Sleeping with the enemy

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In recent weeks Burmese Buddhist monks mounted a street rally to protest the rise in fuel costs in Burma. The monks were joined by the general population and the protests soon escalated into violence and military intervention as the military junta applied force to return control. Its strategy was to shoot and incarcerate the leaders of the dissidents.
The western reaction to the conflict was to morally condemn the action, though without taking more concrete steps there seems little value in such action. It is apparent that western governments are willing to take action when tyrants breach the rights of a significant number of people, and its fair to say that western governments abhore the Burmese military junta. But historical precedence also suggests that western governments are not prepared to escalate moral outrage to military intervention unless there is a compelling vested interest in doing so. Eg. In the case of Cuba, the US feared regional insecurity and early Russian missile deployment, in Iraq it was concerned about the oil (never mind the press focus on weapons of mass destriuction).

The only benefit from western governments helping Burma would be the goodwill extended by any new government. Given the Buddhist values of Burma, it seems likely that any force applied to the country would likely result in regime change. The question is whether western govrnments are likely to act. The west only applied sanctions the last time this occurred in 1988, when 3000 protesters for democracy were killed. Since then the military junta has retained power. There seems to be little support for the junta within the country, but also little incentive for the west to engage. The likely reason for not intervening in Burma is likely to be Chinese sympathy for the regime. I can see several reasons why the Chinese would support the Burmese junta:
Drug trade through China profits Chinese government officials who likely turn a blind eye to the trade in exchange for kickbacks
China would not like to see a new democratic government in Burma because it would be concerned that any new administration would allign itself with western governments. The implication is that a Burmese government sympathetic with western interests might support US bases. China is unlikely to support any western involvement in the region.

Moral righteousness has never been a compelling reason to engage in military intervention. Morality has become secondary to pragmatic (materialistic) concerns in the global race to advance the interests of your country. Some countries are better than others, and it has to be appreciated that whilst Chinese interests are implicated in supporting the Burmese statist government, they have more at stake given that Burmese is on their doorstep, and not close to western markets. Having said that, the USA gave Cuba’s Fidel Castro a lot harder time than China and Singapore are giving Burma. There are many examples of government duplicity in state politics:

1. Western countries preparedness to engage in trade and investment with China despite its failure to rectify the debasement of individual rights in the country.
2. A Japanese company that was recently caught selling intellectual property to North Korea and Syria through a Chinese Malaysian company
3. France’s provision of weapons to Iraq prior to the Iraqi war
4. The Singapore government which steadfastly continues to finance development in Burma despite international condemnation
5. Chinese indifference to the Burmese drug trade which channels Burmese drugs through China to global markets
6. Western governments complicity in Singaporean and Chinese support for Burmese money-making activities

The latest example is the tacit support of Burma by the Singapore government. The Singaporean government, through its $150 billion state-owned investment house Temasek Holdings, has invested an estimated $3 billion in Burma. Temasek Holdings is controlled by Singapore's powerful Lee family, the most influential being the former president. The question is how should western governments respond to Burma as well as Singapore. Lets consider what the options are:
1. Western governments attack government interests in Burma
2. Western governments apply tighter sanctions to Burma
3. Western governments apply sanctions or freeze Singapore assets. Clearly western governments have a lot of influence here when you consider that Temasek has $3bil invested in Burma, but $20 billion invested in Australia.
4. Western governments doing nothing – ‘minding their own business’

Burma is a very poor country, and it’s a legitimate complaint to suggest that western investments in Burma (such as Singapore’s $3billion go along way to supporting Burma's military junta) play a part in supporting these governments. The question is whether this investment is central to it. Criticism could equally be drawn to China since it effectively helps Burmese by facilitating its drug trade. But don’t expect western governments to undermine their trade interests in China for the sake of Burmese democracy. I would suggest that there is more chance of western intervention if Burmese citizens escalated the conflict. However for cultural reasons I suspect the conflict will ground to a halt. Passivity will return as it did last time.
Singapore's strategy was to build links with Burma in the mid-1990s when other countries were abandoning it. As a result of western withdrawal, Temasek was able to negotiate some very lucrative deals, and were no doubt rewarded for that support. This philosophy of non-judgement and engagement has been characteristic of Asian governments for a long time and is central to Asian attitudes to moral issues. More surprising perhaps is the fact that Singapore has not received any condemnation for its action. The reality is that its not just Singapore that is helping Burma, but a number of other countries interested in its energy resources – offshore gas in particular.

