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FAST TRACK SMALL PRINT

Free traders were pretty happy to get the fast-track legislation (trade promotion authority TPA) through Congress the other day. As I mentioned the other day, there were whoops of joy down at the Oz Embassy as it means a free trade agreement between Australia and the US is more likely.

One of the reasons critics don't like this legislation is because it means Congress can't modify international trade bills, despite being mandated to do so by the constitution. But there are other concerns associated with it, and a couple of them come from free-traders themselves.

Brink Lindsay (I got it via Brad DeLong) points out that the steel tariffs and farm bills were part of the quid pro quo for getting the legislation through in the first place, while the Employment Policy Foundation point out that there will be a Six-Fold Increase in Trade Adjustment Assistance Under Senate Trade Bill Raises Program Costs to $24 Billion.

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EYE of the BEHOLDER

The left, we know, are stupid. The right are...fact checked. I can live with that.

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BETWEEN YOU AND ME AND THE SUV

That little monthly newsletter, The Washington Spectator (alas, they are not electronic and so have no link), offers this quick summary of new book damning the dread SUV (4WD back home in Australia):

We've called them Seriously Unsafe Vehicles, and now comes a book by Keith Bradsher, the former Detroit bureau chief of the New York Times, showing that we understated the case. Due out in September from Public Affairs, Bradsher's book, High and Mighty: SUVs-the Worlds Most Dangerous Vehicles and How They Got That Way, calls the vehicles "neutron bombs," three times more likely than cars to roll over in an accident. They also emit one-third more global-warming pollutants than cars. According to the newsletter Corporate Crime Reporter, Bradsher's book sites secret auto industry crash tests show-ing that SUV s are "uniquely dangerous to other motorists, inflicting head, chest and leg injuries up to eight times as severe as those caused by other passenger vehicles." They are also more likely to kill pedestrians, including children unseen through their high and blackened rear windows as they back out of driveways. Bradsher also discovered that the SUV manufacturers' market research has found that SUV buyers tend to be aggressive drivers, and that the makers design their vehicles and their billions of dollars in SUV advertising to appeal to them.

I love that bit about "aggressive drivers" - like all those mums (moms) and dads (dads) outside my son's school each afternoon, piling three kids, two neighbour's kids and their bikes and other kid-junk into the back.

Since SUV political correctness has become the new cause célèbre of the never-wrong right, I thought I'd remind lefties that the big advantage of the SUV from our point of view is that they have superior beverage holders, so, for instance, on my Honda CRV, there is a cosy place for both my caffe latte and my Chardonnay.

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MORE CONFUSION from the RIGHT of BLOGWORLD

The doyen of right wing Australian bloggers, the one they all want to be, our very own oTherTim, makes an interesting statement on his site..

Referring to this SMH cartoon by Alan Moir, he calls it FANTASTICALLY DISHONEST, because "Never have Tony Abbott, John Howard, or Philip Ruddock suggested that their opposition to illegal immigration is anything to do with protecting Australian jobs (in fact, their government has increased legitimate immigration to help generate jobs)."

First up, it is interesting to note that the cartoon refers to "refugee boat people" not illegal immigrants, a distinction the law respects if not all right wing bloggers.

As to oTherTim's claim that, "Never have Tony Abbott, John Howard, or Philip Ruddock suggested that their opposition to illegal immigration is anything to do with protecting Australian jobs" then perhaps the best warning is James Bond's: never say never.

A two minute search of Minister Rudock's website reveals a whole host of references to illegal immigration, particularly in the form of visa overstayers, who are illegally employed and who are chastised for taking Australian jobs. Not sure why Tim would want to deny that the Minister and the Govt. have said this stuff: I thought he'd applaud it:

Ruddock 11 April 1998:"It should also be noted that people who work illegally may well be taking jobs away from unemployed Australian residents."

Ruddock 24 June 1998: "Employers should ask all prospective employees for proof of identity and immigration status - even if they have been sent by a contractor or agency"..."By checking work rights, employers help stop visitors from working illegally, thereby making jobs available for those who are legally entitled to work."

Ruddock 6 August 1999: "This is important as it ensures that employers have access to a pool off people with a bona fide right to work, rather than resorting to employing people who are in Australia illegally, such as overstayers, or people who do not have permission to work," Mr Ruddock said. "This will not only ensure that unemployed Australians have access to casual or seasonal work, it will mean that working holiday makers can obtain incidental work and it will reduce the dependence of such employers on illegal labour sources," Mr Ruddock concluded.

Ruddock 6 May 1999: "Illegal workers take jobs away from Australians, and by checking work rights employers can ensure that only those people entitled to work in Australia are given jobs."

Ruddock 19 Feb 1999 "The Minister said the result followed yesterday's detention of 51 illegal workers on two tomato farms in Victoria, and an operation earlier today in Stanthorpe, Queensland, that saw a further 19 fruit pickers located"...."These results are a clear indication of our determination to locate people who blatantly disregard Australia's immigration laws and take jobs from Australians," said the Minister.

Ruddock 15 May 2000: "The government is committed to combating the problem of people working in Australia when they don't have the right to do so, because it is taking job opportunities from Australians," Mr Ruddock said.

All of these quotes sound like he's making a pretty clear link between illegal immigration, especially in the form of visa overstays, and taking jobs from Australians (and even legal residents). Again, I thought Tim would be applauding such a crackdown.

There is also the more general issue that members of this government have consistently made the link between legal immigration and unemployment. In fact, it is this very link that has been used by the government to justify the shifts in immigration policy that Tim favourably mentions, namely the shift from family reunion criteria to skilled worker criteria. For instance, The Age reported in 1997:

The Minister for Immigration, Mr Philip Ruddock, yesterday said migrant number would be cut to 80,000 in 1997- 98. The Government believed a further cut was necessary "because of high levels of unemployment", he said. The intake of 12,000 under the humanitarian program would remain unchanged.

On the same day, also reported in The Age, Mr Howard was making a similar point in a radio interview:

'In certain ethnic groups you've got unemployment levels of 40, 50, 60%. Now that's unfair to all of us,' Howard told John Laws in a radio interview when the migration program was cut last year. He was explaining then how he sympathised with people who were listening to the Pauline Hanson message. If people are anxious in the context of unemployment, he said, 'that is completely understandable'."

Howard went even further in a doorstop on the same day. By now he is clearly pissed off that Pauline Hanson was claiming all the credit for his linking of unemployment with immigration and he let her have it:

"I also notice that the rather empty populist who represents the seat of Oxley in the Federal Parliament, Mrs Hanson, is running around saying 'Oh, I did it. You know I persuaded them.' Well could I remind her, could remind the rest of Australia that my belief that there is a link between certain levels of immigration and high unemployment goes back to 1991, which is five or six years ago, long before anybody had heard of the current occupant of the seat of Oxley."

Bit of a hissy fit, really. And speaking of which, it makes it a little difficult to explain why Tim Blair says this of the Moir cartoon in question: "Moir is putting Pauline Hanson's words in their mouths. He's another example of the stupid left's belief that conservatives are evil."

Um...Well, to explain it gently, he doesn't have to put Hanson's words in Howard's mouth because Howard himself insists that they were there a long time before she arrived on the scene. Probably need to do a bit more googling, Tim, before assigning the label of "stupid".

But wait, there's more. In August 1999, at a business lunch, Howard was asked about the link between unemployment and immigration:

Prime Minister, one of the consequences of economic prosperity is full employment. Now in Australia this might mean that it’s not 3% or 5%, it maybe 7% because the old unemployed people don’t match the new jobs. If that is the case and that is what I am finding, how are you likely to review your immigration policies to bring in people who have the skills that Australia needs and certainly hasn’t been able to provide its work force, so that we can position ourselves into a global future?

To which he responded:

I would answer that question in a couple of ways. The first way is to say that we have already begun, and in fact over the last three years we have begun to alter our immigration policy quite dramatically to address the very issue you’ve raised. Over the last three years we have altered in a very major way the balance between family reunion and skilled migration. The current migrant intake, a far greater bulk proportion of the people being brought in, are skilled migrants and far fewer come in under the family reunion category. So we have already begun to address that.

He continues the answer, as I've already suggested, to use what he claims is the link between unemployment and immigration to justify changes to the "mix" of immigrants.
The suggestion that none of these guys have ever made the link between immigration, legal and illegal, and unemployment is hard to sustain.

