Sydney and Plans

I had my first success in getting a letter published in the SMH for quite a while toda; Don't mess with the heart and soul of this great city. (You have to dig a bit.)

It was editted from the original which I share with you below.

It is remarkable the faith people have in the mythical Ability of planners to write wrongs. Supposedly in the city of Sydney those wrongs include the “chaos” created by the unplanned environment of the 50s and 60s.

It is fascinating that the same Premier who planned to give us an Opera House planned to give us the Cahill expressway. Fascinating that the citizenry continues to complain about The Toaster without reflecting how much more open the Opera House is now than it was with the original collection of East Circular Quay buildings.

And the politicians and media get seduced by the nice clean lines of the impressions of the new designs, without looking at the pieces of the impression that are areas that don’t change. The bulk of the improvement is like fashion magazine “before and after” shots, though in this case the after shot is the one improved by not colouring it all in.

Cities grow like organisms, their functions change and morph. Sydney is no longer a bustling wharf town to the disappointment of sum. But messy railways, aerial freeways and busy ferry wharves are visual expressions of the vibrancy of the city. It is not some airbrushed picture postcard of sentimentality. Please Clover and everyone else, let Sydney quietly evolve and banish your sterile visions.

The editted version really missed the bit about how misleading all the artists drawings of the "future" city look. I'll save that for another day.

Gans and Housing

Unfortunately I can't link to Australian Financial Review stories but I thought I'd share this with my few loyal readers. The following was a letter submitted to the AFR Thursday that might I suppose still get a run.

The proposal by Joshua Gans and Christopher Joyce for the creation of an ‘AussieMac’ (“Home loans need an AussieMac” AFR 27 March) is based on the false assumption that mortgage lending is “as safe as houses”. The creation of a AAA rated credit pool to create competition in home lending makes sense if the asset, residential mortgages, really are that secure an investment.

The unfortunate reality is that house prices can be subject to price bubbles like any other asset. Once the bubble goes too far prices will fall, and frequently (or very frequently as now occurring in the US) the owner has negative equity, and the securitised mortgages contain more risk than ever envisioned. The problem with an AussieMac is that it compounds the problem by introducing moral hazard; no one really cares about the quality of the underlying loans if they are using Government guaranteed credit.

The way to stop bubbles is to increase the funding cost to acquire the asset, but in general raising interest rates is a very blunt instrument as it suppresses productive as well as speculative investment. If all housing finance was derived from deposit taking institutions one way to control housing price bubbles would be to reduce the 100% risk weighting given to residential mortgages in calculations of capital adequacy. This is not only effective, but logical, as it reflects the fact that prices now might not match prices in the future.

Securitised mortgages while increasing competition took away the effectiveness of the strategy. A Government backed securitised mortgage market may be worthwhile if it could also include a similar mechanism for dealing with housing price inflation.

Of course I'm jealous that Joshua got an invite to Australia 2020 - but I'm glad he is there, as is John Quiggin. A couple of economists who usually (not always) make sense. Meanwhile poor Malcolm Turnbull and the Liberals are relying on Henry Ergas for their economic advice. I guess he and Malcolm both know how to turn a quid from building and then selling advisory businesses - the search party is still out trying to locate Ergas' other expertise.

A Funny Thing Happened on the Way to the Forum

A classic 60s slapstick-style comedy - but my blog is about Australia 2020.

You see I was vain enough to nominate for one of the committees, disappointed that I didn't receive a letter of invitation and then stunned when the final list was released today.

You see I nominated for what was announced on 3 February as "Economic infrastructure, the digital economy and the future of our cities". With the announcement of the steering committee on 26 February it was announced that Warwick Smith would chair the committee - on "Economic infrastructure, the digital economy and the future of our cities". And that was certainly the name of the committee in the on-line form I completed.

I was a bit concerned when the first twenty members were announced on 23 March, because none were listed for the committee on the digital economy, though at the bottom of the release it still said "Economic infrastructure, the digital economy and the future of our cities" was one of the ten critical areas for discussion at the summit.

But with the final release of the full 1000 participants today the first item "Future directions for the Australian economy – including education, skills, training, science and innovation as part of the nation’s productivity agenda" in all the earlier lists was morphed into two separate committees of 100 - one on the "Future directions for the Australian economy" and a separate one on "The Productivity Agenda (education, skills, training, science and innovation)". On the official lists Warwick Smith is now shown to be chairing this.

