April 13, 2005 | Graham

Sadr does Ghandi

I reckon most analysis of Iraqi politics is off-beam because it analyses the actions of the players in terms of their presumed principals rather than their actual pragmatism. In an earlier post I branded Moqtada al-Sadr a warmonger because he was fairly obviously waging insurrection so as to increase his prominence in the post-war negotiations. Others saw him as a hero because of his brave defiance. This post analyses his latest self-interested manouevrings.
After sacrificing thousands of his followers in Najaf, al-Sadr appeared to have been folded into the civilian horse-trading process, presumably with more influence than he would have had without that sacrifice.
Now he has re-emerged into public, and thousands of his followers have demonstrated against the US occupation. This article from Sify News is the earliest report of it I can find.
Apparently, while they were dressed in uniform they did not carry weapons and were instructed not to retaliate, even if fired upon by the Americans – non-violent resistance in a complete break with their past.
Again, this seems fairly obvious to me to be a gambit to increase Sadr’s influence, and while non-violent, of a piece with the violence. Look at the demands that Sadr is making:

Khazraji read off to the crowd Sadr’s demands of the Iraqi government. They included a quick trial for Saddam; making Thursday the second day off in the week not Saturday, due its association with the Jewish Sabbath; the freeing of all Iraqi detainees; the strengthening of border security; and that the parliament respect the resistance and bring it into the political process.

It is also significant that a number of Sunni clerics urged their followers to join in.
So, the US has made the cost of violent insurrection too high, in his judgement, but he can still muster physical support, so he organises a demonstration. Democracy is the art of building coalitions, so he looks to augment his physical presence through alliance with others.
He wants a quick trial of Saddam (for which read execution), which most of the country would applaud, but which is against the Sunni interest, and he balances this by putting out feelers to them to join with him in his demonstration. At the same time he looks for an anti-Semitic angle – Thursday rather than Saturday holidays – to cast his net more broadly.
The Sunnis will also be interested in the immediate release of all Iraqi prisoners, who must be disproportionately Sunni, as they will with the call to bring the resistance into the government (even though this appears to be happening anyway). I’m not sure who the border security issue is aimed at, but presumably the Sunnis as well, as one border which is insecure is with Iran, a Shi’ite nation. Then again, it might be the Shia, who could be concerned about interference from Syria, or even both Shia and Sunni who might be concerned about the Kurds linking up with their relatives in Turkey with whom they harbour desires of forming an independent Kurdistan. Just like “border security” in Australia, it has some of the timbre of a dog whistle.
We should keep our eyes on Sadr. He has all the makings of another Saddam. Obviously psychopathic and ambitious, he knows how to hide his talons and play the dove, but his Ghandi is about as convincing a peace-maker as Barry Humphries’ Dame Edna is a woman. There’s a lot more turns and twists in this one, but very few gladioli.

Posted by Graham at 10:09 pm | Comments (3) |
Filed under: International Politics

April 12, 2005 | Graham

On Line Opinion more powerful than Steve Price and Chris Smith combined?

Last night’s Media Watch explored a campaign by radio shock jocks Steve Price on 2UE and Chris Smith on 2GB to give the ABC a touch-up for their coverage of the burial of the Nias helicopter crash victims. What I found most interesting about the story was not the stuff-up by the ABC in handling the telephone complaints, or the conflicts of interest of the presenters, but the fact that only 98 complaints were received!
During the last election On Line Opinion had 1,524 responses to our long 17 question survey (with 4 of those questions requiring paragraph length responses). Perhaps we’re more influential than Sydney talkback radio, or maybe the influence of shock jocks is actually over-rated. I imagine if we ran a questionnaire on the ABC’s handling of the funeral, we’d generate more than 98 responses, plus present them to the ABC in a form that their complaints department could easily deal with, while simultaneously completing a research report that examined just why respondents thought what they did. If you doubt me, check out On Line Focus.

Posted by Graham at 2:30 pm | Comments (1) |
Filed under: Media

April 10, 2005 | Graham

Papal funeral shows it’s Catholics, not fundamentalists, who are the “conspiracy”.