The question is – just what standards should western governments apply to other nations – whether we are talking about brutal dictators or governments that support them. The military junta has a vested interest in most foreign-sponsored investment, so there is no possibility of avoiding junta support. The hotels, airlines, military equipment and training, crowd control equipment and sophisticated telecommunications monitoring devices, are derived from Singaporean inveolvement. Singaporean companies have provided computers and communications equipment to Burma's defence ministry and army, improving the junta's ability to communicate with regional commanders – thus allowing it to better suppress protesters in Burma’s 20 largest cities. Singapore is the only ASEAN country in a position to provide Burma with this equipment because of its modern armed forces and defence support base. It speaks volumes that Singapore appointed an ambassador to Burma who was previously a senior Singapore Armed Forces officer and prior director of Singapore's Joint Intelligence Directorate. Such a role would be normally filled by a career diplomat. Singapore also helped sponsor the military regime into ASEAN.

But perhaps its worth reflecting on Singapore itself. Its easy to forget that Singapore is itself a authoritarian state, albeit a rich one. There is no question that the Lee family-controlled People's Action Party has been in power for almost five decades because of the economic prosperity it has delivered, but it has also been there because of its entrenched statist policies. Its certain that soft diplomacy was a requirement by Britain, but what about Burma? Is the Singapore leadership adopting any similar standards? Singapore ranks only behind China, Cuba and North Korea in leadership longevity. I don’t think anyone would mind if Burma emerged as another Singapore, but it seems unlikely to tread this path. If Singapore is to profit from Burma perhaps it should be incumbent upon Singapore to act – to turn it into the ‘capitalist state’ that it has become.

Its clear that Singapore plays a greater role than just the supply of weapons and other support for the military. Singapore is a financial base which facilitates trade for Burmese businessmen. By setting up Singaporean accounts Burmese interests are able to evade international constraints such as sanctions. Among these junta cronies are Tay Za and the druglord Lo Hsing Han. Lo is an ethnic Chinese, from the opium-rich Kokang region of East Burma bordering China. Lo is one of Burma's biggest heroin operations, but through Singapore he has been able to legitimatise his activities. Lo's son Steven Han is married to a Singaporean Cecilia Ng. He is also denied permission to enter the US because of his drug links, but they travel without restraint in Singapore. Given the link between Singapore an the heroin trade you might wonder why the USA has not applied more pressure on Singapore to cease and desist in its relationship. Tay Za was last year celebrating the launch of his new airline, Air Bagan, in the company of the Singapore head of aviation.
The question is why is the US and other western governments not pressuring Singapore to end its support for Burmese military junta and drug lords? I think the reason is they don’t do anything without provocation. Otherwise they would have to account for why they didn’t act sooner. You might think that a regime change might end the drug trade, but I suspect they are might conclude it might be worse with private operators. Anyway it will be interesting to see if they act.
I support military intervention in Burma. I think the job could be done quickly. I just don’t see it happening.

- Andrew Sheldon www.sheldonthinks.com

Real Inflation

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Its been announced today that the price of eggs are going to rise 50c a carton, milk up 10c per litre, in addition to other foods. The rationale for the increase in prices is said to be the drought, but there are two factors which suggest this is not true:
1. Farmers have said that they will not benefit from the price increase - which suggests its either to cover higher input costs or retailers are in fact getting all the benefit
2. Products which are unlikely affected by drought are facing price increases - eggs and milk being some examples.

The reality is that retailers are pricing products on the basis of people's capacity to pay. Australians have benefited from a huge wealth explosion over the last 15 years as a result of credit expansion. These price increases largely reflect an attempt by business to claw back some of the gains. It thus becomes apparent that any future wage rises were not precipitated by greedy wage earners, but by business trying to claw back earnings at a tim when they are finding it hard to sustain profit growth. The fall off in profit growth is a direct result of a slow down in credit growth, as households worry about falling housing prices and higher inflation.

