New Zealand’s “nuclear moment” *

* Spoiler alert; not really.

True to the idiom she has made all of her own, Jacinda Adern, the Mayor of New Zealand, has signalled her virtue on climate change by committing her country’s economy to being hamstrung until someone with a brain takes over her job.

If you’re interested in the details, click the link above. Be prepared, however, to be left wanting more tangible details on how this promise of carbon virtue will be achieved and funded.

That’s not the topic of this post today, however. We’re more interested in the total irony resulting in this quote and headline:

The irony is, of course, that nuclear energy does not form part of the strategy.

Bill’s Opinion

There are in life, some very useful heuristics we can use to save time when forming opinions. These are not infallible but are more often correct than not.

On climate change, if the person you are discussing the problem with fails to mention even the possibility of nuclear energy being part of the solution, you can be fairly sure they are calling for some kind of transfer of political and economic power first, solving environmental problems a far distant second.

Nobody named Brian is ever competent

It’s an uncomfortable but unconscious truth that some first names are not associated with success. Those which immediately spring to mind include; Wayne, Kevin, and Nigel.

Brian is another example. Yes, the guitarist from Queen is highly competent in the fields of music and astrophysics, but he’s the exception, like Farage is amongst all the Nigels.

Australia has a classic “incompetent Brian” running (ruining?) the bank, Wokepac.

Luckily for Brian, he’s a member of The Club, which is handy because this time next year he’ll need to find a new job.

Why?

Two reasons:

Firstly, he’s been at the helm during the latter phases of the multi-decade ongoing decline of the weakest of Australia’s “big four” banks, culminating in the apologetic letter (from page 10) in the annual report.

Secondly, he’s got to find $8m cash in his personal bank account between now and March next year.

Now, I’ve no doubt Brian’s personal wealth easily exceeds that; he earns over half of that a year in the salary component of his package alone, notwithstanding his generous decision to waive his performance bonus.

The more pertinent question is whether or not he has enough personal belief in the future of Wokepac, the Australian banking industry and the Australian economy in general, to cash in $8m of his investments and personal wealth and transfer it to shares in the dog of the banking sector?

Bills Opinion

Since joining The Club, Brian has feathered his nest nicely whilst virtue signalling, using shareholder’s money, on matters LGBTQ+, Aboriginal, diversity and every other cause célèbre.

The time has come to see quite how committed he is to this as a future business strategy. Chicken or pig, Brian?

Diplomatic immunity, Mr Riggs

Congratulations to South Africa for outplaying England in the rugby World Cup this weekend.

The Springboks made history on Saturday for two reasons; they were the first team to have lost a match during the pool stage to then go on to win the final. Secondly, they joined only New Zealand in the club of teams to have won it three times.

It’s actually better than that; two of New Zealand’s victories had the home advantage and the first one (1987) was at a time when the rest of the world didn’t pay their players whilst New Zealand only pretended not to.

England were the favourites in most pundits’ minds, so this was a brilliant upset by the Saffas.

However….

If you can bear to look, there is a concerted effort to frame this victory as “1995 redux”.

For those not interested in rugby, the 1995 World Cup victory by Francois Pienaar’s team against the All Blacks was lauded as a unifying moment for the newly-democratised country, not least because Nelson Mandela publicly supported the team by wearing the jersey with the captain’s number.

It was a really great moment in sport but does it really translate to the wider situation in South Africa? Is it going to make a difference?

Bill’s Opinion

Anyone who has visited South Africa in the last, say, fifteen years knows that this “moment for change” narrative is built on sand.

In fact, anyone who’s met a South African recently will also know it’s total bullshit.

Why? Every South African you meet has a tragic home invasion story about either themselves, a close relative or personal friend. This is not something a safe, civilised country with a positive economic and social future experiences.