Marion Maddox’s silly book God under Howard is so driven by her own personal demons and shibboleths that it misses the most obvious and successful religious “conspiracy” in Australia today – the Catholic ascendancy.
Forget about evangelical, born-again protestants conspiring to conflate church and state, Catholics are in dominant positions of power everywhere. A good display of this was the way the papal funeral was televised live on three of our TV stations and was allowed to supplant the news – that’s real power. I’ve seen and heard nothing like it since ABC radio used to broadcast evensong every Friday.
For those of us who set our clocks by the 7:00 pm news bulletin, this is as cataclysmic a divine resetting of the natural rhythm as God stopping the sun for Joshua outside Gibeon! What greater demonstration of Catholic dominance could one need than that the ABC would be party to this? It certainly wouldn’t have happened in Menzies’ day.
And then, the post funeral analysis was conducted by Geraldine Doogue and Kerry O’Brien, two of the ABC’ most prominent presenters, and both Catholic, at least by birth. In fact, everywhere you look these days there are Catholics in positions of power. In 1992, criticising the High Court, Labor Senator Chris Schact claimed “Six of the judges are WASP men (white, Anglo-Saxon Protestant), and the other is a female WASP.” Elementary research at the time showed that Irish Catholic was a better predictor of a lawyer’s elevation to the highest bench in the land than Anglo-Saxon and Protestant, demonstrating the penetration into the legal profession of Catholics.
Catholic world-views colour many of our public debates, with many of the proponents of social justice owing their convictions to Catholic social justice teachings contracted when they studied in Catholic schools (may even explain some of my own peculiar views on particular issues).
And if Maddox was looking for transformative religious agency on the Liberal Party, then she should look no further than the way that right wing Catholics infiltrated the party after the DLP split. These days the god-botherers who set the Liberal Party agenda in a conservative and reactionary direction are most likely to come from an Irish Catholic background and echo the ideas of BA Santamaria (an explicit influence on Tony Abbot for example) or even opus dei (look at David Clarke.) Perhaps I should write a rejoinder to her effort. I might call it The Virgin Mary under Howard.

Posted by Graham at 10:52 pm | Comments (2) |
Filed under: Australian Politics

April 09, 2005 | Graham

Rational markets

I first came across the “efficient markets” thesis which says that stock prices always embody and fairly price all the information known about the stock , in the ’80s, but never paid much attention to it. Stock markets are an efficient way of resolving the arguments between investors as to what price they should pay for a share, but if they always priced them correctly, how do some investors, like Warren Buffet, do much better than others? It can’t be all gambler’s luck.
Still, I’m always keen to seek out alternative views, and, let’s face it, if markets always trade at the right price, then my job in managing our small family portfolio would be a lot easier – just “set and forget”, put your feet up and open a stubby! So, when the latest edition of The McKinsey Quarterly carried an article for which the blurb claimed:

Behavioral-finance theory suggests that irrational investors can over- or undervalue shares and that rational investors can’t always correct these mistakes immediately. Our research, however, suggests that such discrepancies aren’t common enough to affect financial decision making in a major way.

