Buying Australian

There are generally only two places where I buy books. One is an independent bookstore on Bourke St in Melbourne and the other is a major US online retailer.

The former is my favourite; the store is not large but I don't ever recall them ever not having a book that I was looking for. If that ever did happen, I strongly suspect the staff would recommend something that would turn out being better than the thing I was looking for. It wouldn't matter which member of staff I spoke with, either. They all seem very switched on. This isn't a place for discounted books, but I don't mind. This is the type of institution that I support because it's useful; but also one whose existence makes me feel a bit better about the world.

My second bookstore is so practical that I still find it a bit disconcerting. I order from my desk. They have pretty much everything I could ever think of. It arrives on my desk at work within about a week. And it's cheap.

I buy from both and both delight me, in different ways.

Last week, I turned on the 7.30 Report and heard the CEO of a major Australian "big box" bookseller decrying my second favourite bookseller. Apparently, a combination of avoiding GST and the strong AU dollar is driving them out of business. The Big Box is considering sending online sales offshore to avoid GST and help the compete.

I found this man and his interview very annoying.

The simple fact that any Australian who's been shopping in New York or Hong Kong will quickly realise is that, even at historically moderate exchange rates, Australian get screwed when it comes to shopping. Part of this surely has to do with low economies of scale for serving the Australian market. However, I recently spoke to someone in a bike store about a particular brand of bike shoes that the store was now charging customers $20 to try on. "These cost half the price online," he confided "we know everyone will buy them online. The guy who owns the licencing in Australia charges such an exorbitant price that we can't drop our prices; charging people to try them on is the only way we can make money from them". So perhaps, opportunism in this market is also playing a part.

Clearly, retailers not having to pay tax from overseas is an unfair imbalance in the market and perhaps one that will eventually demand correction. Obviously, it does not make sense to let industries be destroyed when the dollar is high when they will be critical again if the exchange rate backs off.

However, big book stores aren't losing market share because of international competition; they're losing it because they're paying for a warehouse size area of prime retail space and they still can't manage to stock the book I'm after. As a friend who works in the industry once commented "when a book hits the bestseller list, they buy in a thousand copies, but no one there realises that this book is the second one in a series and that people will also want to buy the first book. They don't buy any of those and people come in and want both.". Who'd have thought - it seems that knowing about books might be of benefit in selling them.

This morning, again, in the Australian, Gerry Harvey of Harvey Norman was bemoaning the inequities of being an Australian retailer. I suppose that's his job and is new found concern with the Government's tax coffers is only to be expected. The point he perhaps misses is that shopping at the types of stores he operates is, for many including myself, a sort of retail hell. The staff are unhelpful. Either they ignore you, or they're trying to sell you crap you don't want or need to boost their commissions or move rubbish floor stock that no one else is dumb enough to buy. It's big. It's confusing. The store is in an unpleasant location, usually on a main road, and the bleak, bare frontage is a beacon of (sub)urban distress. I shop in these places - sure. But I don't want to. The fact that buying online means I can avoid this is an integral part of the attraction.

My life as an Industry

My parents keep bothering me about getting married and having baby

Persoanlly, I'm not too fussed about the whole business but I do understand their perspective. They have three children, ranging in age from their mid-twenties to their late-thrities. All have been in stable live-in relationships with their respective partners for at least three years. None are making any signs of "getting on with it".

As the youngest of these three I feel like I should be given the greatest leeway, but I think they've reached the point where they want grandchildren to tell their friends about and being deprived on them makes them feel a bit maligned. I can empathise with that, too, because I want to get a kitten and my boyfriend keeps telling me I have to wait until we can committ to being in the country for at least 10 years. Boo.

In any case, I now have a new argument for when they ask when I'm getting married - I'm waiting for an economic downturn.

My theory is that if I wait for a downturn, my marriage could turn me into my country's saviour. The tourist interest generated by the wedding will invariably bring a flood of vistitors, thus propping up the economy. In addition, my countrymen will be so delighted that it will buoy the public mood and probably generate a confidence-led economic recovery.

At least, that seems to be how it works in the UK.

I don't mind the British monarchy - I find it bafflingly peculiar, but I think it says more about the empire's subjects than it's rulers. Perhaps, however, this example of inhereted privelege doesn't offend people because it doesn't need to; it's anachronistic, certainly, but appears relatively benign.

However, I can't help but feel that the monarchy is more than just benign; it's a national industry. Why give up a living tourist attraction that commands no real power but brings in so many tourists each year? Would would become of the souvenir salesmen if we did that?

Whose Side Are You On?

As politics has moved to the centre (in this country and others), ideologies seems to have grown a bit muddy. The political ideologies of "left" and "right" are both seeking to answer the question of how to land on the most economically productive use of society's rescources. the division of ideologies used to be quite clean cut:

On the right, you believed that markets were very good at solving problems and should be left to their own devices.

On the left, you believe that governments should intervene to improve areas where markets aren't very efficient.

Ideologically, the right believes in low taxes and low government sending to incentivise individuals to strive to obtain the things they want. The left believes that sometimes people end up in difficult situations through no fault of their own and that public services can be used to avoid these inequalities from becoming entrenched. Neither side is right or wrong; they're just different ways of looking at the world and at people. For my own part I find I switch between them in different situations.

As far as political parties go, the problem with having distinctions like this is that it can shut down good political ideas that don't conform to the party ideology. The advantage, though, is that you know what you're voting for when you go to the polls.

Over the last couple of years, we've had a Labor government pushing for an emissions trading scheme, while across the floor the Liberal opposition was pushing to introduce a carbon tax instead. For those expecting their Liberals to behave like it, this has been a particularly weird situation. We now have the Liberal shadow treasurer trying to out-do a Labor government on bank regulation.

Stranger still, however, is Tony Abbott's new "flat tax" proposal. Tony has suggested that a more equitable tax scheme than the current tiered system would be to have a tax free threshold for all households earning less than $25,000 per year, then a flat tax rate of 35% for incomes between $25,000 and $180,000. For income earners on above $180,000 both schemes propose a tax rate of 45%.

Here's what the proposal looks like:

What this shows is low income households (less than $46,000pa) paying a lot less tax, middle income households ($46,000 to $165,000) paying a lot more and high income households being largely unaffected. To summarise:

- the majority of people pay more tax;

- middle income earners subsidise low income earners (relative to their current levels); and

- the fastest way to increase the proportion of tax you pay is to to earn about an average income and get a raise.

There's nothing wrong with this, per se, it would just make more sense if it was coming from the other side of politics. if it was, I'm sure the Liberal would be talking about another "Great Big New Tax".

Sharing

A new fad appears to have emerged; in line with our new post-consumerist society apparently people now want to share stuff.

There is now a bike share scheme in Melbourne (at a ridiculous cost taxpayers, but that's a topic for another post) and several commercial car-share schemes that I occasionally hear people raving about in the papers, but I don't know anyone who actually uses them.

The thing is, I don't know if I want to share. I don't think that I'm overly selfish or overly precious about things - I wish that I could be swept away in the hysteria of all of this sharing. I wish that I could trade in my bike and car and just keep the money to spend on other luxury consumables - then save even more by learning to share those, too. The thing is, sharing just isn't stacking up for me.

1. People Wreck Things
Train stations are made of concrete and the only furniture is made of metal and bolted down. However, in my lounge room, there's carpet and a couch. I am hardly a neat-freak, but I take care of my stuff and I like it to be in good condition. Whether malicious or negligent, hire car schemes fill me with dread about showing up to my allocated car to find a pool of vomit in the passenger seat.