Since the end of Apartheid, South Africa has simply switched the race of the 1% of the ruling class. Perhaps the Apartheid era rulers were also massively corrupt, but they managed to maintain some level of protection of personal safety and property rights (albeit for a minority of the population all of the time and the rest of the population some of the time) and could at least keep the lights on and drinking water flowing.

Through incompetence, corruption and an undisguised animus for people with the wrong colour skin (there’s a word for that which escapes me), the new ruling class have managed to reduce the size of the minority for whom living conditions are tolerable to an even smaller number than before universal suffrage.

Anyone who thinks 80 minutes of kicking and catching an oddly-shaped football will reverse the inexorable slide towards Zimbabwe V2.0 has not been paying attention or is suffering from cognitive dissonance.

There is a joke the non-ruling class blacks tell each other in South Africa; we wanted freedom but we got democracy instead.

“How did you go bankrupt?” Bill asked.

“Two ways,” Mike said. “Gradually and then suddenly.”

Did we stop you beating your wife?

Probably not.

Speaking personally, I was only vaguely aware of The White Ribbon Foundation through seeing a poster in the kitchen area of an office in which I was recently working.

Some male colleagues had signed their names on the poster under statements pledging to not hit their partners and to speak up should they see someone they know committing domestic violence or abuse.

My reaction was to think it was a pointless exercise but also a good scam; trick and bully corporates into paying the White Ribbon “protection fee” to have a representative come in and give a day’s awareness and have the company name added to the online register of organisations that don’t encourage their staff to beat up their spouses.

Domestic violence and abuse is one of those unopposable causes isn’t it? “What, you don’t agree we shouldn’t beat women up? What kind of a monster are you?”.

I’m somewhat surprised therefore by the financial collapse of the charity. Prima facie, this was a business model that should have been simplicity itself to maintain and earn a good living from.

Bill’s Opinion

In recent years, the corporate world has become a target for charity shakedown operations of which the White Ribbon Foundation seems to have been one of the more obvious.

The model seems to work along the lines of;

  1. Define a worthy cause and frame it in terms that are incapable of being opposed without risk of catastrophic publicity,
  2. Offer corporate “training” at an inflated fee,
  3. Request “donations” in return for being named as a partner/ally/supporter.
  4. Rinse and repeat.

Examples I can think of operating right now include all our favourite subjects; climate change, LGBTQptanyangkipperbang, indigenous businesses, gender equity, etc.

The credit for the original idea seems to be due to the infamous American race-baiting politician, Jesse Jackson, as described in the book “Shakedown” (the customer reviews are entertaining).

One wonders whether Jackson has ever thought to claim royalties from the numerous copycat charities operating around the world these days? Perhaps that’s a level of chutzpah too far even for him.

John McGrath; inside a trade, thing

This amused me today.

We’ve discussed the altruistic character that is John McGrath previously, and how his track record is very clearly to create wealth for people called John McGrath whilst absolutely destroying value for those who invest in his company or, indeed, listen to his advice on the trends in the real estate market.

In fact, without wishing to say, “I told you so”, I will have to say, “I told you so”. As I wrote just under 12 months ago in response to McGrath’s advice for property owners to hold their nerve and not sell as the market will definitely recover quickly:

If you really want to become a millionaire, take 6 million dollars and invest it in whatever John McGrath tells you to.
A cynic might suggest John would like you all to not flood the market with your firesales until he’s finished the conveyancing on his.

What a difference a year makes.

Bill’s Opinion

One can accuse John McGrath of many things; share market con artist, pathologically-addicted gambler on horse races, double-faced spruiker, etc., but he definitely knows more than most about the Australian property market.

Whether he needed to cash in his assets for reasons of expediency due to crippling gambling debts or not, we might never know, but there’s a big flashing sign for anyone who believes the personal stock trading of company directors is a good indication of whether or not to buy their shares.

In the meantime, this is yet another example of the delta between expressed and revealed preferences.

Sun Tzu and the art of phony war

Recently, we discussed whether or not Australia was under attack by China.