Perhaps even more interestingly is the inconsistency between statements made by government members. Although John Howard was keen to claim that he was making the link between unemployment and immigration long before Pauline Hanson, Minister Ruddock was denying there was much of a link, and in fact, that it might be a positive one. In a media release entitled 'Pauline Hanson Wrong Again', which was issued only a couple weeks before the PM's doorstop interview taking all the credit, he said this:

Mrs Hanson also blamed migrants for Australia's level of unemployment...."Despite her claims, research shows a properly-balanced migration program has a neutral or slightly positive impact on employment, because migrants create demand for goods and service and bring in human and financial capital," Mr Ruddock said. "If we are going to have a debate on immigration, the leader of a political party has a responsibility to deal in fact not fiction. Mrs Hanson is not living up to this responsibility."

Nor was John Howard, apparently.

The fact is, the link between unemployment and immigration is a stock-in-trade of right-wing populists, as these quotes suggest. Why pretend it isn't? Normally the gallery applauds long and loud, so I'm really not quite sure why OtherTim would be upset at Moir's mild cartoon. Is this just another example of the right getting all politically correct about their pet issues? I thought it was us pathetic lefties who weren't meant to have a sense of humour. (And I know it is we who are stupid, cause oTherTim told me so.)

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ONE LITTLE OBSERVATION, SO MANY WAYS to SAY IT

Just in case you hadn't noticed, Paul Kelly would like you to know that the US is important to Australia:

It is best to state some home truths. Australia's most important single relationship is with the US, a proposition that is neither new nor unique.

Okay? So why are you telling us? (And BTW, wouldn't the fact that it is our "single most important relationship" actually make the proposition unique, given that you couldn't make the proposition about anywhere else, thus making it a one-of-a-kind proposition, which is kind of your working defintion of unique?)


Ask official strategists in London, Moscow, Beijing or Tokyo what relationship is the most important for their country and the answer on each occasion will be the US.

We kinda figured that too, but it is often good to follow one statement of the obvious with another. Makes them seem less obvious. Obviously.

This is not rocket science.

No it isn't. But it helps to have the obviousness reinforced like this: a bit of meta-obviousness never goes astray when you want to state the obvious.

Given US military power and economic clout – equivalent to one-third of global gross domestic product – this answer is a truism.

An obvious truism, one would have thought. And thanks for the explanation--it's their military and economic clout. Right...Obvious really, once you think about it.

But the question about truisms is whether you state the obvious or treat it as a given.

And if treating the truism as a given you then go on in consecutive sentences to say it over and over again just in case the self-obvious obviousness of the given truism wasn't immediately apparent, or even obvious. Paul continues:

John Howard is keen to state the obvious.

Well he's going to have to get in line, isn't he Paul? I mean obviously there are a lot of people lining up to state this obvious, self-evident truism who really wish that we would take it as a given rather than having to state the obvious about this given truism. I mean, this is a given in itself, I think it is true to say.

He believes the US primacy in our national relations should be explicit.

Well, it's hard to believe it could get much more explicit than this opening paragraph; however, you can't be too careful.

And he wants to highlight the shift in priority towards the US.

True. Which I think would make this a truism.

Then just in case all this obviousness was getting a bit obvious for you, Paul shifts the focus of apparent truisms to other less obvious, though nonetheless obvious, truisms.

Australia's single most important regional relationship is with East Asia. This has been the case for decades and will remain as long as can be foreseen.

And will no doubt be reinforced several more times before the end of this paragraph.

It is our neighbourhood and the focus of our future. This point has been formulated many ways. Howard often says he runs an "Asia-first" but not an "Asia-only" policy. In a speech last year Howard said that Asia "lies at the forefront of our policy focus".

Bingo! Well reinforced.

Foreign Minister Alexander Downer is more explicit.

Personally, I find that hard to believe. I mean, he'd have to tattoo it on his bum and broadcast it at prime time to make it any more explicit than, I think we can all agree, it already is.

In November 2001 Downer argued that, because of Coalition policies, "Australia's engagement with Asia has grown substantially over the past 5½ years". Labor ridicules this claim. But its significance is that the idea of engagement, if not the execution, is bipartisan. The white paper draft says that "close engagement with Asia is an abiding priority". The rhetoric is less euphoric than that of Paul Keating but the continuity is clear. No Australian government can afford to soft-peddle engagement because our commercial, security and political interests in East Asia are too great.

So hang on. Engagement with Asia is important? I think this is starting to sink in. But how does all this fit together, Paul?

The main challenge for Australian statecraft has been to integrate our Asian engagements and our US alliance. This is not a new idea.

No it isn't. But then again, we wouldn't spoil the flow of the paragraph by inserting anything new, or say, original. And so Paul doesn't. Truly.

Read the rest of the article for more unnew ideas, or just keep reading the first couple of paragraphs. The effect is the same. If you'll excuse the obvious truism.

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AS SURE AS EGGS IS EGGS

Funny the things you hear living here in Washington DC. There is no doubt at all that Australia is pursuing as an absolute priority a free trade agreement with the US, and you could just about hear the whoops of joy down on Mass. Ave when GW got his fast-track legislation through. If you regular citizen-types out there want to have a say about it, think about it, or try and influence its outcome, you'd better get your skates on.

Alan Oxley, one of the think-tank types behind the Australian govts push had this to say recently; and now Ken Davidson has followed up with a few pertinent warnings. I had a bit of a go at the topic on Xena's site a little while ago (scroll down a bit once you click the link).

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FOLLOW-UP ON COOKED BOOKS

A Morgan Stanley article suggested that revised official government figures on US economic indicators for the last 3 years would show marked changes, mainly downwards. The figures have just been released and amongst the key changes noted are as follows: (then after that, a comment by financial journalist, author and listmeister, Doug Henwood)

Summary of major revisions

The revised data modify the quarterly pattern of real GDP for 1999-2001. Both the previously
published and the revised estimates show GDP growth peaking in the fourth quarter of 1999 and slowing
substantially during the quarters of 2000. However, the revised estimates show declines in GDP for each
of the first three quarters of 2001, whereas the previously published estimates showed positive but
decelerating growth in the first half of 2001 and a decline in the third quarter. Both sets of estimates
show GDP growth resuming in the fourth quarter of 2001.

The most important differences between the revised and the previously published estimates for
1999-2001 are the following:

The annual rate of growth of real GDP from 1998 to 2001 was revised down from 3.1 percent to
2.7 percent. The annual rate of growth of real GDP from 1998:IV to 2002:I was revised down
from 2.8 percent to 2.4 percent. The largest contributors to the downward revisions were
downward revisions to the growth of personal consumption expenditures (PCE) and of
nonresidential fixed investment.

For 2001, the revised estimates show real GDP growth of 0.3 percent; the previous estimate was
1.2 percent. Lower growth of PCE and larger declines in nonresidential fixed investment and in
change in private inventories accounted for most of the revision.

As described above, the revised estimates show a longer downturn in real GDP than the
previously published estimates. The percent change at an annual rate in real GDP was revised
down from 1.3 percent to -0.6 percent for the first quarter of 2001, was revised down from 0.3
percent to -1.6 percent for the second quarter of 2001, and was revised up from -1.3 percent to
-0.3 percent for the third quarter of 2001.

For 2001, personal income was revised down 0.4 percent. Wages and salaries was revised down
2.9 percent, and personal interest income was revised up 9.8 percent.


Revisions to 1999-2001 estimates

The percent change from the preceding year in real GDP was unrevised at 4.1 percent for 1999,
was revised down from 4.1 percent to 3.8 percent for 2000, and was revised down from 1.2 percent to
0.3 percent for 2001.

For 2000, the largest contributors to the downward revision to real GDP growth were fixed
investment in equipment and software, PCE for nondurable goods, and PCE for durable goods; the
contributions of these components were partly offset by an upward revision to change in private
inventories. For 2001, the largest contributors to the downward revision to real GDP growth were PCE
for services, equipment and software, change in private inventories, and state and local consumption
expenditures and gross investment; the contributions of these components were partly offset by an
upward revision to federal consumption expenditures and gross investment.

The percent change from fourth quarter to fourth quarter in real GDP was revised down from 4.4
percent to 4.3 percent for 1999, was revised down from 2.8 percent to 2.3 percent for 2000, and was
revised down from 0.5 percent to 0.1 percent for 2001. For 2000, the downward revision was mainly
accounted for by slower growth in PCE and private fixed investment. For 2001, the downward revision
was mainly accounted for by slower growth in PCE and a decrease, rather than an increase, in net exports
during the year.

