing out, has made Russia very sceptical abojut all the talk of "freedom and democracy" but has not touched the military industrial complex in the US or the JSF program.

…so back to Ukraine. Ukraine is not a NATO member. Latvia is. If Russia were to send forces across the border to Latvia NATO would automatically be at war with Russia. So Putin gambles that the US will only play proxy wars in Ukraine and he can create a pretext for expanding his borders West-ward. At least he hasn’t claimed that Ukraine has weapons of mass destruction, or that they harbour Al Qaeda, or that they gas their citizens.  But wait – he should be scared! The US and its sort-of-willing allies just spent US $400 billion on the Joint Strike Fighter. Australia just pitched in with a $14 billion purchase of a couple of squadrons. If you heard or read any of the hyperbole surrounding the purchase you will have learned that this is a radar evading aircraft that will have complete situational awareness and will guarantee victory in all future air combat environments for decades to come. With that kind of kit potentially heading his way Putin should be cowering in a fox hole – right?

Ironically the ABC radio news reader actually used phrases I recognised from the manufacturer’s public relations Office from circa 2008. Funny thing is, no one is scared because no one else believes it, least of all the Russians. The reason is simple. After the collapse of the USSR the Russian military industrial complex had to create competitive weapons or starve. Hunger is very motivating. The result was bleeding edge, cheap and lethal systems such as the many variants of the Sukhoi air dominance fighter – now the baseline for air power in the Asia Pacific as well as Eastern Europe. The Western military industrial complex figured it could just get fat by putting ‘their’ people into key decision making positions in the bureaucracy then bleeding tax payers to subsidise uncompetitive make-work programs. The most expensive of these is the Joint Strike Fighter, or JSF.

The JSF was originally conceived as a second tier second day of war ground attack aircraft. It was intended to operate in a relatively benign air power environment and under cover of the much more capable F-22. Its primary concern was to attack Soviet mobile columns on the North German plains and to avoid mobile Soviet surface to air missile systems as they were circa 1990. That was and is its primary design criteria. To that end it was made ‘stealthy’ i.e. hard to detect by radars operating in the X band but only from the frontal aspect, and was given limited self defensive capabilities. This very limited functionality was then ‘spun’ into being the supposed air dominance fighter of the 21^st century. It isn’t. Russian radars operating in the longer bands (S and L) can see it and shoot it down. The Sukhoi flies higher, faster, turns quicker, carries 11 missiles to the JSF’s 4, has a bigger radar, has a better infra-red suit…it can detect the JSF at tactical ranges, jam and out manoeuvre its missiles, engage and disengage largely at will. For a more detailed explanation of tech and strategy see here: http://findinghomebookspace.blogspot.com.au/2013/09/defence-force-pornography-meets-real.html

This was the finding of Dr Stillion of the Rand Corporation, and of independent expert think tank Air Power Australia. Other critics have noted basic engineering and design flaws too numerous to mention here. For some considered commentary about alternatives see here: http://www.newaustralia.net/defence_airforce.html 

The Joint Strike Fighter has become so expensive and so useles it even has a research website dedicated to what a bad deal it really is. See here: http://f35baddeal.com/ If anyone in Europe buys the plane - good luck! It won't defend your country but it could cost you the very things you want to defend, like affordable education and health care.

If the US or NATO want to send a message to Putin they can only do so by imposing a ‘no fly zone’ over Ukraine. The fact that they haven’t indicates that they don’t want to risk an air war with Russia. After all, they wouldn’t want any of their very expensive and fragile kit to get damaged in a real contest now would they….there is a lesson in that for Australia. Let’s hope we learn fast.

 

Open Letter to Senator Colbeck - Tasmanian World Heritage Area

 

 

Dear Senator Colbeck

I write to urge you to reconsider your comments on the Tasmanian World Heritage Area extensions posted on your website (http://www.richardcolbeck.com.au/featured_stories/the_tasmanian_wilderness_world_heritage_area_scam) . I appreciate your concern with this issue, but it would be helpful if you became better acquainted with the facts and background of this matter before ‘rushing to print’.

What your helicopter tour showed you was logging roads and coups deep in world heritage value forests. This happens with dispersed logging strategies and is standard forestry practice. It is the reason there has been a rather bitter conflict in Tasmania for four decades. What you saw was world heritage forests being whittled away. Including some logged areas in the new boundaries will allow those areas to recover ecologically and preserve the integrity of the reserves as a whole. Saying that the area is undeserving of protection because of logging is akin to saying that the Egyptian sphinx is unworthy or preservation because its nose is damaged.