My conclusion was that, regardless of whether or not either party wishes to admit it, in a very real sense we probably are.

If one accepts that hypothesis, there are a range of common sense actions that should follow, at the very least, to prevent the status quo from deteriorating further and to reduce the risk of further hostile actions.

The problem, quite common in western democracies, is the election cycle tends to reward politicians who practice realpolitik, rather than taking a more principled approach to hostile foreign powers.

An example of this can be seen today with many on the Remain side of the Brexit debacle; the evidence is overwhelming that the EU negotiators have not been operating under good faith (an example is the use of the Good Friday Peace Agreement as leverage), yet many of the key players in the British parliament are behaving as if Micawberistic optimism will win the day. To suggest we’ll get a deal after three years of being told non and nien makes something will turn up seem almost pragmatic and sensible.

But we shouldn’t be surprised. Flying back from Munich with worthless pieces of paper only to have to say, “bugger it” and open up the armoury the following year is in the British national DNA. 

Australia’s too, it would seem.

The Lucky Country’s peace for our time moment seems to be playing out currently with barely a day going by without another story emerging about inappropriate Chinese state influence in Australian domestic politics.

Before we continue, there are a couple points to be clarified:

  1. When I refer to “the Chinese”, I’m referring to the state government and its agents, not the ethnic identity.
  2. It’s my belief that there’s very little distinction to be made between the Chinese government and large Chinese corporations. They may be nominally privately-owned and independent but, if you believe that to be true, I’ve a terracotta army I’d like to sell to you. 

I wish to present four pieces of evidence supporting my position that we are not dealing with a good faith actor when we do business at a national or corporate level with the Chinese:

  1. China believed to be behind hack of Australian National University.
  2. “State actor” believed to be behind hack of Australian national parliament computers (ok, it doesn’t name China but we all know who they mean). 
  3. Australian MP bribed by Chinese businessmen.
  4. Ex-pat Chinese government party member, now an Australian MP, can’t recall ever being a member….. for 12 years.

Bill’s Opinion

It’s not the fact these things have happened and are continuing to happen, it’s the dog that isn’t barking that is most concerning.

Look at the reporting of the statements coming from the various Australian government officials and opposition party leaders. It’s as if China was a synonym for Voldemort.

The most recent incident, for example; it’s a member of the Australian federal government with deep and enduring links to a foreign power, yet the official response is nothing to see here, move on.

It’s almost as if, I dunno, nobody has the testicular fortitude to mention the name of the government that always seems to be interfering in Australian domestic affairs in case, horror of horrors, they take their money away and spend it elsewhere.

 

Image result for peace in our time

 

 

Like China in your hand

History doesn’t repeat itself but often rhymes…..

Here’s a little potted history lesson for those who are too young to remember:


Once upon a time, there was a large superpower that was, in many ways, the antithesis of what the western democracies stood for, or at least claimed to stand for. The west claimed to stand for values such as the rule of law, property rights, freedom of speech, restricted government powers, open and free elections, free men to be judged in a court of law by their peers, non-coerced contracts, etc.

The west and this superpower weren’t at a state of official war but interaction, particularly trade, was extremely limited. A company in the UK, for example, could import or export goods with this hostile superpower and its representatives could travel to and from its territory but there were caveats and restrictions to this.

At a minimum, the traveller would have a safety briefing. In some cases, the security services might give a briefing and require a post-trip debriefing to glean valuable information.

At the extreme, travellers might be wise to follow an informal form of “Moscow Rules”, even if they weren’t spooks themselves.

Why? Because the hostile superpower was a) hostile, and b) open in its disregard for those values we listed in the paragraph above. If you are visiting a country with a total disregard for the rights of the individual, you’d be a fool to wander around blithely assuming you weren’t always in danger.

That country was Russia and its associated satellite states, of course.

In 2019, we have exponentially more trade with a country that shows a similar disregard for the rule of law, property rights, etc., yet we hop on flights to Shanghai and Beijing without a second thought as to the personal, corporate or national risk we are taking. Why? Because, for most cases, we have not had reason to think they are hostile.