The largest downward revision to the percent changes in real GDP for the quarters of 1999-2001
was 1.9 percentage points (first and second quarters of 2001); the largest upward revision was 1.0
percentage point (third and fourth quarters of 2001). The average revision to the quarterly percent
changes in this annual revision was 0.9 percentage point (without regard to sign); the revisions without
regard to sign to the quarterly percent changes in the annual NIPA revisions from 1979 through 2001
averaged 0.7 percentage point.

From its cyclical trough in the first quarter of 1991 to the fourth quarter of 2000, GDP expanded at
an average annual rate of change of 3.5 percent. Real GDP reached a peak in the fourth quarter of 2000;
GDP then decreased a total of 0.6 percent (0.8 percent at an average annual rate) in the first three
quarters of 2001. GDP increased 2.7 percent at an average annual rate in the fourth quarter of 2001.

The percent change from the preceding year in the price index for gross domestic purchases was
unrevised at 1.5 percent for 1999, was revised down from 2.6 percent to 2.5 percent for 2000, and was
revised up from 1.7 percent to 1.9 percent for 2001. The largest upward revision to the percent change
in the price index for the quarters of 1999-2001 was 0.6 percentage point (first quarter of 2001); the
largest downward revision was 0.5 percentage point (first quarter of 2000).

Current-dollar GDP was revised up $5.7 billion, or 0.1 percent, for 1999; was revised down $48.3
billion, or 0.5 percent, for 2000; and was revised down $125.9 billion, or 1.2 percent, for 2001. The
percent change from the preceding year was revised up from 5.5 percent to 5.6 percent for 1999, was
revised down from 6.5 percent to 5.9 percent for 2000, and was revised down from 3.4 percent to 2.6
percent for 2001. Current-dollar GNP (GDP plus net income receipts from the rest of the world) was
revised up $35.3 billion, or 0.4 percent, for 1999; was revised down $12.8 billion, or 0.1 percent, for
2000; and was revised down $98.7 billion, or 1.0 percent, for 2001. Net income receipts was revised up
for all 3 years: $29.5 billion for 1999, $35.5 billion for 2000, and $27.2 billion for 2001. The revisions
to net income receipts -- which affect GNP, national income, corporate profits, net interest, and personal
interest income -- stem from the revisions to BEA's international transactions accounts (ITA's) that were
released in June. Although the revisions to the ITA's extended back to 1993, the revisions prior to 1999
are not incorporated into the NIPA's at this time. (An article describing the revisions to the ITA's was
published in the July 2002 issue of the Survey of Current Business.)

National income was revised up $6.6 billion, or 0.1 percent, for 1999; was revised up $3.5 billion,
or less than 0.1 percent, for 2000; and was revised down $95.5 billion, or 1.2 percent, for 2001. For
1999, upward revisions to net interest, to nonfarm proprietors' income, and to rental income of persons
were partly offset by a downward revision to corporate profits. For 2000, a large upward revision to net
interest and smaller upward revisions to nonfarm proprietors' income, to other labor income, and to rental
income of persons were partly offset by a large downward revision to corporate profits and a smaller
downward revision to farm proprietors' income. For 2001, a large downward revision to wages and
salaries and smaller downward revisions to corporate profits, to farm proprietors' income, and to nonfarm
proprietors' income were partly offset by a large upward revision to net interest and a smaller upward
revision to other labor income.

Corporate profits from current production -- profits before tax with inventory valuation and capital
consumption adjustments -- was revised down for all 3 years: $19.4 billion for 1999, $88.3 billion for
2000, and $35.5 billion for 2001. For 1999, profits before tax (PBT) accounted for most of the revision.
For 2000 and 2001, large downward revisions to PBT and smaller downward revisions to the capital
consumption adjustment accounted for the revisions. For 1999, the downward revision was to profits of
both financial and nonfinancial corporations. For 2000 and 2001, profits of nonfinancial corporations
accounted for most of the downward revisions.

Personal income was revised up $9.2 billion, or 0.1 percent, for 1999; was revised up $87.4 billion,
or 1.1 percent, for 2000; and was revised down $38.2 billion, or 0.4 percent, for 2001. For 1999,
upward revisions to personal interest income, to nonfarm proprietors' income, and to rental income of
persons were partly offset by a downward revision to personal dividend income. For 2000, a large
upward revision to personal interest income and smaller upward revisions to other labor income, to
nonfarm proprietors' income, and to rental income of persons were partly offset by downward revisions
to farm proprietors' income and to personal dividend income. For 2001, a large downward revision to
wage and salary disbursements and smaller downward revisions to farm proprietors' income, to personal
dividend income, and to nonfarm proprietors' income were partly offset by a large upward revision to
personal interest income and smaller upward revisions to transfer payments to persons and to other labor
income. The large downward revision to wage and salary disbursements for 2001 reflected the
incorporation of newly available Bureau of Labor Statistics (BLS) tabulations of wages and salaries of
employees covered by state unemployment insurance.

Disposable personal income (DPI) (personal income less personal tax and nontax payments) was
revised up $9.4 billion for 1999, was revised up $89.2 billion for 2000, and was revised down $24.1
billion for 2001. For 1999 and 2000, the revisions were similar to those to personal income. For 2001, a
downward revision to personal tax and nontax payments also contributed to the revision. The percent
change from the preceding year in real DPI was revised up from 2.5 percent to 2.6 percent for 1999, was
revised up from 3.5 percent to 4.8 percent for 2000, and was revised down from 3.6 percent to 1.8
percent for 2001.

Personal outlays was revised down for all 3 years. Downward revisions to PCE accounted for most
of the revisions for 1999 and 2000 and more than accounted for the revision for 2001. The personal
saving rate (personal saving as a percentage of DPI) was revised up from 2.4 percent to 2.6 percent for
1999, was revised up from 1.0 percent to 2.8 percent for 2000, and was revised up from 1.6 percent to
2.3 percent for 2001.

The statistical discrepancy is current-dollar GDP less current-dollar gross domestic income (GDI).
It arises because most components of GDP and of GDI are estimated independently. GDP measures final
expenditures -- the sum of consumer spending, private investment, net exports, and government
spending. GDI measures the incomes earned in the production of GDP. In concept, GDP is equal to
GDI. In practice, they differ because they are estimated using less than perfectly consistent source data.

As a result of the annual revision, the statistical discrepancy as a percentage of GDP was revised
from -0.8 percent to -0.4 percent for 1999, was revised less than 0.1 percentage point at
-1.3 percent for 2000, and was revised from -1.5 percent to -1.2 percent for 2001. The revision to the
discrepancy for 1999 primarily reflected a downward revision to GDI. For 2000 and 2001, downward
revisions to GDI were partly offset by downward revisions to GDP.



Comment by Doug Henwood:

Well the numbers are out, and the boom was less boomy than we
thought. The last couple of paragraphs deal with the arcane matter of the statistical
discrepancy, which I normally wouldn't bring up, except that in this
case it embarrasses Alan Greenspan. The full name of the GDP exercise
is the national income and product accounts (NIPAs). There are two
sets of estimates - one of product (expenditures on consumption,
investment, etc.) and one of incomes (wages, profits, etc.). In
theory, the two accounts are supposed to match; every dollar of
income is earned in production. In practice, they don't quite match,
and the difference is called the statistical discrepancy. The
statistical discrepancy had been unusually large in the last few
years, for reasons no one quite understood; income was running well
ahead of product. The BEA says the product number is more reliable,
and they feature it in their statistical releases (e.g., many people
have heard of GDP [gross domestic product], but almost no one has
heard of GDI [gross domestic income]). But New Economy optimists,
chief among them Greenspan, focused on the income figure, saying that
it might be the more reliable number. They were wrong. The income
numbers have been revised down significantly, and the statistical
discrepancy has returned to more normal levels. But since Greenspan
is the greatest central banker of all time, this bit of irrational
exuberance won't be held against him.

Doug

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MORE RIGHT THINKING

Jason thinks she's a spunk, though I'm afraid I can't see it myself (two left eyes, you know), but geez, Jase, beauty is only skin deep, right? And ugly goes all the way to the bone. Lean Left does a nice take on the latest Ann Coulter nonsense on why it's okay to bomb abortion clinics.