Removing the logged areas from reserve areas is one option but it does not require a wholesale roll back of the world heritage area which is what your government is proposing (74,000 ha). Curiously this proposed role back includes the glacial lakes of the Mt Field National Park. Obviously this is simply cover for gifting old growth world heritage value forests to the logging industry. It reduces your credibility to pretend otherwise.

I understand your concerns about special species timbers. This issue was addressed comprehensively by Tasmania’s Legislative Council whose select committee was chaired by, and largely made up of, conservative members. It was widely expected that their changes to the Forest  Agreement areas would spell the end of the agreement. However the Environmental NGOs accepted the changes and allowed further areas into production. This was a substantial compromise which deserves acknowledgement. I encourage you to get across the detail and talk to the ENGOs before passing judgement.

I was particularly surprised by your statement that this process was political. In the four decade history of this conflict this was the only time an agreement has been reached rather than imposed. It was industry that approached the conservation movement seeking an outcome. The conservation movement obliged despite there being no moratorium on logging during negotiations. Political parties were kept at arms-length. The only political interference was by the Legislative Council which watered down the conservation outcomes in order to allow a greater supply of special species timbers.

I have spent a lot of time in Tasmania’s forests – logged and unlogged. The simple fact is that a 60-80 year rotational logging regime cannot conserve the ecological values of the forest. I discuss this in more detail in my blog post here:  http://www.findinghomebookspace.blogspot.com.au/2013_04_01_archive.html

Please talk to more than one interest group on this issue. The Tasmanian Forest Agreement is a complex negotiated document representing trade-offs between diverse groups. I am not an expert in the agreement but I know that there is no such thing as a ‘forestry vs conservation’ position on this. Different industry groups have different interests.  Unsurprisingly some of them did not get everything they wanted. Such is public life.

I will post this letter on my blogspot, and with your permission, will post any reply.

Yours sincerely

 

 

Erik Peacock

Tasmanian State Election - Building Resilience through Public Policy

How Tasmania can Prosper – the Conversations we Have to Have

Well its election time again in the great State of Tasmania. I initially set out to write a political commentary to help local readers better exercise their civic duty (voting is compulsory in Australia) but changed my mind. Instead I have tried to answer the question: “what would have to change for Tasmania to become economically self supporting?” It is a question with wider implications because Tasmania is a marginalised peripheral economy. There are lots of them in the world and we can learn from what works elsewhere.

So rather than talking about who to vote for, let’s talk about what we need….I don’t have all the answers but I would like to start a conversation, so here goes….

Evidence Based Policy....

Tasmania is stuck in a hole. It is a welfare dependent State in which forty per cent of the adult population are on some form of welfare/pension, youth unemployment is around 20 per cent, a handful of large foreign based businesses call the shots, the population is ageing and unwell, and the political class spend their time on wedge social issues and slagging the other team instead of figuring out how to fix things.

The thing that most needs fixing is the fact that almost everything that is spent on retail, insurance, chattel and home mortgages, business finance, gambling, much of our hospitality, and increasingly food, leaves the State to line the pockets of people who live somewhere else. Vast amounts of money have been made from mining but Tasmania is littered with dead, dying or just plain poor mining towns. The money is not here. Mining the Tarkine will help some folk for a time but it will not fix our economy. In my opinion things will only improve if we find an economic model that keeps our wealth circulating at home.

Here is an imaginary story based on real world examples that have worked elsewhere. Not all of these initiatives are necessary and not all are possible, but all are worth talking about.

“Once upon a time Tasmania established a State Bank which could issue its own credit. The bank was given the same charter initially given to the Commonwealth Bank of Australia and for the same reasons. In addition the Bank provided small business finance at below market rates to foster and encourage small business. In addition the Government offered State based insurance for basic insurances on a not-for-profit basis. In this way a huge amount of money was kept in the State that would otherwise have left. Shares in both the State bank and the insurer were issued to all long term residents thus circulating money within the local economy. In addition to issuing dollars the State bank issues each long term resident with a ‘Taz’ which was time limited currency only recognised in the State. This had an immediate stimulatory effect on business by encouraging spending and preventing hoarding. The government also sponsored an Island wide ‘Community Exchange System’ or ‘tally system’ which allowed the exchange of goods and services without money. This system enabled persons with low incomes but with skills, to participate more fully in the economy and community. It increased business activity and strengthened the social fabric. Being untaxed it could also be considered an indirect form of economic assistance.