2. Quality
I can live on pasta and avoid eating out. I can restrict my clothing purchases to things that are already discounted and sell old clothes on eBay, if I must. However, I do own a very nice carbon fibre road bike and a fixie in cute colours with wheels expensive enough to be given their own bike lock. I am also, in my old age, getting a bit picky about cars.

Share schemes seem to trend towards to mean - they don't seem to acknowledge that in most respects I tend to be either a complete tight-ass or an elitist snob.

3. Where are these things?
Car share schemes are like petrol stations. Apparently they're all over the place, but when you start looking for one they mysteriously all vanish.

4. Demand
These schemes, like anything in infrastructure, are about balancing supply and capacity. If you buy enough cars/bikes to meet demand during the highest peak periods, most of your fleet will be idle the rest of the time. If you buy enough to get a good level of utilisation then there's nothing available during peak periods.

So, if you join one of these things then observe that there "never seems to be a car/bike available when I need it" you can reassure yourself that it's designed to work like that. If there is one available, you can rest assured that either there won't be once more people join up, or you're paying too much in fees.

Onwards and Upwards!

3 June 2007 was a milestone for carbon pricing in Australia: this was the date when putting a price on carbon finally became a bipartisan policy objective. Environmental types may harp about how Australian coal generators and energy companies "should have seen this coming for decades" but the fact is that as recently as four years ago the notion that a national carbon price (through a cap and trade scheme or a tax) was somehow 'inevitable' was by no means a foregone conclusion.

This point is by no means irrelevant to the current debate.

No material infrastructure investment decision in Australia will get past an Investment Committee process without a detailed financial model based on the well-founded principle of discounting cash flows (DCF). This is equally the case for investments by corporates, super funds and private equity (perhaps with the occasional exception in the more risk-loving mining states). For those not familiar with the logic behind DCF, here's a quick run-down:

- The only reason you invest money is because you expect to get money back at some time in the future. It is assumed that by making a series of well-reasoned assumptions about future performance, you can make a reasonably reliable estimate of how much money you will receive in each future time period.

- Not only do you expect to get your money back, you expect to get a bit more to compensate you for risking it in the first place. The more risk, the more you expect to get back. The return is usually expressed as a percentage return on your investment and by working back from the future date to the present and reducing each of your expected future cash flows each year, you can figure out how much you should be willing to spend on something now to receive the forecast payment in each future year.

- Adding up all of these "present value" numbers gives you a target price - if you can undertake the investment for less than this, you should do so, otherwise you shouldn't.

The DCF method of valuation is ubiquitous. The problem is that it's only as effective as the values that you plug into it and it implicitly relies on being able to make a relatively reliable forecast of future earnings.

When guys like Marius Kloppers (CEO of BHP) come out in support of a carbon trading scheme on the basis of "reducing uncertainty for business" they are not talking about a vague, qualitative type of uncertainty. Not knowing whether a project is going to have a substantial new cost tacked onto it means not being able to predict future cash flows and not knowing what annual percentage return you should expect to earn.

Companies can respond to this in several ways:

- Use a 'worst case scenario': in this case, many good projects that should be undertaken, won't be.

- Delay: given that the uncertainty will be removed once the political decision is made, many companies may simply delay the investment decision in the hope the policy is resolved quickly.

- Consider a range of policy outcomes and come up with a probability weighted outcome: this will reduce the level of underinvestment by consider both the best-case and worst-case scenarios. However, while there is an option to delay, delaying would generally be more favourable.

There has been no substantial new electricity generation infrastructure built for a very long time now. The impact of delaying and under investing in projects is that supply is constrained, which forces up the prices paid to existing electricity generators and eventually this rise in prices must be passed on to consumers.

So, at this stage, it appears we're faced with a bit of a Morton's fork:

1. Bring in a carbon price and energy prices will go up because of the added cost of carbon.
2. Don't bring in a carbon price and energy prices will go up because of a supply shortage.

It could be argued that there's the option to take a firm policy stance against any sort of carbon pricing but I would suggest that since 3 January 2007 this suggestion would be less than credible.

For those who took issue with coal generators receiving substantial compensation under the Rudd Government CPRS proposal, consider this: under the CPRS the proportion of compensation to generators was a minor portion of the total expected cost of a CPRS (perhaps around 25-30% for the first five years) and came from a much larger pool of revenues being delivered to Government. That Government revenue could be redistributed through welfare payments to those most dramatically impacted. While carbon pricing is being delayed, higher prices from underinvestment means that existing coal generators will be getting a bonanza - and they won't be sharing any of it.

The Shit Sandwich

I like analogies that neatly sum up life's dilemmas and if they involve swearing, all the better. One that I seem to be using a lot lately is the analogy of the shit sandwich. It goes something like this:

"Sooner or later, you're going to be forced to eat a shit sandwich. When this happens, some people will whinge about it, some people will just make the best of it and some people will pretend it tastes delicious."

I derive a great deal of satisfaction from using this analogy when accused of being a little too "constructive" about things. Yes, I may have a bit of a tendency whinge about things when I should just swallow a great draught of stoicism and get over it. However, if I'm going to overshoot the mark, I'd rather be a bit of a whinger sometimes than one of those overly optimistic people who are so busy trying to channel the power of positive energy that they neglect to notice they're getting screwed.

Cynical, much?

The Price of Vigilance

I have a caffiene addiction. It's addiction just as surely as if I were laying in the gutter in a pool of vomit. Except that I'm a blithering, slurring drone who can't walk straight when I haven't had a coffee, rather than after I've had a few.

Being both an addict and a bit of a snob (which is to say, instant coffee makes me feel like my gut is rotting, so I only use it for emergencies), coffee forms an important part of my budget. To date I have managed to avoid the need to break into any houses or mug any little old ladies to feed the habit, but all of these articles in the Age suggests I might need to reconsider my position on that.

So, what's going on with coffee prices? Well, judging by the following graph of arabica prices (arabica is the standard cafe bean) prices are indeed heading north.

Check out that positive gradient! Looking at this chart, the price of beans has increased by over a third in the past two years. If I take a cursory look at this chart and combine it with the broad media coverage, I would be starting to think that I was going to have to commence drastic austerity measures to keep up my consumption (in my world, this might mean ironing my own shirts).

However, there is more to think about here. Consider that the pointy end of this chart is suggesting a coffee price of around US$4.665 per kilogram of coffee. If you assume, generously, that each cup has 15g of coffee, this means the price per cup of coffee has soared from around 4.5c per cup to a whopping 7c per cup. Even assuming that wholesaler costs add 100% to this price, we're talking an increase in the price per cup of 5c.

When I moved from Perth to Melborne around 10 years ago, the difference in coffee prices was remarkable. In Perth, a coffee costing up to around $4 was reasonable. $3.80 was about the benchmark for a standard coffee from a standard coffee shop. In Melbourne, anything over $3 was expensive.

The difference between Perth and Melbourne wasn't driven by input costs, like a 5c differential in coffee prices. It was driven by greater levels of competition. Coffee shops in Melbourne had to take a hit to margins to get people through the door - I suspect that some Melbournce cafes sell at very low margins just to get customers in to buy high-margin items (eg, muffins). In Perth, lower competition meant that consumers would pay a bit more. This little allegory points to the fact that prices aren't always driven by input costs - sometimes they're driven by customers' sensitivity to price movements (ie, their elasticity).

However, the story about a West Australians moving to Melbourne 10 years ago perhaps points to the bigger issues here. A sandgroper (West Australian) can still show up in Melbourne and be surprised by getting a coffee for $3 when they have to pay about $4 back home. Over a period where inflation has pushed average prices up by more than a third, coffee prices have moved by only around 5%. Perhaps the level of competition has pushed margins down so far that everyone is feeling the squeeze more than they'd like to, but cafes are too worried about losing market share if they increase prices.