I just had to have a look.
The essay called Do fundamentals—or emotions—drive the stock market? is worth reading, although it tends to confirm what it apparently denies, so no feet up stubby in hand while the money just walks in the door.
The authors identify a number of situations where obvious mispricing occurs, but then explain that this isn’t really mispricing. There is the case of 3 Com which floated 5 percent of its Palm subsidiary at a price which valued the subsidiary at more than the price of 3 Com including the subsidiary. Why, they ask, didn’t investors go short Palm and long 3 Com? Their answer is that the number of available Palm shares was very small, and there was a risk the company float wouldn’t succeed, so this option wasn’t open to investors. Well, maybe not, but it doesn’t prove the pricing was rational – the 5% of Palm shares were held by some idiots who thought they were worth far more than they actually were. So, if the thesis of the article was correct, the Palm float would never have even gotten off the ground – the shares would have been shorted before they were even issued!
They also look at the issue of Royal Dutch/Shell – two companies in a joint venture which share profits in fixed proportions – where the companies have traded on both the London and Amsterdam markets, at prices which vary by as much as 30% from theoretical parity. This is explained away because over time the disparity has become smaller, and because in some cases where similar arrangements have resulted in mergers, the share prices have converged! To me that’s good proof that the original mispricings were in fact irrational, not the reverse?
The authors also point to a period on the ’70s when shares were priced on an average P/E of around 10 and another in the ’90s when they were priced on an average P/E or around 30 as examples of mispricing which the market solved. They say that the P/E ought to normally be around 15, leaving you wondering just how wrong markets have to be before efficient market proponents will admit that perhaps their theory has a few holes. Apparently evidence of over-pricing by 100% or a divergence between low and high of 300% doesn’t count.
Of course there is an inherent conflict between efficient market theory and consultancy – how is McKinsey to earn its keep if the best advice is just to let the market do it all for you? So, not surprisingly the article contradicts itself at the end by offering public company executives some advice in the event that their company’s shares are mispriced. Advice such as, if they are over-priced, try to buy other people’s companies using your own shares as consideration rather than cash! But if markets were efficient, who’d be stupid enough to take the shares as consideration in the first place? If there is a market in consultancy advice I suspect it isn’t particularly efficient either, except at lining consultants’ pockets.

Posted by Graham at 7:33 am | Comments Off on Rational markets |
Filed under: Commerce

April 08, 2005 | Graham

I really couldn’t care about Voluntary Student Unionism so why write about it?

Like most current and former students, I don’t spend a lot of my time worrying about the minor extortion represented by student union fees, yet here I am doing a second blog post on them. Why? Probably because the issue is encouraging some of the most fanciful claims I have heard in public debate in years, and I can’t resist an easy target.
The latest flurry, to which Mick O’Regan gave air this morning on The Sports Factor, is that compulsory student unionism is behind Australia’s standing as a sporting nation.
Mick’s not the first to provide a forum for this argument, but I have yet to hear anyone cite even basic facts to support the proposition, such as what proportion of the total monies spent on sport in general, and elite sport specifically, comes out of student union fees. My guess is it is very little. If they do represent a large proportion it is certainly not apparent in the facilities which the universities provide.
The facilities at UQ where I went were, and as far as I know, still are, very ho hum. Swimming in the uni pool is like swimming in the ocean, there is so much chop because of its ancient design. If you want a good running track you’d be better off going to Nudgee College where foreign teams trained on their tartan in the run-up to the Olympics.
The rugby field has a clubhouse, just like, but not nearly as good as, a lot of the other Brisbane club sides, and they do produce some stars, but then so do clubs like Souths and Brothers.
UQ does have a nice state-of-the-art weights and fitness gym, but I bet it’s used more for increasing the aerobic capacity of faux-blondes in leotards than building endurance and strength in current Olympians.
Perhaps this is why rowing seems to be mentioned most often as the sport which will lose out. Well, we do seem to do well in rowing, but it’s hardly a mass appeal sport, the demise of which is going to raise the national heart rates and cholesterol levels because its absence will noticeably impact on the amount of activity we are all doing!
No, on this issue, the only measurable aerobic effect is the huffing and puffing coming out of the publicists. If there was evidence that the system was producing great sportsmen and women out of great facilities, surely someone would have produced them by now.