In these circumstances there are only 2 ways that businesses can build earnings:
1. Higher prices > increasing the prospect of inflation
2. Consolidation of productive capacity > normally results in greater pricing power so higher prices

Clearly in this type of environment if business cannot expand unit capacity then they have to make more profit margin to earn the same profit. From this point forward we are looking at an acceleration of inflation.

In recent years the CPI has been the market measure of inflation. At some point over the next few years people will come to realise that was nothing more than a political tool for facilitating a shift of wealth from households to governments (through tax bracket creep) and business (through higher prices). At some point farmers and unions are going to see the fraudulent nature of this scam.....as workers start to loose their jobs and farmers are forced off their farms by higher input prices, low farm gate prices and drought.
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Reason is the standard for debate.
- Andrew Sheldon www.sheldonthinks.com

Bush to esculate China trade war

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A lot of criticism of China has focused on its trade surplus. This criticism until now has focused on the managed peg of the yuan to the USD. Actually the USA cant use this argument because China is actually financing the US deficit and its done a great deal to reform its financial system in preparation for deregulation. Another justification is that it is reasonable for it to make a slow adjustment so not to penalise any Chinese economic interest group.
But the China debate has taken another turn. There is mounting criticism that the China is discriminating against foreign interests on regulatory policy. The same criticisms were made of Japan from the1970s onwards. Japan was very slow to change, and the US didn’t press the issue because it needed Japanese support in its Cold War stand, as well as an outpost against China. To this day Japan is not an easy place for foreigners to do business. But most of that comes down to the unique tastes (sensitivities) of the Japanese consumer, nationalism and a very unique mode of economic organisation. There is simply not enough room on Japanese store shelves for foreign products, and US-made refrigerators will not fit in a Japanese house.

China continues to report huge trade surpluses which will only continue to grow as the economy expands. But is this really a serious issue? I think not because:
1. China will comply because it is not dealing from strength
2. China is competing with many other countries for foreign direct investment. A trade war would see more of that money go to India, Indonesia, Vietnam, and maybe even Pakistan and Bangladesh.
3. The threat of retaliatory action will come from the EU and USA. Japan will be conspicuously quiet.
4. Its hard to see China getting the same soft treatment as Japan - unless China’s support in dealing with North Korea is required, and I think North Korea is contained, so not an issue.

China’s August exports exceeding imports by $24.97 billion - a surplus exceeded only by June's $26.91 billion. China has opened up much of its economy in recent years since joining the World Trade Organization, considerable restrictions remain on foreign investment in areas including finance, automobile manufacturing, petrochemicals and media, and that some new regulations on mergers and investments also seem intended to aid domestic companies.
But whilst there seems no compelling evidence to suggest this will be a problem, you can expect heightened tensions on the issue. In fact I would go so far as to say that George Bush will elevate the issue to attract votes in the forthcoming election due 5th Feb 2008. I expect that he will attempt to make China the centre of US economic malaise…though he is running out of time to escalate the issue. So this I think will be like another Iraq – a single issue to polarise simple Americans worried about the economy (that’s the housing market folks). Anyway all the huffing and puffing will be good for gold because:
1. It draws attention to the USA trade deficit
2. It escalates a major point of conflict between the USA & China
Frankly I don’t think this strategy will work in his favour – Americans are becoming more cynical…or at least the press is, so that will feed through to the general populous.
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Reason is the standard for debate.
- Andrew Sheldon www.sheldonthinks.com

Greater political representation for expatriate Australians

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I am not a constitutional expert by any means, though I suspect there are other bi-cameral (2-house) parliamentary structures around the world that offer upper house representation on the basis of residence. My specific interest and understanding comes from the Australian parliamentary system. We have 2 houses:
1. Lower House - House of Representatives - elected by each person according to the majority of seats won in each electoral constituency. The party(s) with the majority of seats in this house form the government.
2. Upper House - Senate - elected by each person according to a majority of seats won in each state where the distribution of seats is geographically equally dispersed and not based on population concentrations.