What we don't know is whether the original committee was dropped because of lack of interest from potential participants, or it was thought to be too diverse a group of topics (though I can easily link the three), or whether it was because the weight on nominations for the big headline "future directions of the economy" resulted in a need to find a way to accomodate them all.

But in the process the whole "critical area" has simply disappeared. So there is no explicit reference to economic infrastructure - it hasn't been added to one of the other economic lists. There is a whole committee to talk about the minority of Australians who don't live in cities - and no committee for those who do. And meanwhile - the digital economy doesn't exist - and it hasn't even been explicitly added to the 'productivity agenda".

I haven't had the time to go through the list in detail - but I do note the media coverage that James Packer has been added. That might be good because Packer and Lachlan Murdoch together perhaps equals one synapse. But heavens he's on the committee to talk about future directions for the Australian economy. We know his answer - gambling - or, as they call it down on the farm, "Prosperity through Probability" - a great slogan for the side of the barn.

To paraphrase the Bill Clinton 1992 election slogan "It's D-Economy, stupid." So much for Kevin Rudd "getting it" as his Minister for the Digital Economy keeps telling us.

(Note: It is also interesting to note how the order of the committees has changed - with health being top of the list now whereas the economy was originally. Was this designed to make it harder to note the change, or just playing to the warm inner glow of talking about health.)

A Bubble of Blood

Hope that got your attention.

This is an eye update. I had a one week check-up yesterday, and had a nervous morning because I started to get enough vision back in the eye that I noticed that I again had a dark view at the bottom of my eye - but this time like a straight line, unlike the arc of the detatched retina. I also noticed the line moved up and down as I tilted my head but still no idea.

The doctor explained that there has been a little post operative bleeding and this has gathered at the bottom of the eye. The line stays as a horizon even if I tilt my head to the side. Discovered today that I can see it sloshing around when I walk!

So that is all good. The detatchment was, as they say in the trade, macula off, but so far it is going well. Still another week before the gas bubble dissipates and we really see how it is going.

One-eyed Tahs Supporter

Please read on - this isn't about football.

On Monday 10 March the vision in my left eye was incredibly blurry. This was very strange because the Friday before I'd picked up new reading glasses and had a visual field test, and the Friday before that I had the eye test to get a new prescription and was advised I had no pressure problems (glaucoma), no catarats and they even took nice pictures of my retinas. I do have large optic nerve attacments but I have had for a while, and they aren't getting worse (that's why you have the field test), I also had slightly large veins in the eye. The optometrist asked if I had hypertension and I replied that my blood pressure was good.

On the Monday I made an appointment with my GP but didn't think it was an emergency, so the earliest I could get in was Monday 17 March. When I saw the GP that afternoon I also mentioned my blocked nose and the GP decided we should check to see if there was a sinus infection that could be causing the vision problem, this required a sinus CT scan The GP thought I'd be struggling to get booked in but that I had to insist, and made another appointment for me at 6:15 Thursday, which was of course the day before Good Friday. At this stage all I had was very blurry vision, so that seemed OK. By the time I left the surgery it was too late to call the Radiology place, but when I rang first thing Tuesday they said I could get in straight away.

I went about life as normal on Tuesday but on Wednesday morning I woke to have a green shadow circle segment in the lower right corner of my left eye. As this didn't clear I rang the GPs office - but he doesn't work Wednesday. By Wednesday night it was black and almost filling the whole of the eye.

So Thursday morning I rang to ask for an earlier appointment and got one for 11:15 am. As soon as I sat down and talked about the symptoms he realised something more was wrong (he simply thought a bleed) and booked me in to see an opthalmologist straight away. So down I went to the specialist and saw him at about 12:30 - on first examination he looked at my eye and said "yes you have a problem" then put more drops in my eye to dilate my pupil and sent me out for half an hour. Not a great wait I must say.

Then when I go back in after looking again he tells me I have a torn and detatched retina which is not good. He only sees two a year. I will need to see a retina guy, but they have one right there (and I discover later he only works there Thursday). They squeezed me in to his already busy schedule - plus gave me some more drops to further dilate the pupil.