Posted by Graham at 11:14 am | Comments (2) |
Filed under: Australian Politics

April 06, 2005 | Graham

RBA makes right decision

Two of my best friends (Henry Thorntonand Nicholas Gruen) don’t agree with me but the RBA made the right decision in leaving the cash rate target alone.
They might be market economists, but they don’t have faith that the market alone can get it right. I’m a little more generous. Particularly as I think the economic world in which they cut their teeth (particularly that old codger Henry Thornton) has changed significantly.
30 years ago the economy was heavily controlled and regulated and it was possible for businesses to just push rising costs onto customers. In some areas of the economy that is still true, but not in as many as it used to be. That’s because floating the dollar, lowering tariffs and decentralising the wages system gave us a much more efficient market than we had before. That makes heavy handed fiddling unnecessary.
The RBA’s power to set interest rates is similar to Saudi Arabia’s power to set the price of oil. As the most creditworthy participant in lending markets the price it is prepared to pay to borrow tends to set the price that other participants accept or charge. Except that, in a world where the market is working pretty well, that price shouldn’t be noticeably different by more than a few percentage points from the price everyone else pays.
In other words, in the modern world the RBA should act as a price follower rather than a price-setter. The only instance when it should act outside the market parameters is when the market has gone dramatically off the rails.
There are no signs of that at the moment. Sure labour is getting more expensive, and so it should, that’s a sign of increasing productivity and living standards, but there is a huge reservoir of employable and under-emplyed, so we’re not running a really tight labour market. And if we were and as a result wages became uncompetitive, many of those jobs would just move overseas to a country with a lower rate of pay, thus increasing the reservoir and acting downwards on pay rates.
The housing boom has come off the boil. There is still a lot of lending for investment, but those investors either know what they are doing, or are going to burn their fingers. Either way I don’t think it will cause inflation.
Oil price rises, another reason touted for interfering, in themselves will tend to depress economic activity, not increase inflation. There is no point reliving the nightmares of the ’70s when oil price rises caused inflation because as I said before, there is now limited capacity for businesses to pass on price rises, or for employees to claim pay rises to meet the additional cost. Times change. In fact, given the huge percentage of oil that is government taxes, oil price rises equate to a fiscal tightening.
Much of the economic boom of the last few years has been driven by increased borrowing secured against a suddenly more valuable asset base of domestic housing. There is only so much puff to that sort of expansion. With the kids’ inheritance now spent, much of the domestic economy is naturally starting to slow, and the oil price rise will exacerbate this. Those parts of the economy that will continue to go gangbusters will be to do with resources and exports, but there is no need to rein them in. Given the current account deficit there is every reason to ensure that they can continue to borrow at a reasonable price so as to fuel their needed expansion.

Posted by Graham at 1:10 pm | Comments (4) |
Filed under: Uncategorized

April 05, 2005 | Graham

Brogden becomes a Newman

Crikey reported yesterday in its subscriber only email that:

NSW Liberal leader John Brogden is ready to announce his $20 billion plan – to be called ‘Rebuild NSW’ or ‘Rebuilding NSW’, depending on who you talk to – aimed at winning the next election.
With a $20 billion wish list of major public private partnerships, it will be launched at a Millennium Forum luncheon at the Westin Hotel on 11 April before an audience of developers, builders and construction types.
It’s the brainchild of a Victorian PR company which believe the voters of NSW want to see lots of shiny new toys.

Is this yet another example of Liberal Oppositions inappropriately applying the lessons of Campbell Newman’s Brisbane City Council win where part of his campaign was to build 5 new tunnels to solve Brisbane’s traffic problems? I’ve said it before, but I’ll say it again – Newman won despite his tunnels, not because of them.
At this time in this country oppositions will not win government by promising large infrastructure projects. Not only won’t electors believe that they will be delivered, but the promise to build them lowers the opposition’s credibility, increasing the propensity for electors to believe that they will never be built.
Newman won in Brisbane because he ran against the perceived indolence of the Labor incumbent, and because he promised to fix the little things. Newman dramatised his “Can do” moniker by rushing around the suburbs filling potholes, not building four lane ones! Brogden should be running on a platform of fixing the infrastructure that’s there, not building more of it.
Our research in WA showed that the Canal proposal was no help to Barnett, but more pertinently, our research in the last NSW election showed that the Liberals’ promise to build a cross-harbour tunnel to Manly was a significant negative for them.
Not that infrastructure projects can’t be winners. Andrew Leigh finds a relationship between the Federal Coalition vote and the Roads to Recovery project using reversion analysis, but there is an important distinction between John Howard and John Brogden. Howard is in government and in a position to start laying tar before an election – Brogden can only promise for the future, a place that electors are notoriously reluctant to put much of a deposit on.

