Wednesday, February 25, 2009

NZ NGN Conference

I will be spending the next two days facilitating he New Zealand Commerce Commission's NGN Conference.

One of the participants, Benoit Felton, has blogged about the Australian NBN. His information came from a session with Paul Budde and I don't know who the other dinner companions were who might have misled him. I felt it necessary to provide some answers to his questions.

I will provide some more informed commentary when I return.

You've got to be kidding

A frightening statistic in the Oz that nearly half of Australia's undergraduates are studying business or commerce.

The article goes on to berate the relatively poor showing for management research in comparison to its undergraduate load, and some fairy confused concerns about innovation.

My concern is the reverse - way too many people doing degrees in derivative subjects rather than the core. Innovation and marketing are in large part derivatives of economics, larg slabs of organisation theory are better tauht as psychlogy and sociology (and communication theory) than as business subjects.

Could we try to get more students to complete majors in "real sciences" including the social sciences and start making "business" a single year Grad Dip that you add onto that first degree - a bit like the way Secndary Education is studied (I have no difficulty with the enrollment being as a double degree structure and really the equivalent of two majors being in business, but at least one major should be in a course that is NOT business).

Monday, February 23, 2009

Howard in defence of "neo-liberalism"

I've only alluded briefly to the Kevin Rudd exercise in The Monthly. It is a reasonable attempt to analyse what the period of "extreme capitalism" or the "neo-liberal movement" that ran from the mid 1970s to, well, about now represented.

Last week John Howard responded in his eponyomous speech to the Menzies Research Foundation.* He claimed;

In 1980 our nation needed five great reforms. We needed to deregulate our financial system, fundamentally change our taxation system, make our labour markets freer, reduce excessively high tariffs and rid the government of ownership of commercial enterprises that would be better run privately. By 2007 these five great reforms had been achieved.

Warming to his topic Howard attacks Rudd for attacking the excessive pro-market reforms of the coalition, but then trying to claim that really the sub-prime crisis is entirely the fault of the Americans. Ultimately Howard misses the point that the sub-prime crisis occurred in the US through the more extreme version of the implementation of the same philosophies that had been pursued in the US.

What is really most interesting is how everyone has lost site of the reasons why the prescription from the mid 1970s was as it was, and why we should all be Keynesians now. Following on from the Keynes analysis of the depression and the global role of Government in nation (re)building following World War II Governments were suddenly confronted with the OPEC price rises of the mid 1970s. As any introductory economic text of today will explain a supply shock cannot be responded to by any Keyseian response, what you need to do is facilitate the restructuring of the economy. That was why the neo-liberal prescriptions were efective.

But it was wrong to think that Keynes was wrong. Most particularly wrong was Allan Greenspan in not raising US interest rates as the US economy recovered from the mild recession at the start of the century. This has been coupled by the remorselss process of wild deficit spending by the Republicans - something Thomas Frank in The Wrecking Crew has labelled as part of the strategy to "defund the Left".

Howard's address has received comment from both the Left and the Right. On the Right Michael Duffy accuses Howard of rewriting history in his claim that he had always acknowledged the preceding Labor Government for its efforts in financial deregulation and in tariff reform. However the bulk of his effort is to lambast the Rudd essay and borrows the Latham description of it as "zigzag economics".

In this he is possibly quite fair, reflecting as it does on the tendency of both Howad and Rudd as PMs to rubbis their predecessors once in office. It is interesting to note that Howard prior to his first election was at pains to suggest he wouldn't change things too much, there was no promise of IR reform and at that first election there would "never ever be a GST".

The criticism from the Left comes from Stephen Keen in Crikey (possibly behind the paywall). Keen's first criticism is that Australia wasn't far behind the US in its rush to encourage the masses into home ownership, including changes to capital gains tax, various home buyers subsudies and generous negative gearing allowances.

(He doesn't mention the famous Howard quote "I never had anyone come up to me a shake their fist in my face because they were angry that the value of their house had gone up". This was something I rectified in a letter exchange with the PM at the time, but it had no effect).