While waiting they take pictures of my retinas - and wow - it really is ugly. About half the retina is detatched and it is masking the rest of the retina so it looks blurry. When I get to see the retina guy he tells me officially the bad news - and for some reason (possibly contributed to by not having eaten since breakfast, a high level of stress and having looked at the world through one eye) I start feeling incredibly dizzzy - so I lie on the floor and get the rest of the news lieing on my back. He tells me that I actually do have cataracts forming, which is sort of good because the surgery to fix the retina results in cataracts so it is less of a concern if I was geting them anyway. The surgery could be done at the Eye Hospital but Thursday night might be a problem because it is also the hand hospital and there is a five hour operation about to start to reattach a guys fingers. They can't tell what has happened to the macula and if it hadn't yet detatched then getting the retina back on would be better for recovery. I convinced the guy we should try for Thursday night.

It is now about 3:30pm and he tells me I should aim to be at the Hospital by 5 and present to Eye Emergency. He encourages me to take the train but I want my iPod so need to go home first and we figure driving will be just as fast. We very nearly made it except for a guy who just double parked in Hospital Rd and who took exception to us tooting - what part of he was blocking access to emergency didn't he understand.

Because we'd missed 5pm eye emergency was shut, so we went to ordinary emergency. Ordinary emergency didn't understand that while the hospital was expecting me I wasn't really booked in - they sent me up to the first floor who wanted to send us back down. I didn't move till she called her supervisor who was brilliant, took me back downstairs and explained to the triage sister what to do. It was still a long process to get admitted.

At 10pm the retinal guy and I remet in theatre, he'd been home had dinner and a bit of a sleep. Surgery was under a local anaesthetic but quite frankly I don't remember a thing (the good eye was covered and the optic nerve of the dud eye blocked by the anaesthetic).

Back to the ward at about midnight. Text to Marg to tell her I was OK - then try to sleep on my stomach with my face down. Out of hospital at about 10:00am the next day. Now my eye is full of gas, I can't catch a plane for a couple of weeks, have no vision out of the eye and have to wait to see if I'm one of the 90% for whom the retina reattaches.

All this trouble to become a one-eyed Waratah's fan and they still lost miserably to the Crusaders.

Telstra's Big Loss

The High Court today gave its decision in Telstra's case challenging the validity of the telecommunications access regime.

It wasn't just a loss for Telstra though, it was really a big loss. The court ultimately had to decide whether the cutting over of local loops to competitors for the purpose of providing ULLS and LSS services was an acquisition of property, and if so whether the so-called "historic shipwrecks" provisions of the Act were sufficient to preserve the validity of the access regime.

Telstra lost on the very first limb, the acquisition of property. But they lost not on the technicality that was argued in the case of whether Telstra did or did not still have the ability to use the copper. They lost on the grounds that their property right to the copper had always been encumbered by the legislative framework, that when they acquired the PSTN it as acquired under a legislative regime that included the requirement to provide access. The Court didn't further dwell on the fact that any other asset invested in since the vesting was equally covered by the provisions of the act.

In an earlier post I said "Those who are resorting to property rights arguments might find out they have less than they ever imagined." This is certainly what has now happened to Telstra. There are some futher interesting questions about what the management and Board have been representing to shareholders in terms of the assets they own, and their probably could be some "good faith" defence. I know the Commonwealth was always very careful as vendor to state that in the sale process it was not changing any element of policy.

As a side benefit, the Court also ruled that had their been an acquisition, the historic shipwrecks provisions would have been sufficient to save the regime, though Telstra could still mount a challenge that the compensation wasn't just in the Federal Court. But that route is now eliminated.

This is a deceptively big decision, one that I think many corporations will have wished Telstra hadn't ever brought. It will certainly lify a veil of uncertainty over the scope of the legislative arrangements for telecommunications and could even further embolden Government.

David is Sorry

I had the good fortune to be in Canberra on Wednesday 13 February 2008 and stand in Federation Mall to watch the apology to the stolen generations on the big screens. I turned my back on Dr Nelso when he tried to justify the intervention - a policy no doubt well intentioned by the militarist Mal Brough but only supported by John Howard (as with so much) in the hope it could "wedge" the ALP.

I was dismayed to find some of my acquaintances and one of the local papers still objecting - both I think because of the usage "stolen generation" and their observation there was no "generation" stolen. This objection is based on the use of the word “generation”.

Let's start with the definition of the word "generation" that means all those people in a family or group (or nation) born at about the same time. Clearly the facts state that most of the indigenous children born at any time in the first seven decades of the twentieth century got to live their lives with their parents. But we do know that between one in ten and one in three was taken from its family. That is a lot.