The intent of this system is to afford greater protection to the smaller states which would otherwise lack representation in the government. The implication is that people should have representation on the basis of where they live. It therefore strikes me as reasonable that Australians living abroad should have separate and distinct representation in the Australian parliament by virtue of living abroad. This is not to suggest that they should have a political party, but rather than there should be another electorate which comprises Australians living abroad. This seems particularly sensible given that the powers of government seem to extend offshore and that little ocnsideration is given to expatriates - by virtue of being absent. The Australian parliament duly recognised the needs of expatriates by holding a parliamentary inquiry into their needs. Though that inquiry appeared to have come to nothing.

Notwithstanding the flaws of our parliamentary system, it would seem appropriate to adopt an electorate of 'Abroad'. It would seem logical that an ambassador or expatriate would seek office for this seat if uit were ever to be established.
You might ask why should expatriates have separate representation? I can think of several reasons:
1. They have very different and distinct issues from resident Australians
2. They pay higher rates of tax than resident Australians, yet use fewer services
3. They have less contact to local political issues as resident Australians, effectively rendering their vote in 'local elections' as useless. In conrast, if there was an expatriate electoral MP then Australians residing abroad could lobby and receive material consonate with their interests.
It must be remembered that there are about 1 million Australians living abroad and that they represent 5% of the 20mil total Australian population. It is fair to say they would be a political force if they were given independent representation.
The proposal before you is not a ludicrous proposition given that our parliament already recognises the need for representation of minorities from different geogrpahic regions. In fact, given that the 'tyranny of distance' between Canberra and Sydney, Melbourne, Darwin, Perth and Brisbane has been removed by modern transport and communications, then dont expatriates living abroad have a more compelling claim to a Senate seat than resident Australians. We have to understand that the globalisation of internaitional markets means that there are far more Australians living abroad than 100 years ago when the constitution was adopted.

It seems clear that either expatriates should be given due representation or that the provisions for a senate be erased because they are no longer pertinent to the era of modern communication and transport.

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Reason is the standard for debate.
- Andrew Sheldon www.sheldonthinks.com

Private & public evasion – a hint of double standards

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Integrity in government has long been a dream of mine, but nothing highlights my political rage more than blatant hypocrisy. We see this most clearly in the policies of the Howard government. Hear are several examples:
In response to the James Hardie asbestos scandal, the Federal Government is considering introducing a 10-year jail term for company restructures deliberately aimed at avoiding personal injury compensation. This is fine, but what about the gross evasions of government. Eg. Maralinga nuclear toll, stolen generation, and other public instances of evading public compensation.
The government has tightened rules under the Corporations Law to protect shareholders from dubious executive practices, but there what about the reoccurring incidences of tax evasion and fraud perpetrated by politicians over the years, with no law to discourage them.
Its great that accountability is being adopted, but why now, and why not universally. It stinks of political opportunism, and worse still, the draft bill is so weakly worded to be toothless for the following reasons:
Intentional avoidance could be difficult for prosecutors to prove in court
The bill applies to actions where "where an exceptional number of personal injury claims have arisen out of a company's action or product, and more claims of that nature are expected".
The bill would not apply if the extent of the future liability can be 'reasonably estimated'."
Under current law, claimants for injuries with long latency periods such as asbestos diseases (which takes decades to develop) miss out on a share of winding-up proceeds. It is proposed that liquidators should recognise these latent claims by establishing a trust fund based on actuarial assessments.
News Source: SMH.
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Reason is the standard for debate.