The Government appointed a Small Business Minister who soon learnt that the chief concern of small business was the cost of electricity, and that small business and consumers heavily subsidised a handful of bulk industrial power users. The Minister also found that small business was the single greatest employer outside the public service. The Government therefore mandated a single electricity price for all users in the State. This led to a dramatic increase in small business confidence and consequent uplift in employment. Bulk power users were concerned about how this might impact their viability but a ‘supply and demand’ study found that there was abundant electricity if it were not exported to Australia via Bass Link. From that time on only surplus electricity was exported and importation of electricity was banned. However the State continued to invest in wind power as a natural compliment to base load hydro electricity increasing security of supply and exporting the surplus. Income from exports was then used to drive down the domestic price or re-invested in further production.

The Small Business Minister also learnt that there was no effective civil enforcement mechanism for non-payment of debts. The law was modified to allow persons to obtain a ‘debtors judgement’ in the Courts and have that judgement enforced on a fee for service basis by the Monetary Penalties Enforcement Service. Assurance of debt recovery boosted business confidence.

 

This success in stimulating small business led to some serious debate about taxation policy. The new Government put a proposal to the Commonwealth to make Tasmania a ‘special economic zone’ in which all taxes were abolished except for GST, company tax, resource royalties, personal income tax; and taxes on alcohol, sugary drinks, and imported tobacco. Abolished taxes included FID, stamp duty on cars and homes, motor vehicle registration, land tax, capital gains tax, air port taxes, and taxes on employment. In addition council rates were found to be a poll tax where rates were based on the nominal value of a property rather than a fee for a service. Councils were obliged to radically restructure their rates. Those that were found to be unviable were merged. Motor vehicle owners were obliged to pay into an insurance fund – either the State insurer or a private equivalent, for medical care. These changes in themselves saved a great deal of bureaucracy and encouraged investment and employment. Removing a tax on motor vehicle registration was particularly beneficial to farmers and other businesses.

However all of this tax cutting led to something of a funding crisis for the public service which had already been asked to ‘do more with less’. The Government addressed this firstly by making a law allowing Departments to reduce staff hours as an alternative to redundancy. This copied the approach adopted by Germany during the GFC. It enabled cost cutting during hard times but kept critical skills, corporate memory and social capital within the public service, avoided a crisis of confidence, and kept money circulating. It also avoided the former ‘boom and bust’ approach where the public service grew during the good times then faced harsh redundancies during the harsh times.

The first Department to be tackled was Health and Human Services. The Government knew that it would never be able to provide a comprehensive public health system in Tasmania. This has been understood by academics and health professionals for over 20 years and reflects the situation in the rest of rural Australia. The Government also realised that Australia failed to tackle the emerging national health crises in part because the health system is run by and for the benefit of doctors and medical specialists. Further, legal liability increased the cost of medicine because medical practitioners feel safer referring patients to specialists. This has led to a dumbing down of general practise. In tackling these issues the Government set out the following policy road map:

·        Limit liability and the amount of liability claims by law, and provide a State sponsored not-for-profit professional indemnity scheme for medical professionals.

·        To the greatest extent possible for a state government, implement the recommendations of the Productivity Commission Report into Health Workforce (Australia’s Health Workforce, Productivity Commission Research Report, Productivity Commission 11 December 2005). See further: http://www.pc.gov.au/projects/study/health-workforce/docs/finalreport

·        Allow appropriately trained nurses to perform most of the treatment and diagnosis currently performed by GPs, both privately and in the public system, under remote supervision by a doctor.

·        Protect the practise of midwifery in private homes.

·        Trial delivery models for treatment in patient’s homes thereby freeing up hospital beds.

·        Trial delivery models for outsourcing medical treatment to developing countries.

·        Trial delivery models for web based analysis of medical data from specialists outside Australia where this is more cost effective.

·        Remove restrictions on intake numbers to surgery and medical specialist courses.

·        Properly fund medical student placements so that medical graduates are not obliged to pay ‘up-front’ and do not graduate with a substantial debt.

·        Restrict sugar, salt and fat content in drinks and processed foods.

·        Tax sugary drinks in the same way that cigarettes and tobacco are taxed.

·        Enact plain packaging for cigarettes.

While taxing imported tobacco the Government legalised the domestic production of tobacco for sale and personal use. As a result many people stopped inhaling tobacco laced with herbicides and pesticides in favour of less addictive organic leaf. These reforms over time delivered significantly better health outcomes and led to savings in the hospital system.

The next major area of reform was in education. Noting that previous State by State comparisons were unfair because Tasmania is part of regional/rural Australia, the Government compared educational outcomes against rural Victoria. While these results were more encouraging they were still found to be poor compared to OECD averages. The Government discovered that a decade of chaos with constantly changing curricula, constantly changing structures, and school closures had led to teacher burn out, loss of experienced staff, and lower educational outcomes. The Education Minister also learnt that in Tasmania a person can qualify as a teacher based on a university ‘pass’ of 49 per cent. This was lifted to 60 per cent overall, and 90 per cent in spelling, grammar and maths. The Minister also learnt that, while the requirements to qualify as a teacher in Tasmania are among the lowest in the developed world, the requirements to maintain registration are amongst the most onerous. This created a brain deficit at one end and a brain drain at the other. The Government moved to reverse that situation.

