The end of political correctness or Wikileaks?

Share |

Wondering where the free world is these days. Fortunately there is an organisation called Wikileaks which is fighting to preserve some public sector accountability. If disclosure was not forthcoming, clearly greater public confidence would be retained by the public in government. I say 'release it all'....all the information. Let's see heads role. More importantly, let's see how utterly unaccountable they are by reflecting on how few government heads role. Why are they unaccountable? Well, they don't have to worry about competition. There is a two-party duopoly in most countries, which means that there is no competition. This means that under the current system of governance, we have no real choice about the quality of our public administration.

Let's see just how bad the public statements by politicians have been. What about Sarah Palin? Future US president. She has compared the founder of Wikileaks Julian Assange as 'anti-American' and as bad as the Taliban. I guess that makes her an apologist for the Conservative Party policy over the last decade. Her nationalism is very scary on this point. So what of the Democrats.

Secretary of State Hillary Clinton said:

"the leak of hundreds of thousands of secret diplomatic documents is an attack not only against the United States but the international community as well and erodes trust among nations".

How does one attack everyone per se? How does one erode confidence? By publishing unflattering comments, or by making the remarks in the first place. These are more damaging than off-handed statements because people have taken the time to write them and they are 'official'. The reality is that all public political debate should be so honest. It would be nice to think that this would be the start of honesty and accountability. The end of 'political correctness'. Unlikely. The reality is that the founder of Wikileaks is is going to be targeted for political persecution. He is one courageous guy. I'm a proud Aussie today. Very few Australians have done anything to make me proud. This probably tops the list. I don't have national pride...but this is pretty special.

Sadly, most voters are simply indifferent to the persecution of their fellow citizens. The US and other governments are going to attack Wikileaks, and they will make the argument that its to 'protect US lives abroad'. The reality is that this is a blatant rationalisation. The best way for the US to protect US lives is to engage in multi-lateral (not unilateral) wars and consistent foreign policy based on ideas...not self-serving, politically-expedient policies.

------------------------------------

Author

Andrew Sheldon

Resource Rent Tax

Applied Critical Thinking | www.SheldonThinks.com

Misconduct or political extortion?

Share |

Reading the latest news about ASIC's investigation into the affairs of Andrew Forrest, the CEO of Fortescue Metal's, one is inclined to think something very shady is going on here. We have two former executives of Andrew Forrest making statements about false disclosure, and then backing out from those positions. This is very suspicious for a number of reasons:

1. Andrew Forrest is enemy number 1 in the government's pursuit of a resource rent tax. This gives the government considerable reason to discredit Andrew Forrest. ASIC charges of misconduct with disclosures to the ASX are a plausible bases for achieving this objective.

2. Andrew Forrest is one of Australia's richest people, and I suspect one of the few who does not endear himself with political parties and leaders....until the government started talking about a resource rent tax.

3. We have two 'apparently disgruntled' former executives of Fortescue Metal's apparently backing out or wothdrawing statements of malconduct at Fortescue.

I am not trying to cast dispersions upon anyone in particular...because I have no idea where the blame lies...I just find it highly suspicious. I am inclined to think that the Labor Party is trying to extort wealth from one of Australia's richest man...but I guess this is hard to find evidence for because I suspect these activities are undertaken by 'shadow figures'. I just find it interesting that this case comes up....and miraculously disappears.

This type of thing happens all the type in Russia and the Philippines. I just wanted you all to know where democracy is leading us. All the best with that!

------------------------------------

Author

Andrew Sheldon

Resource Rent Tax

Applied Critical Thinking | www.SheldonThinks.com

Banking executive accuses bankers of arrogance

Share |

You might think you are in a dream......but a banking executive in Australia has labelled his brethren as 'arrogant' and 'lacking empathy'. One has to acknowledge his honesty....except its long overdue. Where has this guy been for the last 15-odd years? Better late than never? But does a banking executive suddenly find a moral conscience? The banks have extorted huge wealth from consumers over this period. The value of the illegitimate fees collected must add up to $20 billion. The executive wants the banks to reform before the government imposes reforms on them. I'm sorry, but for someone so 'reform minded', he seems really quite pragmatic. He is arguing that the banks ought to change before the government forces them to change. Ok, there goes the 'empathy theory', so what about the arrogance? Well, that was never in question.

