Weekend Links August 25

4 months till Christmas – yippee

Global Macro:

  • 10 Best Central Bankers in the World – Global FInance Magazine via Business Insider. Seems I was wrong the RBA is not the best but second to the Bank of Canada. UE? 😀
  • IMF advises delaying austerity till growth returns. Better late than never but I fear its too late – UK Telegraph
  • Caterpillar cuts Chinese production – Bloomberg
  • Macro Morning will be back on Monday but for now here is Bloomberg’s take on the overnight action

United States:

  • Fed has scope for more easing – Bernanke via Reuters. He just needs the votes on the FOMC
  • Bloomberg’s take on Bernanke’s letter – here
  • Underlying weakness in last nights Durable goods release – WSJ Blog

Lance Armstrong:

  • I don’t know whether Lance Armstrong did or didn’t do it but just like the PM and Slater and Gordon last week and countless others I am sick of the MSM and in many ways the legal system always assuming the accuser is pure and the accused must have done it in matters such as this.
  • New York Times on LA dropping his fight – here
  • Bloomberg on LA being stripped of the titles – here
  • Lance Armstrong stripped – UK Guardian
  • New Yorker on LA’s decision not to fight – here
  • MANY OF THE RIDERS WHO COULD INHERIT LANCE ARMSTRONG’S TITLES WERE ON THE JUICE – Business Insider

Europe:

  • Merkel backs Samaras on Greece – Bloomberg

Asia:

  • China won’t save the world – Forbes
  • Doubts raised over Chinese Stimulus plans – FT
  • The only way out for China – Andy Xie via The Big Picture
  • Chinese Bridge collapse cause infrastructure concerns – NY Times
  • China might be in worse shape than we think – Business Insider. This is a topic we are talking about in Macro Investor this week.

Local:

  • Tinkler might have pulled out but Whitehaven says the boom will continue – Sky News
  • Cards turn on Tinkler the gambler – SMH
  • RBA – BHP doesn’t change forecasts. Sky Again
  • More projects at risk might change things a little though – AFR
  • Mining fears of Chinese Invasion – SMH Nice headline.
  • Currency wars take the AUD prisoner – AFR. Yes Indeed, in the current environment it should be mid ’90’s at a minimum, or is that maximum.

Other:

  • A real working hover bike, cool – Popsci

Comments

  1. Stutchbury continues to provide multiple pulpits from which Chris Joye can preach unfettered from his YBR book, verbal the RBA and peddle his myths of affordability – here and here

  2. Great links Greg (and yes RBA is second best, at best…and falling…)

    Agreed on Lance Armstrong – whatever the guy did, he raised half a billion for cancer research.
    That makes him a hero in my eyes.

    • LA is a tricky one in my book. His achievements are very impressive. Even allowing that he doped his cycling achievements are impressive, but he was also a leading figure in the movement that has brought the sport into disrepute. If you believe that sport can inspire people then what he’s done is in some way the opposite of that. On the fundraising thing, the outcome is tremendous, but what are the motivations and methods (eg. inspiring people with an elaborate lie)? Does the end justify the means?

      • Yes, troubling.

        And a very real shame. Lots of people have been incredibly inspired by LA. That ideal will always now have the tarnish of a “cheat”.

        A difficult one to reconcile IMO.

      • I’m told by riders in the know that many he raced against at that time were on some additive as the link above suggests. There were a few doing it clean, but even then would they have won on a level playing field?

        We’ve been looking at the stage times of the big events the last few years, and you can see the war on drugs is winning as the times are slower and the current generation are impressive athletes as well.

        I think the sport is better now so some good has come out of this.

        I don’t like cheats, but he deserves respect IMO. Why don’t the US Anti-Doping Agency go after the others? If only we saw some of this is finance.

        • “Why don’t the US Anti-Doping Agency go after the others?”

          My understanding is that the case against LA was put together by doing exactly that.

          10+ of his ex-teammates (some of whom have also been convicted) have given USADA sworn statements detailing their first-hand knowledge of LA’s drug use/doping from 1999 to 2005.

          A link to a summary of the evidence would be helpful if anyone can find it.

          • From the USADA website

            The evidence against Lance Armstrong arose from disclosures made to USADA by more than a dozen witnesses who agreed to testify and provide evidence about their first-hand experience and/or knowledge of the doping activity of those involved in the USPS Conspiracy as well as analytical data.

            Numerous witnesses provided evidence to USADA based on personal knowledge acquired, either through direct observation of doping activity by Armstrong,or through Armstrong’s admissions of doping to them that Armstrong used EPO, blood transfusions, testosterone and cortisone during the period from before 1998 through 2005, and that he had previously used EPO, testosterone and hGH through 1996. Witnesses also provided evidence that Lance Armstrong gave to them, encouraged them to use and administered doping products or methods, including EPO, blood transfusions, testosterone and cortisone during the period from 1999 through 2005. Additionally, scientific data showed Mr. Armstrong’s use of blood manipulation including EPO or blood transfusions during Mr. Armstrong’s comeback to cycling in the 2009 Tour de France.

          • re the other teams

            again only my understanding but USADA only has juristiction over US cyclists and US teams. Hence the US Postal Service/Motorola/Discovery Channel teams investigations.

          • True. I wonder what the next step will be? One man down and the others? I wonder if more convictions will follow? Thanks for the info.

          • innocent bystander

            from a slightly older article:
            Basically, Armstrong describes a situation in which an athlete has little recourse or ability to defend him or herself once the USADA has decided that he or she is guilty of doping.

            The lack of “due process” that Armstrong’s lawsuit describes makes many irrelevant allegations about the unfairness of the process, along with the following troubling one:
            The athlete cannot compel witnesses to testify in the arbitration hearing. The USADA, meanwhile, can use affidavits to introduce the witnesses’ testimony. This means that Armstrong can’t cross-examine his accusers, which seems fundamentally unfair.