Sure, we know they have “re-education camps” where they have sent thousands of their own citizens in internal exile. Yes, we see the increasing use of “social credit” to bully their citizens into silence and conformity. We watch with interest as man-made islands are created in the South China Sea to secure and expand the country’s maritime territories. We witness the implementation of the One Belt and Road trading route with land purchases and infrastructure. We see huge areas of Africa being bought by Chinese government corporations. We point at strange sights such as Chinese Police-branded cars driving around the streets of Australian cities. Finally, this year we can watch on live-streaming feeds, the protests by residents of Hong Kong against changes to the legal system being met with increasingly authoritarian means, in direct violation of the international treaty promising not to do so.


The evidence is compelling that, whatever you might call the Chinese state; Communist, “post-Communist”, mercantilist, or some other suitable noun, it is far from being a free society as a citizen of a western democracy would know the term.

And yet…. corporations and governments have increased the level of trade and interaction on our behalf with the Chinese state without seemingly any commensurate increase in vigilance or precautions.

Why might that be?

Why might a country, say, Australia, be unwilling to publicly criticise any one of the nefarious activities (and more) described above, particularly in the case of clear hostile activities on Australian soil?

Bill’s Opinion

Much is written about cultural differences and how people in the west should treat other cultures respectfully. The classic is example revolves around the concept of Asian cultures setting a higher value on “face” than we in the west might.


Here’s an idea; that is a truly racist attitude. Why? Because the Chinese are an intelligent people with personal and national “agency”. They can observe our culture as much as we observe theirs. In fact, they do, and they choose to still act the way they do.

Pretending the Chinese leaders are delicate flowers whose feelings might be hurt if we publicly and regularly told them to rein in their activities and act in accordance with international law is the ultimate in weakness.

And that’s another cultural observation; the Chinese don’t respect weakness.

Why would we, therefore, constantly offer this as our response?

Of course, the elephant in the room for Australia is the economic master/servant relationship. China could ruin Australia’s economy for a generation simply by deliberately reducing the Chinese GDP by one or two percentage points and pivoting to African countries to satisfy its demand for minerals and resources. In fact, the land grabs in Africa are presumably part of a strategy to reduce reliance on pesky western economies and their annoying conversations about human rights.

Perhaps it won’t be long before our one reason for not standing up (diplomatically, I’m not suggesting warfare) to China is removed by China anyway?


At which point, we will be simply a weak parody of Neville Chamberlain.

Cheer up!

Switching on the news and browsing the media websites this week is unusually depressing. Without perspective and a wider source of information and analysis, one could be excused for thinking the world is going to hell in a handcart. I’m not going to list the reasons why one might be feeling low, the media do a good enough job of running “if it bleeds, it leads” stories. 

In any case, I’m not convinced it’s true. In fact, I think the reality is almost 180 degrees the other way; there are far more signs things are going well and what we’re being served as news is simply a mixture of confirmation bias and a logical reaction to incentives. A regular browse of the good news stories on Human Progress is a useful counter to the media confirmation bias.

I don’t say this lightly…. I have become convinced, via conversations with friends, family and colleagues that the media business model, what is left of it, has become detrimental to the general mental health of the world.

Technological advances have resulted in a proliferation of volume (24 x 7 updates) and sources (you’re reading a personal blog, but it’s still “a source”) of news. Our old friend, Pareto distribution, drives eyeballs and clicks to those presenting the most compelling new information.

Not much bad stuff happened today” is not a headline we’ll continue to tolerate on consecutive days for very long.  

Let’s lighten the mood a little today then. Because it’s human nature to take pleasure at others’ mild misfortune (after all, that describes the basis for all comedy), today’s blog post is simply a bunch of happy predictions I am prepared to make and the timeframe within which I expect them to occur. 