Price fixing and collusion are illegal. Sending a signal out through the media that "we should all lift our prices now while we can blame it one the commodity price" may not be.

Now, if only I could get my salary to keep pace with inflation, I might be able to afford it.

Allen and Gloger

I recently discovered an interesting little biological byline. I take a certainly delight in the rare occasions where trash talk forms a logical nexus with 'respectable' scientific theory. This little observation fell so neatly into that category that it had to get a mention, irrespective of the fears that it might impede the high-brow tone of this publication (*cough*).

It turns out that way back in 1877 a biologist named Joel Asaph Allen posited that endotherms in colder climates should have shorter appendages than equivalent animals from warmer climates. It became known as "Allen's rule".

The initial theory was framed in terms of the hypothesis that figures with more contrast between their dimensions have a greater surface area than figures with the same volume but closely comparable dimensions. That is, a rectangle with dimensions 4x1x2 has a greater surface area (28) than a cube with the same volume (a 2x2x2 cube has surface are of 24). More surface area means more heat loss, which is an advantage in hot climates, but a disadvantage in cold climates.

Examples of this include things like polar bears having short legs and recent studies suggesting that the hotter the climate, the larger the beaks on local birds.

There is another rule called "Gloger's rule" that states that within a species of endotherms, more pigmented forms tend to be found in regions closer to the equator.

I'm sure you can see where all of this biology is headed. All I'm saying is that that if you're walking past the science labs and you hear a girl in a lab coat tell her mate that she "went on a date with a gentleman of equatorial ancestry conforming to Gloger's rule" and subsequently "discovered he was a classic illustration of Allen's rule", you should get what those crazy science chicks are on about.

A New Visa Scheme

Here's a thought.

Bernard Salt, the ubiquitous demographer, recently wrote this article in which he highlight that there's a 'shortage' of men in Australia. The issue is particularly worrisome for those women born in the 70s.

As an example, Salt notes that for the 169,000 women in Australia born in 1971 there are only 156,000 men in Australia born in 1969 (noting that a two year age gap is the norm for couples). This means we are short 13,000 men for that year alone - and that's before we factor in the higher incidences of homosexuality among men, or the fact that many of those men may be cloistered away digging dirt out of some Western Australian hole.

Now, as we all know from the well-worn generalisations dragged through the media, those 13,000 women are all sitting at home with their cats eating ice cream direct from the tub and lamenting that they can't "get a man". They all want to get married and have babies and for many of them time is running out.

Urgent action is required. If we don't get these women married there is likely to be catastrophic social consequences, probably in the form of a feline-borne plague.

So, here's what I propose. We should start up a visa system that will allow men (and men only) to enter into the country - but only on the proviso that a woman in her 30s wants to marry them. If they get divorced at any point in the first five years of the relationship, they will automatically be deported.

This departs markedly from the current visa system - mainly because there are no work or educational requirements and the couple don't have to know each other before the man arrives.

The details could be worked out, but the idea is that the man has to pay his own way to get here. The visa may grant a stay of three months, but during that time the man has to either be in a committed relationship with long term prospects, or have secured at least five dates per week with single women in the target age bracket. Failure to meet the requirements means deportation.

"But what if," I hear you ask "these women are not in relationships because they haven't made relationships a priority in their lives? Or what if some if them are unattractive, or emotionally manipulative or if they're not very nice people?"

All of these points are moot. Sure, the law would be stupid and is that blatantly exploitative of the men involved, but these women have needs and we as a society have to acknowledge that whether we like it or not, these needs have to be met. Besides, immigration is the "world's oldest travel".

If this post sounds logically flawed, inconsistent with our existing legal framework and blatantly sexist, please note it's just a reframing of the stupid arguments used to justify legalising prostitution.

Long White Cloud

Plastic Lines has been silent for the last couple of weeks. Last week it was because the one contributing author was living it up in the NZ snow. Prior to that it was all about meeting the deadlines that had been brought forward a week. I am assuring myself that I will try harder, because I like writing in my blog more than I like deadlines.

New Zealand is awesome. Having been raised in WA, I have a strong aversion to the cold. To my mind, cold weather is completely inexcusable unless accompanied by hills with snow on them. The South Island of New Zealand may be moderately colder than Victoria, but with snow fields in abundance, it's justified.

We stayed in a pretty crappy hostel for most of the trip, which was populated by snow-bogans in their early 20s. We overheard a whole lot of conversations because we were separated from our neighbours by locked internal door, rather than a (more conventional) wall but I don't think we heard anyone discuss any topic other than the possibility of laid. One night, one of the dodgy heaters blew up in the next unit, which shorted out all our power such that we woke up freezing at 3am and couldn't do anything about it until the next morning. My point is that IT WAS STILL AWESOME.

To top off a week of awesome snow, bruises to prove how tough I am and cheap alcohol, we spent the last night at a wildlife park where I got to pat a dear, an eel and the ugliest pig I've ever seen and let a Kea nibble my finger.

The Kune Kune Pig - awesomely ugly

One of the great sources of entertainment for the week was cruising between the two local TV channels. We were completely astounded by how nice the cops were on their local reality-TV cop show ("I'll hold off processing this fine for not having your rego in order for 24 hours to give you a chance to pay it") and learned about the perils of giving people drivers' licences at 15 (I loved it when they noted that the drunk 16 year old driver asleep in the stolen car on the side of the freeway "already had a suspended licence").

Dodgy TV moment of the week, however, has to go to the racist guy hosting the morning TV program and his bitch co-host. The most cringe-worthy moments included:

- Him complaining about how "Asians just don't integrate" (literally, using that language);
- Him reading out a letter saying that "maybe there wouldn't be so many Maori people in jail if they just stopped committing so many crimes" then staring down the barrel of the camera and saying "couldn't have said it better myself".
- Her interviewing Ms New Zealand and nodding sincerely as they discussed how she didn't get through to the final 15 because the judges were all corrupt and the New Zealand government wouldn't give her enough money to take an entourage to Las Vegas.

It was jaw dropping stuff. Unfortunately it seems like the downside to living in an agrarian paradise is a few insular attitudes.

Equity and Compulsory Voting: a Framework

I live in a safe ALP seat in inner Melbourne, which means that once every three years I am overwhelmed by the sense that nobody loves me and the world is unfair. Sort of. Here’s an attempt to qualify my sense of disenfranchisement:

The Framework:

Assume for a moment that wealth has a certain ‘natural’ utility. That is to say, assume that we live in a ‘perfect’ free market economy, where you get to keep everything you earn (ie, there are no taxes) and the market includes perfectly fair pricing for all goods and services (ie, perfect competition). We assume that the only value of wealth in this economy is the goods and services that wealth it can be used to purchase. In the first instance, we assume there is no inherent social or political advantage conferred to those who are wealthy that could act to increase their utility. The utility of wealth is only influenced by consumption. In this respect, we can say that the advantage of wealth is “politically neutral”, that is, in case (1):

Actual utility = politically neutral utility

Assume that there are three levels* of wealth within this society, called A B and C, where A has the least wealth and C has the most. The utility associated with each level is standardised; that is, the score reflects what portion of politically neutral utility A, B and C can each capture. In case (1) we assume that everyone has a utility score of 1. Graphically, this looks like this:
Now we can start to overlay political assumptions. We will assume that political power has no potential to create or destroy wealth, only power to redistribute it.

Assume that under the current system, everyone at level A cannot afford to eat, everyone at level B eats and owns a car and everyone at level C eats, owns a car and a big yacht. Most poeple would share the view that we can make this system ‘fairer’ by redistributing some of the utility of the Cs to the As. This forms Case (2): fair redistribution.
Note that this does not mean A has more actual wealth that C, just that A has more actual wealth than they would in the "politically neutral" world, and C has less.