Keen goes on to be critical of the whole theory of financial market deregulation, pointing out correctly that there is no natural limit to finance institutions competing away their prudential controls in an endless rush to create credit. The only market control is the kind of crash we are now witnessing (and as we briefly witnessed in Australia in 1991). Australia has escaped the worst of this because we had slightly tighter controls and our own national savings (in the form of superannuation).

The question is not whether the finance sector needs to be regulated or not, but how to regulate it. Governments acting as price setters doesn't work any better, especially if their decisions on prices can be affected by the democratc process. What is needed is a system of regulation that includes "automatic stabilisers". Particularly this means (a) prudential controls on lenders not just deposit taking institution and (b) risk weightings that adjust if the asset class is experiencing excessive (e.g. average plus one standard deviation) price inflation. It isn't hard to design or implement.

Meanwhile the former PM should perhaps reflect a bit more on privatisation and labour market reform and wonder whether he didn't pursue both of these ideologically and not because of the real impact they would have on the economy.

* Am I alone in thinking that the idea of Howard giving the first Howard lecture is decidedly off? Am I also alone in thinking they have created the speech a little too quickly? One is left with the feeling that the Liberals are trying to overdo the lesson from the ALP and Keating. After 1996 the ALP tried to disown the Keating Government, whereas the Liberals are trying to run the argument that really the people didn't vote out the coalition they just bought the coalition light. (as Howard did in the speech saying;

One of the greatest compliments paid to the former government was the campaign approach in 2007 by the now Prime Minister. With the exception of his stance on climate change and industrial relations, he sought at every turn to diminish the differences between himself and the Coalition.

The man Latham called "The Poisoned Dwarf"

It is truly fascinating to watch the machinations of The Australian's Glenn Milne. When he is not attacking people on stage at the Walkleys he is renowned first as the ultimate media backer of the Costello (non)challenge for the last five years of Coalition government.

His second claim to fame is as the ultimate peddler of rumour and dis-information in Canberra. If you want to start a story, give it to Milne.

Today's contribution does not start auspiciously. I quote;

The Liberal script was compelling. Curtain Up: Helpless blonde heroine tied to Ghan railway track by erstwhile friends and supporters. Climax: Train approaches relentlessly en route to Perth.

It is a small point, but the Ghan track runs from Darwin to Adelaide, so a train travelling to Perth on that track would be far more compelling than anything Milne has written.

The rest of the article is supposedly about some deep machinations inside the ALP driven by the NSW Right, all to "deal with" the threat of the Victorian Left. The mystery writer to Milne develops a fantasy conspiracy driven by the concern of the NSW Right of the influence of Gillard and her supporters.

I can believe much of this, because the NSW Right has shown itself to be notably devoid of judgement for a number of years. But let me remind Milne, his source and Mark Arbib, Karl Bitar and the rest of the Sussex St mafia that the ALP in Canberra and in NSW is always STRONGEST when the Left is in a leadership role.

Can anyone imagine Gough without Lance Barnard? Can anyone imagine Hawke without Brian Howe? What was Neville Wran without Sid Einfeld, or indeed Bob Carr without Refschauge? Has anyone noticed that the real immolation of NSW Labor began with the resignation of John Watkins, has anyone thought to ask themselves how different life would be if Sussex St had been prepared for Watkins to succed Carr rather than Iemma?

The alliance between Rudd and Gillard was not an "unholy alliance", it was the essential alliance. In pursuing this alliance Rudd had learnt from Simon Crean who had attained the leadership by partnering with the inept Jenny Macklin. The ministry tht Rudd claimed the right to select probably varies little from the Ministry that a proper factional deal would have served up - except for the fact that all the factions, incl;uding the NSW Right, really exist as myriad sub-factions.

As for Rudd, I think his moves to accomodate the NSW Right are far more about ensuring they don't become a threat to him, rather than some kind of buttress against an assault from Gillard. One has to remember that the NSW Right was firmly behind Beazley at all times, and was avowedly opposed to the ascension of both Latham and Rudd. His error will be in over-estimating the threat they pose, and of listening too much to their entreaties and claims to be the brilliantly successful machine they claim to be.

My understanding from my own sources is that the NSW Right is trying to flex its muscles in Canberra. Those who feel seduced by them need to analyse how unsuccessful the NSW Right has been in its direction setting for Canberra, how it has managed to monumentally kill its own State Government and how it continues to project an image more akin to the politicians of the era of The Wild Men of Sydney.