But its worse that that. The banking industry is guilty of extortion in a way that only oligopolies with the complicity of governments can achieve. The question is why no competitors have emerged. To this day, given the reputation of the banks, I never understood why others never entered the industry. For example, why didn't Woolworths set up a bank? Why not Macquarie Bank or HSBC? What about all those foreign banks who entered the commercial market in the 1980s. Surely they could invite the same anti-monopoly- breaking legislation to break up the bank cartel as the iron ore companies were able to do in WA railways. What about Virgin? They offered a credit card. Why not a bank?

It is characteristic of our democracy that it has taken 15 years to achieve utterly nothing in banking industry reform.

------------------------------------

Author

Andrew Sheldon

Resource Rent Tax

Applied Critical Thinking | www.SheldonThinks.com

Business tycoon recommends new tax

Share |

Were we not raised to believe that capitalists loath taxes and like cutting them to maximise profits. The current tax debate in Australia shows how things have changed. Stranger than fiction; Gerry Harvey, the tycoon behind the Harvey Norman retail chain in Australia wants to see more taxes....not upon himself, but levied upon others. He does not argue for less taxes, but rather more. I wonder if he would have supported the Resource Rent Tax on miners, which would have seen them paying a tax rate of up to 63% in the dollar? I wonder what 'moral position' he would take in 20 years when the government decided to adopt a universal tax rate of 63% to treat everyone 'fairly'. After all why should miners pay 63% when Google pays 0.1%. Its not fair. So by all means raise everyone's taxes to 63%.

If you follow this logic, you start understanding the history of taxes. Back in the old days, we used to pay just 3-5%. Now government expenditure accounts for 30-50% of the economy across Western countries, so we have come to accept taxes. We need to ask why. The reason was - people loved the idea of taxing the rich. No one cared about them because they were rich. People did not care because they had no cares because they had lots of money. It did not matter that they had principles (i.e. a belief in freedom from coercion). For the majority, the taxation was practical. Coercive but practical. The govt then had the justification it needed to increase taxation. Principles had been dispensed with (i.e. Statutory law displaced common law).

Let's flip back to today. We have governments always keen to extend their taxing powers. We have a business tycoon who is very close to the Labour government. In fact, his best friend is John Singleton, who does all their advertising campaigns. So he talks to his mate, and says "I know I'm a minority, but I really think I could be making 10% more profits if the tax system was more equitable". John says "No worries, I'll get on to my mate Gillies, and line you up a good deal". John gets on to Gillies and says "Gillies, you want a good deal on election campaigning". Gaw, gee John...we don't have the money. We are only popular with business for whom we cut special deals". So John replies: : "But Gillies, this is good for the government. I think you should increase the tax burden on small retailers so big retailers like my friend can make more money. You don't have to decrease slavery....you just have to broaden its effects".

And that is the legacy of business people who can't think...and not just tycoons who didn't finish high school. Most businessmen today have no integrity. The reason is they consider ideas or ideology as detached from reality. That is the universe of moral scepticism we live in. Values detached from facts. Beyond crossing the road and not getting hit by a car...beyond that level of correlation they struggle because they are not validated or rewarded for thinking conceptually about such things..it could only lead them into psychological repression or anxiety and depression. Now that you mention it....those symptoms are on the increase. Is it the pressures of 'modern society or is it the blatant contradictory in government policy, and the whole state of social discourse. I think I might be on to something. Nah! I must be mistaken. Governments give us ample opportunity to participate in public discourse. I get to vote every 3-4 years, write submissions which are ignored....and I get a lot of tax deductions. They even gave me a $1,000 dividends a few years ago despite a 50% increase in bracket creep in the last decade and a mining, property and stockmarket boom which delivered them mass revenue increases....nope I must be wrong.. They are lovely people. Besides, their Gerry and John's mates!