            Given that the evidence against Armstrong is likely based almost entirely on witness testimony, this seems unusual and unfair.
            One hopes that, at the very least, if Armstrong does not fight the charges, the USADA will release the evidence that has caused it to find Armstrong guilty of doping, so that we can all evaluate it.

            http://www.businessinsider.com/lance-armstrongs-lawyer-says-he-is-certain-to-lose-his-doping-case-2012-7

        • dumb_non_economist

          Trouble is with all the dobbing in by team mates as to LA’s drug taking and I think even one of his team doctors, no one has explained how he managed to test clean, no explanation of who provided the “technology” to avoid testing +ve, while elsewhere they were getting caught left right and centre. Until that is covered he remains “the man” when it comes to the tour.

      • LA thing (as with much in cycling) is akin to Madoff – if the results look too good to be true, chances are it’s not real.

        At-least LA has done something good with the money.

        The other issue is that there is a long history of doping in European cycling to which spectators, fans, media turned a blind eye. The collective attitude was not that this was cheating (it was basically assumed that all pro’s were doping). It was instead that it’s a shit job being a professional cyclist, and if they had to resort to enhancements to bring the entertainment we demand, then so be it.
        When the US came to the sport, bringing the ‘meritocracy’ ideology of their culture, this clashed – and has continue to clash.
        Not saying doping is good, just providing some perspective.

    • Mining BoganMEMBER

      I had a seven-year-old ring me this morning to tell me about the manky banana he found at the bottom of his weekend bag.

      Both stories have the same ickiness.

    • Ever noticed that PO has a gazzlion articles posted daily and almost all of them written by Mr Schlesinger? Very prolific writer this Mr Schlesinger.

  3. One problem with waiting until growth returns until austerity is kicked in – that’s what we said last time, and the time before that, and the time before that. No one ever has the political courage to inflict cuts on a populace when times are getting/are better. The Opposition will always undercut you, and when they get elected on a popular platform of more spending ( which they always will) it’s back to ‘later, when things get even better…..” Spending cuts have to happen now, because there will never be a better time to do it.

    • Frankly, the world needs a set of political leaders with the courage of our late David Lange.”..He headed New Zealand’s fourth Labour Government, one of the most reforming administrations in his country’s history, but one which did not always conform to traditional expectations of a social-democrat party….Upon coming to office, Lange’s government uncovered skyrocketing public debt…His government implemented far-reaching free-market reforms…. Lange lost the support of many elderly people by introducing a superannuation surcharge after having promised not to reduce superannuation.” He benignly got elected, THENset about what he saw as having to be done; it may be the only way.

      • “by introducing a superannuation surcharge after having promised not to reduce superannuation.”

        I prefer the courage of a Leader who doesnt deceive the electorate. Someone who signals a major change BEFORE an election and then implements it. It’s been done you know.

        It doesn’t take much courage to deceive.

        • As I noted, no politician is ever likely to be voted in on a platform of cutting people entitlements. Not because they are ‘being honest’, but because any opposition will offer the electorate a future laced with magical alternatives. How else do you suggest we get courageous leadership ‘in’…..

          • Howard went to the electorate before he brought in a new Federal tax- the GST. At the time there was heated argument against it. It turned out to be the proper thing to do.

            I know many disparage the man and I too dont ascribe to many of his Govt’s policies. But you knew where JWH stood and therefore where you stood.

          • I know many disparage the man and I too dont ascribe to many of his Govt’s policies. But you knew where JWH stood and therefore where you stood.

            Indeed. So even though he didn’t say a word about Workchoices in the lead up to the 2004 election, no-one with any intelligence was surprised when it was announced and implemented. You always knew Howard would favour those in power over the average punter.

          • Conveniently ignoring the deceiving of Australia with the CO2 tax?
            To the fallacies so soon ? I thought we were talking about how you “always knew where JWH stood” ?

          • dumb_non_economist

            GSM,

            Howard could afford to be honest about the GST, the Keating gov was very unpopular and was going as far as voters were concerned, so he took very little risk.

            I don’t see how you can compare the GST to the Carbon Tax.

        • Doc,

          No, we were actually talking about;

          “…..the courage of a Leader who doesnt deceive the electorate. ”

          … and highlighting your critique of JWH while conveniently ignoring the great big lie of the current Govt who does deceive the electorate. That’s not clear?

          Fallacy? Dreaming again doc?

          dumb,
          The comparison is pretty clear. It’s about courage and cowardice. Howard put his job on the line when introducing an unpopular new tax. Gillard’s new tax however is borne of a deceit of the electorate.

          Please dont bother with the spin reply. “Oh what a tangled web we weave…..”

          • No, we were actually talking about;“…..the courage of a Leader who doesnt deceive the electorate.
            So your position would be that “JWH” lacked the courage to take Workchoices to the electorate and therefore deceived them about his actual intentions, right ?

            ”… and highlighting your critique of JWH while conveniently ignoring the great big lie of the current Govt who does deceive the electorate. That’s not clear?
            I made no statements whatsoever about the current Government, nor have I expressed support for them.

            I will note, however, that official and documented Labor party policy going into the last election (and the one before that, along with the Liberals) was to implement a carbon pricing scheme. Which is a lot more than could be said about Workchoices.

          • doc,

            I’ve heard all this Govt’s spin and deceits, but thanks anyway.

            And as to your support, no clarification is necessary either.

          • Is this the same guy who introduced Australia to ‘Core’ and ‘Non-core’ promises?

            That aside, going forward given Abbott’s propensity to make statements without checking the facts is hardly makes the next Government a beacon of honesty either.

          • Wing Nut,

            Here is the quote;

            “I know politicians are going to be judged on everything they say but sometimes in the heat of discussion you go a little bit further than you would if it was an absolutely calm, considered, prepared, scripted remark,” he said.
            “The statements that need to be taken absolutely as gospel truth are those carefully prepared scripted remarks.”