The Minister also found that:

·        Immigration, family breakdown and autism, have a negative impact on academic outcomes. It is simply not possible for a class room teacher to cater to high and complex needs, whatever their origin.

·        The state education system does not invest in bright students. There is no gifted education program in Tasmanian State schools, although gifted children both need more support than average, and provide a greater return on investment.

·        Many classes are chaotic and stressful because teachers have no effective tools of discipline and many parents do not discipline their children.

In light of the above the following approach was adopted:

·        rejecting the doctrine of ‘mainstreaming’ children in favour of special classes, and potentially special schools, where children with high and complex needs had some chance of getting their needs met;

·        advancing children according to their ability not according to their age;

·        abolishing teacher registration by shifting the onus of hiring competent staff to school principles;

·        shifting funding away from buildings and technology towards supporting class room teachers;

·        keeping focus on core competencies in maths, spelling, grammar and science;

·        supporting the right of parents to education their children subject to reasonable oversight by the Tasmanian Home Education Advisory Council;

·        increasing the age of compulsory schooling from five to six for girls and seven for boys in line with research on neurological development, particularly in boys; and

·        allowing appropriate disciplinary options for classroom teachers (following discussion with parent bodies).

The next area tackled was the criminal justice system....but the State Service Act prevents me from writing about it....

In tackling these issues the Government adopted the following policies. First they developed a realistic housing policy which is discussed later. Then they ...did another bunch of stuff I am not allowed to write about...

Tasmania had unfortunately inherited Australia’s decade long housing crisis. The self evident failure of the market mechanism to house families was identified as an exacerbating factor in almost every other social ill including crime and family breakdown. The Government conducted an audit of all vacant Crown land to which services could reasonably be connected then put low cost dwellings on that land. Initially these were pre-fabricated shipping containers that were fitted out at the prison as part of a ‘pay for incarceration for work’ scheme and as a trades training program. As modular units these could be configured to house anywhere from one person to a family of five as they are in Holland. Closed school buildings were re-modelled to hostel style accommodation. Various public/private partnership models were explored. In addition building and council regulations were changed to emphasise shelter over middle class ideals of housing. While the regulatory issues were initially complex, living in huts, sheds, shipping containers, and vehicles became a legal and viable alternative to housing insecurity and homelessness.

Having addressed health, education, justice and housing, the Government turned its attention to supporting agriculture. Unlike the Australian Government, the new Tasmania realised that not all investment is good, and that the buy-up of productive land by Chinese State companies did not reflect the operation of the free market, but rather reflected the foreign policy of the Communist Government of China. Sale of agricultural land to persons not resident in Tasmania was banned but Tasmanian farmers were allowed to lease land to foreign interests subject to a national interest test and limited to a 30 year lease.

Tasmanian retained its market niche by banning GM crops on the Island but actively encouraged establishment of an industrial hemp industry for the production various products including clothing, paper, food, oils, ethanol, and building materials. In time this came to be a major crop alongside poppies and essential oils. The Government did not invest money in irrigation although the State Bank was prepared to lend on favourable terms. However a comprehensive environmental impact statement examining salinity water table issues was always required. Similarly any person who wished to undertake coal seam fracking was required to prove that there would be no impact on the water table, and to conduct small monitored trials. This had the effect of banning fracking from most parts of the State. In recognition of the rights of farmers, the Government allowed farmers rights to all of their land to the centre of the earth and the right to deny access to it.

The new Government continued to respect the Forest agreement, recognising that industry had initiated negotiations, all parties had made compromises, and that the agreement was key to gaining recognition and international markets. The Government also commissioned a study into potential commercial uses of plantation timbers including composite structural timbers, log cabins, firewood, and combustion for electricity generation.

Those pushing for a Tasmanian Republic suggested that it could avoid buying expensive military toys and protect its territorial integrity by maintaining a citizen army. Military service would be compulsory after high school and would double as health and fitness training. Each person who was assessed as ‘fit to bear arms’ would be issued one and this weapon was kept under lock and key at local police stations to be issued in the event of war or insurrection, and for training. The police would became part of the new military structure thus creating greater linkages between the police and young people. Genuine conscientious objectors would not be obliged to participate. It was suggested that the Republic of Tasmania should be able to put around 80,000 people under arms – the same number as the Australian army.”