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COOKED BOOKS, BURNED FINGERS and the WALLS CAME TUMBLING DOWN

Interesting piece from the Morgan Stanley group that mentions the fact that the official US Govt statistics for the previous three years--the end of the booming 90s of neoliberal bliss--are about to be updated (as is common practice) and maybe there won't be quite the orgasmic vindication of unleashed capitalism that we were led to believe. Never!

The US accounting profession has a lot of egg in its face right now. As the numbers get restated, the great earnings bonanza of recent years is being questioned as never before. While the government’s national income accountants are hardly in the same boat as those at Arthur Andersen, both groups of professionals appear to be guilty of having overstated much of what was supposedly so glorious about the New Economy. We have a saying in America, "What goes around, comes around." Sadly, the numbers we were all told to trust have simply turned out to be wrong -- wrong for companies, wrong for the economy at large, and wrong in the eyes of financial markets. I guess the words of Benjamin Disraeli will always haunt me, "There are three kinds of lies: lies, damned lies, and statistics." Such are the painful excesses of any bubble. WorldCom is not the end of this saga.

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COUPLE of NEW-TO-ME BLOGS

Please take the time to check out Two Tears in a Bucket and Dissociated Press. Both had a lot of interesting stuff and were good finds.

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OVERTURES, CURTAINS, LIGHTS

Ever been in that position where people around you start speaking about you in the third person as if you weren't in the room with them? No? Okay, it's just me.

One way to imagine what it's like might be to read PUBLIC DIPLOMACY: A STRATEGY FOR REFORM: A Report of an Independent Task Force on Public Diplomacy Sponsored by the Council on Foreign Relations.

This extraordinarily honest 16,000 word document (including appendices) is the strategic plan that outlines the need for and the methods of the Office of Global Communications mentioned first a couple of posts down.

It concedes that the "image problem" the US has overseas is not only serious but can only be handled by an aggressive public relations campaign mounted by the Federal Government working in partnership with private individuals and industries, especially those involved in the entertainment industry. It calls this offensive "public diplomacy", itself a beautiful example of the PR-persons craft.

In other words, it sees the problem purely in terms of spin and nowhere at all addresses the apparently too-radical idea that some headway might be made if the United States modified its behaviour in some way. As such it is akin to the person who, annoyed by the noise of radio, turns on the TV to drown out the sound rather than simply turning off the radio:

The purpose here is not to increase U.S. popularity abroad for its own sake, but because it is in the U.S. national interest. Doing so requires a deeper understanding of foreign attitudes and more effective communication of our policies. It also means fully integrating public diplomacy needs into the very foundation of our foreign policies in the first place. Particularly now that we are fighting a war on terrorism, we must come to understand and accept that "image problems" and "foreign policy" are not things apart: They are both part of an integrated whole.

The particular focus is on the "war on terrorism" which, in one of the reports most revealing asides it characterises in this way: "For the foreseeable future, the war on terrorism will and should overshadow other policy issues..."

The official line is that the "war on terrorism" will go on for the "foreseeable future"? No mention here of "being home by Christmas" or other (often empty) promises that have characterised other wars. I wonder if they meant to be so honest or if they just forgot we were in the room?

The report offers plenty of support for the contention that the US has an image problem:

Gallup's poll of nearly 10,000 people in nine Muslim countries-including Indonesia, Iran, Jordan, Kuwait, Lebanon, Morroco, Pakistan, Saudi Arabia, and Turkey-found that 53 percent of respondents viewed the United States unfavorably. When asked whether they believed that Arabs carried out the September 11 attacks, well over 70 percent of those polled in Indonesia, Kuwait and Pakistan said, "No, not true." In Saudi Arabia, Indonesia, Turkey and Pakistan, 44 percent to 53 percent said they believe the Western value system has a negative influence on the Islamic value system. Many in the Muslim world do not believe the U.S. military action in Afghanistan is morally justifiable-well over half of Turks, two-thirds of Kuwaitis, and 80 percent or more in Pakistan and Indonesia. And finally, few of those polled by Gallup in the Muslim world believe that western nations respect Arab/Islamic values-only six percent of Iranians, six percent of Indonesians and 13 percent of Saudis believe this. In a Zogby International poll conducted in the spring of 2002, Arab countries gave the United States low favorable ratings across the board in its dealings with Arab nations.

And they know the problem is not confined to the Middle East:

Though a recent Council on Foreign Relations/Pew Research Center/International Herald Tribune poll shows Europeans have a better opinion of President Bush than they did before September 11, they remain highly critical of most of his policies and what they see as a unilateral approach to international affairs. Fully 85 percent of Germans, 80 percent of French, 73 percent of British and 68 percent of Italian respondents say the United States is acting in its own interests in the fight against terrorism, while very few feel the United States is taking into account the interests of its allies.

There is certainly the concession that US behaviour is part of the problem, but there is a genuine reluctance to countenance, say, policy changes that are "outside US interests", which, of course, are self-defined. Given this fact, all that is left is manipulation and soft-soaping. Thus they begin by saying that:

...our public diplomacy must show direct evidence of U.S. government efforts to alleviate such pain through aid packages and other American-sponsored activities, including those on behalf of Muslims in places such as Bosnia, the former Yugoslavia, and the Palestinian territories. It also means articulating to lesser-privileged nations a positive vision of their future that shows that we understand and support their desire for increased prosperity, an improved quality of life, and peace.

The Oprah approach - we feel your pain.

But you just know there is a great big "but" coming:

We must remember, however, that expressing empathy alone, particularly if it seems contradictory to our policies and values, will not be nearly enough. For the foreseeable future, the war on terrorism will and should overshadow other policy issues, but this war also underscores the urgent need for more effective public diplomacy in general.

As I say, it doesn't seem to occur to them that maybe stopping the "war on terror" might go a long way to "expressing empathy" with "lesser-priveldged nations". It only raises the questions of how they are going to spin it. The need for such spin is "urgent".

And on this score, they are not exactly short on ideas and strategy BUT:

Let us be clear: public diplomacy is not a matter of seeking foreign public approval to drive U.S. policy, nor is it simply an effort to win popularity. Rather, it involves a baseline recognition that foreign attitudes and understanding affect the success or failure of U.S. policies.

As if we didn't know. It's kind of like, we want you to like us and not bag us, but we don't really care what you think. Does this make anyone else think that maybe all this effort into "public diplomacy" isn't going to achieve a lot and may in fact be counter-productive? To reinforce the point, the paragraph continues:

We cannot always make others happy with our policy choices, nor should we.

Okay, so what are we doing here again? Oh yeah:

Part of our challenge is to better explain why we do what we do, and then to accept that many will choose to differ. We may be able to offset some of the hostility, but not eradicate it. This is part of being a great power. We should not leave the impression that all differences are resolvable or could be if we would just be nicer or more empathetic.

Well, I don't think there is much risk of that.

So how do we set the top of public diplomacy spinning? I thought you'd never ask.

There is actually quite a lengthy segment that outlines the process of setting up the infrastructure, including a statement by the Prez and education of diplomats. But it starts getting really interesting when they outline the PR push proper, and we really do get into full-blown product placement marketing talk:

New attitudinal research and target marketing can define potential target audiences along a continuum of support for U.S. foreign policies. New research techniques have shown that it is six times more expensive and difficult to move "undecided" consumers to the category of "soft support" than it is to move "soft support" to "hard support." Therefore, we must "move the moveable" before we can effectively address the skeptical.

To this end, a number of strategies are suggested:

We must more fully employ credible messengers, who complement official government sources. To encourage genuine dialogue and avoid an "us vs. them" approach, it is essential that we identify and develop indigenous talent, (i.e., mullahs, talk show personalities, etc.),

Ah, yes. The mullahs and the talk show personalities. So the John Ashcrofts and the Rush Limbaughs.

We also have to make sure that overseas media outlets tell the truth. Thus we cannot allow their to be any "bashing" of the US. IN other words, the truth will be, by definition, favourble to the US. So again, no need for the US to change, the rest of the world just has to learn the truth:

Conversely, we often confront "friendly" government-supported media, such as in Saudi Arabia and Egypt, that although they are major recipients of U.S. assistance, tolerate and even encourage media bashing of the United States. Should we challenge such bashing with the governments in question? And if so, how? This is not a call for censorship, only for efforts to encourage professional journalism that would separate truth from falsehood.

Then there is a rather confusing interlude in light of the original diagnosis and the received wisdom that says "they" hate "us" because of our values.

