qed’s blog

The US administration effectively nationalised AIG to the tune of $100 billion or thereabouts but this isn’t the beginning of a socialist revolution. No, the Bush administration acted to prop up the rest of the stock market which might have collapsed if AIG had gone to the wall, which is what makes the development particularly sus.

AIG was in a bad way, they were left holding the bag on a whole bunch of so-called financial instruments which were underwritten by the now non-existent home loans that were extended to a whole bunch of people who couldn’t afford them. The credit growth over the last decade or so suddenly ran into the brick wall of reality and AIG were stuck with billions of dollars worth of assets that weren’t worth a thing. Zilch. Kaput!

So why should the US government buy them if nobody else wanted to be party to the biggest financial writedown in history? And importantly what do the good people of the US get in return for the money? Well it seems obvious that the move by the US Federal Reserve was meant to avert a complete collapse of the stock market, time will tell if that works, but it already seems likely that the crisis in the home of capitalism has not yet abated with news that a consortium of world central banks have popped another US $360 billion into the money market to avoid the next installment in the story. The figures just keep getting bigger. And the solutions are starting to look more like panic…

Why should any government, especially one that preaches so loudly on the efficacy of markets and the need to dergulate step in and pick up the tab? Who wins? Well the companies that don’t see their stock valuation disappear in a massive global plunge get some respite perhaps as do the fund managers who have sizeable portfolios invested in the stock market on behalf of pension and superannuation schemes. The average punter with a few shares might suffer, but it is the institutions with zillions of other peoples money at stake that are probably the most nervous at this stage, and here in lies the big rub for the western world.

The relatively recent phenomenon of spectacular and sustained growth in wealth via the stock market has suckered all and sundry into this house of cards. Governments around the globe have abandoned policies that protected national wealth as they heeded the neocon catchcry of global financial deregulation, market economies and notionally free trade. Public assets have been flogged off, government pensions replaced by private superannuation schemes and manufacturing dismantled in order to promote economies built on consumerism, driven by continuous credit. If the stock markets around the world collapse, then everyone is in deep shit because so many of our institutions are wedded to this system, whether we like it or agree with it or not.

And what happens when it does fall apart? Then the financial reserves of the biggest economies get raided. But stop and think about the money involved. $100 billion, to bail out AIG could probably build millions of houses, or 100’s of hospitals or thousands of solar and wind farms. That sort of expenditure results in tangible assets and is arguably a better way to spend public money. Instead the US government has effectively offered a very limited form of welfare that directly benefits the big players on the stock market and ends up returning nothing to the rest of the population, other than a vague assurance that the whole facade won’t come crashing down. Brilliant! What could be done with $350 billion?

The only truly delicious element to this very sorry debacle is the way that the news of it has been spread so successfully by the very agents of consumerism and manufactured consent, the mass media. Maybe we will see a sudden upsurge in some other headline grabbing news so that the Wall St wonder can quietly go about and do whatever else it needs to. What that could be is REALLY worrying. Maybe we will see the worldwide launch of a massive tree planting scheme or perhaps a wholesale shift towards sustainable agriculture and food for everyone. Maybe George Bush will grow wings and fly, perhaps the Queen will abdicate or Angelina Jolie will adopt another half a dozen needy babies. Maybe people will figure it out for themselves.

Last week Garnaut predicted the destruction of significant environmental treasures in good ole Oz, iconic features like the Great Barrier Reef and the Murray Darling River system. Today, the once Nuclear Disarmament Party candidate turned Labor Party hack Peter Garrett extended the deadline for legislative assessment for the proposed Gunns pulp mill in Tasmania. As Senator Milne observed “Minister Garrett had absolute discretion on this issue. He had no legal obligation to extend the deadline, and no justification for doing so”. Garrett is about as useful to the environment as a chainsaw…

While today’s news is letting us know about the latest failure of capitalism, over in WA we can see another failure in our political system, that thing that is supposed to represent the will of the people. The breakdown of the popular vote shows that the Greens polled over 11% of the vote yet they have exactly zero members in the new legislature. On the other hand the National Party who collected less than 5% of the vote end up increasing there representation to 4. It is no wonder that governments and entrenched oppositions both resist calls for proportional representation, they would all lose out. This way it is merely the voice of the people that is being ignored.

All of the fans of so-called free markets take note, deregulation and unfettered greed spells big trouble. How blatant can the failure of capitalism be? The system is supposed to make money, hah! All that is happening is that public funds are now underwriting private profits so that the whole system doesn’t collapse. In other words, taxpayers who don’t have a financial interest in these businesses are forking out so that other businesses which they also don’t have an interest in can continue with business as usual, all because if these two mortgage companies have failed to look after their own arse.

We had a little market crash a few years back and around the world governments decided to nationalise a few things so that people generally were protected against the worst effects of failures in the capitalist model. In recent times such policies have been systematically attacked and the institutions undermined and sold off as the neocons lauded the economic miracle of the stock market. Now in the US we are seeing the whole house of cards looking very shaky indeed.