Posted by Graham at 6:54 am | Comments (1) |
Filed under: Australian Politics

April 05, 2005 | Graham

Rau just the tip of an iceberg

The Four Corners site says “Cornelia Rau’s case has raised uncomfortable questions about how Australia treats people at the social margins such as the mentally ill, prisoners and asylum-seekers.”
Yes it does, but it does much more than that. It questions the assumption that the bureaucracy and the professions are composed of competent and compassionate individuals who always make good judgements and should bring to account the suite of “Nanny state” nostrums being administed to us.
Four Corners devotes its attention to Baxter, because that is where the maximum pressure is on the government and where prejudice says the worst injustice should occur because Baxter is a privately run detention centre.
In fact, Rau went through the publicly run Queensland detention system before she got to Baxter, and was examined by psychiatrists from the Princess Alexandra Hospital – another public institution – who failed to diagnose her problems, and whose professional lives are lived both as public servants and private practitioners. The issue isn’t how staff are paid, but how the system is organised.
And it is not only people in detention who can be trapped in Kafkaesque nightmares. There is a tendency in post 19th century society to institute bureaucratic “solutions” to perceived problems, a process that has not slowed under the Howard Government, despite its philosophical commitment to smaller government.
Some bureaucratic solutions work, but many exacerbate problems. One which has some of the same haulmarks as the Rau case, but affects many more people who are at large, is the apparatus of the child support system. It too involves psychiatrists and social workers and people empowered to act judicially without the competence to act justly. I wonder when it will come in for more attention.

Posted by Graham at 6:20 am | Comments (4) |
Filed under: Australian Politics

April 04, 2005 | Graham

Real presence

My first reaction when the ABC morning broadcast said that the death of Pope John Paul was the day’s leading news item was – maybe for the world’s Catholics, but there’ll be something else for the rest of us.
I’ve revised my view as the days have progressed. Karol Wojtyla made a real impression not just on Catholics, or on “Christendom” (a term John Howard anachronistically used this morning to describe the community of all Christians), but on Jews, Muslims, Buddhists, Hindus and atheists.
Why is this so? Partly I think it has to do with his political activities. World leaders opposed to communism saw the Pope as an ally, even when he didn’t always approve of their own policies. So there is a bond, for example, between him and George Bush. And by taking a strong political position he also broke from the supine 20th Century history of the Catholic Church which has too often failed to stand up to oppression, or worse, been complicit in it.
In a relativist world he also stood for the proposition that some truths are absolute. Even when you didn’t agree with his position on abortion or contraception or ordination, you had to admire his adherence to views because his gauge of truth was rightness rather than popularity. That could explain his resonance not just with Protestants, traditional denominational enemies to the Roman Church, but with leaders and followers of other religions.
He was also recognised for his acknowledgement of other Christian denominations and religions, being the first pontiff to visit a mosque or a synagogue – quite a step forward for a church that still teaches that those of us out of communion with it will suffer eternal torment in hell.
But none of these is sufficient to explain the way his death has affected so many so widely and so profoundly.
I think the answer lies in deep common human psychological needs and what is an almost mystical melding in his life and death of the real and the symbolic that I can only explain as a sort of incarnation.
When Princess Diana died I felt shut out from the communal grief. This was an experience that I shared with many of my male friends – tears and and Diana appeared to be a girl thing. Here was this woman whose only claim on our attention was the celebrity that she had won by marrying into the Windsors. She was pretty enough, but without the “coronet” no head-turner, and wayward and weak – what one might call “scatty”. I suspect that the female grief I saw around me was for the death of the illusion that any girl could win the lottery of life and become a princess, rather than any grief for the loss of her personality.
Wojtyla is different. He was a man of substance who through the agency of the Catholic Church lived a life as a symbol as well as a man. What I think we are seeing now is a worldwide response to that fusion. He was a man who one can admire both for who he was and what he represented, and this fusion has become almost supernatural, particularly in its effect.
Coming so close on Easter it opens a new window of understanding for me on the death, resurrection and the nature of the humanity and claim to divinity of Jesus Christ. When the creed says that God was made flesh and dwelt amongst us, is it this phenomenon of melding that it is referring to. Is our reaction to Wojtyla’s death an experience of God in creation, and in some ways a post-figuration of the more profound expression of that incarnation that those of us who are Christian celebrated a week ago?