If recent polls are correct, the Muslim world responds much more favorably to our values and freedoms than they do to our policies. We must leverage the common goods of freedom and democracy to build consensus and ownership.

Anyway, I guess as long we don't actually change any of our policies and just promise to leverage "the common goods of freedom and democracy", because that what's freedom and democracy are all about: leverage.

And now they get really serious about finding the right people to deliver the message, and this is all tied in with their policy of increasing the involvement of the private sector. The private sector is useful, not least because it can be a "heat shield" "that can be useful when tackling controversial issues that might have negative political or diplomatic repercussions." That is to say: "Private messengers can engage in controversial critiques and debates that the U.S. government might often shrink from for fear of political backlash." The best people to do the job are likely to fall into these sorts of categories:

*Arab-American firefighters and police officers who rushed to the site of the World Trade Center collapse;
*Victims, particularly women and children and including Arab and Muslim Americans, who can tell their stories or those of lost loved ones;
*Arab or Muslim Americans who are thriving in the United States and who can attest to the respect their religion receives;
*Arab and other Muslim students who have studied at American universities and colleges and returned to their home countries after graduation, who were recruited as part of the existing State Department program for foreign students of all nationalities;
*Well-known Muslim- and Arab-American sports figures and celebrities (i.e., Mohammed Ali);
*Business leaders;
*Scientists;
*Healthcare leaders.

Yes, get those distraught mothers with pictures of their dead children out there and working for the cause. Patriotism demands no less. If they don't work, maybe we could try to get: "credible television properties and personalities such as MTV and Sesame Street to play a substantial role."

In a delightful Big Brother twist, the document also recommends setting up the "Corporation for Public Diplomacy" (CPD), the idea of which is to:

Bridge the gap between public and private sector initiatives by creating an independent, not-for-profit "Corporation for Public Diplomacy"

Um, seems to me that if one of the interested parties is creating, funding and running the CPD, then the use of the word "independent" is a little fraught. But as the bard said, you know sometimes words have two meanings. Just two?

In fact, they concede the point in the next para: "The CPB is not part of a cabinet-level department, and is therefore somewhat independent of direct political influence."

Which reminds me, my friend Mary is going to have a baby and the father has just left her: I guess she's only somewhat pregnant.

This "somewhat independence" opens up a lot of opportunities that are not available to the government alone, they argue. In other words, they're are explaining why they want to create this faux corporation and use it as a front organisation, and thus admitting that it is a faux organisation. Kinda honest of them really.

Corporation for Public Diplomacy would likewise seek to leverage private sector creativity and flexibility. It could receive private sector grants and would attract media and personalities who might be less willing to work directly with U.S. government agencies. Its proposed structure also takes advantage of the fact that private media often communicate American family values, religious commitments, and the merits of democracy more effectively than do government officials. Groups such as the Advertising Council and the ad hoc group of Hollywood executives, producers, engineers, and creative talents who joined together after September 11, which have done enormous work for other public causes, should be enlisted to help the CPD.

The best cover the "somewhat independence" provides, however, is compromising the actual independence of other organisations.

Finally, we believe the CPD would be well-positioned to support independent, indigenous new media channels (i.e., satellite, radio and TV networks or private satellite TV stations with joint venture programming with existing Arab stations) or joint think tanks on domestic issues with countries in the region.

With "support" like this, who needs independence?

And now, courtesy of the doublespeak world which they habitually inhabit, they click back into the use of the word "independent" as if it was meant to mean what it means and speak of creating yet another front organisation, this one even having the word "independent" in the title. (Remember fellas, you've already told us that these things are only somewhat independent, just a couple of paras back. How bad do you think our memory is?)

Establish a quasi-public/private "Independent Public Diplomacy Training Institute" (IPDI). The long-term need to attract and train modern Foreign Service professionals is analogous to the need for those who understand the ever-increasing role of economics in foreign policy-"geoeconomics"-in contrast to the earlier dominance of strategic Cold War thinking. This new independent entity could help in recruiting and preparing a new breed of foreign professionals who understand the critical role of public diplomacy. The IPDI would also attract the best talent and techniques from U.S. corporations and universities for research, marketing, campaign management, and other relevant fields and then apply private sector "best practices" in communications and public diplomacy and become an important training ground for the next generation of public diplomacy and governmental officials.

Yes, you can see the independence just oozing out the pores of this new independent body:

The IPDI would offer training and services in public opinion research, cultural and attitudinal analysis, segmentation, database management, strategic formulation, political campaign management, marketing and branding, technology and tactics, communications and organizational planning, program evaluations, and studies on media trends. In coordination with, and as a supplement to, the State Department's National Foreign Affairs Training Center, such an Institute would enhance the quality of public diplomacy programs and the skills of the next generation of foreign affairs professionals.

They are even kind enough to give us a case study of how all this independence might work by describing in some detail their considerable knowledge of a Middle Eastern Radio Network, and a whole game-plan for imbuing it with the sort of independence that will turn it into one fine propaganda machine. I ask again, do you ever feel like you've walked into a room and they are talking about you, and looking at you, but it's as if you weren't there? Perhaps I was inadvertently wearing this.

Prominent among these is the new Middle East Radio Network (MERN) created in the spring of 2002. Known in Arabic as "Radio Sawa," this station aims to attract young Arab adults. Delivered via local FM and AM radio and digital satellite, the station is still in the audience-building phase, so most of its programming is Middle Eastern and American music, with newscasts twice an hour. Its plans include gradually adding components, however, and eventually there will be audience voting for favorite songs, recorded questions from listeners about America and U.S. foreign policy, call-in discussions, and pieces on young people, women's issues, and health. In other words, MERN will interact with its audience and the underlying messages will be respect for each other and each other's opinions. MERN is also building an Arabic-language Web site that announcers will constantly promote on the air. On that Web site will be key U.S. documents, including the only Arabic-language text in cyberspace of the US constitution. This approach may become a model for all the languages of U.S. international broadcasting.

Ultimately, it less a concern with mullahs than with moolah. All this independence pedaling is going to cost a shitload, and gee, we'd like some money.

The bottom line: U.S. public diplomacy must be funded at significantly higher levels-with moneys phased in over several years, tied to specific objectives, and monitored closely for effectiveness, including the possible use of test campaigns....To make public diplomacy the kind of priority the administration has talked about would involve a budget far in excess of the approximately $1 billion currently spent by the State Department and the Broadcasting Board of Governors in their public diplomacy programming. As a point of reference, just one percent of the Defense Department's proposed budget of $379 billion would be $3 to $4 billion. This pales in comparison to the $222 billion American companies invest annually on overseas advertising. The marginal increases in funding now being considered on the Hill will have insufficient impact and will not be commensurate with the problems this report describes nor the reforms for which it calls.

Actually, you can see their point. In the greater scheme of things it isn't that much money, only about a couple weeks worth of my PayPal donations, and look at the lefty propaganda I manage to put out to the many millions of blog-readers from around the world who log-on here religiously every day.

But to sum up: so this is the strategy the rest of the ungrateful world can look forward to. No quarter given; just lots of distraught mothers and muppets testifying to the greatness of the imperial centre (I mean superpower) via the work of modestly funded institutions of independence.

Of course, you'd have to be hopelessly naive not to realise that stuff like this goes on, but it is not every day that you get to see behind the curtain in quite so explicit a way.

And isn't it lucky that none of "them" can read this website and find out that it's all a PR exercise? I mean, imagine if they knew we were talking about "them" like this.

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FIRST ABOLISH THE CEO

I think I'm beginning to understand how you poor oppressed righties felt when John Howard bravely and single-handedly lifted the yoke of Paul Keating's political correctness from your poor broken backs. With capitalism doing one of its regular double backward pikes with tuck, there has arisen a little more questioning of the veritable truths, including in this piece from Ross Gittins:

The public habitually blames economic rationalism for all the aspects of modern economic life we don't like. But I think a fair bit of the blame should go to rationalism's bastard child, the Cult of Shareholder Value.

It's already become clearer that the recent obsession with company profits and share prices is very much a product of the long bull run in general and the fad of executive share options in particular.

Options have been discredited and are on the way out, which may significantly change the behaviour of CEOs over the rest of the decade. I think the new conventional wisdom will be that executive remuneration is way too high and must be reduced.

And, if we're lucky, there may also be a view that "short-termism" was one of the great vices of the 18-year bull run that must be "reformed" in the present decade.

As John Quiggin says, imagine if Margo Kingston had said that.