Thursday, February 19, 2009

Looking to the future

David Braue in ZDNet has a story about filtering today. But the small moment I want to refer to is the Q&A from the recent Communications Alliance Confrence. David wrote

Asked whether the off-topic abuse Conroy copped would rule out similar experiments in the future, Garlick was cautiously optimistic. "I think a lot of people were worried that the force of the comments directed at the other topic [filtering] would dissuade us from doing it again," she said, "but I think we did get some valuable lessons from it. Most people seemed to think it was a good way — more informal and transparent — for the government to communicate."

My small moment is that it was my question!

Meanwhile in other small moments the AFR BOSS magazine had an article in Where I get my ideas from (sub required) talking to Deena Shiff of Telstra.

She talked about a book called The Origin of Wealth which she has been apparently dog-earring and going back to. It until now has been sitting unopened in my desk-drawer - I was drawn to it because it had an endorsement from John ay on the front cover.

But Deena went on to talk about a couple of websites she follows - but they were depressingly telco/technology focussed. From my days as a strategic planner and reading The Art of the Long View I try to maintain the discipline of conciously reading outside my normal reading modes. That means things like picking up the occassional street paper, odd magazines (like Enlightenment Next I bought in Melbourne last week), reading Quadrant and Dissent). I also conciously cultivate a contrarian stance - asking like the title of Barry Nabeluff's book Why Not?.

Conferences like the CA one on Broadband and Beyond reflect how mono-cultural the technology discussion can become. My brief summary was that the future being pictured looked very much like now - in other words it wasn't very future focussed at all.

Wednesday, February 18, 2009


Bastardry sems to be the term most applied by commentators to the machinations currently going on inside the Liberal Party. Christine Wallace* has applied the term to describe Peter Costello's moves, indicating that Costello had twelve years to watch the master.

Christine does a nice line in analysing the trials of opposition and advances what she calls the peloton theory of leadership, that you let someone else make the early breaks and wear themselves out before breaking from the pack late. She refers to this as the approach used by Rudd, Howard, Hawke and Fraser and suggests only Whitlam did the hard yards.

It is useful, but misses some facts. Rudd wasn't the organiser of the peloton in opposition, that was Swan, Smith and others. Howard was a spent early leader who taught Costello the "wait till they beg" strategy. And Hawke really had no earlier opportunity.

Meanwhile Dennis Shanahan in the Oz gets stuck into Malcolm for turning his attention to the structures of his party.

The indignation apparently prompted one Liberal to say "This party was founded by Robert Menzies and any attempts to turn it into a personal fiefdom will be resisted", which is stunning in its incomprehension. What is the relevance of Menzies? Is it that it was his personal feifdom and can never be any other's? Is Menzies to be elevated to the same level as Marx - the Liberals are no longer liberal nor conservative but "Menzieists"?

Has this poor sod reflected on how little the Liberal Party of the late 40s looks like that of today? Think federal structure, think reforming after disaster, think of the need to distance the party from the control of big business that bedevilled the UAP. If that is not enough think that the opponents were all true socialists (and included a fair number of communists) none of whom questioned that their mission was the "socialisation of the means of production, distribution and exchange".

As Shanahan goes on "they also fear jostling for the meagre benefits in Opposition may unleash a damaging series of recriminations and factional fights, which paralysed the Liberals in the 1980s." He could have pointed out that this was also the ALP approach from 1996 to 2001.

One prize is the seat of Bradfield to be vactaed by Brendon Nelson. Imre Salusinszky, also in the Oz, has written about the array of candidates for the seat ranging from right-wing ideologues to faithful party servants. He includes Janet Albrechtsen in his list, but says she is not a member of the party and is not interested.

Interestingly Albrechtsen doesn't mention this in her own column, despite otherwise trawling through the list provided by her colleague. She gives a little run through of the history of the seat including two long-serving bench-warmers. Her call is that the seat calls out for a future leader, and that in making the choice;

the party should not make the mistake of confusing commitment to principles with commitment to party. Commitment is not necessarily about being a long-standing member of the party. On the contrary, the best political warriors may be among those who have worked outside the party and politics demonstrating a history of believing in the principles that underpin the Liberal Party as the dominant conservative force in Australia. John Howard may have left the political stage, but many of the principles he pursued during his long career have prevailed. On the battlefields of welfare reform, indigenous politics, history, economics, citizenship, national sovereignty and values generally, conservative ideas have proven remarkably resilient. The Liberal Party cannot lose sight of that as it pursues renewal.