We talk freely of the generation that went to war - in reference to both the first and second world wars - yet the proportion was certainly below one in three and for most areas and age groups less than one in ten. Clearly ordinary usage permits the use of the word "generation" to refer to circumstances that affect a significant proportion of that population but not all of it. To use the word "generation' in the context of stolen generations is acceptable within ordinary usage.

A second meaning of "generation" is the period of time between one generation and the next - so we hear phrases like "a once in a generation opportunity". This period is usually considered to be 25-30 years, though it can be as short as 15 years in some usage (e.g. generation X and Y refer to two fifteen year periods).

The period of seventy years over which the policies applied constitute two or more generations in this meaning of the word and the "stolen generations" can be interpreted as referring to this time (and it is because of the length of time of the policy that the original "stolen generation" became "stolen generations" as used in the apology).

If you want me to go through all the other limbs of objection I will but let me summarise; They weren't stolen - well yes a lot could be argued to have been taken under the same conditions as DOCS would take kids today, but we do know there were some who were taken merely because they were half-caste, we know a different standard on separation was applied to blacks than whites and we know that after separation they were treated far differently than ay white children taken on the basis of inadequate home life - most especially the habitual separation of siblings from each other.

It was well intentioned - yes, but it was based on race and race alone in many cases and that is inexcusable in hindsight. Was Hitler "well intentioned" in seeking racial purity in Germany and does that justify his actions.

So "stolen generations" is arguably acceptable language to refer to the systematic removal of children from their homes on racial grounds, though it is not the language I would choose.

We aren't responsible for actions made by previous generations - we're not taking responsibility just expressing regret and apologising. When I say "I'm sorry" to someone whose close relative has died I am not saying I was responsible for their death. You could equally argue we shouldn't be proud of anything in history.

Finally, if just saying sorry is going to make the aggrieved people, many of whom are still alive, feel better then it is a good thing to do. .

Vale "The Bulletin"

So the Bulletin is no more.

This is sad news, especially because of the inadequate reasoning offered by the publisher - that it was effectively killed by the internet. The net is great for breaking news and some forms of extensive writing, but not for the kinds of article based journalism of which The Bulletin was a part.

Somehow I don't see Time or The Economist going the same way as The Bulletin. The Bulletin couldn't find its way to sustain the kind of writing found in those journals and had more in common with its Womans Day stablemate than either of them.

The early history of The Bulletin was of a highly nationalistic, populist rag - that employed some really great writers. One wonders why in its more modern guise the publishers didn't try taking it down the populist route - a bit more humour (why did The Chaser need to start their own outlet), a bit more depth in the politics (maybe sack some of the old columnists).

Now we don't have a news magazine - in my youth we also had a weekly news paper of Bulletin pretensions in Nation Review, then Fairfax did a good job with The National Times. There are the writers and the material - some of Quadrant and The Monthly would fit well in the weekly.

Given the magazine didn't compete with anything else in the stable - why not at least try to sell the masthead/brand? And was this a decision L. Murdoch new of before deciding to buy in?

Glad I'm not there

An item in the SMH describes the problems being experienced by AAPT's new call centre (and computer system).

You can bet the consequence will be a huge increase in TIO complaints, so I'll be able to bask in the glory of declining complaint levels while I ran the show and increases after I left.

The story really is a bit more complicated!!! However, one does question the wisdom of the whole "step out" change process that was employed. While the theory is great - maximise the benefits of the change by creating the opportunity to remove the most staff - the practical reality is that there really isn't such a thing as a "labour market". By that I mean that the skills required in a job are not ever actually available "off the shelf" in the marketplace.

What I'd really like to see is the report by the change management consultancy - Deloittes - on the change. Will the blame be laid at the door of management changes at AAPT, failure to properly implement the Deloittes change program or will it be a questioning of the Deloittes change methodology!

Ming's Legacy

In the Weekend Australian Christopher Pearson has a swing at the great Ming's legacy.

He has taken exception to an item in the Higher Education Supplement by Bob White which had harked back to the expansion of the Universities and the creation of Commonwealth funding under Menzies as the last time a Commonwealth Government had done anything positive for Universities. Perason's generally elitist critique is based on the assumption that the threefold increase in student numbers and the linked increase in academic posts came at the expense of quality because the expansion must have required admitting people of lower standards. He then makes the usual "cluture wars" critique of the academic sector being made up exclusively by rabid left-wingers who then supposedly have melded all thinking in the country in their own image. He includes the usual snide distinction of the 5 new "besser brick" universities from the "Gothic".