The extent to which you think redistribution (ie, tax) should take place is likely to depend on your political persuasion. Some people would argue that C should own a small yacht instead of a big one in order to give A enough money to eat. Others may argue that C should give up the yacht altogether and give A enough money so that everyone has enough actual wealth to own a car. However, the principle that some level of redistribution is "fair" is broadly accepted.

I would argue that case (2) effectively represents what governments want to achieve; though their precise starting point, methods and the extent of the redistribution may vary.

The Equity:

So, what’s the beef with compulsory voting?

The problem is that of the 150 seats in Australia’s lower house of parliament, only 20-25% are really in for a contest. These are the “marginal” seats – generally defined as those that would require a swing of less than 6% of the vote to change the sitting member

Marginal electorate politics wouldn’t be such a problem if the group of 20-25% marginal seats were randomly distributed. The problem is that they’re not. Marginal seats form a biased cross-section of the population. A quick look at the current map of national electoral zones (http://www.aec.gov.au/profiles/maps/national/aec-boundary-map-june-2010.pdf) shows that the vast majority of marginal seats are in the outer suburbs of major cities – basically, the people deciding the outcome of the election all sit within level B in our model.

Marginal seat politics means that there’s an incentive for politicians to stray from a political model of “fair redistribution”. The result is that in order to get elected you need to pork‑barrel marginal electorates. Under the assumption that political decisions don’t create wealth, just redistribute it, this means a political subsidy for level B at the expense of A and C. Perhaps due to the fact that the political class and their supporters typically come from level C, the bulk of the burden will usually fall on level A. Hence, we have case (3): the pork-barrel:

Based on our model, we're saying level A can go without food so level B can keep there car and afford to pay for the occasional rental of a big yacht.

This is an issue that’s intrinsically caught up with having a compulsory voting system. If voting was optional, politicians would have to campaign in all seats or face the risk of voters (like me) becoming so disenfranchised that they don’t bother showing up to vote.

PS – the PLNC is dead. My brain couldn’t cope with any more Murdoch papers and I figured I would invariably descend into election dross, anyway.

*I avoid using the word “class” because, as Australians, it makes us uncomfortable. I can only assume this comes from a national tendency to associate social classes with classes of wool, where being of a higher class is necessarily better. This is distinctly opposed to the British understanding, where being middle class is normalised and anything else has the connotation that you come from a dysfunctional family and you don’t work for a living.

Labor's Climate Policy? "It's Shit!"

The funniest part of the Chaser's election coverage, which kicked off last night, was surely the point at which the team formed an impromptu "Citizens' Assembly" from the Lateline studio audience. "What do you guys think of Labor's climate policy?" they asked "It's shit!" came the unified reply.

The gory details of Labor's policy started to emerge over the weekend, but the Herald Sun has just picked up a new hole in the plan: "Gillard defunds award wining solar science".

Here's a summary of why I think Labor's climate policy is a balls-up:

1. The US 'Cash for Clunkers' Scheme wasn't about the Environment

I haven't written here previously about why I think the "Building the Education Revolution" program is getting a very unfair wrap - but I've thought about it. Unfortunately, people look at BER and say "that's not the most efficient way to give schools new infrastructure". I agree - but BER's primary driver wasn't about giving schools new infrastructure.

The construction industry is big, cyclical and highly interconnected, meaning that an economy-wide downturn can hit the industry hard and the flow-on effects can be persistent. A sharp downturn means that firms have to lay off a large number of workers, many of whom are unskilled (or all have similar, specialist skills that aren't in demand) . This means there are few short-term re-employment prospects and a lot of panic. Consumer confidence takes a hit and it could well be the start of a downward spiral.

So how does this relate to Climate Change Policy?

Given Julia Gillard was the Minister responsible for BER, I can only assume that she would have a well-founded understanding of the distinction between the rationale of a a stimulus project and the key auxiliary benefit that justifies the expenditure (and helps sell the scheme to a populace with limited economic literacy). For BER, construction industry stimulus was the main game, school infrastructure was the auxiliary benefit.

A 'Cash for Clunkers' program involves trading in an old car for a cash payment to put towards buying a new car that is more efficient. The Obama administration implemented a similar system in 2009, called, the "Car Allowance Rebate System" (CARS). Unlike Australia, the US still has an auto-manufacturing industry. In the case of the US scheme the environmental benefits were auxiliary - the main game was supporting car manufacturers.

These days, Australia doesn't make a lot of cars. Not only are we no longer in need of urgent economic stimulus for this economy in general, this policy would suggest that we're trying to stimulate an industry that doesn't exist. The cost will be bourne by Australian taxpayers, but most of the benefits will flow to overseas manufacturers.

So how did the CARS program wash up? Well, lots of Americans got new cars - so many, in fact that the $3 billion US program had to be closed early. And the economic benefits? Even with a sugnificant auto-manufacturing industry in need of some support, some cost-benefit analysis research suggest the project had a net cost of US$1.4 billion.

2. Screwing the Good Guys

If you asked me a week ago for an opinion in the "bright spots" of the Australian solar power industry, here's what I would have been thinking:

First, the Solar Flagships program that the Government has committed to funding to the tune of $1.5 billion. I don't know whether large-scale solar generators will ever be cost competitive - even with a carbon price they're still a long way off. However, I think large scale systems have a better chance of being cost-competitive than small scale systems and if utility-scale solar is ever going to be competitive, there is a massive need to start addressing the technology risk (if no one has built one before, there are much greater risks things won't work - this pushes up the cost of funding to the point that the funding cost alone can make something uncompetitive). Solar Flagships is a good inroads to addressing this.

Second, I think there's potential for some Australian researchers to build some great capabilities in high-end solar technology. A few months ago while doing some research into solar panels i came across some interesting marketting references to Australian researchers. Solar panels generally fall into two camps; "branded expensive and reliable" or "so cheap you'll take the risk". The type that I was looking at was from a large manufacturer based in China that fell firmly into the latter camp.

Unsurprisingly, the solar manufacturer sought to provide some reassurances of the quality of the technology. In the marketing material where they did this, the key selling point was references to their use of technology and research collaboration with programs from the University of NSW. Developing this type of capability clearly made sense from an Australian industry perspective; we're not a mass-manufacturing country, but if we can maintain the research programs in these sorts of areas it's possible to become a specialist in this niche of the research industry.

Guess who's paying for the "Cash for Clunkers" program? $220m comes from Solar Flagships and the Herald Sun article reports that the UNSW Photovoltaic Centre of Excellence has lost its funding.

3. A Scheme that Could Do Something Useful Appears to have Disappeared

The CPRS had problems, but I get the feeling that I'll look back on the CPRS White Paper in years to come and contemplate that it was the closest thing to a functional carbon pricing mechanism that this country is likely to get. Coal generators were getting comfortable with how much it was going to cost them. Shareholders were aware of the issues and it had become regarded as a foregone conclusion. It was already been written into asset prices.

For those with the 'Resources Super Profits Tax" fresh in their mind - consider this: the aggressive response of the mining industry to the proposed RSPT was exactly the type of response a government should expect when looking to hit companies' profit margins. The only reason the power sector couldn't be as aggressive in relation to the CPRS is because Labor was given such a clear mandate from the 2007 poll. Even if Labor can get re-elected (and right now that's looking questionable), the perceived public mandate is gone. Expect industry to come out with all guns blazing.

4. Climate Policy is Complex

150 randomly selected citizens should not make decisions about climate policy. Here's why:

JG: "so, Fred, what do you think is an appropriate allocation of compensation to cover generators' increased working capital requirements that result from needing to take a long position on carbon to hedge their short power position, given the mismatch in the contract settlement dates?"
Fred: "I think power prices are too high."