If you share my optimism and outlook, they might cheer you up immediately. If you don’t, you might experience the even greater pleasure of delayed gratification when the deadline passes and you can return to the comments section and have a chuckle at my expense. 

Either way, I will benefit from a warm feeling of selfless, righteous altruism….

Bill’s Opinion Predictions

Sports

The Bledisloe Cup match this weekend will be won by Australia and, if this prediction transpires, they will go on to draw or win the return match the following weekend and therefore finally win the Bledisloe Cup for the first time in almost a generation. This one is a long shot and is based more on a feeling New Zealand’s team has become fragile and somewhat “woke”.  

The 2019 Rugby World Cup will be won by a northern hemisphere team. My preference would be England but I could probably live with it being Ireland and, after a little introspection and professional counselling, even Wales. The important point is, it’s not going to be New Zealand.

Brexit

Britain will leave the EU on October 31st without a deal. Boris Johnson will be Prime Minister at the time, but will call a General Election in January and will be returned with a clear but not large majority.  

No material changes will occur to the border between Ireland and Northern Ireland.

Britain will not experience significant disruption to trade or travel as a consequence to Brexit. Some luxury or highly-specialised goods or services might have a wobble but will be solved within a few weeks.

EU

As a consequence to the world not ending after Brexit, the EU will double down on their commitment to a European federal una-state, passing laws to ensure a single taxation code, a European military, centralised control of immigration and further adoption of the Euro.

Leo Varadkar will be ousted as Taoiseach by the Dáil before Christmas 2019 as a reward for being played by the EU with regards to Brexit.

USA

The Democrats will nominate Elizabeth Warren as the 2020 presidential candidate. Donald Trump will win a second term with an increased share of both the Electoral College and the popular vote. The presidential debates will comedy gold on a par with the best efforts of Monty Python and Ricky Gervais.

Media

Following the USA elections, there will be some high profile media casualties, with a consolidation or bankruptcy of several high profile brands such as CNN, MSNBC, The Washington Post and the New York Times.

In other countries, such as Canadia and Australia, several mastheads and broadcasters will be further subsidised or even nationalised.

Global Economy

Despite the continuing call for a global stock market crash, higher highs will be reached on the major indices. Gold and silver will see a 20% increase by the end of 2020.

China will “lose” the trade war with the USA. This will be spun as the opposite to save face but the trade indicators will show a material improvement towards the USA.  

Australian Economy

Flat as a pancake over 2019 and 2020 with a slight uptick in unemployment.

House prices in the two main cities will continue a slow atrophy with the occasional dead cat bounce for a month or two which will be lauded as signifying the “new bottom”. At the end of 2020, prices will be lower than today.

 

“Completely mystified”

The responses below the tweet are priceless, but before you click the link, let’s look at the supporting article.

Apparently, the most likely explanation to the phenomenon of lowering costs for some expenses yet rising costs for others is something I’d not previously heard of; Baumol Cost Disease.

From Bloomberg’s helpful description:

The theory of Baumol cost disease, developed in the 1960s by economist William Baumol, states that some things rise in price even as productivity goes up. When society gets better at making cars, electronics, food and clothing, wages go up. But as wages go up, industries that don’t find ways to use less labor to produce the same service — for example, a string quartet — rise in price as well.

Which, prima facie, sounds reasonable and rational.

However, I would caveat that feeling of reasonableness with the statement that Malthusianism also sounds reasonable and rational when it’s first described, possibly for similar reasons.

What Malthus has been wrong about for the last 291 years is the Industrial Revolution. Or, more specifically, human inventiveness. Oscar Wilde touched on the solution we found to Malthus’ problem with this pithy quote;

Civilization requires slaves. Human slavery is wrong, insecure and demoralizing. On mechanical slavery, on the slavery of the machine, the future of the world depends.

As the wags and wits on Twitter were fast to point out, the costs that have experienced the most price inflation are, in a suspicious coincidence, the things that have most benefited from government “help” in terms of regulation and subsidies.

