verging_on_random

Corporate ethics

Imagine this situation. A (male) friend tells you that he came upon a hot young girl at a party, totally off her tree, and so he took advantage of her, knowing she would never remember who it was. When you protest that this was a pretty sleazy thing to do he gets very resentful. “Hey,” he says, “There were some nasty guys at the party. If I hadn’t raped her someone else might have and at least I didn’t really hurt her.”

So what do you say to your friend …. “Oh well that’s OK then?”

Or picture you and a friend walking along the street and there’s a house with the front door open. Inside the door there’s a table, with a shitload of money on it. Your friend walks up and pockets the money. You tell your friend to go put it back but s/he responds “Look the money was in full view of anybody walking past, sooner or later somebody else would have taken it. At least I didn’t crap on the carpet and you and I can use the money to have a good time, which is better than letting some other wankers do it.”

Do you nod agreement, saying “Oh yeah, I see now that you’re right.”

Hopefully most people would respond that no, rape or theft is wrong and you shouldn’t do it, even if someone else is likely to do it if you don’t. Wrong means wrong, and isn’t excused because other people might be prepared to do wrong.

Now read this from today’s Sydney Morning Herald (p 15):

If coal exports from the proposed Anvil Hill mine do not go ahead, not one molecule less carbon dioxide will be emitted to the atmosphere, because the overseas customers for the coal will simply buy it elsewhere … the investments, jobs, taxes and royalties that now benefit all Australians … will go elsewhere.

So there you go … we might as well do it because if we don’t, somebody else will. Kind of like “If we don’t sell cigarettes to the kids they’ll simply buy them elsewhere … if we don’t bribe Saddam to buy our wheat he’ll simply buy it elsewhere.”

What a pathetically bankrupt approach to corporate ethics, which unfortunately in my experience is all too common amongst Australian managers.

PS: the guy who wrote the Herald article is the executive director of the Australian Coal Association … but you already guessed that didn’t you.

The alternative prime minister

I despise John Howard and his government. I know that most people don’t feel as strongly as I do but even so, it’s hard to find people who speak of the Howard Government with any real warmth or admiration. So why has it been in power for more than 10 years, and why does the betting currently favour its return in 2007?

No doubt the reasons are complex but surely the explanation lies partly in the uninspiring nature of the opposition. It’s all very well to say that oppositions don’t win elections, governments lose them, but the perceived quality of the alternative government must influence voters’ willingness to throw a government out. Morris Iemma must be hoping so, at any rate.

Which explains why I despair of Kim Beazley. After a lifetime in politics his judgement and communication skills are still so flawed I wonder if he can ever mount a serious challenge to John Howard. I said as much recently when he made his idiotic ‘Oops, wrong Rove” gaffe. My frustration was not because he obviously had no idea who Rove McManus was - hey Kim, join the club - but because he chose to say anything at all about the death of McManus’s wife. Remember this wasn’t some ambush by a journo being cute, Kim chose to lead off his daily doorstop or whatever it was with this feigned display of grief. No doubt he hoped he could piggyback his comment onto the media coverage of Belinda Emmett’s funeral. Well he got his publicity all right, for looking like a complete ass.

That was an illustration of the flawed basic strategy. Kim seems to have decided to model himself on two prime ministers who have perfected the art of being ordinary blokes: Bob Hawke and John Howard. The trouble is, Hawke and Howard are doing what comes naturally whereas with Kim it’s obviously artificial. You can almost see the strain on his face as he tries to act like he thinks a ‘middle Australian’ would act having a few beers at a barbecue.