It is all pretty pathetic really. The first thing to note is the high population increase post war - both from baby boomers and from immigration. The second is that university places possibly simply hadn't kept pace with existing population growth, and certainly would have declined through the war. So the claim that the increase of places equals a reduction of quality is based on some assumptions that all other change had followed a "standard" path.

As for the so-called invasion of the left, this is and remains a myth. At least it is a myth that this has had any enduring effect on the make-up of intellectual debate, there are plenty of functioning right-wingers out there. Heck, even Tony Abbott survived the university system, and Peter Costello went through a Menzies University.

The idea that the five Menzies institutions are second rate is really getting confused. Yes that claim might be able to be levelled at the Universities spawned by the Dawkins reforms (of which the University of Western Sydney from which Bob White hailed is one) but then again if there are n universities one must be the best and one must be the nth.

Pearson simply is a big bag of wind. But also the likes of Bob White should get a little bit more real about the developments since - without the Dawkins reforms he'd be a Lecturer at a Teachers' College.

For the record

This man taught my daughter to ride a bike, but I can promise you I am her biological father!!

John Winston "Mr Right" Howard

A photo on page 2 of this morning's SMH that accompanied this carry-overed front page article was captioned spot the celebrity. (Unfourtunely I can't find the photo on-line.)

It featured the man who used to be the Prime Minister flanked by the NSW Shadow Attorney-General Greg Smith and his son Nathaniel. We guess the former PM was meant to be the celebrity - but it is the company he now chooses to keep which is telling.

Remember that Epping pre-selection in which Howard supposedly backed Pru Goward? Hard to believe that the PM really got rolled by the NSW Right. We'll never really know who the PM backed.

We know (see my earlier blog) where the Liberal Party in NSW stands. It looks like the former PM stands right beside it!!

The Democrats in the SMH

It all started with an article by Laura Chipp. It is fair to describe this as a basically predictable "establishment" Democrat post-election justification and wishful future thinking.

The letter from Andrew Elder of Eastwood in today’s SMH has some interesting responses to the piece, some of which I agree with. (Elder also wrote about it in his blog - but I can't understand the gormless writing style. He comes across as obnoxious, but some of his observations are reasonable).

In the end the Democrats went to the election not standing for anything. "Bring Back Balance" isn't a campaign theme - it gives no indication of how you intend to act, especially when you know the biggest brand issue is the number of people who believe (wrongly) that the Democrats sold them out on workplace reform in 1996 and the GST in 1999.

Contrast that with the description of GetUp! also in today's SMH. I think it is a mistake to over-read the numbers involved in GetUp! It is not the vocal end of a larger group - this is the entire group of people concerned about these kind of social justice, civil rights, indigenous, refugee and democratic process issues. They are by definition "activists" because holding the views they do is already an "active" position - they have thought for themselves and resisted the mainstream view. Politically the "cartel parties" will mostly represent the "mainstream" view - that's what you do to get a majority of votes. And that mainstream view becomes self-reinforcing because the masses (a good Marxist term) get their biases reconfirmed for them by their political leaders. Howard was the master of that, sometimes described as the dog-whistle.

But GetUp! continue to kid themselves that they have influence. Sure they may get audiences with their local member about what they have discussed - but so will the local Right to Life group. Sure they generate some petitions and letter writing campaigns - but so do the Catholic lobby groups who want everything censored. And it remains my belief that their contribution on election day was negative for progressive causes...all they did was harass voters with their rating of parties on the issues they regarded as important. I saw wavering voters decide to vote Liberal after their GetUp! confrontation but no one do the reverse.

What those flocking to GetUp! meetings (and those enamoured by ideas like the Third Voice Alliance) need to do is to realise that what counts is getting votes for your cause. So campaigning without a candidate to support is pointless - as is some vague line like "Vote for Change". (I should note that the US system of primaries makes this slightly different - there external vote gathering groups can help).

On the flip side those who do have a plan to get candidates elected need to focus on all the work needed between elections. GetUp!'s constant campaigning works. The Democrats got seduced into thinking it was just up to the elected representatives to keep the party in the public consciousness, and didn't do anywhere near enough between election street level campaigning. And what they did wasn't capitalised on - signatures on petitions did not become a database of "fellow travellers". And they also fell for the trap of letting policy be something defined by the parliamentary representatives - as the GetUp! meetings showed people like the chance to do policy work. (It should be noted that the messy clash between the parliamentary and organisational wings of the party in the Lees/Stott-Despoja explosion can be identified as the source of this problem - a problem that will be resolved now on 1 July 2008).