            Hmmmm….”I know politicians are going to be judged on everything they say…. ”

            With an election at stake Abbott knew what he was about to say, ie the unpleasant truth, but went ahead anyway. It often takes honorable people with courage to state a controversial truth , while cowards with nothing to lose look good throwing rocks at it.

            However, people can spot the real deal liar . It’s something you just, know. Demonstrated in this link below. Is this why our honourable PM only confines her “impromptu” visits to kindergartens and Union meetings nowadays?

            http://www.youtube.com/watch?v=n8rsyg0lkkM&feature=player_embedded

          • I’ve heard all this Govt’s spin and deceits, but thanks anyway.

            So implementing published policy is “spin and deceit”, but implementing unpublished and unmentioned policy is “courageous” ?

            That’s a mighty impressive cognitive dissonance you’ve got going there. Heck, you can’t even blame Workchoices on Howard having to compromise with some other political party. It was all him.

          • dumb_non_economist

            GSM,

            Again, he took very little risk as the Keating Gov was on the way out, and everyone new it.

            As to comparing the two taxes, the carbon tax comes nowhere near the GST on its impact and in addition I disagree with you that it was an issue.

    • Janet says:

      Spending cuts have to happen now, because there will never be a better time to do it.

      Channeling the neoliberal gurus Ronald Reagan and Margaret Thatcher again, are we?

      The problem with “austerity” is that in practice, as opposed to in theory, the outcome it achieves is always the same: wretchedness for the masses and untold wealth and opulence for the transnational capital class. Or as the Mexican writer Carlos Fuentes so eloquently put it:

      **quote**

      The country was threatened with an acute case of schizophrenia. A minority centered their lives on the New York Stock Exchange, and a majority on the price of beans. One economy was all gilded wrapping paper, the other all huts and untilled land. The former was the minority’s, the latter the majority’s.

      CARLOS FUENTES, A New Time for Mexico

      **end of quote**

      • glen,

        Your analogy isn’t altogether accurate of the circumstances.

        Large parts of Europe’s “masses” have been gifting themselves very generous pensions and retirement benefits for decades. Socialist leaders are reducing retirement ages while the more responsible hardworking saving populations are expected to pay for them? There is a huge mature culture of Socialist entitlement in Europe.

        The truth is it’s pay the piper time. If the masses are looking for scapegoats or even root causes to their ills, they will need to look in the mirror as well as at their elites.

        A better outcome will result.

        • I think that even if we look even at Europe’s great “success” story, it belies your assertions.

          A recent BBC article attributes German’s “success” to three factors:

          1. “There is no doubt that Germany has benefited greatly from the euro.

          By getting into bed with more sluggish economies in southern Europe, Germany adopted a much weaker currency than would otherwise have been the case – as one of the very few countries in the world running a balance of payments surplus, the deutschmark would have been a great deal stronger than the euro.

          This has provided a terrific boost to German exports, which are cheaper to overseas consumers as a result.

          2. “Just as important are the relatively low levels of private debt.

          3. “…the Social Democratic government was able to use its close ties with labour unions to push for moderation in wage inflation.

          http://www.bbc.co.uk/news/business-18868704

          If we compare the fortunes of labor in Germany to those of transnational capital, what we see is that Germany did exactly the same thing China did, which is to murder labor, while concomitantly rewarding transnational capital, and embarking on a quest for demand externally rather than internally:

          **quote**
          Net real wages in Germany have hardly risen since the beginning of the 1990s. Between 2004 and 2008 they even declined. This is a unique development in Germany-never before has a period of rather strong economic growth been accompanied by a decline in net real wages over a period of several years. The key reason for this decline is not higher taxes and social-insurance contributions, as many would hold, but rather extremely slow wage growth, both in absolute terms and from an international perspective. This finding is all the more striking in light of the fact that average employee education levels have risen, which would on its face lead one to expect higher wage levels. In contrast to the prevailing wage trend, income from self-employment and investment assets has risen sharply in recent years, such that compensation of employees makes up an ever shrinking percentage of national income. Inflation-adjusted compensation of employees as a share of national income reached a historic low of 61% in 2007 and 2008.

          http://ideas.repec.org/a/diw/diwwrp/wr5-28.html

          **end of quote**

  4. Schnitzelburger

    I think it says something about central bankers when this guy makes it into the top ten with a respectable B+

    Sanusi Lamido Sanusi, Nigeria

    2012 Grade: B+

    2011 Grade: B+

    Core inflation: 12.0%

    Unemployment: 23.9%

    Benchmark interest rate: 12%

    • good story, apply that to about 99% of those poor suckers here that took out the first home buyer bribes. Cant sell, cant move, for the next decade.

      i love how its always called the “property ladder” though, like its some stairway to heaven.

      “Many had assumed they were getting on the first rung of the housing ladder, and having put down substantial deposits, they would be able to move to larger properties in years to come.”

      oops bad assumtion.

      “Now some of them face having to go back to their parents for further help, to get on the next rung of the property ladder.”

      when are these idiots going to realise they arent actually on a ladder, they landed on snakes.

  5. Très intéressant : “Market News International is reporting that the German Finance Ministry may ask Greece to exit the euro “temporarily” while it straightens out its finances.”

    • Farewell I meant to say…
      Edit button please.

      Abbot’s plans frighten me. He, as a representative of the generation BB, seems to be on the path of making sure gen Z et al will not be entitled to anything unless they are born to wealthy parents.

      Can those who are averse to public services funded by government please explain how you justify accepting large chunks of government funding for private services?

      If the Government cut spending on private services to concentrate on funding public services primarily, wouldn’t the end result be decreased fees on the private side?