This doesn’t stop here unfortunately. Right now huge slabs of money are simply disappearing, a lot of it is money on the books of banks, superfunds and governments. All of the debt the US and others have been carrying as the consumed their way through the last twenty odd years is starting to look extremely risky right now.

A few days ago I took a small plunge and paid for a subscription to Crikey. That isn’t too remarkable, people subscribe to all sorts of things. In my case it was a considered decision, after all I can get the squatter version of Crikey forever and there are plenty of other news sites around that I can trawl for free. However the recent Fairfax decision to attack its editorial workforce illustrated what is going to be the biggest single problem with mass media in the not too distant future, the question of how to make the business of journalism pay.

Now I decided to have a quick whip around to see what else is on offer as far as paying for content on the web. Lo and behold top of the pops award goes to the AFR who will give you a year’s worth of access to afr.com for only thirteen hundred bucks! Mind you they appear to charge you about half price if you already get the newspaper version so I suppose that’s an incentive.

On the other hand the Australian is available electronically for the same price as the print version which I suppose is an improvement, except who wants a complete replication of a newspaper delivered to your already overloaded in box.

You can get the Age delivered to your doorstep, newspaper style for a $1.00 a day but strangely they don’t appear to have an online version unlike the Oz. They are not alone, if you toddle off to isubscribe you can sign up for all manner of printed magazines but not a single electronic version.

Some of this might be due to concerns about plagarism and unauthorised redistribution once something hits the web, but such concerns have not prevented things like iGoogle popping up.

A few newspapers have adopted electronic versions similar to the Oz, notably the New York Times, Le Monde and the Guardian in the UK just to name a few. They offer you a electronic replica of the paper version for a comparable price plus access to the archives. It seems like a reasonable deal but it also seems to miss the point that newspapers are the product of the print age, people who want their news via the web aren’t really interested in paying for a rehash of what they can get from a newspaper. This point was illustrated by Antony Loewenstein when interviewed recently on Newshour who suggested that younger audiences are looking for a media that reflects the values of their generation. He also made the point that young people view existing media outlets with a degree of mistrust.

Still newspapers and Radio/TV stations command a sizeable amount of advertising revenue, plus they do have substantial existing audience reach. Although the numbers might be slowly declining, they are not in imminent danger of collapse. What is evident is that a cultural shift is unfolding which is bound to bring new players and different approaches that will eventually replace the institutions we currently have. Making the web pay remains problematic and creates uncertainty but hopefully the journalistic skills and traditions will survive. Although individual bloggers are often castigated for unsophisticated and factually questionable work, it may be that as individual web sites develop and gain an audience they too become more conscious of their reputation and adopt practices that reflect the same ideals that are currently the creed of existing journalism.

In the coincidence stakes the following three stories (which popped up in my Slashdot feed) pose a disturbing question, are we seeing the rise and rise of a police state throughout the world?

First story was the shooting death of a prominent anti-government webmaster in Russia whilst in police custody. Next comes the slightly less dramatic news that in the US police have raided a meeting in a public of a group who were planning a protest at this week’s Republican National Convention. Then there is also news of German customs agents raiding a consumer electronics show in search of patent breaching kit, which whilst down there on the list of things puts the news that Microsoft have been granted a patent on “page-up” and “page-down” keystrokes in a slightly more interesting light. Microsoft is apparently getting close to 10,000 patents. Patents basically mean that anyone else using “your idea” has to pay you money and you can see why Bill’s baby is so keen on them. Some people actually consider them a form of protection, harking back to the days of protection rackets, but these days backed up by police or in the German case, customs powers.

Not long ago that the press were jumping up and down about the fate of a couple of elderly ladies sentenced to re-education in China for having the guts to apply for a permit to protest about housing issues in China at the time of the Olympics. Generally the western media were fairly strident in their expressions of outrage over the Chinese government actions, it remains to be seen if that was just a opportunity to have a swipe at China or whether the free press does actually have some concerns about the exercise of police (ie state) power over its own citizens. This is a serious concern given the amount of powers that anti-terrorism laws have handed police in recent years. That such laws did nothing to stop terrorists and terrorism seems to have slipped under the radar, however civil libertarians and proponents of free speech would not find cases such as these particularly comforting.

Does anyone care?

In what is clearly a sign of what to expect from the Rudd Labor Government, Peter Garrett has just announced an expansion of uranium mining for South Australia’s Beverly mine. Mr Garrett owes his fame to his extensive history as the lead singer for Midnight Oil, a band that was for many the touchstone for sentiments against nuclear power and other environmental issues. In 1984 he was the lead candidate for the Nuclear Disarmament Party in the Australian Senate as well as a time as president of the Australian Conservation Foundation and Greenpeace board member. In 2007 he voted against an expansion of the uranium mining at the party’s national conference saying “I have very great concerns about the current fragile safety regimes and the porous nature of safeguards because of the International Atomic Energy Agency’s inadequate monitoring of safety issues.”

How betrayed are we all be feeling right now?