Sounds like JA would meet those criteria admirably!

However, in her history of the seat she left out the very first member for Bradfield, for one term, the one and only W.M.Hughes, Labor rat, thorn in the side for librals ever after. That means 50% of the members for this safest of conservative seats were once members of the ALP. Will that be the position for the next member?

While the Liberals continue their turmoil, it is worthwhile reflecting on what really is going on here. Governments once elected are usually very hard to unseat. The vigorous internal competition in opposition is a selection process that continually refines and strengthens the opposition. It is this combat, not planned leader based strategy, that eventually presents a convincing "alternative government" to the people. It was one of Brendon Nelson's mistakes to think that because he was the leader of the opposition he was the leader of the alternative government - the one does not automatically follow the other. The latter title has to be earned. It is not earned merely by "policy formulation" though that helps, it is also earned by developing character and presenting more than just "the leader".

The difficulty for analysts and pundits alike is that these aspects of character are not easy to measure in standard opinion polls. John Howard went from being strong and resolute to tricky and distrustful. He and Mal Brough could never understand why the NT intervention did not give them the poll lift they expected - it was simply because it played into the tricky and distrustful mindset rather than strong and resolute. It had been first identified in the Shane Stone memo, gained strength in the "Not Happy John" era and turned into a tide by 2007.

Politics is a lot more complex than most commentators will admit.

* While I'm at it I should give a plug to Christine's really useful morning news service called Brakfast Politics. My only suggestion would be that she develops the morning e-mail to actually be an HTML e-mail that contains the updated home page.

Monday, February 16, 2009

Disability Equipment Program

In a speech today Senator Conroy has advised that he is conducting study into a single comprehensive telecommunications equipment program for people with disabilities. He said;

Therefore, the Government will now undertake a feasibility study into whether a disability equipment program—independent of telecommunications carriers—should be established. The Department has already done some preliminary scoping work for the study. It will involve a detailed market analysis of the current arrangements for providing equipment to eligible people with disabilities.

The study will assess the estimated demand for specialised equipment over the next 10 years, and what eligibility criteria might apply to accessing that equipment at subsidised rates. It will also include a technology analysis of what sort of equipment might be required, and whether some equipment not currently available in Australia, should be made available. An analysis of projected operational costs and funding options will also be undertaken. I have asked my Department to ensure that there is comprehensive public consultation.

Not before time, I say. Disability and consumer groups have long lobbied for one program. However, first Telstra and then Optus developed their own programs. The consequence of this has been that there is not enough volume in the whole rest of the industry for anything significant.

At last Senator Conroy has realised that there are aspects of the current marketplace that mean "requesting" industry programs won't work. However, it is also to be hoped that he and his Department don't go the reverse and try to actually BE the single program. "Industry" can do this well, once the large players realise they get no credit for doing programs on their own.

(A related but inconsequential issue has been a long running presumption that the USO levy funds the disability program that Telstra runs and so everyone should benefit. Telstra simply argues that the USO levy is so short of costs it doesn't cover everything. The solution, of course, is quite simply to separately ear-mark the money. And while industry might argue about who should fund this, the Disability Discrimination Act would requuire tecos to pay for it themselves.

In fact the whole area is a case study on how we've got the regime wrong. If we didn't mention disability in the telecommunications act at all, then each provider would be required to make arrangements for a disability equipment program. Clearly Telstra's market power enables it to conduct a program more cheaply than anyone else. In an effective market structuring regime a regulator would be able to instruct Telstra to make its scheme available to others - an access regime to the equipmet program. But we don't have that - let's hope that the Departmental enquiry gets us somewhere close).

How not to do customer support

Interesting story that happens to be about WiMAX, but is really about customer support.

The modern on-line business model which is all about self-install and phone or on-line support sounds great in theory, but as the case study demonstrates can fall apart in practice. And it doesn't instill confidence in customers when you tell them they have to source from third parties equipment necessary to make the network happen.