You would think, having been bitten so badly by his own dumb strategy, that he would pause and reflect on whether he was following a sensible course. But no … what did he do? The Monday afterwards, just when the “Is Kim’s brain leaking?” stories are disappearing, he decides to rev the whole thing up again. He issues a statement saying he got the names mixed up (no shit, Kim, we thought you were trying to make a joke). What’s more, he’s going to write to Rove McManus to apologise. I mean wtf? Is this some deliberate plan to reinforce the “Kim’s a pratt” public persona? Who writes to anyone in those circumstances? Yes OK, people old enough to be my mum but who else? Kim if you were sincerely concerned about Rove’s feelings you would have quietly rung him up and had a chat. You wouldn’t write him a formal friggin’ letter and announce it on national television.

So now we have a flawed basic strategy coupled with poor judgement in its execution. But wait. It gets worse.

After the Roves fiasco you would think that Kim would maybe have reflected and decided to stop doing the “Hey look how in touch with ordinary people’s lives I am” bullshit, or at least given it a rest for a bit. But no, what’s he do in his doorstop last Thursday? Well here’s how he leads off:

BEAZLEY: Firstly of course, before I get into the main topic of today. Shane and Glenn, absolutely vital that in your 100th Test you ensure that we have a good start to putting that urn back to where it belongs, which is here. We want a triumph in the Ashes and we want a triumph quickly.

Hur-hur-hur jolly good Kim, you Mr Everyman you. I didn’t see the interview but I can hear you chuckle as I read the words. It reminds me of the feigned good humour that is the stock-in-trade of a certain kind of clergyman and real estate salesman. Or of somebody trying to appear cool. Kim if you’re so lacking in self-awareness you don’t understand how false this strained bonhomie comes across can’t one of your minders slap you until you wake up to yourself?

The real tragedy of Thursday’s doorstop was that Kim also had this to say:

There’s one other thing that I ought to say something about and that is the Wheat Board and the story that’s out there at the moment that there’s an advice given the Wheat Board a year in advance to the rest of the community, that the Government intended to go to war in Iraq. Now, John Howard was prepared to take the Wheat Board into his confidence a year before going to war, but not the Australian people.

Kim that should have been the first thing you said. Instead, it wasn’t even the ‘main topic’ that you wanted to talk about. You threw it in right at the end after a lot of pointless bullshit about giving food stamps to young mothers instead of money. And that, of course, was what you got quoted on by the media.

Here’s a story that suggests our prime minister has been lying through his teeth for three years about the circumstances in which he committed Australia to an unprovoked war of aggression and what does the alternative prime minister want to talk about? Shane and Glenn.

Like I said …. I despair of the man.

Name dropping

I met John Howard twice back in the early 1990s, when he was opposition IR spokesperson and I was IR Director for a national construction industry employer association. The Libs had an obsession with IR in the construction industry that started back in the days of the Fraser Government. Andrew Peacock as Foreign Minister had to explain to the Americans that one of their intelligence facilities being built in Victoria was going to be almost a year late because of industrial action by the Builders’ Labourers’ Federation. The embarrassment must have been acute.

Anyway over the years I had quite a bit to do with a series of Liberal IR ministers and shadow ministers: Peacock, Ian Viner, Ian McPhee, Fred Chaney and Howard. With the exception of Viner, none of them showed much interest in what real-life construction industry employers thought about IR. They had a pre-determined set of attitudes grounded in one fundamental perception: trade unions = bad. Good employers were the ones who were prepared to ‘take on’ the unions. Employers who weren’t prepared to take on the unions were gutless unprincipled worms. Being an employer implied, to them, an ideological condition with an associated set of loyalties. As far as they were concerned employers should be prepared to take one for the team, go broke if necessary, anything except treat trade unions as equal partners in an enterprise.

Howard was quite an unmemorable character. The first time I met him was at a private lunch. There were 5 or 6 of us; Howard was accompanied by Ian McLachlan (shadow industry minister at the time) and another shadow minister who made such an impression I can’t even remember who he was. It was rather a strained lunch; we tried to explain to them why their IR policy would cause major problems for contractors and in return they gave us an ideological justification that never came close to reality.