      My comments are not against private schools. We are currently in the public system because we don’t want our kids to grow up in the cocoon of the “prestigious” club although financially we could. They need to learn to value all components of the society we live in, and that money doesn’t fall from the trees. So for our kids part of the educational path is through the public system and the later years may be private -unless I cannot handle the level of inequaility in the end, and our family of four goes back to where we came from.

      Reading stories like this makes me sick.
      http://www.heraldsun.com.au/news/victoria/landlords-are-ripping-off-desperate-renters-living-in-squalid-houses-amid-melbournes-worsening-rental-crisis/story-e6frf7kx-1226458051425

      • Goldilocks,

        “If the Government cut spending on private services to concentrate on funding public services primarily, wouldn’t the end result be decreased fees on the private side?”

        If the Govt cut spending on deliberate hordes of waste, bad policies, useless subsidies, white elephant projects and chose to take a pro- business stance that actually creates (taxable) wealth, then funding public services within it’s means becomes much more doable.

        Are you ignoring that the Govt currently is in massive debt? Or does your sense of entightlement trump sound public finances?

        • Hi GSM. Maybe I really am a bit thick when it comes to cost-effectiveness, particularly when it comes to education. My husband gave me a kind lecture on the topic this morning and I accept I need to read more and learn more about the system.
          I am a product of the “welfare state” that has taken pride in education, so I am very biased and perhaps brainwashed from birth. One of the first things I was taught at school was that it was a lottery win to be born in Finland. 😉

          • Goldi,

            If you are here at MB reading and learning, I refuse to believe you are in any way thick.

            Best of luck to you and your family.

        • Mate, every last entitiy spending big on something (or spending small on somehting) wastes a very large portion of it. Period.

          • Gunna,

            No argument.

            But when it’s YOUR money at stake, it’s advisable to demand the best value for (your) money. No matter who is in Govt.

            Sorry, but I cannot see any mileage for anyone in defending wasteful Govt spending. In doing so your handing Govt a checque so they can screw you and those that most need/deserve assistance.

          • I would observe

            ‘it’s YOUR money at stake’

            For the average Australian in debt to 150% of disposable income then it simply never is a case of ‘YOUR’ money. Its actually someone elses money which any given individual is now acting as agent for.

            ‘it’s advisable to demand the best value for (your) money. No matter who is in Govt.’

            Which given Australia’s one party political system (with a blue suit and a grey suit), means that it is a matter of deciding whether function are undertaken or not. In terms of the end recipients of a system (health spending, education spending, welfare spending, infrastructure spending, you name it) there is no difference between a private system or a public, except that the private is generally seen as more pernicious (for end users) and more overtly focussed on generating a buck, and invariably heavily reliant on trashing the public alternative in order to build a margin into whatever service is being talked about.

            ‘I cannot see any mileage for anyone in defending wasteful Govt spending.’

            If you see spending as inherently wasteful then it becomes a question of who does the spending and why? and who gets the benefit of the spending?

            On the one hand you can have the APS, with better conditions for employees and far more oversight and car about probity of how the spending is undertaken (which taxpayers pay for, I know) or a private system where organisations will pay whatever they can get away with, not car particularly much at all about the efficieny of spending or the public implications of it, and always build in a profit margin that the end users have to carry (I am not saying there is anything illogical about it as far as the firm is concerned but when it is public expenditure you have to wonder whether any societal outcome must of necessity be better done by building in a profit margin for a private sector agent). Sure you can bag the fatcat public servants (most of them arent, but thats another discussion) but facat private servants have no greater concept of public good and dont generate more economically efficient societal outcomes for a public consumption.

            ‘In doing so your handing Govt a checque so they can screw you and those that most need/deserve assistance.’

            You are handing the government a checque anyway, and as previously mentioned those most needing/deserving assistance are invariably screwed anyway…..

          • Gunna,

            Hmmm, sounds a lot like convoluted spin to me, but there you go. I was referring to Govt expenditure, taxes…. not household debt.

            “those most needing/deserving assistance are invariably screwed anyway…..”

            Fear not! Some are waking up that to be a massive recipient of Govt aid doesn’t mean prosperity or a better future for your kids. My hat is well and truly off to the wonderful people of the bush in the NT. A landmark change happening there in case you missed it.

            4 from 4 in recent polls. People are a wake up to the so called well intentioned kindness and generosity of the Left.

          • Sorry, but I cannot see any mileage for anyone in defending wasteful Govt spending.

            You seem pretty happy to champion the Howard Government that wasted a mining boom on middle class welfare and tax cuts for the wealthy.

          • Cheers GSM

            ‘Hmmm, sounds a lot like convoluted spin to me, but there you go.’

            Strange you should say that, for I have felt exactly the same way whenever anyone goes on for more than a couple of minutes about the iniquities of government outlays.

            And, with all due respect (and I respect your right to have a differing opinion and agree that in some cases it is one that is plausible) I suspect I have been hearing far more from the point of view you espouse (usually from those in power telling me it is government policy) than you have from people espousing anything similar to what I am saying. As has the Australian body politic for more than a generation. And I find you have summed my thoughts nicely. It sounds like a lot of convuluted spin.

            ‘I was referring to Govt expenditure, taxes…. not household debt.’

            Well the government ultimately derives its expenditure base from households, and those households owe an awful lot of money. And government policy has for a generation been to open up scope for increasing debt by individuals while narrowing down the scope of its outlays. Which sort of has me wondering where we go if someone were to consider what happens if there is less scope for increasing individual debt going forward.

          • Gunnamatta said:

            I suspect I have been hearing far more from the point of view you espouse (usually from those in power telling me it is government policy) than you have from people espousing anything similar to what I am saying. As has the Australian body politic for more than a generation.

            In Ponerology, the Polish psychologist Andrew M. Lobaczewski argues that the Vatican and epicenter from which the disordered neoliberal gospel radiates is the United States:

            **quote**

            In the present day, when the United States is well on the way to becoming a full-blown pathocracy, and is thus the source of contamination, spellbinders for the deviant reality promote “American style” economics and “culture”…. Most people do not understand that the first step to becoming part of the global pathocracy that America is attempting to impose on the world is to become part of the economic system as it is formulated in America.