As to the relevance of the article to WiMAX, this actually reflects another interesting aspect of telcos, that the support model chosen is usually deficient for the problems discovered on the network early. Even Telstra with its 3G network had problems with the device choices of consumers for connection and the need for external antennae.

Monday, February 09, 2009

Try that again

I nearly choked when I read that Senator Minchin had issued a press release breathlessly reporting on the $1.1M the Rudd Government had spent on building "new websites to promote itself."

Minchin went on "While Governments have a responsibility to provide up-to-date information to the Australian public and the internet is an effective way of doing this, the costs associated with some of these individual sites seem to be quite extraordinary". Please - 36 sites for $1.1M, the biggest expense listed being $180K on something as sexy as promotion of accounting standards.

Let's not trawl over the 1 billion dollars that were spent by the previous Government over ten years in its promotion of everything from "alert not alarmed" to "Work choices" (the latter costing taxpayers $116M, the Liberals Government and Howard his seat). The Rudd Government has even announced clear guidelines on Goverrnment advertising campaigns to restrain that excessive expenditure.

As to the $1.1M, it's been my experience that people expect Government to overpay for these kinds of developments, but all up those bills look quite reasonable.

Public statistics

Our good friends at DBCDE in putting together a Digital Economy discussion paper have talked about access to Public Sector Information. Meanwhile the folks at Crikey provided a really good example of the use of statistics in their video of the day today (see below).

Thursday, February 05, 2009

Factions, Philosophy and Names

Shortcons and Left-Right-Outs? If you are having trouble keeping up with
factional maneuvering
in the Victorian ALP, the NSW ALP and even the Liberal party, you might like to know that these refer to the break-away right group (led by Shorten and Conroy) that has done a deal with the left and the group that is left behind. At the same time the Shortcons are reportedly registering an association called Labor Unity to effectively claim that name.

This has of course been matched with the turmoil in the NSW ALP. This reaches even further into the lolly-bag of names - with labels of Terrigals, and Troggs.

At least these names are more distinctive than Left or Right, because these factions don't any longer have much at all to do with ideology. While the Left/Right split has its historical base in the relationship between the labour movement and its political wing with communism, there is blessed little philosophical difference between the factions.

People join factions because you can't get nominated or elected to anything without being part of one. Once in it is about deploying that patronage.

For the true true believers the Communists are making a comeback!

At least the Liberal Party turmoil does seem to revolve around philosophy. What is frightening is that there are any left in the party who can seriously believe the extreme US conservative model. But clearly Tom Switzer does.

I think the period of global turmoil will see some development of political philosophy. Kevin Rudd's attempt in The Monthly is worthy but as the Piers Ackerman article notes it has received flak from former ALP right heavies Mark Latham and Michael Costa.


I had a recent crack at journalists over accuracy. Today's topic could go under that heading or merely "hyperbole".

Piers Ackerman writing in the Tele has stated;

No matter how much Prime Minister Kevin Rudd furrows his brow and adopts a serious mien, memories of Labor governments past will bedevil his efforts to sink the nation under a red tide of debt that will take generations to clear.

Generations? Really? A generation is thought of usually being 25 years or so. Generations is therefore 50 years or more!

Later he points out that the debt position Howard inherited from the ALP was $96B. An amount that was cleared over the decade, and more. It was in the end cleared even without the proceeds of the Telstra sale.

What part of keeping the budget in balance "over the course of the economic cycle" that was the mantra of Howard/Costello before being adopted by the ALP don't commentators and conservatives get?

Tuesday, February 03, 2009

About race

There were a couple of interesting stories about race over the last few weks. The first is Janet Albrechtsen with her reverse racism. She as made it her personal crusade to get everyone to focus on Obama as not black, but the President. She could be Martin Luther King "let not a man be judged by the clour of his skin, but by the character of his heart" (see below)

She has a swing at the media in general;

But when opinion leaks into news coverage and straight analysis, as so often happens, something altogether more dangerous is happening. The media forfeits their place as the fourth estate when they forget their primary duty to report the facts so the average reader, as well the commentariat, can form their own judgments.