About a year later I had a one-on-one discussion with Howard in his office. At the time I was seconded full-time to the NSW Building Industry Royal Commission. I can’t say he made much of an impression on me; he seemed to lack humour, or curiousity, and didn’t say anything that was especially perceptive or astute. If somebody had predicted his future resurrection as opposition leader with all that’s happened since I would have laughed.

Two things about Howard did strike me. One was his instinctive ability to cherry pick bits of information from what was happening in the Royal Commission to suit his pre-conceived frame. If I tried to raise other evidence that didn’t fit comfortably in the frame he skimmed straight past it. The second thing was a series of questions that he asked about economic conditions. He wasn’t interested in getting facts. I wasn’t an economist and I didn’t have access to any data that he couldn’t get for himself. He was interested in what employers thought was happening to the economy.

I’ve thought since then that these are two clues to Howard’s success as a politician: his exceptional ability to use facts selectively in support of a position that he’s already worked out, and his focus on saying what people think is the case without worrying whether or not it meets the known facts.

Aaaah the relief

I’m the first to admit that when it comes to clothes, I pay some attention to contemporary ideas of style. I strenuously deny that I’m a mindless slave to fashion but I can make concessions. Even though I’ve frequently been told that my legs are my best feature I’ve been prepared to cover them with shorts that gradually descended below the knee. As if in compensation, I’ve invested in socks that barely protrude from the shoes.

I resolutely refuse to succumb to the stereotypical image of late middle age. I won’t have a cardigan in the house and a general anaesthetic would be required to get me into a pair of polyester slacks.

I have to report, however, that after enduring a few desperately unhappy weeks, I’ve today rediscovered the joys of a well-fitting pair of briefs. It hurts to say so but when it comes to the bitter “boxers v briefs” debate I’m firmly on the side of the latter. And if that means I can’t wear my pants so low that people can see the waistband on my Calvin Klein boxers then so be it.

The sheer comfort of briefs … a place for everything and everything in its place. It’s the little things …

Western values

I see the Leader of the Free World, pausing from his crusade to bring God’s gift of freedom to people whether they want it or not, has expressed his wish that China embrace Western values.

HANOI (Reuters) - President George W. Bush said on Sunday he would like to see China as “a nation of consumers” …

And to hell with all this heathen Confucian mumbo jumbo.

Just doing his bit to reverse global warming I guess.

Civilised discussion

John Quiggin has a nice tribute to Milton Friedman on his site. He concludes:

He genuinely believed that economics was about making people’s lives better and that disagreements among economists were about means rather than ends and could ultimately be resolved by careful attention to the evidence.

Not a bad philosophy for all social institutions - their purpose is to make people’s lives better and disagreements about means should be resolved by examining the evidence. Unfortunately many people in English-speaking countries seem to regard society as an enormous, never-ending team contest, where one side is always wrong about practically everything. You can see this mentality at work in the absurd ‘left wing/right wing’, ‘East/West’ labels that some people insist on applying to everything from global warming to abortion to refugee policy. The other day I had a commenter on Tim Dunlop’s blog challenge me to stop citing academic literature and ‘go toe to toe with my own opinion’. This kind of attitude reflects a basic failure to understand the difference between opinion and evidence, which in turn leads to the slogan-based decision-making that we see so often not only in politics but also in business.

I hope that online discussion of issues through the exploding blogosphere will eat away at the mindless ‘us v them’ approach of partisan politics and talk-back radio and allow more civilised discussion based on ‘careful attention to the evidence’. But then in some ways I was always a hopeless romantic.

If bunnies ruled the world

Apparently we have a plague of bunnies on the Tweed Coast. I can’t say I’ve noticed, but they are being blamed for an associated plague of brown snakes. According to local wildlife experts like Bill Brown (retired driveway attendant, has personally killed more than 30 spiders in his career) the snakes eat the baby rabbits and cos there’s more and more baby rabbits around the snakes breed like …. well, like rabbits . Hmmmm … must run that theory past David Attenborough or someone.