These issues are complex and they're difficult even if you have a relatively good understanding of the power industry. Simplifying them may be convenient, but it has no hope of producing a meaningful outcome.

PLNC on the Tele

The Daily telegraph has had me perplexed. I have been reading it all week trying to find an article that was even vaguely noteworthy. I kind of feel like picking up an international story is a bit of a cop out, so I was raising the bar and looking for something that was at least domestic - preferable local.

The Courier Mail is so terrible that it's occasionally quite amusing and the Herald Sun and the Adelaide Advertiser at least have the pretense of news. To a cynical southerner, it's easy to get the impression that NSW and Queensland are both lands of the vacuous. But at least Queensland is smiling. The Daily Telegraph is like a plastic-boobed peroxide-blonde girl in a bikini, but rather than feeding your parking meter she's giving you a death-stare.

To make matters worse, I don't even have football to fall back on.

In any case, I've had a bit of a strange fixation with the whole election process this time around, and it's been election coverage that's finally got the Tele over the line.

The Tele has the following to say about the upcoming election:

1. That Penny Wong has suffered discrimination
An lesbian woman with an Asian background and a public profile? Discriminated against? Really?

2. That Tony Abbott is pimping out his family
No, not literally - though at least that would be 'news'. Tony Abbott has a rather unfortunate 'soft side'.

Tony says, "paid ma- parental leave" but I hear, "pregnant and barefoot"

Tony says, "my daughters are campaigning with me" but I hear, "so they can't be off having sex"

Tony says "my wife Margie and I..." I hear, "... deliberately barren - remember?"

When Julia holds a baby, she looks friendly. When Tony hold a baby, I'm scared he's going to try to eat it. Which is odd, given he actually has kids.

3. Julie Gillard evidently doesn't have enough family
This article asks to see more of "Mrs Gillard's" boyfriend. Indeed.

Of course, the stupidity of all of this makes me feel very, very disillusioned about the Australian political landscape - but it's worse than that. It's easy to criticise 'focus group politics' but far more troubling is the fact that political parties keep using it because it actually works.

The recent exhumation of Bob Hawke's political voice places his stark "love of the Australian people" in stark relief against my ambivalence after reading the Tele. Are the nice, rational people that I encounter in my day-to-day life not really representative? Am I delusional in my perception of the 'national character'? Have I deluded myself by surrounding myself with people who are generally nice, rational and open minded, when what the country really expects from me is to quit my job so I can stay home and raise babies and develop delusional fears about immigrants and gay people?

Is Sarah Palin Allowed to Invent Words?

The PLNC begins in the Sunshine state with a look at the Courier Mail:

Sarah Palin creates word controversy, compares herself to Shakespeare

It terrifies me to think that there's even a remote prospect of Sarah Palin becoming the next leader of the "free world", but I have to confess that there's a little asshole voice at the back of my head saying "What if she just got the Republican nomination then didn't win?... think of the comedy... and it's not your country anyway..."

Then I just think about the prospect of Americans having a chuckle at our expense over Tony Abbott and I quickly learn a thing or two about showing more empathy.

The Mail doesn't pass judgement in this article. Queensland is like a hot version of Alaska with a few less guns, so you can't say too much about Palin without running the risk of alienating a few people. It simply states that:

"Former Alaska Governor Sarah Palin defended her newly-created word today, then compared herself to Shakespeare in the realm of coining new terminology. The word was "refudiate" - it was unclear if she meant refute or repudiate..."

Perhaps she meant both!

Palin noted, in her defence that "Shakespeare liked to coin new words too." Indeed he did, but she's a fair way off the mark in her comparison. Shakespeare invented words based on a vast knowledge of linguistic etymology and classical mythology and in doing so created a type of language that extended the range of expression of the English language. That's why you all got stuck reading iambic pentameter as a teenager.

Interestingly, the following phrases also create nuances of meaning*:

1. So Kate goes, "Wow - I wish I'd been there!"
2. So Kate is like, "Wow - I wish I'd been there!"
3. So Kate is all, "Wow - I wish I'd been there!"

With the first expressing a direct quote, the second a potential paraphrasing and the third suggesting that Kate is either excited, or a pain in the ass.

What Palin has done here is not as unsophisticated as when I'm tired and decide I want to change what I want to say half way through a word ("problem" and "issue" thereby become "ishblem" or "proshue" and people tell me I'm an idiot). She's combined two similar sounding words with compatible meanings and come up with something that sounds very much like an acceptable piece of the English language. Until you think about it a bit more.

The point is that Palin may be well off the mark when comparing herself to Shakespeare's conscious construction of linguistic shades of grey, but she could equally well have argued that English is a language that has been shaped by bogans that just got things 'wrong' en mass. The work "bird" was "brid" in old English and I occasionally wonder if "ask" will become "aks" in future English.

Does this mean that Palin's on to something here? I suspect not, but only because I can't recall hearing many bogans repudiate things.

*I nabbed this example from here

Plastic Lines Newspaper Challenge

Over the next two weeks (or so), I will be engaging in a series dubbed the inaugrual "Plastic Lines Newspaper Challenge". The concept is that over the period of the PLNC, posts will be based on Murdoch newspaper articles, one from each state and territory.

I usually read the Age. One friend recently questioned this choice by suggesting the Age was "crazy, left-wing propaganda" and that reading it made me a Communist. I think this response was a bit of an overreaction, given that my preferred paper is the AFR, I just don't want to have to pay for an online subscription.

The PLNC will aim to draw something interesting out of the Murdoch dross.

If Carlton Functioned Like a Corporate Workplace...

Here's a list of ways Carlton would have to change if the boys were really determined to be 'professionals'. Given I realise that the Plastic Lines readership may not have a high correlation with the football-supporting public, let me explain two things:

- Chris Judd is the captain; and

- Brett Rattan is the coach.

Here we go:

1. Chris Judd wouldn't run for the ball
Judd would reason that he had done all the work getting himself the captaincy. It's no longer his job to get contested possessions. In fact, contested possessions are beneath him and it would be unbecoming for him to attempt to get them. Further, he would often leave the ground at three quarter time. After all, he only moved from West Coast to Carlton so he didn't have to work so hard and could spend more time wit his family, it would be unreasonable to expect him to stay back with the others.

2. Runners would all be young women
All the senior players would have dedicated runners to bring them water and pat the sweat off their brows. Despite the fact that sex discrimination no longer exists in the workplace, all of these runners would be young, female and attractive, except for the occasional one who would be a bit older. The older runners would usually work for more arrogant players, who were more likely to need someone to speak them in a mothering tone. Given that this is now a 'professional' sport, these runners would now be called 'Executive Assistants'.

3. Players would play two games a week
Yes, I understand their contracts only say one game per week, but they should have understood that they are obligated to perform additional duties over and above what's in their contracts.

4. Move Over Betts, Yarran and Garlett
Betts, Yarran and Garlett wouldn't be up at the forward line. The notion of this row of small forward runs completely counter the notion of running a professional organisation. There would now be three key criteria for obtaining these types of key positions; you'd need to be tall, white and have attended a private school, preferably in Melbourne.

5. Recruitment would be based on TAC Cup performances
Rather than look at players recent performances, skills and potential, selectors would base recruitment on how many goals each player was able to kick during their final TAC Cup (under 18s) game. This is based on the well founded logic that looking at a single number that someone was able to achieve at the age of around 18 is the best way of defining their lifetime capabilities.

6. Chris Judd and Ben Cousins would still catch up

Not because they liked each other. Just because they worked together once, are still in the same industry and, you know, it's hard to tell when keeping in touch with someone like that may come in handy.