The Right must really be popping the champas right now as the pseudo lefties all over the country fall over themselves in a mad rush to pursue some historically right wing agendas, Iemma and the power sell off in NSW, Gillard and Rudd with John Howard’s education “reforms” and now Pete Garrett and an expanding uranium industry. It begs the obvious question of whether or not there is anyone with moral conviction actually in government. As for the Pete, obviously Nicholson didn’t realise just how far Garrett would go.

So as with Gunns, Mr Peter Garrett obviously is only too happy to accept the opinion of a select bunch of experts as to the consequences to the ENVIRONMENT of development proposals. The personal and instinctive responses that people feel on these subjects, and presumably Pete did share these feelings once upon a time (in a galaxy far far away), are irrelevant to a “professional” politician. I don’t share his view that ” (on the uranium mine) the proposal won’t produce any adverse significant impacts on matters of national environment significance” and I am sure plenty of other people who voted for Garrett and Labor agree. Nor of course is that any guarantee that there won’t be any adverse impact on the environment. Exxon showed us just how responsible corporations can be with regard to the environment.

He’s a piece of shit!

As the casualty list grows following yesterday’s Fairfax announcement, you get the feeling that the rest of the local media heavy weights are gathering tips for their own “business improvement initiative” . It seems we live in an age of management speak, where cost saving is used to describe sacking people and going forward, a term of evasion that avoids acknowledging what’s happened before. And it also seems that the disease is spreading, so we now have promises of periods of consultation that are both extensive and one on one. The door is always open, unfortunately it is fast becoming the door you show people out.

One of the amazing things you find in media industries is just how many people work in managing the people who make the content that fills whatever media space you happen to choose. That not to say that management is unnecessary, but it is a fact that the lion share of numbers and wage growth in media employment over time is in management, the people who tell other people what to do and sometimes how to do it. Something doesn’t seem right if the CEO of Fairfax can send 500 odd people in search of other jobs and then collect a performance bonus at the end of the day.

At the ABC similar thoughts must be running through the mind of a former Fairfax man, Mark Scott. Mark doesn’t collect a performance bonus, but he is busy driving a reform agenda designed to streamline content production and improve utilisation of resources. It will also mean quite a few people lose their jobs (mostly operational staff), but you don’t hear management use terms like redundancies, it is all about going forward and gearing up for the new age of media. For the record here is Mark Scott in march 2008.

Now although I confess to a certain cynicism with regard to the idea of a 4th estate, there may well be a problem for the notion of democracy if we end up with next to no one actually generating the stories that were previously thought of as journalism. This might be sold as the price of progress, but the cost savings deserve to be challenged. It is most unlikely that media organisations in the throes of retrenching staff will be very interested in commissioning expensive in-depth journalism. Trivial lifestyle features or cooking shows are much easier and cheaper to make. This is a view illustrated in more depth by Nick Davies, a Gaurdian journalist and author of Flat Earth News on the 730 report. As we move to a new world of fractured news distribution via the internet, there are clear signs that those people who once were seen as champions of the press (journalists) are being replaced with content producers who have little time or interest in pursuing the traditions or ethics that guided their predecessors. Which suits who?

Footnote
Orthodoxy - if you think about the implications of this definition from Wikipedia, it seems obvious that we are indeed losing a radical and dissenting voice in this media revolution.
In general intellectual contexts, the terms “orthodox” and “orthodoxy” are commonly used in an unfavorable sense, similar to that associated with “dogma” and “dogmatic”. The implication is that orthodox beliefs are not rationally justified but are imposed by some overseeing body, such as the dominant group in an academic discipline. For example, the term orthodox economics is commonly used by critics to refer to the dominant approach to economics, which its supporters would more commonly call mainstream economics. In this sense, orthodox economics is commonly counterposed to radical or heterodox economics.

On the front page of certain newspapers you can reasonably expect to see a vitally important story like “Can Oz Idol Survive” or even more importantly how “We could have done more” to save a certain whale. Not so very remarkably Crikey reported yesterday that media mentions about the baby whale outnumbered the next biggest story (some dying river system) by almost 2 to 1. So it seems that as far as the mass media are concerned, a dying baby whale is much bigger news than the fate of the Murray Darling. Even the ABC thought so, yesterday’s midday news was slavish in its coverage (live cross etc etc) of the now departed whale and totally bereft of any mention of the ecological disaster unfolding out west. Strange really, when you think of which one has the potential to affect more lives. Oh well…

Not only do the Poms lead the world in surveillance, it seems they are pretty much up there in the stupid stakes as well. Now ordinarily people lose things and memory stick are, let’s face it, pretty easy to lose. But technology is around to secure data these days so surely its not to much to expect that a government that spends billions on spying on its own citizens would take the trouble to lock up its data.

If a government sees its role as chief spy then it needs to clean up its act. On the other hand, this highlights the problem of entrusting systems with sensitive information. As many IT security “experts” know, humans and physical security are much bigger problems than the technology. All of this is an excellent reason why any invasion of personal security be it by surveillance or by data aggregation should not proceed until it is demonstrated that the security of the data is guaranteed. Clearly the poms fail the test, one suspects that they are not alone.