            **end of quote**

            Then just a couple a days ago I began reading a book by Nancy Snow—-Propaganda, Inc.: Selling America’s Culture to the World—-that goes into the nuts and bolts of how America is evangelizing its sociopathic neoliberal gospel across the globe. Here’s how she describes the political and economic model the US is attempting to impose upon the world:

            **quote**

            The USIA [the global propaganda arm of the US government] uses “national security” and “democracy” interchangeably with “free enterprise” and “the free market.” Economic prosperity is defined as “expand exports, open markets, assist American business, and foster sustainable economic growth.” “Democracy” means a system in which business interests and their government allies make political decisions that run the free enterprise system of private profit and public subsidy, i.e. the military-industrial complex. The people are permitted to endorse the decisions of their leaders by voting occasionally, but otherwise are not expected to meddle in the affairs of the private/public partnership. This neoliberal model of market democracy is not based on a participatory ideal of politics but on one in which the public’s role is minimized, and transnational (and thus publicly unaccountable) private interests carry out political and economic decision-making. Economic prosperity becomes narrowly defined as that condition by which corporations can function free of any government regulation of their bottom line while relying on government intervention in the form of tax breaks, corporate welfare, and related business assistance.

            **end of quote**

  6. Dr Smithy

    When you are a small businessit is the Unions. The Govt and any other moron who decides they are going to stick their nose in your business that have the p[ower

    On this Fair Work thing…answer me this

    I have a bloke working for me. His workmates complain about him. Every person in the business wants him out of there but he can’t be fired.
    Someone explain to me one good thing about this situation…please…just one of you smart alecs, that are at Uni or work in the PS, that know everything about Work Choices and how bad it was and all about Fair Work and how just plain Utopian it is!!
    Am I cranky? You bet! This stuff can destroy a business and cost everyone their jobs.

    • dumb_non_economist

      Flawse,

      No offence, but what do you want? Lets say they allow employers to terminate for no reason, what will be the result then? You may be a fair and reasonable employer, but I’ve seen plenty who aren’t and the power will usually reside with the boss.

      • I want to be able to fairly, reasonably, after a warning or two, unless the misbehaviour has been way out of court, to be able to dismiss a bloke who breaches every piece of good-will a business extends to him.
        I want to be able to stop paying a bloke who will not attend work especially when my home, family, and life’s work are at risk.
        I need to be able to do something for my other employees, when they are complaining that their lives are being made difficult by the non-performance of a bloke that I can and will do something about it.

        In my warehouse there are three storemen full time. If one doesn’t show up the load on the others is increased 50%. Is this fair to those employees? The other bloke is sitting at home, still collecting more sick leave, long-service leave and holiday pay while they are working their butts off to try to keep things going.

        Never mind notions of fair between management and staff. So again you lot tell me is this fair to the other employees for a start.

        • I want to be able to fairly, reasonably, after a warning or two, unless the misbehaviour has been way out of court, to be able to dismiss a bloke who breaches every piece of good-will a business extends to him.
          Which is basically the intent of current laws.

          Do you have an employment contract with this person to be at work by a certain time and/or for a minimum number of hours per day/week ?
          Have you documented his repeated violation of this contract ?
          Have you given him fair warning to shape up or ship out ?

          If so, I struggle to believe you’d have any serious trouble dismissing him.

          Never mind notions of fair between management and staff. So again you lot tell me is this fair to the other employees for a start.
          The problem is not when there is a legitimate case, and no-one, at any point, has suggested employers should not be able to dismiss employees at all.

          The problem is when dismissals are malicious, frivolous, used as an “example” to everyone else, or just simple nepotism. That is why the laws exist.

    • Bang on flawse!

      Had the same situation as a manager in the past. Just one guy making life miserable for everybody. We’d put him on notice and he’d be Mr Perfect for a couple of months and then regress. He finally went in a redundancy when the business was sold.

      BTW I run a small business producing electronic products. Do I employ anyone? not in a pink fit – I outsource all my manufacturing. Once these crazy dismissal laws are repealed I will consider puting people on. You only have to look at the disaster that is Europe to see where this all ends up.

      • Ian,

        “Do I employ anyone? not in a pink fit”

        And you know, there will be those who actually cannot understand why? After all, all employees are so loyal, hardworking and trustworthy. FWA says so.

    • When you are a small businessit is the Unions. The Govt and any other moron who decides they are going to stick their nose in your business that have the p[ower
      No, I’m pretty sure that as the employer, and holding an individual’s livelihood at stake, you’re the one with the power. Especially when the vast, vast majority of employees, on an individual basis have zero bargaining power since their skills are not unique. Certainly the theory used by most managers these days is that people are just generic cogs in a wheel and can be replaced at any time.

      this Fair Work thing…answer me thisI have a bloke working for me. His workmates complain about him. Every person in the business wants him out of there but he can’t be fired.
      Why not ? What prevents you from doing so ? Be specific.

      Am I cranky? You bet! This stuff can destroy a business and cost everyone their jobs.
      So what do you want ? The ability to fire anyone at any time for any reason ? To rule your employees through fear of unemployment and destitution ?

      • flawse,
        You can see from these oh so informed responses, what you and our Nation are up against. Because you have the courage, initiative and drive to better yourself and your family, automatically you are to be penalised for being just that , in their eyes. You are an evil capitalist, don’t you know?

        The fact you are risking YOUR money, YOUR asset , YOUR future on YOUR enterprise doesn’t get matter. And yet, the same people call you a rent seeker no doubt!

        Your story is very accurate. I have a dozen or so like that working for me. I call them BLUDGERS. Or parasites. They are taking up space that should be given to others far more willing and deserving.