Need for greater public disclosure

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In 2004, the US government & Congress passed measures or guidelines requiring private enterprise to adopt greater levels of disclosure, as well as tightening its capacity to act contrary to the interests of shareholders. The laws were intended to restore confidence to markets who were questioning the legitimacy of the profits earned by some of America's largest companies. The collapse of 2 'giants' - Enron and Worldcom suggested that this was no 'one-off'. On top of those breaches of public trust, the 'Big 5' accounting firms were called into question for conflicts of interest between their auditing and accounting activities. Apart from the presence of fidiciary duty, there was a clear need here to 'appear judicious', yet none of the 5 accounting firms thought it necessary to do that. That saids alot about business ethics....but it also saids something about community standards of prudential supervision that no one sought to break up these conflicting responsibilities. Clearly the reason is that the only people served by greater accountability would be shareholders, but they have no power. Even fund managers - as custodians of shareholders money - have little interest in redressing these issues since they get their margin anyway, and in fact collapses create buying opportunities if they are competent enough to pick the frauds. But shouldn't shareholders reasonably be able to access the information that fund managers have access to? Shouldn't corporate executives be obliged to release information to the market in a timely and honest fashion. I'm willing to bet the protective measures adopted by government will do nothing to change accounting standards in future. But my concern here is not corporate accountability, but public accountability. Whilst the politicians are busy adopting higher standards of corporate disclosure, accountability and compliance, where are the measures to ensure the same level of scrutiny of public enterprises.

Consider the following areas:

1. Campaign donations: There is a huge conflict of interest between party contributions and public benefits for corporations.
2. Treasury operations: The operation of the treasury and central bank are critical to any country, but often their activities are not open to scrutiny because of high levels of confidentiality. Voters should have a right to know the legitimacy of their currency. Consider that the Federal Reserve is not required to disclose its gold transactions. See Cleveland Regional Central Bank advice.
3. Collusion: Why is the government beyond question over the integrity of its policy platform. Clearly opposition parties are not up to the task. This however speaks to the failings of the adversarial-style of party democracy. The problem is that centralisation of power always corrupts because vested interests can collude, and in the process entrench their political power. The question might be asked? Are oppositions incompetent or just complicit? I would suggest both depending on the issue.

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Reason is the standard for debate.
- Andrew Sheldon www.sheldonthinks.com

Solving economic problems

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The topic for this essay may sound very alarmist.... I'm talking about problems at a time when the global economies are booming. Housing prices and equities have never been so good, we have full employment and the poor nations of the world are growing. But how real is it.

In the wake of the internet bubble - Americans might have been asking that exact question. In the bear market that followed, critics were panning corporate executives that had conspired to defraud shareholders of wealth, employees of jobs and security for the sake of personal gain. A few executives have been found guilty under the Corporations Law in several countries. The Worldcom, Enron cases in the USA, Parmalat in Italy and HIH Insurance in Australia are testimony to the fact that its a global problem. The problem being global in its extent.

The governments in many countries have responded to calls to reign in such dubious accounting & management practices as they always promise to do, but executives always find new ways to evade such laws. It comes as no surprise that dubious conduct is often lawful, that executives in concert with their lawyers are often able to find 'technically' legal ways of evading the law. We must remember that the law and morality are not the same, though one might question why? Pragmatism is the short answer. Those people that write laws only do so to protect their own interests. It is therefore dangerous for voters to narrow their focus to their immediate self-interest, lest they suffer the repercussions of illegitimate acts by others.

Unquestionably the greatest threat posed to a society is by the agency that professes to represent them - the government. In the name of the 'common good', governments have rationalised a great many 'technically legal' breaches of morality for the sake of protecting their own interests, ie. Affirming their own power or popularity. Hitler, Lenin and Stalin are perhaps extreme examples, but less grandiose breaches of morality occur today, but since they don't attract the concern of the populace, they are marginalised and their impacts desensitised. People are no longer defenders of principles, because they no longer see principles as serving them. Consider that holding principles today is tantimony to holding contradictions. But rather than checking their premises, people are prone to discount their knowledge and resign themselves to the 'common good', choosing the 'safe mode' and going with the consensus. The manifestation of consensus thinking is entrenched vested interests and lower standards (expectations) of value. The implication is an erosion of principles and accountability, and a wider sense of disillusionment and cynicism.

Consider that in response to the corporate failures the government decides to increase accountability and establish new guidelines for corporate reporting. That's fine. But such practices have been going on for decades, and guidelines are endlessly side-stepped because they are arbitrary rather than based on principle. Arbitrary laws or guidelines are dogma that apply only within a narrow context. Only principles are contextual, and can be countered to prevent executives from side-stepping breaches. The reason that principles are not adopted as legally sanctioned guidelines is that - by implication - they would be universal. They would need to apply to government as much as corporate executives.