Finally, many Democrats - Laura Chipp included - are now suggesting a role for the Democrats in local Government elections. This is especially tempting in NSW where the timing (September 2008) gives us something to do before the 2010 Federal Election (not getting a State election till 2011) (I personally discount the likelihood of a double dissolution - the Liberals would be insane to give Rudd a trigger). If the Democrats are serious about this then there is alot of policy, infrastructure and campaigning work to do now.

It is an interesting challenge - I hope there are people ready to take it on.

Abolish the States?

In the SMH on 28 December (Sidestepping the seven-year itch) David Humphries wrote “This is not an argument for the states' supremacy, or their abolition, a constitutional nonsense given the effective impossibility of removing the states by referendum.”

I've heard lots of similar commentary over recent times, and would first claim that just because something is hard doesn't mean it is impossible - effectively or otherwise. It is possible that a requisite referendum could be past in every State.

However, there really is a relatively easy way to abolish the States, amend s51 of the Constitution so that the Federal Parliament isn’t restricted about the fields they can legislate in and slowly the States can be eroded into irrelevance. The operation of the provisions about Federal law having precedence over State laws mean the Federal Parliament can legislate the States out of "effective" existence.

Property Rights

There is a strand of economists who would generally call themselves institutional economists who place great store in the concept of property rights. This theory runs both a developmental perspective - that economic development can only occur once prpoerty rights are protected - and an environmental perspective - following the Coase theorem that all externalities can be efficiently resolved by the market if all property rights are fully allocated.

There are, however, many flaws with this approach. Firstly, the Coase theorem has as an assumption that transaction costs in trading the properyy rights are zero. Secondly, many argue from the efficacy of the allocation of a property right to the presumption of its allocation. So a polluting firm claims that the property right in air quality (or water quality) is already theirs so they are the ones who need compensation if they are to stop polluting.

Joshua Gans writing in his blog Game Theorist has written a neat short review of Bee Movie. He says the movie as an allegory about property rights and concludes:

The message for the kiddies is you might have property rights but that enforcing them may cause others harm, so think about that one. Now think about that people who might be downloading Bee Movie rather than dragging everyone to the cinema.

It is an interesting thought for those running the property rights line at some of our biggest corporations. Take for instance Telstra who argued a case (decision pending) in the High Court that the access regime was unconstitutional as it was an unjust taking of property. I haven't fully read the transcripts, but one of the arguments is that if you choose to be a telecommunications carrier you choose to play by these rules.

It is an interesting argument because in a separate case Telstra and Optus won a case against local government authorities who wanted to charge the carriers for the above ground and underground space they occupied with cables. They won that case on the basis that the Federal telecommunications power did enable the over-riding of the State laws.

But it does seem to be a little like the Bee Movie analogy - you don't know where a property rights argument might end. Are the Council's being deprived of a property right by the Federal law, and therefore be entitled to compensation from the Commonwealth? would the Commonwealth raise this from a tax on the telcos?

This is not meant to be a legal argument here - just an argument of consequences. A similar matter also emerged in the case, that the asset of the network was always encumbered by the power of the Commonwealth Government to regulate prices.

Those who are resorting to property rights arguments might find out they have less than they ever imagined.

John Valder

John Valder in a letter to the SMH tries to argue that the Maxine McKew campaign was nothing special and that the ALP could have won in Bennelong in 2004.

There was an excellent repy today from young Tim Quadrio under the heading A Good Clean Win. He makes the three points that Maxine ran a positive campaign - not the slurs Valder wanted to rely on; that Maxine won with the national average against the incumbent PM ; and that in 2004 the election overall was such a disaster for Labor nothing would have secured an extra 5% in Bennelong.

For the record my own unused contribution was:

The beauty of time is that we never can know what would have happened if we had done things differently. That allows each of us the luxury of our own alternative view of history. John Valder (Letters 18 December) thinks that the ALP could have won Bennelong in 2004 if only they had taken the seat seriously. His reasoning is the influence of the ‘Not Happy John’ campaign and the candidature of Andrew Wilkie for the Greens.