One thing is for sure, Alan Woods would never say it, as a piece from a few weeks back indicated (no link, bugger it), where he ran the usual von Mises-type line, a bit like this from James Kee:

What's missing from every list of corporate responsibility is the basic purpose of enterprise: to profit by providing goods and services that people want. If private property were truly respected, shareholder interest would be the primary, or even better, the sole purpose, of the corporation.

Yeah, right. Profit and wealth are created in a vacuum; nothing else needs to be considered.

Anyway, there's another piece over at The Nation that looks at the cult of shareholder value:

The deeper debate is urgently needed. If the current swirl of reform actions succeeds only in restoring the status quo ante--a stock market that investors once again "trust"--then Americans at large will remain the losers. The problems of corporate governance are about much more than rapacious egotism. The glorification of CEOs and their outrageous self-dealings grew directly out of Wall Street's narrow-minded concept of the corporation's purpose, the doctrine known as "shareholder value." Starting in the 1980s, corporate raiders (often supported by the major pension funds) attacked and took down numerous managements on grounds that the CEOs were too timid about downsizing their companies--that is, squeezing and shedding workers or discarding viable units of production or slashing long-term research budgets in order to maximize short-term gains for shareholders and insiders.

To my two left ears, it is sounding like the latter not the former quote is reflecting thinking that is becoming all the rage.

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ANOTHER WAY TO WASTE GOOD BEACH TIME

Here's a variation on a search engine. Punch in two names--say, Tim Blair and Noam Chomsky--and it spits out a graph comparing the number of hits it gets for each name.

oTher Tim got [3482]; Chomsky got: [104,310] The graph looked a bit like this:

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Anothery I did: Tim Dunlop [422] John Howard [108, 787]

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Try your own.

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VAUDEVILLE ACT II

As usual, The Cato Institute is reading my blog, responding to my socialist libertarian concerns. Thus they post their own story on the new "Office of Global Communications" and offer this link to one of their books reviews.

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THROW THE SWITCH TO VAUDEVILLE

Although Americans remain incredulous that they are not universally loved and adored, and many have a nasty tendency to blame this lack of affection on we silly, jealous foreigners, they will not give up on the possibility that underneath we are all really just Americans who want nothing more than to be exactly like them. There is this odd presumption that if you scratch anybody in the world hard enough or in the right place, a flag-waving American will pop out. A human, on this logic, is simply an American waiting to happen.

The latest implement for releasing our inner yank is the proposed "Office of Global Communications."

The office, due to be up and running by fall, will allow the White House to exert more control over what has become one of the hottest areas of government and private-sector initiatives since Sept. 11. Known as "public diplomacy," it attempts to address the question President Bush posed in his speech to Congress the week after the terrorist attacks: "Why do they hate us?"

Unfathomable, isn't it?

House International Relations Committee Chairman Rep. Henry J. Hyde (R-Ill.) said in a speech last month to the Council on Foreign Relations was at a loss: "How is it that the country that invented Hollywood and Madison Avenue has allowed such a destructive and parodied image of itself to become the intellectual coin of the realm overseas?"

The short answer might be that it is the country that invented Hollywood and Madison Avenue. Another answer might be that it is also that country that gave the world the CIA and the Pentagon and the biggest empire in history (no don't say empire, say superpower).

Or maybe it's because some American's say stuff like this:

“AMERICA! AMERICA!”—sang Katharine Lee Bates in 1893—“God shed His grace on thee.” Appealing to God to shed the same grace on the rest of the world can no doubt be taken as a call for American imperialism. I confess that the word imperialism does not frighten me, but since a term like “leadership” would be less incendiary, I will resort to it.

In advocating such leadership by America, I do not make light of the widespread doubts that this country, by its very nature, is endowed either with the will or the skill to play even a benevolently imperial role in the world. But then the cadences of George F. Kennan in 1947 spring reassuringly back into my ears. To my delight, I heard echoes of his words in President Bush’s State of the Union speech. I heard them when he opened by affirming that it was history that had called America to action, and that it was “both our responsibility and our privilege to fight freedom’s fight,” and then again when he concluded that this represented “a unique opportunity” for us to seize.

But Kennan’s more eloquent formulation remains the locus classicus here, and so I want to conclude by quoting it once more, in an updated form as applicable to World War IV as the original was to World War III:

The thoughtful observer of Islamic terrorism will find no cause for complaint in its challenge to American society. He will rather experience a certain gratitude for a Providence which, by providing the American people with this implacable challenge, has made their entire security as a nation dependent on their pulling themselves together and accepting the responsibilities of moral and political leadership that history plainly intended them to bear.

To which, surely, the only fitting response is a very loud and a very resonant amen.

Could even be the measured tones of Charles Krauthammer that some find, what, unsoothing?

Our enemies have already turned against us. Our allies will not. Europe knows that in the end, its security depends on our strength and our protection. Europeans are the ultimate free-riders on American power. We maintain the stability of international commerce, the freedom of the seas, the flow of oil, regional balances of power (in the Pacific Rim, South Asia, the Middle East) and, ultimately, we provide protection against potentially rising hostile superpowers.

The Europeans sit and pout. What else can they do? The ostensible complaint is American primitivism. The real problem is their irrelevance.

Being subordinate they can tolerate. Irrelevant they cannot. They may have been subordinate to the United States in the Cold War, but in that great twilight struggle, they manned the front lines, gamely fielding huge land armies against the Warsaw Pact. We provided the nuclear guarantee. They provided the boots on the ground. We were the dominant partner. But we were still partners.

No longer. And they know it. The Soviet threat is gone. Against the new threat of terrorists and terrorist states, the Europeans are sidelined. They are capable of police work but are irrelevant to war-making.

The Afghan war, conducted without them, highlighted how America's 21st century high-tech military made their militaries as obsolete as were the battleships of the 19th century upon the launching of the Dreadnought in 1906.

This is not our fault. We did not force upon them military obsolescence. They chose social spending over defense spending -- an understandable choice, perhaps even wise given that America was willing to pick up the slack. But hardly grounds for whining.

We are in a war of self-defense. It is also a war for Western civilization. If the Europeans refuse to see themselves as part of this struggle, fine. If they wish to abdicate, fine. We will let them hold our coats, but not tie our hands.

Or possibly even stuff like this, by Fox host, Tony Snow:

Something in our nature insulates us from grief.

Time erodes raw pain; forgetfulness dulls the sharp edges of agony. But we should not recover too quickly from September 11.

Recall for a moment the chilling details. The hijackers moved with brisk efficiency through security lines. A pilot banks a jet just before it explodes into the World Trade Center, dipping the wings in order to kill as many people as possible. Firemen rush into what will become their tombs. Giant buildings shudder and collapse. The bright sun disappears, blotted out by carnage and debris.

Hundreds of miles away, a fireball consumes part of the Pentagon. And over the skies of Pennsylvania, Todd Beamer shouts, "Let's roll," knowing he will die so others can live.

Then, as we count our dead, others far away dance in the streets.

We Americans have been drawn into a war devoted not to the conquest of land but the governance of souls. It has awakened in us a fresh appreciation of evil, a renewed zeal for good, and a recognition that American citizenship grants us a unique and precious sense of brotherhood.

Now, if we can manage our anxieties and fears, we will become better, nobler and stronger. We're doing it already. After six months, light has punched through September's darkness. Hope and resolution have shoved back despair. After six months, we're different but the same — brash, daring, idealistic and free.

Some societies may cut and run, but we stand tall. We braved the fire to set our brothers free. We hoist the flag, and our defiance proclaims to the world three things: We'll survive, we'll thrive, and we will win.

Look, I live here. I know that not all Americans are like this. But this is what the world sees and hears. And just look a that last bit from Tony Snow, for instance. I mean really: just fuck off.

Until those with a public voice can refrain from making embarrassing and arrogant statements like this, Americans are never gonna get the love they think deserve from the rest of us. This guff from the anchor of FoxNews on Sunday epitomises the sort of blinkered superiority that just gets up other people's/country's noses.

Consider in particular the para: "We Americans have been drawn into a war devoted not to the conquest of land but the governance of souls. It has awakened in us a fresh appreciation of evil, a renewed zeal for good, and a recognition that American citizenship grants us a unique and precious sense of brotherhood."

For a start, it is not just "We Americans" who have been drawn in - it is a large number of allies and foes alike who have been "drawn in". Australians, Danish, British and others have lost their lives. You'd never know it if you lived on planet america.