 

 

Australia Indonesia Espionage Controversy

For those interested in the recent diplomatic fracas between Australia and Indonesia I would like to offer some perspective.

I was a youth ambassador to Indonesia with the Department of Foreign Affairs and Trade AIYEP program during the twilight years of the Suharto regime. One of the most important things learned through that experience was the high value placed by Javanese society on the concept of gotong royong. Indonesia’s civic values come from the reality of village life – everyone is interdependent and everyone has to get along. Gotong royong means coming a decision through respectful dialogue with the aim of reaching the broadest possible consensus. The final decision may be made by the village head (Pak Raja) and there may be strong disagreements along the way, but once the decision is made everyone is expected to fall into line and get along. It is rather different from the adversarial approach which developed in the West as a way of mediating unresolvable conflicts between the monarchy, the Parliament, and the different orders of society.

Under Suharto gotong royong was used in a perverse way to stifle dissent (as I am sure the occasional Pak Raja has done too) but although Indonesia is now a democracy gotong royong  remains a core value of the society.

Indonesia doesn’t really care how rude Australians are to one-another. Westerners can’t be expected to behave properly, but Indonesia does expect maturity in international relations – which is why you can’t announce that you are going to “turn the boats around” if the country you are sending them back to hasn’t been part of that discussion as an equal partner.

Abbott is the antithesis of gotong royong. Indonesia had already rebuffed him over boat people. Revelations of phone tapping simply added injury to insult. So what does SBY gain from ramping up the rhetoric? After-all, the relationship is worth half a billion dollars in aid money to Indonesia each year alone.

Well, actually SBY gains a lot. ASEAN countries correctly perceive Australia as North America’s lap dog in Asia. Indonesia is the world’s biggest Muslim country. By humbling America’s lap dog in Asia Indonesia gains status within ASEAN. It says “we are here, we matter, we are a player”. It sends a message to both Australia and the US that Indonesia will not be dictated to. It also sends an important message to Australia: “We matter. You may be Europeans in Asia but you are in Asia and you must do things the Asian way. There is a big country to your North and you need to consider it carefully.” There is also another, perhaps unintended message: “you just elected an amateur for PM.”

In the nearly 20 years since I was in Indonesia Australia’s understanding of that country has grown little. Doubtless many Indonesian villagers still get their perception of Westerners from C grade American television from which they learn that we are all rich, greedy and promiscuous. However the Indonesian elite have grown to understand Australian society very well, mostly by virtue of living and studying here, but also through trade and diplomatic ties, and cultural exchange. They know our pressure points.

Eventually we will return to a reasonable dialogue, and we will all, like squabbling villagers, get busy getting along. SBY will emerge as the Pak Raja who brought the consensus about. Abbott will look foolish even though the spy scandal was none of his making.

In the longer term Indonesia appears to be embarking on a policy of military and diplomatic containment of its troublesome southern neighbour – but first it has to contain Abbott.

The Bus in the Bush

When I was little and we had first migrated to Australia we lived in the woods in a bus and a kombi van. It was a place called McGuires Marsh and you can read about that story in my book. After 30 years I went back there. Nothing had really changed. The bus is still there. I found wild deer, a Tasmanian Devil's den, and wombat holes. Surprised a couple of kangaroos but really there was just sun and wind and clouds and grass and a fast running creek, and gum trees stark against the sky.

I have made a picture essay below.

Turning off towards Osterly and the highlands we encounter newly shawn sheep



Three chimneys tell their own story of ambition and loss at Osterly

 

The farmhouse where we lived. Still sound but the water tank is gone, the fence is broken down, and the flower garden is no more. Not currently lived in.

The bus we lived in at first is still there - near the creek on the edge of the highlands

The bus is now a little worse for wear but the door still opens

Time for a walk across the hills. This is high sheep country but wild deer are also found here.

This tree has seen some seasons come and go

The view from the top - looking back towards the Wellington range and Hobart

 The farm gate where it all began. This trail leads to the Ouse river.

USA Financial Crisis – Lessons, Responses, and Social Engineering in Australia

 

It would be an understatement to say that the US is having financial difficulties and an overstatement to say that the end is nigh. The US government spends each day significantly more money than it receives in taxes or other revenue. It plugs the gap with borrowings which mostly take the form of bond auctions that are mostly bought by the Chinese. The Americans pay interest on the bonds which is fixed, not by contract, but by the market. In order to meet its interest bills the US sells more debt, that is, it borrows more money.