Anyway I don’t care, I like bunnies. I had a pet bunny for nine years, he died last year. He was what they call a house rabbit, he lived inside like a cat. Which was kind of necessary, pets being verboten where I lived. Maybe they thought the bunny would bark and keep the neighbours awake or something, I don’t know. At first I tried to keep my bunny in a cage but he didn’t seem to like the idea much so eventually I gave him the run of the house. After he tried chewing through a few things like my mouse cable and an extension cord he decided plastic didn’t taste too good and he was no trouble at all. And no he didn’t make a mess, rabbits are just as house-trained as dogs. The only difference is that they tell you where to put the toilet not the other way round, but once they’ve picked the spot they use it all the time.

Bunnies have the most wonderful personalities, or at least mine did. They give lie to the idea that when animals are presented with a threat their response is either ‘fight or flight’. Bunnies only have one response: run away . Very sensible too. But they’re inquisitive and playful and occasionally they jump in the air out of pure happiness.

For a few years Thumper (yeah I know, very original) had a guinea pig for a friend. I was constantly amazed at the way the bunny was prepared to share his things, not like the guinea pig whose life’s ambition seemed to be to corner the world food market. And efficient! Thumper would finish every scrap of a leaf before he’d start on the next one. None of that wasteful ‘just eat the best bits’ stuff.

Bunnies are affectionate and love company. Thumper would be waiting for me when I came home, bright eyed and ready for some petting. He’d sit next to me while I was working at the computer and headbutt my leg occasionally when he wanted some attention. And he was a good listener. He’d sit up and pay close attention when I talked to him, even if it was about a particularly knotty problem in my thesis that he might not have completely understood.

He was a good watch-rabbit too. A few times he woke me up by stamping in the early hours of the morning and I found out later that there’d been thieves or vandals around. Of course he woke me up stamping sometimes when there was a bandicoot in the yard, or he thought he saw an evil dragon flying across the sky, but I’m sure he meant well.

He had a long and happy life, well as much as I could tell. I often felt guilty that he had such an artificial life but I drew comfort from the horrible fate that comes to most of the wild ones in Australia. Have you ever heard a rabbit’s death scream? It’s blood curdling. I knew when he was going to die because he just stopped eating, but he wasn’t in any pain so I saw no reason to have him put down. Dying in a strange place amongst a lot of cats and dogs would certainly have been a sad way for him to go. He was stretched out peacefully on the floor one morning when I got up and I shed a few tears for him, because he’d been such a faithful friend .

I think it would be nice if bunnies ruled the world. They share their things and they don’t have a mean bone in their bodies. The only reservation is that they’re not the smartest kids on the block but then neither is George W Bush and I’d take a bunny over him any day.

Have a good weekend all

Global warming: Our PM shows more leadership

The penny has belatedly dropped with our Prime Minister that global warming is not a plot by left-wing loonies who are pissed off because they can’t afford to drive Toyota Landcruisers and live in air-conditioned McMansions. His frantic efforts to look like he’s on top of the problem promise to provide some wonderful entertainment between now and the next election.

His initial responses have gone down like a lead balloon. I think most people understand that $60 million worth of experiments and trials, plus vague talk of nuclear power in 20 or 30 years, is a less than satisfactory response to an urgent issue. Especially when he makes the announcement just after committing $90 million to fund chaplains in schools. It’s a pretty obvious statement of priorities.

Nothing daunted, Howard is making another effort to ’show leadership’ on the matter. He wants global warming to be the main topic discussed at the APEC meeting to be held in a few days. Mind you, from what he’s said he doesn’t have any contributions to make to the discussion, it will be a kind of “Well what do you guys reckon?” exercise. But at least it’s better than nothing … after all China and India and the USA will be there and as he never ceases to remind us, there’s no point doing anything unless they’re along for the ride.