My experience working polling booths on election day at this and the previous election is that the approach of ‘Not Happy John’ and the more recent incarnation ‘GetUp!’ delivered wavering votes back to the Liberals, specifically Mr Howard. As a former Liberal it is easy to understand that Valder thinks negative campaigning works, but it usually doesn’t. Its few apparent successes are masked by the more powerful effect of incumbency.

The outcome in Bennelong was primarily different because of the outcome nationally. The national two party preferred swing was 5.45%, while in Bennelong it was 5.53%. The significance of the Bennelong campaign was more in the uplift in spirits it provided across the ALP and Maxine McKew’s softly, softly model was ideal for that.

What Gerard has said lately

I tried sending a letter to the SMH in relation to Gerard Henderson's 13 November column but I clearly no longer have the knack of being published in that journal. Only Crikey and the AFR and a few telco industry rags seem to like my stuff. Of course, the beauty of the blog is that I am my own editor - albeit for a far smaller readership.

His 13 November item was headed Truck of truth hits a few potholes. This was a column written during the election and in it he started with a criticism of then candidate Maxine McKew contrasting some comments she made with future outcomes during the last election.

His purpose was to "out" behaviour where participants in public debate label their opponents liars when “they really mean they recall events in different ways, disagree on current matters or have contrasting views about the future”.

This is fascinating because Mr Henderson has a reputation for writing detailed letters to correct what he claims are untruths said about him. He also has a reputation for pursuing the “Sydney Line” (as incoming Quadrant editor Keith Windshuttle calls it) of absolute truth.

So his column made interesting reading. Hopefully this new found belief in relativism means we can call a truce in the “history wars”.

More troubling is his claim that “inaccurate predictions” do not constitute a lie. I can accept that an inaccurate prediction based on a full analysis of such observations and explanatory theories as available is not a lie. But I think it becomes a lie when the person making the prediction consciously chooses to ignore factors in making that statement. For example, to make a three year prediction about interest rates which no market economist would dare contemplate.

The same applies to a wilful failure to obtain additional information that was readily available, such as occurred with the children overboard scandal, or to consciously avoid “intelligence” that runs contrary to one’s pre-determined course of action, as happened with Iraq.

We needed more than just a truck of truth this election; we needed an injection of integrity. And in the end it seems like we got it - with the formidable Senator John Faulkner appointed as Special Minister for State with just such a brief.

But dear Gerard Henderson has again today inspired me to write. His contribution Failed policy strong on sentiment was an attempt to claim that the idea of minimum "living" wages is a fanciful affair that works against the interests of the economy at large and hence people in it.

There are two specific matters that I want to challenge. The first is that he manages to cover the early history of the Harvester Judgement without mentionuing why it was that Justice Higgins was required to rule on what constituted a "fair and reasonable wage". The reason was simply that in the era of protectionism the idea of protection was to protect employees as much as investors, and so the law stated that a firm would benefit from the protection (by exemptions from excises) so long as employees were paid a fair and reasonable wage.

The policy was itself entirely coherent if the assumption of protectionism was accepted, and it was not Higgins fault if the parliament's drafting was so woolly and vague. The fact that the first case required the development of a definition and a whole series of other parliamentary and judicial actions perpetuated the concept should not be laid at the feet of poor Justice Higgins.

The second point in the article to challenge is Henderson's derision of the proposition that if an employer can't pay a "fair and reasonable wage" then it would be better that they not be in business. Actually, a neo-classical view would be that it is indeed better not to have the firm in business if it cannot pay the genuine cost (a decent living) of the hire of labour. There are an array of reasons why labour might endure such conditions, but it is economically wasteful to consume something for less than the cost to produce it. Continuing to make the employment available "below cost" (subsistence) results in other ventures that might identify an available labor force from establishing or it results in labor not relocating when it should. This is an argument from simple economics, not from some social justice doctrine.

And what if the consequence is enduring unemployment? Well, the Keynsian response is still the right one. Generate growth in the economy by Government expenditure, either simply by the payment of unemployment relief, or far better by taking the opportunity to use the excess labour to undertake "nation building" projects. And in the process pay them a "living wage" because then we really could be accused of living in a fascist state as the workers on government projects dropped dead from malnutrition.

It gets worse - journalism that is

You can't blame journalists for the headings that sub-editors choose but "A Ruddslide that never happened" is how The Australian heads an article by Brad Norington.