Regrettably, much of the mainstream media in the Western world have abandoned this trusted role. They want to be players, not mere observers. Intellectual scepticism, which should sit at the heart of good political analysis, is too often a rarity in an increasingly liberal (in the American sense of that word) media.

Indeed, for Odrama to present himself in this way as Lincoln’s heir hints at the sort of hubris that usually sets in only towards the end of a presidency. To do so at a time in his career when he still has no executive track record of any kind and precious few achievements as a legislator suggests a vast presumptuousness.

But this has gone largely unremarked. For much of the media, the cocktail of colour, left-wing politics and grand rhetoric is enough to secure him immortal presidential greatness, whether or not he achieves anything.

All of which seems to imply her belief that Obama will prove to be an ephemera. One does wonder if anyone is paying much attention to exactly what a basket case has been left in the US by thirty years (including Clinton) of effectively conservative Government.

Meanwhile a more rational conservative took aim at an anti-semitic rant that had leached its way into the business section of The Age. I don't rightly know how to place Michael Ronaldson yet, but this piece was a good statement about the standards one might hold writers to.

But the headline "Broadsheet no place for narrow minds" could really apply to Janet A.

Monday, February 02, 2009

Those crazy Yanks

This week will obviously create lots of opportunity for endless discussion on capitalism, social democracy, market fundamentalism and all given that St Kevin is going to save capitalism.

There are a couple of books I've read recently that I think are essential reading for anyone trying to make sense of events of the last three decades. I will write more about each over coming weeks. hey are Supercapitalism by Robert Reich, and The Wrecking Crew by Thomas Frank.

It is the latter book that fully details the process of dismantling the institutions of Government by the US conservatives. This is far more extreme than anything occurring in Australia. As an example the conservatives hired people in to run institutions inimical to the interests of the institution.

The case of Nancy Nord of the Consumer Product Safety Commission is one example. Three articles from the Washington Post describe her rule. The first reviews her testimony before a House committee following the Chinese lead paint scandal, and her approach which seemed to be that the market would take care of product standards.

She was then called on to resign following her opposition to legislation that followed the lead case. It noted that "[m]any of Nord's arguments were echoed yesterday by a coalition of business groups." This was standard form for a conservative regulator.

This was followed by the unsurprising revelation that she and others in the regulator had had "business trips" paid forby the firms she regulated.

Australia has seen nothing of this ilk. While Howard Government was perceived to be trying to achieve these kinds of outcomes with some appointments, such as onald McDonald as chair of the ABC or Grame Samuel as chair of the ACCC, all their appointees ultimately still pursued the statutory requirements of their organisations.

While we might think that the collapse in the USA might make everyone retink the conservative agenda, it is not that simple. Take the "musings" of Tim Andrews, a self described "Australian classical liberal living in Washingtom D.C."

This is the fundamental cancer that is infesting the conservative movement: the willingness to play to media elites through ‘bipartisanship’ and ‘compromise’. Odiously selling out your beliefs and politically prostituting yourself to climb the greasy poll to success. It is morally repugnant. But, not only that, it does not work. Howard was Australia’s second-longest serving Prime Minister. He gained this honor for a reason. For conviction. For standing up for the values of what is right.


Those who know me will understand that I have a problem with the concept of "fact", because everything is preceived through the filter of the observer's existiong set of beliefs, presumptions and values.

However, there are some "errors" which simply do stand out. They are particularly embarassing when they are by supposedly reputable commentators in major newspapers. I have two today, neither of which is a particularly significant "fact" in the argument being constructed, but each detracts from the substance of the article.

The first is Paul Sheehan writing in the SMH. He starts;

When Federal Parliament resumes for the first session of 2009 tomorrow, two large egos will face each other across the red chamber; two men with Napoleonic habits of thought and action.

Oh dear! The House of Reps is green like every other lower house.

The second is John Durie in the weekend Oz. Writing about the Telstra succession he writes;

The leading internal candidates, David Moffatt and Kate McKenzie, were considered last time around and rejected.

As talented as Ms McKenzie might be, there is no way she was considered for the CEO's job in 2005. In fact, at that point she wasn't even a direct report to the CEO, as she was still heading Regulatory and reporting to Bill Scales.

One really would hope for better on the simple bits.