Correlation isn’t causation but there’s clearly something worth further enquiry here.

Bill’s Opinion

The most interesting part of the Baumol description is this:

….industries that don’t find ways to use less labor to produce the same service….

The obvious question that prompts is, “why don’t they find ways to use less labour?”.

Perhaps the range of possible answers are as simple as these two:

  1. Because the work involved is impossible to automate or make any more efficient, and/or
  2. There isn’t a great enough incentive to automate or make more efficient.

Anyone who has ever spent any time working in a government or quasi-government department and the private sector will recognise the critical difference immediately; there is no personal reward for for a manager to find a way to deliver the government service with fewer or with lower-skilled employees.

It is extremely rare for a government minister’s stated desire for improved efficiency to be translated into meaningful incentives down the organisation to a level where they will have any material effect.

As Ronald Reagan so eloquently put it:

Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.

Or, as an anonymous quote (no, it wasn’t Milton Friedman) goes:

If you put government in charge of the Sahara desert there will be a shortage of sand in five years.

But remember, “economists are completely mystified“.

We’re gonna need a bigger shredder

Back when Jesus was but a young lad, we kicked this organ off with an examination of why reparations for slavery is a tempting idea but utter lunacy.

Ah, those halcyon days of early 2017 before the world as we knew it went absolutely insane.

Since then, the USA Democratic Party has continued down the road of investigating whether reparations make sense, debating it in Washington.

As we predicted, they are now running into huge issues which are unlikely to be ever resolved. The idea of generational guilt seems to be making a comeback, for example, with Senator Mitch McConnell being asked to “please explain” why two of his relatives five generations ago owned slaves?

To repeat, an apparently otherwise fully-functioning sentient member of the human race just asked someone to comment on the actions 150 years ago of someone with whom they share about 6.25% of DNA…..

Yes, that’s the road we’re on. And it gets worse from here, go back and read my original post on the subject to get an idea of what further lunacy we’ll have to endure. Sometimes slippery slopes have to slide a long way down before they achieve fallacy status.

To McConnell’s credit, he responded perfectly; pointing out the previous President was in the same genetic fix. 

It’s clear this is a bad idea that is going to hang around for sometime to come. The question sensible people should ask now is, what’s the risk to me and where’s the opportunity?

Bill’s Opinion

If you are an American reading this, it’s highly unlikely you currently know whether or not your ancestry passes the slavery purity test. It’s a risk and one which, if it transpires, will certainly cause difficulties for you should you work in politics.

Depending on how long this runs before it’s universally agreed to be daft, there’s a risk that regular people may take a hit (likely financial) if they are found to have had slave owner ancestors.

Actually, let’s clarify that last sentence; EVERYONE ALIVE TODAY has slave owning ancestors. Until William Wilberforce, it was the primary source of cheap labour across every continent throughout human history; if you won a battle against your enemies, you enslaved them. It was just the rule for hundreds of generations.

The amazing thing was that it was ever made illegal at all. Thank you, Christianity and the industrial revolution…..

Of course, the difference between my non-American slave-owning relatives and yours is that mine owned slaves before written records were widely kept. Lucky me.

In fact, it could be argued that people like me, the undocumented slave owning descendants, are the really evil ones because we are hiding in plain sight… No, let’s not give the radical left any more stupid ideas.

There is a silver lining though; there’s a business opportunity here. Every person of ambition who suspects there may be a skeleton in their cupboard from 150 years ago is likely to suddenly be in need of a “cleanskin” service. That is, every electronic and paper record from that era needs to magically disappear like an Epstein flight manifest.

So, this is a call for expressions of interest for funds for my new business venture, Slave Ownership Records Removal Instantly, or SORRI for short.

Our initial start up seed money will be spent on flame-throwers (for the libraries), large degaussing equipment (for data centres) and to pay the salaries of some hairy-arsed mercenaries to undertake the cleansing activities.