 

Think of it like having a credit card, not being able to pay the interest, but then getting another credit card to pay the interest on the first credit card… The technical term for this is ‘bankruptcy’ or ‘insolvency’. Under Australian company law, a firm behaving this way would be wound-up and the directors jailed for insolvent trading. On the other hand if you are the world’s biggest economy with the world’s biggest military you get to write your own rules – to a point. The point at which people stop buying bonds is the point at which the US has to either provide capital to itself (print money) or live within its means.

 

People are still buying bonds so at the moment the US can continue to borrow from its children by pushing itself into a debt spiral, plus printing money (quantitative easing), plus devaluing its currency and hence the real value of its loans (a subtle form of default).

If this guy was a company director in Australia he would be jailed for insolvent trading.

 

 Clearly this is unsustainable but the good news is that the fiscal crisis is solvable. If a business cannot pay its debts it sells off assets, cuts costs, and finds ways to increase revenue. There is plenty for Congress to cut back on without increasing the number of homeless. The US spends as much on Offence – ahem, I meant ‘Defence’ as all of the rest of the planet combined. In addition there are vast black budgets for all manner of vaguely security related projects that never see congressional review and are rarely acknowledged. There are nine official security/intelligence agencies – seriously – nine! Then there are the massive bail-outs to the people who caused the GFC. Then there is the ‘global war on terror’, then there is the domestic war on dissent – ahem, I meant ‘homeland security’. Then there are domestic subsidies to uncompetitive industries; then there is vast rorting by defence contractors of which this link provides one example.

 

The US could halve all of these budgets and still be armed to the teeth. It could then tax the rich, move wealth down to the middle classes to encourage spending and investment, build the economy and pay down debt. It might take 20 years of careful and painful budget management but there is no fundamental reason for the US to go insolvent….but it probably will in some form some-time soon.

 

The Americans may have put man on the moon but we have health care, and we won the America’s Cup, and we actually know how to do counter insurgency….

 

What lessons are we in Australia learning from this? To be honest, Aussies tend to be a bit smug about these sorts of things. The Americans may have put man on the moon but we have health care, and we won the America’s Cup, and we actually know how to do counter insurgency…. but we shouldn’t be too smug too soon.

 

If we dig a little, many of the maladies affecting the US can be found in operation in Australia. Here is a short list:

·         A breakdown in Parliamentary oversight and ministerial accountability for – well – anything at all really.

·         An inefficient taxation system that punishes the middle classes but subsidises the very wealthy.

·         An expensive, incompetent, and corrupt Defence and intelligence bureaucracy.

·         Pointless subsidies to uncompetitive industries (e.g. cars and coal).

·         Loss of productive industries through foreign ownership or unfair foreign competition.

·         Loss of government revenue through privatisation.

·         Excessive foreign ownership of the economy and consequential capital flight.

·         A culture of outsourcing.

·         Failure to invest in education and R&D at levels comparable with the OECD.

·         Blind faith in market mechanisms to solve complex social, economic, and environmental problems, leading for example, to a national housing crisis.

The good news is that we do have a half sensible social security system, compulsory superannuation, affordable health insurance, a better regulated financial system, and though we are highly indebted we do not have a debt crisis.

 

…crisis is on the way

 

However crisis is on the way. Treasury and health departments around the country have been warning for two decades that we cannot afford our ageing population. The real economy is shrinking, the tax base is shrinking, and our economy, from cars to call centres to higher education, is being outsourced. The true impact of this has been camouflaged somewhat by the mining boom but won’t be for ever. On the mining boom, for every dollar of mineral wealth produced about 11 cents stays in the country. Trans-national corporations pay five per cent tax. In real terms I pay fifty per cent. Basically we are giving away the national wealth for ‘mirrors and beads’. The message from academics and others is clear: our fiscal path is not sustainable.

 

So what to do? Well, the State has been doing plenty but hasn’t told you what or why. In the short term there have been nasty cuts to higher education, science, and single parents – stuff that Australia’s lumpen proletariat don’t really care about. The longer term stuff is about social engineering….. which is why if you want to stay at home to parent your kids in this country you get really screwed.

 

My wife isn’t eligible for the Superannuation co-contribution (government subsidy to low income superannuation accounts) because she is not waged. While there is a small tax rebate for families, there is no income splitting for married couples so the tax policy is systemically anti-marriage. The new government will institute a generous paid parental leave scheme – for working women only. Parents who work are eligible for subsidised child care. Parents who save the State this burden and care for their children at home get nothing. When my wife met our (then) local senator to point this out she was told that it was government policy to “encourage” women into the workforce to help the economy. Not for any other reason. When it was suggested that the economy is supposed to be there to support families rather than the other way around she got a look which suggested that two planets had just made contact.