        Doc,
        “the theory used by most managers these days is that people are just generic cogs in a wheel and can be replaced at any time”

        “To rule your employees through fear of unemployment and destitution ?”

        Where do you get this drivel? From the handouts at the Union meetings? The vast majority of modern Australian business is nothing like this. They cannot get enough skilled good workers. You think they will alienate them? Madness.

        And, absolutely yes. The freedom to hire and fire is exactly what is needed. That way, business owners will end up with largely better more productive workforces. Not the dross we encounter so often. Ever risked your money on a business with emplyees? Until you do, you are not qualified to have an informed opinion.

        The world is not the Public Service you know. And don’t worry. Your much loved Socialist Govt will see the job bereft right. Or will they balls that up too?

        • doc,

          “Why not ? What prevents you from doing so ? Be specific”

          Do your research and find out. I have been through the process a few times.

          In effect the current FWA (or Union Protection Rackets) regime encourages workers to be cardboard cut outs at work with impunity and discourages small business from hiring.

          What a smart move.

        • dumb_non_economist

          GSM,

          For the long time I’ve been reading Flawse’s comments he has come across as a very smart and usually reasonable person, whom I’d say would be a good employer. However, with your comments about some of your employers I’d say it’s because of the likes of you that FWA have the restrictions that they do!

        • @ GSM

          Your radical individualism is the product of decades of propaganda. The success or failure of any individual person, or any individual business as far as that is concerned, is a combination of both individual and structural factors. The denial of the role of structural factors in an individual’s success is as much of a distortion of reality as the denial of the role of individual factors.

          And of course radical individualism, and this is true whether it be exhibited by either management or labor, is a completely immoral philosophy.

          As this outstanding NPR program points out, in dysfunctional management-labor relations there’s plenty of blame to go around:

          http://www.npr.org/templates/story/story.php?storyId=125229157

          But you seem to be on a one-sided search for evidence that supports your labor-bashing theology.

          What boggles the mind is how many poor and working-class people buy into the half-truth that structural factors don’t matter. In his incisive ethnographic study, Code of the Street: Decency, Violence and the Moral Life of the Inner City, Elijah Anderson calls these folks “the decent daddy” and “grandmother” types:

          **quote**

          Racism, the changing economy, unemployment, and changing social values all affect the people in the community. But the grandmother, particularly if middle-aged or elderly, often takes an ideologically conservative view and tends to have little tolerance for structural explanations. Given her prior experience in the local community in the days of the manufacturing economy, in matters of idleness and unemployment she is ready to blame the victim, because she feels that there is work to be had for those who are willing to do it and that people can abstain from doing wrong if they want to. It is her belief that the various social problems plaguing the community stem more from personal irresponsibility than from any flaw in the wider system.

          **end of quote**

          In “Reciprocity and the Welfare State,” Christina M. Fong, Samuel Bowles and Herbert Gintis cite some surprising polling information as to the proportion of “decent daddy” and “grandmother” types extant in the poor population:

          **quote**

          …striking is the fact that among the respondents with annual family incomes of less than $10,000 who did not expect to be better off in five years, 32 percent report that the government should not redistribute wealth by heavy taxes on the rich, and 23 percent say the poor should help themselves rather than having the government “make every possible effort to improve the…position of the poor.”

          http://www.contrib.andrew.cmu.edu/~fong2/RECIPR_1July04FINAL.pdf

          **end of quote**

          This study also helps explain why the American ultra right, when it comes to managing public perceptions and sentiments, is light-years ahead of the left. While the American left was out in some post-Marxian, post-Freudian, post-structuralist LaLa Land, Reagan was busy driving home the fiction of the “welfare queen.”

          During his 1976 presidential campaign, Reagan would tell the story of a woman from Chicago’s South Side who was arrested for welfare fraud:

          **quote**

          She has eighty names, thirty addresses, twelve Social Security cards and is collecting veteran’s benefits on four non-existing deceased husbands. And she is collecting Social Security on her cards. She’s got Medicaid, getting food stamps, and she is collecting welfare under each of her names. Her tax-free cash income is over $150,000.

          **end of quote**

          • Glen you are just another extremist with ideologically pure views.
            I’m sure you’ll fix the world in the end when everyone follows your preachings to the letter.

      • drsmithy,

        You seem to assume there’s a big ugly employer and a meek subserviant employee. That’s stuff of the 1900’s. The point I want to make is that for everyone in a business to do well you need harmony, productivity and continuous improvement. Just as you fine tune your products you need to do the same with your employees either by investing in them via training or dismissing them because they don’t add any value to the enterprise. When government interferes with that process then distortions occur.

        • You seem to assume there’s a big ugly employer and a meek subserviant employee.
          No, I assume that the employer typically has a more powerful bargaining position than the employee. Which is perfectly true most of them time.

          That’s stuff of the 1900′s.
          Indeed. The era that our resident right-wingers desperately want to get back to.

          The point I want to make is that for everyone in a business to do well you need harmony, productivity and continuous improvement.
          Funny, that’s the point I was intending to make.

          When people are aware they could be out on the street with no income at the drop of a hat, for no real reason, how do you envisage that promoting “harmony, productivity and continuous improvement” ?

          Just as you fine tune your products you need to do the same with your employees either by investing in them via training or dismissing them because they don’t add any value to the enterprise. When government interferes with that process then distortions occur.
          So again I’ll ask, what prevents employers from dismissing employees who are genuinely disruptive, abusive, or unproductive ?

          • Dr Smithy
            How many people do you employ? What sort of empoyment do you provide?
            How do you manage governemt that comes into your business interfering with its sensible running but when challenged on their ideas just say ‘well if you don’t do it I am going to fine you $xs000. No reaon. No logic. No justification.

            “When people are aware they could be out on the street with no income at the drop of a hat, for no real reason, how do you envisage that promoting “harmony, productivity and continuous improvement” ?