------------------------------------

Author

Andrew Sheldon

Resource Rent Tax

Applied Critical Thinking | www.SheldonThinks.com

The nature of public sector incompetence

Share |

Public sector incompetence reaches new depths in NZ. I have already written about some suspicions I have with about the way senior executives were appointed to Pike River Coal. Those issues have yet to be raised, and they probably will in future. There have been a number of issues which have emerged;

1. Regulation: The cancellation of spot mine inspections as opposed to regular appointments where the miners can be encouraged to tidy practices up for the inspection. i.e. This tends to result in a culture of lax safety concern in a mine. The safety of all is threatened by the indulgences of just one who can cause a mine explosion. The preservation of safety standards in coal mines is therefore critical. Campbell Live reported that the Dept advised that inspectors were not required, even though used in overseas mining industries like Australia.

2. Caution: There is every reason to believe that the government and the company is more interested in protecting its reputation than lives. It has taken the argument that it wants to protect existing lives as opposed to jeopardising others. That might well be sensible if the prospect of danger is high...but now that I have seen the layout of the mine, I am inclined to say that the rescue team should have gone straight in. see Campbell Live for the latest news.

This caution is the result of a government fearful of risking lives. Whilst that is a laudable quality, one needs to perform a risk assessment, and ultimately to leave it to rescuers to make that decision. In this case, there are rescuers prepared to enter the mine and the police commissioner will not allow them. Why? Because there risk assessment is that its too dangerous.

There is no question that there is some risk....but risks are managed...not avoided. I have talked about risk management with investment. It is the same for mining.

At the moment we have 29 people at risk of dying or dead. They might have died instantly in the blast, they might have died of blood loss since, or they might be severely injured, and are rapidly becoming dehydrated. This is improbable given the amount of water in the mines. There is usually water dripping, though if people were so injured that they could not move, they might be stranded in a dry section. There is good reason for believing the following:

1. The miners are in different sections of the mine, so they have different chances of living

2. The 'spaghetti' design of the developing headings at the core of the mine actually reduced the pressure released from the blast. This is important for several reasons. It means that there was some absorption of the blast because the pressure will be released along the line of least resistance. There will be some frictional loss as the blast air passes out the 2.5km heading. It is possible that a person might have been standing mid-way along a circular development, so the pressure was equilibrated at that point. Anyone there would not have felt the blast, or if close, it would have been greatly softened.

3. The smoke from the mine combustion, probably coal burning/smouldering underground since has reduced the chances of anyone surviving...as the evidence to me suggests they ought to have gone in straight away. The mine gas levels were never lower than immediately after the blast. If the evidence shows that any deaths occurred away from and away from air circulation paths, it is probable that the lives of these miners could have been saved....if they survived the blast. The chances of a 2nd blast after a first one are unlikely.

Some poor decisions have been made. Its probable that any alternative decision now will make a difference. After all the prospect of blood loss is moot if they have stopped bleeding. The risk now is dehydration...and that only if they have no access to water.

This is why the company ought to have handled the issue. They will happily allow the govt to deal with it because government, or more specifically, the public service is not accountable. The mine CEO ought to have been called upon to make the decisions knowing that a law suit would result if he screwed up.

The problem with public servants is that they are accustomed to making arbitrary decisions because that is the nature of statutory law. Business also has to comply with statutory law, but corporate decision-makers are far more nibble at making complex decisions because they deal in the real world, where they have to consider context, multiple parameters, etc. This is why the CEO of Pike River knew to handle the problem over to the government, and the Police Commissioner of course is obliged to accept the responsibility. It was an undesirable development. It could be argued that it created a conflict of interest...as the company and government now have to be concerned with their reputation, which might even see efforts made to destroy evidence to protect both parties from political and financial injury.

------------------------------------

Author

Andrew Sheldon

Resource Rent Tax

Applied Critical Thinking | www.SheldonThinks.com

Considerate mayor spares taxpayers debt

Share |

Living in a society where politicians first instinct is to precipitate financial crises by facilitating the mass expansion of debt or printing money; and then their 2nd instinct is to do more of the same, and then to blame the market or CEOs for reacting to the policies they adopted.