 

I once attended a briefing by Treasury officials in which the need to increase productivity was explained in these terms: a birth rate of 2.3 per couple is necessary to maintain a stable population. Australia’s birth rate is 1.7. That is not enough productive people to pay for everyone’s retirement so in addition to micro economic reform (aka making it easier to do business within the country), we need to get all the women into the workforce.

 

At this point I suggested that if women were supported at home to have their babies instead of being forced into the workforce the birth rate might increase. This was followed by a tense silence, like I had farted during a eulogy, and the Treasury official resumed talking as if I wasn’t there.

 

The other aspect of social engineering is immigration. During the war Australia’s population was seven million. Now it is 23 million, a 300 per cent increase in 60 years. Rudd wanted to increase to 30 million and this has been advocated by business interests. It’s not so much ‘populate or perish’ as ‘grow the economy or perish’. Bottom line: it’s cheaper to import skilled migrants than to support Australian women to be mothers and train their off-spring. Australia’s mothers can work; we’ll put the kids in childcare, and import more workers. I doubt whether those in the Left who spruik multiculturalism as a moral value actually realise that they are serving a neo con business agenda…..but back to tax.

 

Australians like the good life but we expect fiscal conservatism from our leaders – and we punish those we perceive as borrowing too much. In Australia a borrower like Obama would simply not have got elected; so how to plug the fiscal gap? Australia is a vastly wealthy country but most of it heads off-shore to line the pockets of the already vastly wealthy. The answer touted by business via various think tanks and research institutes is to increase GST (Goods and Services Tax currently ten per cent) by half as much again and become a high taxing nation – but only for those in the middle. Heaven forbid we keep our national wealth at home.

 

New models of 'family' may better serve the economy of the future

 

The traditional, some would say God given, model of family is now at odds with our socially engineered economic model.

 

All this tax is of course inflationary and puts further pressure on families. One solution is to re-model the family to better serve the economy.  A strong traditional family unit in which economic interests are subordinate to moral and social interests is potentially more resistant to economic control. Better to have isolated units of production and consumption – a largely androgynous society, in which sex is entertainment, relationships are disposable, and children are raised by the next ‘significant care giver.’ There is increasing tension and incompatibility between the traditional, some would say God given, model of family and our socially engineered economic model. Enter gay marriage.

 

Now for the first time in the history of Western Civilisation we are being conditioned to believe that ‘mother’ ‘father’ ‘man’ and ‘woman’ are redundant concepts and any ‘significant other’ will do as parent, even if the ‘significant other’ is fairly transitory.  In this context gay marriage – something that a minority within a minority group of two per cent of the population want - suddenly becomes important. That’s not because it’s a social justice issue.  The marginalisation of GLBT people has always been a social justice issue with multiple complex facets. Rather the “marriage equality” issue is a wedge that can drive a broader social agenda to tear down traditional models.

 

Australia weathered the previous GFC pretty well – but our Keynesian response cost us our national savings. We are now poorly position to weather another global storm. Should the US debt debacle result in a melt-down in the near future expect more radical ‘solutions’ from the business think tanks – but don’t expect them to look out for your family.

 

 

 

Tag line: US financial crisis, debt crisis, Tea Party debt, Obama Debt, marriage equality, Goods and Services Tax increase, US treasuries, US bonds, Abbott paid parental leave scheme, FEMA, martial law in US

 

 

Election 2013 - is there Life Under Abbott?

Why Labor and the Left Lost the Unlosable Election

Labor and the Left lost.

World heritage areas and national parks are no longer safe, marine reserves may be repealed, environmental protections will be gutted, renewable energy will be targeted in favour of coal, climate science has been junked, the Great Barrier Reef is in jeopardy; chainsaws are revving up for a final assault on Tasmania’s forest strongholds. Environmentalists and other truth speakers will be purged from the civil service.

Election night - Abbott wins the election for the Tories

This should have been the unlosable election for progressives. Under a Labor government Australia weathered the GFC better than any other nation in the OECD. We kept a AAA credit rating. We tackled carbon and the sky didn’t fall in, costs didn’t skyrocket and our industries didn’t close. In fact lots of people got jobs in renewable energy and our superfunds invested in them. True, Labor was taking water over 'boat people' but then Labor Prime Minister Kevin, in a tactically brilliant move, pulled the rug out from under Abbott and sent them all the PNG. So why did Abott win?

 

The talking heads have dissected every tactical error in the Labor campaign but ignored the deeper issues. As someone whose social circle includes political candidates for both the Greens and Family First; my lesbian neighbours, the politically correct, Liberal voting business men, and conservative evangelicals, I would like to offer an explanation.