7. No quarter time or half time huddles
Brett Rattan would have far more important things to do than speak to players. At three quarter time they would all gather in a huddle and wait for him. Just before the siren to go back on, he would stick his head around a corner and say "by the way boys, I expect you to score 15 goals in this quarter". If the team failed to comply, it would be their own fault.

Stinky

The Gruen Transfer did a great segment last night on deoderant advertising. It was made more interesting by the fact I was sitting in a lounge room with my mother and boyfriend. Both of them think that ads like this one are a hearty laugh. I'm in the category of people who find them seriously discomforting.

Television has a way of creating meaning through a kind of synechdoche - when someone on Home and Away 'kisses' their friend's boyfriend, I implicitly assume this is the PG version of them doing the nasty on the kitchen table. If you accept that consumers know this, then you can understand why I see the "spot and stare" ads Brut is currently crapping out as a blatant incitement to pack rape. If you think this is some sort of "feminist overreaction" then you've clearly never been alone in an isolated area and had a car full of people, each of whom is around 50% larger than you, leering and jeering at you. The 'implied threat' is not subtle.

In any case, I digress from the main subject of this rant, which is that those tits-and-ass ads for Lynx, featuring content such as the following:

are actually the product of a large multinational firm - Unilever. No surprises there, you may say.

However, consider that within the stable of Unilever brands is another brand of supermarket deoderant and beauty products pitched at a different segment of the market. Do you remember that wildly successful "Dove beauty" campaign? If you don't here's a brief recap:

If you ever had an inkling that perhaps these campaigns were based on a sense of social obligation any deeper than someone trying to sell you shit, think again.

If you have a problem with Lynx putting this kind of shit on your TV, I suggest you point this out to as many of your female friends as you are able. And if you ever see a bloke buying Brut in a supermarket, wave your pinky finger at him for me.

Politics is not the Point

I have received a surprisingly large number of calls, emails and text messges this morning - most of them from women. Just when I thought it was dying, Facebook has gone nuts.

Julia Gillard is notable for a number of reasons - she's from the factional left, she's Victorian, she likes AFL, she's not married and she's a woman. She would be perfect, if only she supported Carlton.

From a political perspective, the fact that she's female is one of the less interesting aspects of the recent coup. Many people aren't happy with the PM being replaced through an internal process, rather than a general election. Many Liberals are unhappy because they were looking forward to a Rudd-Abbott election. Divisions in political views will persist. Not everything, though, is confined to politics.

Less than a decade ago, I was studying towards an electrical engineering degree. Academically, I was perfect for engineering - I was good at maths and science and I liked to build things. Despite this, I hated it. I had come from an all girls school and the culture shock was radical. The teaching style was very aggressive, put-downs and adversarial responses from lecturers were the norm, staff had very poor communication skills and questions were treated as signs of incompetance. I did well in units run by the maths and science faculties, but poorly in those taught by the engineering faculty.

To make matters worse, the course was full of group work and young men (many straight from single-sex schools) at an age where they were both terrified but strangely intrigued by women. It was often hard to find groups to work with. On a couple of occasions, the young men I was working with assumed that 'group work' meant that we were dating.

In around the second year of my degree, I relayed this experience to one of my uncles - himself an electrical engineer - and mentioned that I thought many of the females in my course were struggling with similar issues. His reponse was to explain to me how "women's aptitudes" were not at all suited to engineering and he wasn't surprised I was struggling.

At the time, I really couldn't beleive what my uncle was telling me. I had met men who hated me outright for being female and having opinions. What I found shocking was that, for my uncle, the idea that women had inferior capabilities was so ingrained in his consciousness that he hadn't heard anything I'd said. He was genuinely trying to be supportive by pointing out that my struggles with the culture were in fact intellectual failings and that I should have expected this because I was genetically inferior*.

This type of gender discrimination has always been the the most troubling for me and anecdotal evidence suggest that many women have had similar experiences. Formal, structured barriers are now uncommon but subconscious prejudice (not just in relation to geneder issue) persists. More disturbingly, I've often struggled with how you try to address a bias that people will not (or possible cannot**) admit to having.

One of my Facebook updates this morning was from a friend who is a died-in-wool Liberal stalwart. She was lamenting Labor processes and calling it a "dismal day for the Australian people". She appeared even more incensed by the fact that this process had led to "our first female PM". Even in the midst of being a one-eyed supporter, the significance of the first female Prime Minister was not lost.

Why, in this age where women can earn an income and get mortgages in their own names, does everyone seem so overwhelmed by having a female Prime Minister? I can assume that it's because, at some time, most women with certain ambitions have faced up to the proverbial "caring uncle" and have learned that there is no point in trying to argue - some people just need to be shown.

* At the time I found this response completely baffling. If you, too, find this behaviour odd I can recommend this article on the Dunning-Kreuger Effect.
** See above article.

Religious Education

A friend recently told me a story regarding her four year old son, who has recently started prep at a local state school.

They were on a long car trip and she had been coming up with games to prevent him from getting irritable. In one game, she named an object and he had to think about how long it would take to build. It was a particularly good game because with limited input she could keep him occupied for quite a while. The question "how long would it take to build a house?" became a discussion about what parts a house has and how long it would take to build each of them. This game was going well and the boy was getting better at it, so she thought she'd stretch him a little with "how long would it take to build a whole city?". The boy replied "don't be silly, God made the cities".

This response obviously came as a surprise to someone with no record of church attendance and a child at a non-denominational school. It turns out the school had introduced a religious education program.

The fact is, kids are fed 'information' from a whole lot of sources and I don't consider the occasional hour of RE to be a major concern. I spent most of my school days at either Catholic or Anglican schools. While most of those who conducted my theological educaltion were intelligent and well-rounded, I did come the occasional crazy who had weasled into a school to try and push an ideological agenda onto impressionable minds. I find comfort in the lack of success in attempts to indoctrinate me.

Years of listening to Christian sermons basically just left me with a good store of parables and a better understanding of the frequent biblical references in literature and movies. By way of contrast, years worth of advertising have meant that now, in my late 20s, I still occasionally feel compelled to buy a box of Coco Pops.

The thing I find concerning is that someone has evidently told this kid that "God made cities". Despite my many years of attending chapel services, I can't say I remember that part of the bible. From a teaching perspective, this is like having your kid come home and tell you that "their" and "there" can be used interchangeably, because their English teacher couldn't be assed explaining the difference.

Third Wave of Bullshit

Around six months ago I was wandering through town on a Saturday and happened upon a new cafe at the back end of a department store. With half an hour to spare before meeting a friend, I wandered in.

I like coffee, wine cheese and other things that fit firmly in the category of "stuff white people like", but I try not to be too much of a wanker about it. I like things like single origin coffee, Japanese syphons and cat poo coffee because I find it interesting to see what people can make from a product when they apply their efforts to getting the details right. However, I don't rave on about these things to people that don't care and when I'm visiting my parents I can share an instant coffee (white with one) without the need to wrinkle my nose. I like winery tours, but I also like anonymous carafe wine drunk from water glasses.

So there I was, sniffing my way through the "200 coffee flavours" and watching the young men with uniformly bad facial hair gazing at their syphons. I flicked through the menu and picked out a $5 syphon coffee.

$5 is expensive for a coffee. I'm sufficiently commercially cynical that I realise that while the dedicated baristas believe single origin coffee is all about art, the good shop owners actually know about earning higher gross margins and artificially differentiating in a commodity market.

The barista interjected. "Oh, you want the premium beans from the high plateau regions of Mount Kenya?"
"Yes."
"That's a great coffee, but I reckon you should have the Colombian coffee made from 16 coffee beans harvested from the north west side of the sacred tree descended from the original Jesuit imports from 1730."