            People aren’t out on the street for no reason. That is what all the lies that were told want people to believe. That was a straight lie still is and anyone with any intelligence knows it was a lie. It’s amazing it is one that is still repeated.
            When you have a good employee you look after them. Good employees are damned hard to get. They need time with their family..we want them to have it. Their wife is sick…we want them to go home and look after her. Their kids are sick…hell we are about family.
            In any case you always get back many times what you give. That’s how good people work together.
            Yet somehow I’m supposed to keep some lying p…k that won’t show up for work and always lies with some excuse.

            So you didn’t bother addressing the question I posed. So I’ll ask again.
            Just explain to me why I and my fellow workers should not only have to put up with that crap but that in the process this bloke will earn more dollars per hour worked than others who come to work?

            Surely, with all your knowledge and obvious expertise, you can give me the answer I seek.

          • Of course the employer should have more barganing power – they own the enterprise – in most cases including mine they put their house or other assets on the line. The employee doesn’t.

            Don’t know how to do italics – maybe you can clue me in here – but to copy you

            ***

            When people are aware they could be out on the street with no income at the drop of a hat, for no real reason, how do you envisage that promoting “harmony, productivity and continuous improvement” ?

            ***

            People do not get dismissed “for no real reason”. There’s always a reason usually a very good one. If someone is contributing to profits they do not get dismissed. If they don’t then they should be.

            To your last point – you can dismiss disruptive employees. But the State has made a point of supporting the employee. So they work the system – take the dismissal to arbitration. Then the “go away” money comes into play. That’s what I meant by government induced distortions.

          • So again I’ll ask, what prevents employers from dismissing employees who are genuinely disruptive, abusive, or unproductive ?

            WHEN he is at work he is not disruptive. He is not abusive. WHEN he is at work he works reasonably well.
            He just doesn’t show up for work and brings some excuse every time.
            The only way he can be dismissed is to go to Court, have his fellow workers testify against him about his lies. First that is unfair on everyone else in the place. Second the cost to me would likely run to $100,000. He would have support of a Govt legal team, it would cost him nothing and under the current laws it seems doubtful I could get the result that the business needs.

            Now you know it all you and are an obvious expert on employing people tell me how it is to be done.

          • Specifically 4.3 and 4.4.
            I’m not seeing anything there that would prevent the dismissal of a genuinely negligent, abusive or unproductive employee.

          • When you have a good employee you look after them. Good employees are damned hard to get. They need time with their family..we want them to have it. Their wife is sick…we want them to go home and look after her. Their kids are sick…hell we are about family.
            It’s great if you do this, but there are plenty who don’t, particularly as the size of the business increases. People who fire someone because they want to employ a friend instead. Who fire someone because they don’t like their personal beliefs. Who fire someone because they want to rehire on a lower wage. Etc.

            Yet somehow I’m supposed to keep some lying p…k that won’t show up for work and always lies with some excuse.
            If you have a contract with an employee to turn up at a certain time, and they’re not, and this behaviour is documented, I struggle to believe warning and subsequently dismissing them would be particularly difficult.

            I have seen too many people dismissed for no real reason to accept that getting rid of someone who _genuinely_ isn’t doing their job is that hard.

          • Of course the employer should have more barganing power – they own the enterprise – in most cases including mine they put their house or other assets on the line. The employee doesn’t.
            Pretty sure most employees have their livelihood at stake if they can’t find work, or lose the job they do have. The numbers might be smaller, but the principle is the same.

            Don’t know how to do italics – maybe you can clue me in here – but to copy you
            Hopefully this will come out:

            Put <i> at the start of whatever you want to be in italics and </i> at the end.

            <i>When you type it in it should look like this.</i>

            And it should display like this when posted.

            People do not get dismissed “for no real reason”. There’s always a reason usually a very good one.
            I’ve seen it happen. More than once.

            Further, the theory that “good employees aren’t just discarded” can be equally turned around to say that “good employers won’t have problems with their employees”. Both are equally pithy statements, though both cover the majority of situations.

            However, the law isn’t there to handle normal behaviour, it’s there to handle conflicted behaviour.

            To your last point – you can dismiss disruptive employees. But the State has made a point of supporting the employee. So they work the system – take the dismissal to arbitration. Then the “go away” money comes into play. That’s what I meant by government induced distortions.
            The “State” supports the employee because of the aforementioned power imbalance. Protecting the weak from the strong is, after all, one of the State’s primary purposes.

            These laws do not exist in a vacuum. They exist because in the past employers have been abusive and exploitative, and because today many continue (or have aspirations) to be. As I said above, good employers and employees have never been a problem for either side of the equation, but the position you are arguing is that the employer is always right.

          • If you have a contract with an employee to turn up at a certain time, and they’re not, and this behaviour is documented, I struggle to believe warning and subsequently dismissing them would be particularly difficult.

            Dr Smithy..Aren’t you reading…that’s the problem. YOU CANT.

            When this bloke shows up for work…he shows up on time!!! He just isn’t there about 20% of the time…90% of that on Mondays.
            I’ve consulted on this case. it has already cost me more than $1000 in legal fees.

            Re socialism…the trouble with you modern socialists is that you are actually extremists. You don’t listen. You don’t think. Everything has to fit into your own limited model of what the real world is really like.
            Take you for instance. You sit here arguing for an extreme law based on zero knowkledge of work places, you employ no one; you know nothing of the Law involved. Yet you can sit here, along with this American Glen, and tell all the rest of us we should have no rights.
            More than that you are trying to tell other workers in private enterprise that they have no rights either.
            Everyone has to cow-tow to your version of reality. It doesn’t matter whether it is right or wrong.

            Just by the way under Work Choices I could not summarily dismiss an employee!! But let’s ignore that fact in favour of extremist Union lies broadcast in paid TV advertisements.