So it is refreshing when a politician does more than offer tax cuts which merely keep up with 'bracket creep', or who offers unsustainable tax cuts which will be removed after the next election, because they never made corresponding cuts to spending or reductions in debt.

There is a politician in San Diego County who is doing just that...mind you it has taken the financial crisis, and its probably because he is between a rock and another hard place. No, actually its not such a hard place....the long suffering taxpayer who carries all burdens. They cave like there is no tomorrow. So its refreshing that when there is a politician who does not take advantage of the apathetic passivity of taxpayers or there moral scepticism.

Jerry Sanders, the mayor of San Diego County, is proposing to end the pension for city workers in order to rein in the public financing burden of city workers. Instead these workers will be required to adopt the same 401(k) pension plan used by private pensioners. By removing public servants from public financing, the mayor is sparing city taxpayers from the prospect of an unfunded liability which could blow out in future years.

It is rare that we find such acts of accountability by politicians, which is good reason why they should not be trusted with unconditional access to public funds. The idea of politicians having unaccountable access to financing did not exist in the Dark Ages, why does it exist today? There is an expectation that infrequent elections provide adequate 'choice' and adequate accountability. The international experience suggests otherwise. The contemporary two party duopoly we see in Western democracies offers no effective choice. There is seldom any public accountability in democracies around the world. At the moment, the only govts with balanced budgets are the commodity producing nations like Australia, NZ, Brazil, Argentina, Chile, Canada, which have experienced a rapid rise in commodity prices, and thus the public tax receipts have exploded. This has of course not stopped them from presiding over a blow-out in private household debts...so the same lack of prudence remains. Why did private sector debt blow out? Fed financial distortion...yes, it comes back to government.

It is always public sector enabling...even if materialistic private sector CEOs and aspirational homeowners have taken advantage of it. The system was designed by politicians. So when we have a politician who does not take the easy path of placing the public sector liabilities on the taxpayer-funded credit card, we ought to praise his consideration for the taxpayer. Where you are a local taxpayer, or a federal taxpayer, you will end up paying.

So...thanks to Jerry Sanders, the mayor of San Diego County...great guy...even if it took a financial crisis for him to execute...who knows it might lead to a spread of integrity. It is noteworthy that this greater accountability is happening on a country/local government level.

------------------------------------

Author

Andrew Sheldon

Resource Rent Tax

Applied Critical Thinking | www.SheldonThinks.com

Shareholders unfairly penalised by governments

Share |

According to the SMH, Qantas and a 11 other airlines are being fined in Europe after a succession of fines elsewhere, for engaging in cartel-like trade practices in respect of their freight divisions. These activities have resulted in Qantas paying fines of $12mil to the European Commission, $61mil in the USA and $20mil to the ACCC in Australia. This is a lot of money for a corporation to pay for the illegitimate acts of corporate executives. The question is - why are shareholders paying? Shareholders are passive interests. Whilst they might indirectly profit from these activities, so does the government from imposing fines. It is like a hidden form of taxation, no better than speeding cameras. They are regulations which are not intended to modify behaviour but rather to raise revenue for vested interests. Is any reform intended to prevent such 'taxation' of passive shareholders? Probably not. After all, the ACCC and USA levied their fines in 2007. Why have we not seen any efforts by these companies to take legal action against the over-paid executives responsible for these gross breaches of corporate regulation. Why have we not seen an end to option-incentives which merely encourage people to commit crimes. The idea that options give incentives for people to work harder is really a nonsense because people want to take pride in their work. They see a sense of efficacy, and want to be rewarded for it. Money need not however be part of the incentives...promotion is far better. Financial incentives is an illegitimate grab for cash; just as the government's take is similarly illegitimate.