The governance of souls?! Please, who exactly appointed Americans as the governors of the world's souls? What does it even mean? Planet america has no such mandate.

And as for the 'unique and precious sense of brotherhood'. Well, no-one wants to deny you your sense of brotherhood, or even deny its preciousness. So why do it to us? Because that's exactly what you are doing by calling yours 'unique'. It ain't unique, except perhaps in its ability to blind itself to its own faults and the uniqueness and goodness in others.

This is planet america at its arrogant worst. Get over yourselves, you who construct the public parameters of planet america.

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"The market is rational, and the government is dumb."

So quothed House Minority Leader Dick Armey (R-Texas) not so long ago. The LA Times takes him to task (a little bit) for this hubris, and joins the ranks of those in the mainstream belatedly noticing that there actually is such a thing as society:

The free market is an unparalleled engine of prosperity, but it can't guarantee all the goods a decent society demands. And it isn't the repository of all wisdom about how society should operate. If the uproar over cooked books and the collapsing stock market drives home those simple truths, it could play a useful function--at least as long as this backlash also doesn't go too far.

It's pretty tepid stuff, of course, but gift horses and all that.

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GREAT LEFTY BLOG, IMHO

Just stumbled onto this site, called Lean Left. Lots of good stuff here, especially this post, where he, um, spars with the man who wrote the wonderfully entitled book--which must have seemed like a good idea a few months back--Dow 36,000.

Now back to that Harvard health report.............................

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THE RICH-POOR GAP MAKES YOU SICK

I originally found this report--Income distribution and mortality: Test of the Robin Hood Index in the United States. British Medical Journal, April 20, 1996. 312, 1004-1008--when doing some research on the third way (no link, sorry). You will recall that 3Wers like Mark Latham don't think there is anything wrong with inequality, only with poverty, as self-serving a fudge as you are likely to get.

Anyway, I noticed today that Kevin Phillips mentions this same Harvard Research in his book Wealth and Democracy, so I was prompted into having another look.

Essentially it argues that, in their study, "mortality rates were linked more closely to relative than absolute income, with rising inequality meaning higher morality," as Phillips explains it.

This research and related material is given a pretty detailed look in this article by Peter Montague. He writes:

These studies are important because they confirm work that has previously found a relationship between income inequality and health, using data of good quality from all 50 states.[11] Inequality in the distribution of income and wealth[12] has been increasing in the U.S. for about 20 years.[13,14,15,16] In 1977 the wealthiest 5% of Americans captured 16.8% of the nation's entire income; by 1989 that same 5% was capturing 18.9%. During the 4-year Clinton presidency the wealthiest 5% have increased their take of the total to over 21%, "an unprecedented rate of increase," according to the British ECONOMIST magazine.

Seems to me to hang a major question mark over the claims that inequality doesn't matter.

Am about to read this piece, also from the Harvard School of Public Health.

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TEXAS MAN GETS 300 YEARS FOR NOT DEALING DRUGS

Just when you thought it was safe to be black in America.

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THE PUBLIC AND THE PRIVATE

The Catallaxy Kids bring this fabulous article by Gary Sturgess to everyone's attention. Great discussion of a complex question, no matter where you sit on the public/private spectrum. At the end, however, he does seem to dip into the over-reliance on the wonders of competition, something Prof Quiggin made mention of recently. Still, worth a read.

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NO PAEANS TO DEMOCRACY AT THE AUSTRALIAN

The Editorialists over at The Australian, the home of Emma Thom, are right to say that: "The "fast-track" trade negotiating authority secured by George W. Bush after a tight vote in Congress...provides the basis for serious negotiations to begin on a US-Australia free trade agreement."

But they show the authoritarian hand of nearly all free-trade advocates when they add: "Not since 1994 has a US president had the power to negotiate bilateral or global trade deals without congressional interference."

Congressional interference? That would be the elected representatives of these here United States doing their job?

The "interfering" clause of the Constitution says in Article I, Section 8 that: “The Congress shall have Power … to regulate Commerce with foreign Nations.”

Bloody constitution.

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NEW MOVES IN SPORT REGULATION


No Rules is Good Rules: sport and the new frontier of deregulation

The Minister for sport, Mr Rod Kemp, yesterday announced a new government initiative to deregulate sports. Beginning with the first parliamentary session of the new financial year, the government intends to introduce legislation into the parliament that will be, in the words of the Minister, ‘the best thing to happen to sport since they invented corporate boxes.’

‘We will begin with legislation to deregulate tennis,’ the minister said, ‘and after that we will move through all major sports. It is the logical extension of our other economic and social programs that have emphasised personal responsibility, healthy competition, and the survival of the fittest.’

A working paper from the Minister outlined the proposed changes to tennis within the new deregulated environment.

In phase one, the net will be removed, thus eliminating ‘the single biggest obstacle to the free movement of the ball from one side of the court to the other.’

In phase two, the term ‘court’ will become redundant as the boundary lines themselves are removed. ‘This will mean that players are no longer restricted to pre-allotted spaces, such as courts, in which to play and may instead instigate a game of tennis anywhere. Why should Wimbledon be held at Wimbledon every year? No longer will our great athletes like Lleyton Hewitt be forced to conduct their business according to arbitrary and restrictive definitions.’

The Minister said that it would also help our struggling woman players who seem to have not been able to adapt to the heavily regulated requirements of the traditional game. ‘Now they can do what they like,’ he said.

In phase three, the final phase, restrictions will be eased on what constitutes a ball and a racket and individual players will be able to decide for themselves what equipment to use. ‘Some players may find an advantage in using a slingshot and a bowling ball during the service phase of the match,’ the Minister suggested. ‘Try returning that Mr Smarty-pants Agassi,’ he added.

Opposition spokesman, Mr Mark Latham, condemned the governments move then later endorsed key aspects of it.

‘It is true,’ he said ‘that the game of tennis has laboured under a massive regulatory burden for too long and that something had to be done. I often play on the parliamentary courts and know full well how annoying that net can be in achieving our individual aims of getting the ball back to the other of the court. However, we believe the government has gone too far in its quest for reform. We believe that there is a Third Way for tennis reform and I will be announcing full details shortly.’

The Labor Party proposal would see the net laid on the ground rather than eliminated altogether, with the boundary lines also retained, though they will be dotted and painted in the same colour as the playing surface. ‘Our proposals will civilise global tennis,’ Mr Latham said.

(Later in the day, Mr Latham issued another media release and said he now agreed with everything the government had done, ever, but he would still refer to his plans as the Third Way.)

Asked about the role of the umpire in the new deregulated game, the Minister announced the formation of the Australian Athletic Administration Commission (the AAAC) whose job it will be to oversee any disputes arising from the new game.

‘Players will bring any concerns they have to the new Commission and the Commission will be properly financed to investigate all such referrals. We expect adjudications will be available within a year of submission.’

Asked about the cost of the AAAC, the Minister said that due to the radical nature of the reforms the government expected the initial costs to exceed current expenditures on tennis administration by about 300 percent, but that this figure would drop to about 220 percent after the first ten years.

Former Defence Minister Peter Reith has been appointed as Commission Chairman and he will have the final say on all matters of non-rule interpretation. ‘I couldn’t think of a fairer man to do the job,’ the Minister said. ‘No really, I couldn’t.’

In the wake of yesterday’s announcement, there has been concern from some quarters. Former tennis great, Ken Rosewall, said that as far as he was concerned, ‘if ain’t broke don’t fix it,’ but the Minister explained that that logic only applied to the Constitution.

Further criticism came from an unidentified official from Tennis Australia who said, ‘It seems to me that if you get rid of the regulations, you no longer actually have a game of tennis. Just some people with weapons, hitting things at each other.’

The Minister scoffed at such suggestions. ‘This is typical of the sort of Luddite, communist sort of thinking we have to put up with. If we had listened to people like this in economic matters we would still be living in the backward conditions of a diminishing gap between rich and poor, managed international investment and secure jobs. What a nightmare that would be! Next people will be telling me that there is such a thing as society.’

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COMING OVER ALL BLOGGY?

I've often wondered why online newspapers like the SMH don't make more use of linking, particularly when they offer inadequate 600 word summaries of something like a government report. So it is with interest that I note Gerard Henderson's latest column in the SMH, which is brimming with links (well, there's a few) . The thing looks like a blog!