Posted by Graham at 9:32 am | Comments (7) |
Filed under: Religion

April 02, 2005 | Ronda Jambe

Junkies are the scum of the earth (1)

A harmless reminiscence, with a sad sting in the tail.
Playing the melodies of those forgotten dreams
Learning to play a musical instrument was never something I particularly aspired to. Intermittent years of dance training, as a child, an adolescent and later as an adult were my main active connection with music.
When my older child had piano lessons, I was always just the ogre in the background, cajoling him to put in the time, rather than taking a real interest in what and how he was learning. He changed teachers a few times and when he went to live with his dad at 12 his lessons ended.
So when my daughter turned 7, and I trotted her off to a local piano teacher, it was just a whim that I would try to follow her simple lessons. The book was big print, with jolly coloured drawings and not too many notes to a page.
At that level, the code was transparent. Start with the Queen of the Keyboard, Her Majesty the Middle of C, and be introduced to her court. The little tunes were so satisfying to hear, completing some deep neural circuit connecting my hands, eyes and intellect. Left side and right side reconciled.
Listening patiently each week during my child’s lesson, I derived vicarious benefit from her patient advice. If she was doing a piece correctly, then I could copy that approach.
At first I was confident that my mature mental discipline could overcome the rigidity of age. I had hopes of keeping up with my flighty child, who could hardly sit still for five minutes and was so easily discouraged. But it soon became apparent that her natural ability, lack of inhibition and simple agility would leave me far behind.
Melodies rooted themselves in her memory. Tunes played well, but with a numbing allegrettissimo, made me feel a sluggard, struggling to gain just a fraction of her ease.
All of which has been good for her ego and doesn’t bother mine much, since every new song I learn is a private joy, worth all the effort.
Maybe a nine-year-old doesn’t need more evidence that her mother is past it. Maybe I should be embarrassed that my fingers find it so difficult to play different notes on each hand at different rhythms. These hands, after all, can deal competently with a computer keyboard (but not knitting needles).
Long ago, in my naive youth, my imagined future was never one of great wealth, but rather one in which leisure for reading and listening over and over to opera libretti was taken for granted. Of course I would come to know other operas in the way I’d studied Traviata. Whatever would stop me?
But life and the work-a-day world intervened, and music became a more passive pleasure. The discipline of dance became too hard to combine with parenting and earning a living. Now, along with my daughter, I am reclaiming a humble participation with a part of my heritage that is lodged deep inside.
It seems that as a species, humans are defined by our extremes: we have within each of us the germ of a Mozart or a Michelangelo, and equally the potential of a child murderer or a Serbian rapist.
For a few fleeting moments recently, my children took over the grand piano at Canberra’s Hyatt lounge. In this gracious setting, the younger one, normally fearless, had me ask permission. Soon the teenager worked up the courage to play a bit of blues. And they didn’t fight, although the older one commented sadly that his sister ‘doesn’t know any duets’.
That little interlude gave me hope. Maybe children that love music will grow into people that won’t bring harm to the world. Sometimes when it is time for the evening news, I find I prefer to linger at the piano instead. Patiently affirming my humanity at the keyboard, learning to play a sonatina passibly, can’t be a bad thing all up.
Coda: That piece was published about 13 years ago in the Canberra Times. As I re-read the faded clipping, the ache I have learned to ignore stirred with a familiar physical tightness in my chest. My son must have been about 15 then. He became a junkie about 3 years later, after many difficult years of behavioural and school problems.
Reflecting on the woman who wrote those words, I can see she was clutching at straws of hope for his redemption, even then. In hindsight, she appears perhaps mistakenly idealistic, a dreamer, but thoughtful and concerned with their development. I grant myself that much. After more than 10 years, the last four in and out of jail and still no end in sight, I no longer hold out hopes for his redemption. His sister is a jazz musician, and now carries all my hopes.

Posted by Ronda Jambe at 3:07 pm | Comments (1) |
Filed under: Uncategorized
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