One need only look at the double-standard evident in the global society today - whether we are talking about Australia, the US, Britain or China. Laws are applied to the general citizenry with little restraint, but government officials are relatively free from such double standards. The governments of western governments in the wake of the Enron & Worldcom scandals have moved to improve accounting standards and to tighten disclosure regulations.... but look at the public accounts for governments. Not only are the acounts incomplete, often meaningless, unaudited, but they are often confidential or not collected. The government is without a doubt the most important organisation in every country, representing 15-35% of the each economy, yet they are surprisingly free from public scrutiny. There is no better evidence than this that the public's interest is not being protected, and that public officials are acting contrary to those whom they represent. An honourable representative does not ask for the trust of their supporters, and nor does he countenance it.

The governments of each most countries are guilty of perhaps the greatest crime that can be perpetrated against its people - the blatant & mass expropriation of wealth. For years they have done it by sanction of a 'cynical & unprincipled majority', but they have also perpetrated such breaches by stealth - though the 'theft of inflation'. It is a nonsense that western nations have not experienced inflation as any investigation of price levels will demonstrate. Western governments and their bureaucrats are party to the biggest, self-serving fraud ever perpetrated against productive people. Paradoxically, the theft is being perpetrated by 'doctoring the books', by using accounting and limitations on disclosure to conceal the facts from the general public.

This is not so much a mass 'conspiracy' as a mass evasion. Mostly its honest people just sticking to what they know, and being reluctant to get involved something so grand they could never resolve it. Its easier not to know the facts, easier to lower your expectations, easier to just pay up. Justice gives way to molevolence. "Who am I to question" is the answer to a question they never ask, to a question they don't want to hear.

People look at corrupt third world markets and think they are so backward. But the reality is that they western world is backward too, just less so. Its only 1st world by default. Like third world countries, people sanction corruption in their society by default, by not questioning the integrity of their institutions, by remaning passive. Decadence is as much a curse as poverty, for it is the institutional safeguards that make any society what it is - and can potentially undermine it. The integrity of western institutional stability is being undermined by the largesse and ineptitude of western governments. They are not conspiring in an act of self-interest, rather as an act of fear......the fear of being powerless or irrelevant.

Governments have the greatest power possible to mankind - the power of the moral sanction over other humans, the power to override his identity and righteous for the 'common good'. That is a considerable responsibility, and a dangerous capacity when that power is welded by unprincipled people. It is through its monopoly of the right of moral sanction that governments are able to tax, print money and sanction other organisations through state-backed sancitioning. That sanction is only as safe as the capacity of taxpayers to finance any resulting liability. The power comes down to the governments ability to raise money. That is a debt western governments are fully willing to abuse, and its a level of trust the public can scarcely afford to extend. There is not just the possibility of ineptitude and deception, its a forgone conclusion if history is any guide. There has never been a monetary standard which has not been corrupted by governments over hundreds of years.

Governments are able to achieve their deception through structuring the economy in a way that serves them. They need their allies to achieve their ends. Politicians count on 4 parties to preserve their self-interest. These are:

1. Private Bankers: The banks are among the biggest beneficiaries of the public abuse of money. In the old days bank executives were able to cash in their shares prior to bank failures. In the advent of derivatives, banks need only off-load risky assets to third parties, paradoxically mutual funds managing household savings. Private bankers can get very rich in the process.
2. Central Bankers: Central bankers have a different goal. By financing western governments expenditure, they are able to expand their job market, incomes and thus benefit from not just a richer treasury, but also an entrenched hold on government, not to mention considerable notoriety.
3. Bureaucrats: The role of the bureaucrats is to make the government look good. Ministers are very careful about the type of public 'servants' they employ. They don't want recalcitrants, rather safe, subservient minorities who do as their told. Of course such loyalty doesn't come without a price - the price being life-time employment, generous retirement packages and tax benefits.
4. Military & police: The military and police can be important for preserving government's power. As agents of justice, they hold considerable moral power, despite the fact that many police forces are tainted by accusations of corruption. Police forces go to considerable trouble to dispell those concerns, to downplay the extent of the trouble. But consider the facts: The police and military are secretive, open only to self-scrutiny and are well-paid.
5. Big business: Corporate executives are another favoured party of politicians for several reasons - but fundamentally they have the capacity to make governments look good. Consider how. Executives create jobs that would otherwise go to another country, they have the credibility or prestige of belonging to a more impressive institution (read 'commercially profitable'), as well as the power to retrench and go home. This is why business is beholden to 'big business'. Big business also has the capacity to spend their way through recessions, whether on capital investment or on political campaign donations. Thats why it takes considerable pressure ('public opinion') for governments to act against public opinion. Rest assured that when they do, the laws they enact will be 'toothless', in as much as they will make little difference. In fact, often those laws are designed to fail, as they need to countenance vested interests. Big business acts through industry representation with a powerful capacity to serve their own interests. Clearly the most powerful interest group is the media. More dangerous still is a media with a large market share.