          • Aren’t you reading…that’s the problem. YOU CANT.
            The _law_ certainly doesn’t prevent you from doing so. At least, none of the laws that have been referenced so far.

            He just isn’t there about 20% of the time…90% of that on Mondays.
            So he’s not fulfilling the obligations of his employment contract ?

            Re socialism…the trouble with you modern socialists is that you are actually extremists. You don’t listen. You don’t think. Everything has to fit into your own limited model of what the real world is really like.
            Bullsh*t.

            The only people in this discussion promoting extremist viewpoints are you and GSM. The single best example of this is the constant bandying around of the term “socialism”, despite no-one in this discussion, nor any remotely mainstream political party in this country, promoting policies that could reasonably be deemed “socialist”.

            Unless you’re subscribing to the American definition of socialism, which seems to be that any Government policy not putting the desires of private industry first and foremost over anything else, is “socialism”. In which case refer back to my point about who has the extremist viewpoint in this discussion.

            As for fitting the real world into a limited model, what is “cut taxes and shrink Government” – the far right’s solution to everything – if not that ? Where is the nuance ? Where is the evaluation of individual situations on their merits ? Where is the consideration for anything except maximising profitability ? All you have is a hammer and you want to treat every problem like a nail.

            Take you for instance. You sit here arguing for an extreme law based on zero knowkledge of work places, you employ no one; you know nothing of the Law involved. Yet you can sit here, along with this American Glen, and tell all the rest of us we should have no rights.
            Bullsh*t.

            The law as it stands today is not even close to “extreme”. No-one outside of your fevered imagination is even _suggesting_ you not have the ability to dismiss genuinely disruptive, redundant or unproductive employees, let alone arguing for it. We are making the point that an inherent power imbalance (usually) exists, that employers have been quite abusive and exploitative in the past, that they continue to be so today when given the opportunity, that laws need to exist to address these problems and that they need to come down on the side of the weakest participant by default.

            Incidentally, telling someone who has been in the workplace as employee and manager they have “no knowledge of workplaces” is rather insulting. Pull your bloody head in and calm down.

            More than that you are trying to tell other workers in private enterprise that they have no rights either.
            Grossly hypocritical coming from the guy who wants to be able to turf someone out of a job at any time on a whim. The only person arguing that employees should have no rights is you. It’d be funny, in a tragic sort of way, if I didn’t think you were serious.

    • When you are a small businessit is the Unions.

      This is another argument that’s become comically disingenuous. Not even 20% of the workforce belongs to a union today.

  7. “the theory used by most managers these days is that people are just generic cogs in a wheel and can be replaced at any time”

    Hells bloody bells…Yep that’s the sort of stupid c..p the whole society has to put up with from the ignorant who seem to hold sway in this country these days.
    The rest of us are just cogs in their political wheel.

    • flawse Relax.

      I enjoy reading your writings and agree with most of it – actually all of it. This is a great site – we have Janet, GSM, minebots and mostly quality input from the right and left. Although I feel it’s getting more leftish. Maybe they have more time on their hands than we do.

      Australia needs another Keating banana rebuplic moment. A real shakeup.

    • Hells bloody bells…Yep that’s the sort of stupid c..p the whole society has to put up with from the ignorant who seem to hold sway in this country these days.
      No, that’s the kind of thing employees get to hear when some manager decides he doesn’t like someone and wants to replace them.

      Never mind that the person has months or years of experience that will be lost (and further months lost training his replacement). No, because he’s a low-level employee, he should be immediately and easily replaceable with no impact whatsoever to the business.

      • You appear to have a particular gripe. So in this case a manager decided to terminate a very experienced employee because he/she didn’t like him/her. And then put the company to great expense to retrain a new employee?

        • You appear to have a particular gripe.
          So do most of the people railing against “socialism”, it seems. Hopefully that doesn’t make any of our opinions less valuable.

          I have a few specific examples, yes. Most of these are from my time working in the US, but since that’s presumably the employment model GSM and flawse want in Australia, they seem relevant.

          So in this case a manager decided to terminate a very experienced employee because he/she didn’t like him/her. And then put the company to great expense to retrain a new employee?
          No more expense that training a new employee would otherwise be – but that’s typically anywhere from 1-6 months (depending on the role and job type) of someone on payroll with significantly lower productivity.

          However, that’s what happened in one case. It was a decision made above that person’s direct manager, who thought it was as stupid as the rest of us did.

    • dumb_non_economist

      Flawse,

      I’ve worked for some very small companies and also large multinationals. With the small companies in the work I do I’ve met/know a large number of the owners/managers and a high proportion of them I’d describe as problematic to work for due to their personalities and willingness to wield the stick. In case of the multinationals I’ve come across a number of managers who wouldn’t hesitate to get rid of someone on a personalty issue alone and wouldn’t care less about the cost to the company and they would get support from their direct reports.

      I’d add I’ve never had any issues with any of my previous employers and would be able to return to any of them. I’m sorry that you have been caught by this, but from my experience employees need protection, though I’d say from some of the reported over-turnings of dismissal (for theft etc) a revision would seem in order.

      • Thanks DNE

        That’s the point here. It has to be a two way street. Otherwise everyone suffers not just the owner of a business but his/her employees also

        • That’s the point here. It has to be a two way street. Otherwise everyone suffers not just the owner of a business but his/her employees also

          The only people arguing for a one way street – employers always have all the power in this example – are you and GSM.

  8. Im coming round to your way of thinking on the “worlds best central banker” thing DE.

    That 5% CPI print in 08 was unacceptable. but the inflationary pressures had been building for years under bubbles Macfarlane. Stevens took and kept rates too low in 09 but that was a pretty crazy time. The last couple of years hes been doing pretty well managing all sorts of forces coming at him from pretty much every angle and he does seem to have a very good handle on things. I think you might be right about this one.