The article makes the observation that as the count has continued more of the doubtful seats have gone to the coalition, and that the ALP holds a lot of seats by very slender margins. This is used to start a claim that the ALP didn't win a thumping victory. If one thought that newspaper was into running agendas you'd think it was an attempt to de-legitimise the ALP's "mandate".

Last time I looked (thirty seconds ago) the AEC website had the ALP on 52.86% 2PP with a swing of 5.60%, as oft repeated the third largest swing ever. It is no surprise that following a change of Government that the new Government has a lot of close marginals, because usually those seats have seen strong local defence campaigns by well known incumbents with the generous parliamentary resources of incumbency. Let's face it the coalition ran the mother of all "defend the marginals" campaign this election.

So let's not get confused. The win was huge and awesome. No one in the ALP had dreamed they could pull it off till about March, and even the move to Rudd was interpretted as desperation Mark 2 not a winning plan. And finally the former Prime Minister's so called political genius and direct connection with the Australian people has been revealed for the chimera it was. He won 96 because the coalition lost in 93 (i.e. the public were waiting with baseball bats). He really lost in 98 but won due to the effect of Govt held marginals. He won in 2001 because, as John Howard is quoted in the recent biography, the ALP misunderstood 1998 and he won in 2004 because the ALP campaign dissolved in the yawning gaps between Mark Latham and his campaign team (reminiscent of the ALP in 96 and the coalition in 2007).

And come the next election there will be a swag of local ALP members with all their resources, and who will have been doing their Kevin homework in their electorates.

Getting Policy Objectives Right

Peter Hartcher in the SMH has given the new Prime Minister suggestions on five key policy areas in which he needs to make progress.

I won't address them all here, but what I want to show is how shallow this kind of thinking and writing is. His first goal is for the new Government to show it is serious about fighting inflation and calls for the Government to run a higher surplus than the 1% commited to by Howard and Rudd in the election. He chooses 2% - not I think based on any science other than it is bigger than 1. This begs the question of what the Government is supposed to do with this surplus - they have no debt to pay off, they have almost already fully provisioned for the public service super and we have higher education and health endowment funds.

Perhaps Hartcher needs to ask whether there are other ways to divert cash into savings rather than expenditure. A really good way would be to get back to work on lifting average employees super contributions to 15% of income - not just politicians (in the post Latham rules) and public servants. One way is to divert some tax cuts into employees super funds. So we can still tax but not spend but make the saving in the name of the taxpayers not the amorphous Government.

Hartcher's second policy area is education, where he generally joins the crowd who want to beat up on teachers and education unions. His first call is to adopt national standard curricula. Memo to all commentators: this is a good policy almost everywhere other than NSW where we still have a fairly substantive curricula. Uniformity in itself isn't always necessarily good. He then turns his attention to literacy and numeracy standards asking the States to insist that the results of the national standards tests be released school by school when conducted. This is such poor policy, because it makes the assumption that the school is the only factor determining the result and ignores other socio-economic factors. I'm all for reliable data, but what we need is data on the school "value added". That is, for each school how good is the phalanx of Year 6 results against the results that the same students (wherever they were then) scored in Year 3 (or whatever prior comparison years are available). That is the measure of the school.

As for demanding "explicit mechanisms for improving levels of numeracy and literacy" I don't know of any State education system that doesn't have that as a goal and indeed have matching strategies. Does Hartcher really imagine it is otherwise?

On the third policy area - health - Hartcher really squibs it by saying "All you have to do this year is set the detailed performance targets for the states to meet" While that is simply repeating what the ALP said in the campaign, anyone will tell you that the problem in health policy is actually knowing what good looks like. For example, if hospitals have success in improving recovery times and reducing hospital stays (usually with the application of expensive high-tech capital equipment) they get criticised for reducing the number of bed-days in the hospital.

Public policy planning I think is a little beyond the capability of Peter Hartcher.

Observations

Great call on talkback radio - what the Liberals should do for leadership "Have one last look for Harold Holt".

Since K_Rudd said on saturday that he'd celebrate with a strong cup of tea and "an iced Vo-Vo" we went out on saturday to buy ourselves a pack of what we now call "Kevin biscuits".

Great item today in the AFR by Pamela Williams about Peter Costello, and the Liberal campaign in general. It stood out to everyone but the Liberal party eighteen months ago that they should change leader. That they didn't is their collective fault.

I hope they realise that if they'd changed leader the ALP wouldn't have...and that would have made all the difference.