If these are the vested interests, then the question has to be asked, who are the sacrificial lambs. There are 3 types:

1. PAYE Salary Workers: The contemporary salaryman is the hardest worker but gets the least benefit. They are often under-paid, get few tax deductions and pay tax up-front.
2. Small business: Small business is cherished for its autonomy, but its alot of work. Ever wondered why they struggle to get government to remove excess red-tape? Its because politically they don't matter. They often go out of business, rarely make campaign contributions and they don't employ a great many people workers. They are staunchly independent, so they are politically poorly organised. Farmers are perhaps the most powerful lobby group in many countries because many city folk retain a 'rural identity' or sympathy, but otherwise farming is of declining importance in most countries, and its power is quickly being eroded by big business interests as they consolidate productive capacity. Big business (including big farmers) are better connected and organised than 'small farm' lobbyists.
3. Unskilled workers: Unskilled factory workers have historically been very powerful because they were organised into unions, manufacturing was an important income earner, and they were effective in harnessing community sympathy. That was before 'unskilled' jobs moved offshore to developing countries and unskilled workers moved into service industries. That loss of power saw big business break the unions through government legislation. The unionists deserved it because they were hedonistic in their demands.

The last 3 vested interest groups are likely feeling pretty secure after record rises in property prices and tax cuts prior to the last election, but consider this - the good times will not roll endlessly. The current boom is not sustainable, but is the result of public largesse. The greatest culprit in these 'money illusion' stakes are the Federal Reserve Board (USA), the US government, and their counterparties in China, Britain and Australia. Really any central banker should know better, but people don't like to be critics. But eventually when the credibility of these institutions comes into doubt, there will be alot of criticism. The encumbent governments will loose power for a decade, but nothing will change, irrespective of how much soul-searching will be done.

But these last 3 vested interest groups represent the best opportunity for greater accountability in our public enterprises. Why? Because they have good reason to be frustrated and because they represent the bulk of any population, albeit they are important only is so far as they raise their expectations, have a representative body to unite them, they are able to articulate a clear message, and are able to gain support among other competing interest groups. Clearly they have to change their tact.

Their greatest opportunity lies in identifying the future fallibility of this bubble economy before it happens. There will eventually be a collapse in housing prices in the USA, Britain, Australia and China, which will likely be precipitated by high oil prices. High oil prices are blamed for 90% of the recessions this century, but the truth is - they are just the symptom of the underlying problem - a lack of accountability in public administration. We can go further and identify the structure of modern democracy as the problem. Irrespective, those public administrators and politicians that are supposed to earn our trust, are in contempt. How can they defend such a gross contradiction? How can they reasonably apply increased disclosure upon executives of private enterprises, whilst ignoring public administration. Its not so long ago that public adminstrators were breaching public confidence. eg. The Pyramid Building Society in Victoria, Australia, as well as FEMA in the USA (of Hurricane Katrina fame). Where is the accountability? The absence of accountability points to a deeper flaw in our political system. The answer is not that these 'forgotten' poorly represented vested interest groups expand their influence at the expense of other groups, rather that 'reason is the standard' - not political pull. That is the subversion that needs to be avoided.
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Reason is the standard for debate.

- Andrew Sheldon www.sheldonthinks.com