The advice or staff in a restaurant should always be respected but should always be regarded with a grain of cynicism. If the staff at a restaurant recommend the chicken, this could mean "the chicken is the bast dish on the menu". It could also mean "we have three chickens left over from last night and if we can't get rid of them at this lunch service we'll need to toss them out". I know this because I've been the staff.

"No - happy with the Kenyan."
I sit down and wait for my indulgent purchase and while I'm doing to I skim over the menu on my table. As I'm doing so, something catches my eye. That Colombian coffee that the mo-fo at the counter casually slipped into conversation is $25 for an espresso. A fact he completely failed to mention.

I haven't been back. I like their fit out and Tolix chairs and I like their coffee. I don't like someone trying to screw me with a $25 coffee.

I had only really been compelled to wander into this department store cafe because I knew that the cafe owner had been delivering on my caffeine (and miso soup*) requirements since my uni days and continued to do so through a venture just near my house. The latter was a personal favourite of mine, but I've recently promised myself I'll stop going back there, too**.

The fact is, I like good coffee and I don't mind spending a bit more every now and again to try something out. But if you want to sell a premium product, don't do it by getting having some obnoxious 20 year old kid with bum fluff on his chin try to make me feel insecure about what I'm ordering. I have far more important things to be insecure about.

*miso soup is a top-notch hang-over cure; try it.
** consider this material for a potential sequel

The Shitbox Premium

I bought a house late last year. The whole process was horrible. I don't know why Melbourne became so enamoured with auctions as a means of selling houses, but it seems that now that everyone is doing it, everyone must continue. I experienced a few occasions where an owner was going to sell on the private market, but as soon as anyone made an offer near the asking price they panicked and switched to an auction.

Interestingly, after months of observation and trying to make sense of the bullshit prices that real estate agents quote on properties (add 20% for most and 25%+ for Biggin&Scott or Hocking Stewart), I eventually came to the realisation that it was possible to apply the "preferred habitat" theory to the real estate market. Not only did I find this interesting, I also enjoyed the pun.

The "preferred habitat" theory is an explanation for the shape of the forward curve of interest rates. The idea is that some people want to invest their money for a short period of time and some people want to invest for a long time. However, if long term interest rates are high, people who prefer short term investments will invest for a long period, and vice versa. Basically, it says that people will shift from their preferred strategy, but require a premium payment to do so.

When we were looking at houses, we found that other prospective buyers had a "preferred habitat" that fell into one of two categories; they were either looking for a renovation project, or they were looking for a finished home.

This strategic disjoint led to an interesting outcome; those houses that were well finished and beautifully presented, unsurprisingly, appeared to sell for a premium. More surprisingly, at the other end of the spectrum, houses that were falling down and smelled like cat piss also seemed to sell for relatively high prices; a phenomenon I dubbed the "shitbox premium".

The shitbox premium seemed to rely on renovators underestimating the cost of renovations, and the expectations that whatever price they paid whould be a 'bargain' given the house was so delapidated. Meanwhile, tired looking houses with ugly 1980s facades seemed to sell at a relative discount. It seemed like many of the wide-eyed renovators had an optimistic view of how easy it would be to whack on a second story and move the downstairs toilet, but both the renovators and the 'perfect home' buyers struggled to see past terracota tiles and green marble in the bathroom.

The Unelectable

Over the past couple of days across several different media I have heard people raise the question of whether "Tony Abbott is unelectable". This conversational motif triggers rings alarm bells in my head. My social influences tend to be middle-class, left-leaning, urban, progressive types. They discuss issues at length. As a general rule, this means that if they reach the point that they're having earnest conversation about something this probably means generally means that the "working families" of Australia accepted it as a reality six months ago.

Ideologically, I guess I belong to a class of Liberal voters exiled to the wilderness for a generation as the consequence of some Liberal party factional rivalry that I don't fully understand. Practically, I'm just a "swinging voter" and like most others I know, I can't help but feel like the upcoming federal election is a bit like a choosing between a punch in the head or kick in the proverbial balls.

I guess I should be upfront about the fact that I don't like Tony Abbott all that much. As a (relatively) young, educated female I feel like that's a bit of cliche. It took me a while to pin down exactly why but then I remembered the issues with the RU486 abortion debate back in 2005/06. And then I remembered that inopportune use of the word 'gift' and realised that the though still has the power to bring a bit of vomit to the back of my mouth. This quote from his days writing for his university student paper doesn't sit well with me either:

"I think it would be folly to expect that women will ever dominate or even approach equal representation in a large number of areas simply because their aptitudes, abilities and interests are different for physiological reasons."

I said some dumb stuff as a 21 year old, too, but I didn't believe it fervently enough to write articles about it for the student paper.

Despite having no great affection for the "churchy loser", I'm not waving the "Kevin '11" flag, either. The current government has an uncanny ability to screw up on the PR front and for that to impact its effectiveness. The problem is that 'power' and 'authority' are often self fulfilling. In the US, Barack Obama affirmed his political power by getting a health care bill through Congress. He may have had to significantly compromise the bill, polarise voters, add to the (already potent) vitriol of Republicans and personally beg favours from half of Washington; but it doesn't matter because he 'won' in the eyes of the nation.

By contrast, in Australia, the ramifications of the political disaster of the CPRS are still reverberating. By failing to get this key piece of legislation through, the Government was forced into a position of having to make excuses. They've since been mauled on a whole range of non-issues and handled the fallout very poorly.

To make matters worse, the RSPT, irrespective of its prospective merits or pitfalls, smells a bit like a desperate throwback to good, old-fashioned class warfare. Unfortunately, while the Government was a loser in the CPRS bill failure, the mining industry is fresh off a win, full of confidence in its ability to influence policy and rearing to go.

In the depths of my mind of nerdy analogies, I feel like we're sitting near the mean of a positively skewed distribution. To the left are all the negative potential outcomes of re-electing a Labor Government. They're minor issues that will almost certainly occur; more home insulation-type problems, weak explanations of policy and wasted Treasury resources. To the right is a long tail of negative potential outcomes under a Coalition Government; events that are unlikely but severe. Hanson-era refugee policies, major shortfalls in infrastructure investment, Tony trying to make abortion a political issue.

Risk-aversion suggests we should hope Kevin gets re-elected. If for no other reason than to avoid the terrible irony of the country being run by an Abbott and a Bishop.

Women Lie: A Mathemetical Example

Some months ago and after around 10 pints of ale, an acquaintance and I had a discussion about women and sex. My drinking buddy, like most men I know, was adamant that he had slept with far more women than his girlfriend had men.

I find this position intriguing. Most men seem to think this and I've always seen it as an act of self-delusion. I know lots of women and the stories they tell me may not necessarily correspond with what they tell potential suitors. Unfortunately, women are still compelled to flatter men's egos in this regard. Women can present a mythical number when called upon just as easily as you tell your boss that your job interview tomorrow afternoon is a "doctor's appointment".

If you consider all intra-species, heterosexual coital encounters it's necessary that just as many women were involved as men. Most men can accept this, they just don't think it was their wife or girlfriend involved.

The fact is that for most men the precise opposite is true: the woman you are sleeping with has probably slept with more people than you have. And there is a mathematical proof.

This radical claim is an extension of something called the "Friendship Paradox". I will avoid trying to get into the mathematical details, but the principle is that someone who has had fewer sexual partners is far less likely to be sleeping with you than someone who has had many. If a woman has only ever slept with one man, it's unlikely it will be you. If she has slept with many men, then you may be in with a chance.

Assume the following diagram shows that sexual interactions between eight heterosexual friends; four men and four women:The table below shows the number of lovers each person has had, how many lovers their lovers have had in total and on average:

Note that the average number of lovers each person has is two. However, their partners have on average had almost three partners each.