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MORE FAILURES OF DEMOCRACY NOT CAPITALISM

Speaking of vilified low-life protesters, that is, those who actually did dare to challenge corporate criminality and undemocratic, capitalistic excesses, this story from Italy speaks of how police, under orders from superiors (in turn under orders from whom?), planted evidence, including "explosive bottles" to incriminate protesters.

Also covered in this article from the Guardian:

Italian police have been accused of fabricating evidence against anti-globalisation protesters at last year's G8 summit in Genoa by planting petrol bombs at their headquarters and falsely accusing them of stabbing a police officer.

According to a magistrates' investigation, the police improvised lies to justify a bloodsoaked raid at the Diaz school, which was being used by protesters as a headquarters. The raid, which left dozens injured after being kicked, punched and beaten with batons, prompted an international outcry.

Be interested to see the relative weight given to this story from those mags and newspapers that provided blanket coverage of the protests when it was all the protesters fault.

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ANOTHER HYMN TO DEMOCRATIC REGULATION

The first thing to ask about Benjamin Barber's article, as recommended by John Quiggin, is where were all these paeans to democracy and against runaway capitalism from such influential commentators over the last twenty years? The answer is that they were largely absent (John Quiggin being one of the few who can hold their heads high in this regard). All the running on the idiocy of rampant free-markets was left to grass-roots activists and protestors variously vilified as "economic illiterates", "anti-globalists", "mindless anarchists" and any other slur that most of the mainstream media and their fans in cyberspace could slap on them.

So when Barber says, "The truth is that runaway capitalists, environmental know-nothings, irresponsible accountants, amoral drug runners and antimodern terrorists all flourish because we have diminished the power of the public sphere," then he could at least acknowledge that this has been more the result of well-positioned and influential people like him abdicating this responsibility than it has been of the sort general malaise that he implies.

Second thing to say is that it is better late than never.

But isn't there something a little not-quite-right about his central argument?

Of course, Barber doesn't want to abolish capitalism, so he has to exonerate it from blame. He says: "business malfeasance is the consequence neither of systemic capitalist contradictions nor private sin, which are endemic to capitalism and, indeed, to humanity."

So there is nothing particularly nasty about capitalism as a system; any nastiness apparent is that that derives from "human nature".

This is a pretty common line of argument, especially in defence of capitalism: humans are "by nature" greedy and dishonest, and any system is going to see these key attributes manifest. It harks back to the sort of social Darwinism inherent in a lot of justifications for capitalism, even in the works of someone as smart as Hayek. Even on its own terms, it overlooks the extent to which cooperation is at the heart of human interaction (including within "nature"--human or otherwise--and in "evolution" itself) and instead elevates the competitive, greedy aspect to chief attribute.

Of course, any human system is going to need watching. But a system that is predicated on the sort of competitive, creative destruction that is at the heart of capitalism is one that is going to need more watching than one where such pressures are minimised. Barber's argument relies on the belief that context--institutional setting--has no bearing on behaviour, even as he argues that we need particular institutions to curb the institutional practices of capitalism.

To even say that we need constant democratic and regulatory supervision for the normal practice of capitalism is surely to argue that the normal practice of capitalism is such that it will continue to require such supervision, which is to admit, isn't it, that there is something inherently wrong with such a system?

Which--as welcome as some of his comments are--sorta contradicts his own starting point.

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PUBLIC GOOD PRIVATE BAD

In this article, Thomas Friedman--the oft-quoted tout of globalisation and the man who is to supporters of Israel what the Cyclops was to one-eyed monsters--argues that "fear and greed are built into capitalism"; that "our federal bureaucrats are to capitalism what the New York Police and Fire Departments were to 9/11 — the unsung guardians of America's civic religion, the religion that says if you work hard and play by the rules, you'll get rewarded and you won't get ripped off"; that "the real George Bush [is] a man who trusts his C.E.O. cronies more than the bureaucratic regulators who oversee them"; and that he has "no trust in ordinary Big Oil, ordinary Enron or ordinary Harken Energy to do the right thing without proper oversight."

Does this mean he doesn't think that capitalism is the self-correcting moral agent of legend that rewards the good and punishes the naughty? That capitalism is not a naturally occurring power for good that just needs to be released from the socialistic chains of those who would hold it down? That there is an alternative to rampant free markets?

No. Clearly some crazed anti-globalisation freak has hacked the NYT site and replaced the real Mr Friedman, author of The Lexus and the Olive Tree with this unjustifiable hymn to regulation.

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WALL STREET RALLIES IN ATTEMPT TO EMBARRASS AUSTRALIAN JOURNALIST

According to more than one blogger, because the NY stock market rose one day this week, and a story by Margo Kingston (it was more like a comment than a story, actually) used the expression "Wall Street Meltdown", then she is an idiot. The Bunyip wrote this, for example:

On the day Wall Street puts on almost 500 points, Margo Kingston weighs in on the "Wall Street meltdown," once again predicting capitalism's imminent demise. One doesn't like to highlight the poor woman's deficiencies any more than nature, Tim Blair and her own efforts have already done, but today's steaming pile is a Kingstonian classic.

While it is tempting to accept this for the clever, penetrating and biting satire that it is, it would be a whole lot funnier (hard to believe, I know) if it had some truth in it. The fact that el Margo didn't predict anything like "the imminent collapse of capitalism", I know, is beside the point when we are dealing with hyperbolic wit of the stand-up comics of the right, but there is the fact that, despite the 500-odd point rise on that particular day, overall Wall Street is down, as the BBC more generally points out:

Since mid-May, when shares began their most recent plunge, most major indexes have lost about one-quarter of their value.

And this article gives a somewhat more realistic and comprehensive picture: funnily enough they don't quote the Margo factor, so I guess this is just another area where US finance journalism trails right-wing Australian bloggers.

But yes, the market did rally: and that one day rise, certainly puts the lie to anybody who would suggest the market is down.

Nah, let's not fall into this trap. The Bunyip and the others were joking, it was just a joke, so let's just have a good laugh thanks to his hilarious insights.

And let's hope the market continues its recovery.

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LET THEM EAT STOCK OPTIONS - OR HOW THE OTHER FRACTION OF A PERCENT LIVE

The bad news for executives in companies based in Washington DC--my current long-term stop on the road to surfdom--is that their salaries and packages are lower than last year.

The good news, according to this survey, is that they've managed to stay above the poverty line.

Phew!

The median cash compensation for the 100 executives with the highest cash pay -- salary and bonus -- was $2.62 million, down from $3.2 million in 2000.

(Poverty thresholds in the US are

One person, under 65 years -- $8,959
One person, 65 years and over -- $8,259
Two people, householder under 65 years, including one child under 18 years -- $11,869
Four people, including two children under 18 years -- $17,463)


Amongst the 100 top-paid executives the salary/package ranged between Richard Fairbank at Capitol One Financial Corporation at the top and Mark D. Groban at Mid-Atlantic Medical Services Incorporated at the bottom.

Dick's package was worth $105,488,870, while Mark scraped by on a mere $2,937,550.

In completely unrelated, irrelevant, and frankly, tasteless news, The Washington Post also asks:

CAN IT be that thousands of children living in the capital city of the strongest, and one of the richest, nations on earth are going hungry this summer? It can. That is the bitter truth about the state of poverty in Washington, D.C., in the 21st century. Today there are children in the District whose only consistent meal is the one they receive in federally funded summer feeding programs. These children still go hungry because they don't get enough to eat at home. They are the kids who show up for summer programs at 8 a.m. with only the clothes on their backs and hunger pangs. It is a state of affairs that should shame the city and nation.

Thanks to the owner of a local sports team, some efforts are being made to alleviate the problem.

Washington DC has the highest crime, poverty, child-poverty and infant mortality rate in the nation.

It also ranks 20th on Old Spice scale of sweatiness.

Poverty exists throughout the United States, of course, but far better to rely on the voluntary efforts of individuals than any coordinated government effort. For a government to feed its hungry citizens involves theft, sometimes known as taxation.

As author David Kelley recently didn't explain to a meeting of hungry children in Washington DC:

The welfare state rests on the assumption that people have the right to food, shelter, health care, retirement income, and other goods provided by the government. David Kelley examines the historical origins of that assumption, which, he shows, is deeply flawed. Welfare "rights," he argues, are incompatible with freedom, justice, and true benevolence, and they have damaged the genuine welfare of those who can least afford to become dependent on the government.

You can buy Mr Kelly's book for the full story, or maybe volunteer some money here.