Basically, Australian’s don’t like Wowsers. In the early days of settlement (OK invasion for those on the Left), we had Wowsers. They were usually religious people who harboured a great personal horror at the thought that someone somewhere might be having a good time. They preached against drinking, whoring and gambling, and exhorted husbands to be faithful. In short, they were regarded as a pain the arse.

No one listens to religious people much in Australia any more but nature abhors a vacuum and the Left has rushed to fill it. Let me put it this way:

What if urban working class blue collar red neck Australia doesn’t want multiculturalism - or at least object to the wholesale taking over of suburbs by defined ethnic groups? What if many Australians don’t want gay marriage? What if people actually want the freedom to speak their mind without being reported on, fined, reprimanded, or sacked? What if people don’t want homosexuality promoted as a life style choice through the school system? What if most people deep down would prefer Caucasions to remain a statistical majority? What if people wanted recidivist sex offenders jailed for life or shot? What if most Australians just don’t want more refugees or other migrants flooding into the poorer parts of crowded cities? What if some migrants' cultural values (wife burning and clitorectomy for example) are not in-fact compatible with our values? What if some people think that being a mother is as valid as being an employee? What if we all did become human at some time prior to passing through the birth canal? Is it OK to encourage mothers to have their babies instead of aborting them? What if closing down an entire industry in the top-end and pissing off a well-armed and hungry nation of more than 200 million people to satisfy some animal rights activists wasn’t very smart?  What if some people are really worried about their teenage kids if drugs are legalised? Are people who hold those views bad people?

According to the Left they are. And that’s why the Left lost.

It’s not so much that the educated middle classes have a different set of values from most Aussies. It is that they are utterly condescending and disparaging in the way they put their values forward. Forget dialogue. Forget respect. Having received an electoral thumping the Greens have just discovered that being ‘right’ doesn’t get you elected, being popular does. Forgot to listen - whoops!

The majority of Australians would relate to most if not all of what I just wrote. To them it’s common sense. For them there is a real sense that we are losing our country, losing our morals, and losing our way. Who is ‘right’ and whether these things are objectively true is beside the point.

To make the divide greater those who implement policy seldom have to live with the consequences of it. Blue collar workers have no choice but to live with, or be pushed out by, migrants with whom they compete for jobs. The latte set don’t have to put up with ethnic gangs, are safe in their suburbs, and would never send their kids to public schools filled with ethnic students. When the Northern Territory cattle industry was decimated no-one in the Australian Public Service lost their job.

This divide climaxed recently with the proposal by human rights lawyer and refugee advocate Julian Burnside that Australia’s entire refugee intake should be housed in the Island State of Tasmania. He reasoned that Tasmania started out as one big penal colony so why not send all of Australia’s refugee boat arrivals there? We are talking anywhere up to fifty thousand traumatised people in a State of half a million centred around two large towns. Having dropped that bomb shell Julian flew home to his wealthy urban life. Hmmm. Didn’t seem to have occurred to him that Tasmanians may not want to become again another vast penal colony, or that the social fabric is already stretched, or that we would need to build a whole new hospital, or that we might have spent a hundred years trying to break free from the past.

Tamania is home to many refugees from many places, as well as economic migrants like my parents who emigrated from the UK. Migrants are a welcome and valuable part of our community. There are practical limits though to any society's capacity to absorb large numbers of people from other cultures. Julian is entitled to his views – it’s just that he doesn’t live here and he didn’t ask anyone.  See here.

Not to be outdone local Greens leader Nick McKim then rushed off to his Party to endorse Julian’s suggestion as party policy. That’s OK, it’s just that he is a member of Cabinet and a leader in a coalition government that is ‘on the nose’ and, um, he didn’t consult with the community first.

So where to from here? If we want to build a civil society, whether from the left or the right we need to stop lecturing and start building bridges. We need to care as much about boorish beer swilling blue collar working people as we do about refugees. It’s going to be tough. The Green movement is going to have to abandon the Greens and their social agenda and campaign again as a-political patriotic Australians for the environment. The Left are going to have to BBQ some sacred cows and the right are going to have to grow up and realise that the 'market' isn't going to solve our problems on its own. The market is after all about maximising private profit which is not a benevolent activity.

The Greens can represent the far far left if they want to, but in so doing they need to accept the reality that eighty per cent of Australians will never vote for them. However eighty per cent of Australians still care about the environment and about climate change. Right now Australia needs a movement for the environment from across the political spectrum, not just a manifestation of the social left which is today's environmental movement.

Tag line: Julian Burnside Tasmanian refugee proposal, asylum seeker policy, Christine Milne election, Tony Abbott climate change, Labor election 2013, secondary boycott laws, SLAPP, Greens human rights, gay marriage, marriage equality,