Of course, the same can be said for the women: their average partner will have had more partners than them. However, in my experience women seem far less interested in convincing themselves otherwise.

Three points on RSPT

Three points about proposed "Resources Super Profits Tax" that I wish people would talk about more:

1. Dutch Disease
Dutch disease starts when you build a mine and start exporting your resources. If you are a miner, this is great news because you're making money. Importers go to foreign currency markets, trade their own currency for Australian dollars and use the AUD to pay you. Fantastic. If you're a miner.

However, if you're involved in farming or manufacturing this whole transaction is a whole lot less attractive. As demand for Australian dollars increases, the currency appreciates. You have nothing to do with mining and there's been no change to your business model. However, the cost of your produce from the perspective of your overseas customers may have just gone up 20%, and now they don't want to buy as much from you.

This phenomenon is not restricted to Australia - it's a critical issue with respect to the developing world. However, I have never heard anyone use it as a justification for the RSPT. It is important because it means that when the case is presented for other states to benefit from the natural resource wealth of WA and Queensland, it's not just a 'cash grab'. It actually reflects the fact that mining has made material inroads into screwing up the earning potential of non-resource rich states.

2. Mining and Manufacturing Are Different
I have heard arguments protesting against this tax on the basis that it sets a dangerous precedent for other industries. Undoubtedly, rapid changes in tax law may increase the perceived sovereign risk of investing in Australian assets. However, it's drawing a long bow to suggest the RSPT sets a precedent across industries.

The theoretical underpinning for this type of tax is that the capital used to produce resource profits is derived from a common resource. That is, stuff in the ground is owned by the government (and by extension, citizens) until it is dug up and sold. This is not an issue for most industries. In manufacturing you buy inputs, add value through labour, capital and technology then sell them. In banking, you buy money, add value and sell it.

Seen in a different light; the argument about the RSPT is not so much about thinking about how to tax profits, it's about negotiating how much mining companies should pay for their inputs. The government just wants to use profits as one of the factors in setting the price.

3. A Fair Tax Rate
There seem to be two sides to this debate; those who think mining companies should pay more and those who think they already pay too much. Surely, the issue should begin with the question of what constitutes an appropriate level and structure for mining taxation?

The failure to answer this question cuts both ways. Those who support the tax say that miners
should pay "more", but their failure to quantify a limit suggests they would be happy to raise the tax rate to the point of removing all profits and making the industry unviable. Those who argue that current tax rates are already too high fail to present any objective economic argument as to "why?".

Bikes Are Not Cars

There are two groups of people whose actions piss me off in relation to the "bike vs car" wars. The first is aggressive drivers who feel that it's perfectly acceptable to put my life in danger just to satisfy their innate compulsions to behave like cunts. The second is aggressive cyclists who do dumb shit on the road. The latter group piss me off primarily because I can't shake the feeling that it's their actions that create the built up resentments that motivate the former.

The fact is that a bike is not a car. And a pedestrian is not a bike. Incidentally, a pedestrian is also not a car, just in case anyone was confused. I would have thought that this was bleeding obvious, but evidently the motivations of one-sided interest groups are more pervasive than the laws of physics or even a basic ability to make observations about a moving vehicle.

Traffic laws are built on the principle of encouraging the lowest common denominator to avoid doing some of the stupid things they would otherwise do. These laws are not built on an innate principles or a universal rights framework. What this means is that you can contravene some of these laws but that doesn't necessarily make you a bad person.

If you are on a straight, clear highway that you know well on a clear day and you drive at 5km over the speed limit, you are breaking the law but are not necessarily behaving stupidly. Conversely, it may be moronic to travel at the speed limit if you're on an unknown, winding highway in pissing rain. Similarly, some jay-walking might be sensible and other instances might be stupid. Fines are a blunt instrument, which means that it's stupid to issue them without police exercising some discretion.

People will clearly have differing views on where to draw the line and one of the complication of setting laws is to get the balance right. Assuming that a bike is the same thing as a car, as certain new laws seem to suggest is a sure fire way to getting it wrong. Suffice to say, if you had a choice between my 65kg running you over in my 3 tonne Land Rover, or on my 8kg bike, which would you go for?

Marginally Legal

It's the little things that show you care. And when it comes to issues of the AFL's relationship with women, it's the little things that show you really don't give a shit.

I don't suppose that the problem of dealing with reams of hormone-charged, good looking young men, many of them far from home and stocked with cash, is an easy task. However, it's made significantly easier by the fact that most of these guys like what they do and they are on big salaries that would be hard to replicate elsewhere. That's a big carrot, but it's also a big stick to whack them with if they screw up.

By and large, the AFL is getting more comfortable with punishing players for certain indiscretions. Getting drunk on camera, for example, can get you in a whole world of trouble. In fact, getting drunk at all can get you in a lot of trouble. The actions of the "lowest common denominator" have certainly made things a lot less fun for those players who can have a few drinks and avoid getting arrested.

What the AFL is entirely less comfortable with, however, is spelling out to players that treating women badly is not a privilege that comes with the contract.

Wikipedia, that great font of semi-reliable information, provides a "List of Australian rules football incidents" dating back to 1910. While I acknowledge Wikipedia is far from being an exhaustive authority, it's interesting to note there is not a single incident on the list of an AFL player being convicted of rape. On a statistical level, this means one of three things:

- The AFL is a freakish statistical anomaly. I can't help but feel this is akin to those economists that argued that the GFC was the type of event that occur ed once in every six ages of the universe and that the occurrence just co-incidentally occurred in our lifetime; because the alternative was to admit that their models were wrong.
- the AFL is has screened out all rapists. I can't imagine how.
- The AFL has successfully managed to cover up, intimidate and/or pay off anyone who was going to be a 'problem' to them.

Given the last point is the only one that's even vaguely probable, I can't help but feel that the franchise needs to overcome a bit of a credibility issue every time an issue is raised.

It would be wrong to suggest that the position of the AFL hasn't improved over the years; for example, consider the following incident involving all-round nice guy, Brodie Holland:

"Brodie Holland was fined $2,500 for his role in a fight with a young woman over a taxi cab. After Hollands fiancee was involved in a scuffle with the woman, Holland approached calling the woman a "stupid slut" before trying to tackle her, placing her in a headlock after which she bit him on the stomach, before striking her in the head with his fist. His court appearance was pushed back on two occasions so not to clash with his football commitments; once he faced court no conviction was recorded and no punishment handed out from his club, Collingwood."

I suspect that even in the last three years that AFL might have had a rethink about the PR implications of pushing back a court appearance. The position taken with respect to another nice bloke, Andrew Lovett, suggest that there has been some progress. Perhaps Lovett could be the trailblazer in blowing apart the aforementioned lack of rape convictions against AFL players.

However, the franchise is still clearly uncomfortable. I can't help but feel that when two 'senior' St Kilda players were implicated in impregnating a 16 year old the AFL was fighting desperately to avoid the instinct to 'close ranks'. The fact that one of the players managers has come out today saying that "It's a disgrace the way this was put around not only Melbourne yesterday, but Australia and the world rest of the world probably" is an indication that a certain kind of 'boys club' mentality is alive and well in certain quarters.

A brief trawl of a few forums suggests that the implicated players (who have not formally been named) are aged 26 and 27. In my humble opinion, men this age screwing 16 year old girls is pretty shit behaviour. I know it happens. I know it's legal. I can imagine that an unwanted teenage pregnancy is a pretty bad outcome both for the girl involved and the lucky fellow whose sperm won the lottery to have his AFL earnings syphoned off in child support payments.

However, the AFL didn't come out and say any of these things. When once again called upon to implicitly give a view on appropriate behaviour, it said "...this is a private issue between the parties and the AFL will take no further action."