This type of conduct is not capitalism...its cronyism or fascism. Such conduct is enabled by representative democracy...which far from achieving freedom or a fairer society provides a mechanism for legitimatising the expropriation of wealth from passive interests such as savers, investors, taxpayers and other 'alienated citizens'. There are so many examples:

1. Savers: Banks charging excessive and punitive bank fees on citizens in Australia and other countries

2. Taxpayers: Government ministers voting for their own salaries, and engaging in all manner of travel expense routs. Corruption in the tendering of contracts is an example in some countries. The funding of election campaigns in some countries. The dichotomy between political, corporate and public accountability in most countries. Politicians seem to get away with murder. Literary in the Philippines, where political assassinations 'under democracy' are commonplace.

3. Investors: The poor regulation of stock exchanges and the punitive fines imposed on shareholders for ethical and fiduciary breaches by executives or directors.

4. Minority interests: The tendency of governments to unfairly place greater burdens on minority interests because they have no effective voice, e.g. The greater taxation of the rich, foreigners, tourists, etc.

------------------------------------

Author

Andrew Sheldon

Resource Rent Tax

Applied Critical Thinking | www.SheldonThinks.com

Credit for the strong Australian economy

Share |

Australian politicians have descended into 'economic relativism'. Treasurer Wayne Swan is taking the credit for a relatively strong economy, and Joe Hockey, from the Opposition, wants to claim a share for John Howard....and perhaps Peter Costello.

The problem with this revisionism is that its less than accurate. One does not thank a slave master for relaxing the reins. Even then we would have to thank the Chinese slave masters for liberating their economy, along with other global emerging markets. China is not solely responsible...If they are only concerned with relativist performance, they should thank George Bush and Alan Greenspan for sabotaging the US economy.

Realistically speaking, we ought to recognise that we are not strong, just we are being rewarded for our hard 'commodity' currency, our plethora of commodity resources, our small population and China. If one considers the recent policies of both governments, increasing immigration to artificially stimulate the economy, we might accuse them of diluting Australian wealth....yet any claim to that is probably collectivism...depending on your framework for 'public ownership'.

Neither of the claimants mentioned - Swan or Hockey - has done anything to reform our political system. Rudd talked up human rights and did nothing. They are fascists and they ought to be condemned for the sufferance imparted on Australians...whether for retaining their coercive powers over the population, for wasting public funds, by failing to reform, by entering these childish and petty, blame and credit competitions. They are utterly useless and they ought not have the powers they have.

The Australian economy is relatively strong because the Chinese are financing the development of huge resources in the country, because the government has increased immigration (which increases economic demand), because the govt regulates land subdivision (which underpins property prices and credit growth), and because other countries are more exposed to the broader economy. Australia is doing better than NZ, Canada, Brazil, Chile, South Africa because we are more stable and resource-rich, with greater exposure to China by virtue of our proximity to China. I don't see these politicians featuring as much of an influence in those parameters.

------------------------------------

Author

Andrew Sheldon

Resource Rent Tax

Applied Critical Thinking | www.SheldonThinks.com

Who should be allowed to vote in Britain

Share |

Here are some British politics highlighting that parliament is all about 'politicking' and not about objective and honest appraisal of ideas. PM Cameron has conceded that criminals should be able to vote; placing him at odds with his party. He is in the unsavory position of agreeing with the EC. How unfortunate. The article by The Independent highlights the issues.

My view is that:

You could invite aliens to vote as far as I am concerned. The tyranny of a minority, majority, or even aliens is still tyranny, or extortion.. yep, I thought it was illegal too..

So much for common law.. Let's go with statutory law....its so much more popular! We all like to be loved....even by 'liberated' fools.

More generally I would suggest anyone who has an pecuniary interest in the outcome of politics ought to be able to participate in the system that impacts their lives. Should tourists be allowed to participate? What about persons from foreign trading partners. Absolutely! If we had a respect for integrity, principles and objectivity, this would not be a problem....but not through this silly process of voting for 'pretend representatives'. This circus act is plainly extortion. There are more criminals in parliament than in gaol...and they don't even get travel allowances.

------------------------------------

Author

Andrew Sheldon

Resource Rent Tax

Applied Critical Thinking | www.SheldonThinks.com