But wait! Hasn’t he already set up a forum with China and India and the USA to talk about global warming? Prime Minister what happened to AP6 - the body you announced with such fanfare earlier this year? Remember AP6? It was the true way forward, better than that silly Kyoto thing that everybody else kept rabbiting on about.

Australia, China, India, Japan, Republic of Korea, and the United States have agreed to work together and with private sector partners to meet goals for energy security, national air pollution reduction, and climate change in ways that promote sustainable economic growth and poverty reduction.

Remember? So how come you need to get these countries to talk about it again at APEC? Why don’t you just let us all know details of the progress that AP6 has made? I mean they should have the problem pretty much licked by now, what with the private sector being involved and all.
I think, Prime Minister, that when it comes to global warming you’re the emperor without any clothes. And with the size of the hole in the ozone layer that you’ve done nothing to address, getting around without any clothes is likely to be very dangerous to your health.

Historically low?

Few topics bore me more than interest rates. Being fortunately free of debt and unfortunately equally free of cash, interest is not a matter of practical concern for me. The recent obsession with interest rates in the media is just plain tedious, especially when 90% of it consists of self-appointed experts predicting what interest rates will do in future or the interest rate implications of any conceivable news story. I suspect news editors have a standard template for major stories:

1. 15 second summary of facts
2. 15 second talking economist saying what it means for interest rates
3. 30 second doorstop with John bleedin’ Howard asking what it all means.

Anyway be that as it may, interest rates have become a mandatory part of contemporary political discourse. Significantly, not many people care about the level of interest rates (be honest, can you say without looking what rate applies to your mortgage? To your credit card?). The important thing is whether they are going up or down or staying the same.

The Prime Minister keeps using interest rates to bludgeon Labor. He takes every opportunity to remind people that interest rates reached over 17% for a short period under the Hawke/Keating Government (neglecting to mention that they got even higher, for a short period, under the Fraser/Howard Government). Somehow he uses that to argue that ‘interest rates are always higher under Labor than under the Coalition’. No he doesn’t explain his logic, it’s part of the man’s genius to be able to say things like that without embarrassment. If Kim Beazley said that unemployment will always be lower under Labor than the Coalition he would rightly be howled down with cries of “Show us your evidence” but somehow John Howard can get away with it (Ross Gittins from the Sydney Morning Herald honourably excepted).

Howard presumably realises that it’s a bit shaky relying on an unprovable proposition so he’s bolstered his interest rate credentials with an impressive statement of fact. According to him, interest rates under his government are at ‘historic lows’. So that has to be true, right? You wouldn’t even bother going to check. But I did because I was bored. And you know what?

It’s not even remotely correct.

If you go here, you can find the Reserve Bank figures for a series called ‘Mortgage Managers - Lending - Housing Loans - Indicator Lending Rates - F5‘. They reveal that for the period from 1959 to 1969, the standard bank mortgage interest rate averaged 5.3% and never once exceeded 6%. From 1996 to date they have averaged 6.6% and never dropped below 6%. In other words, home mortgage interest rates have been significantly higher under the Howard Government than they were for the first 10 years for which the RBA publishes figures on its web site (I’m sure you could get earlier figures if you looked but hey, this isn’t an economics paper). The point is that there’s nothing ‘historically low’ about current interest rates. People who bought new homes in the 1950s would have been horrified by them.

So how would Howard justify his claim? I suspect he’d say ‘official RBA interest rates’ now are lower then they ever were under Labor. Which is true. But since the RBA only began to fix official interest rates in 1990, saying rates under his government are the lowest on record is a pretty meaningless observation.

Throwing interest rates around is a pretty pointless exercise, by themselves they prove nothing and serve to confuse issues rather than clarify them. Japan for example had interest rates of 0% until quite recently but nobody thought that was a good thing. The reason I mention them is to demonstrate firstly how our PM is quite happy to make misleading statements to impress the voters, and secondly how so few people bother to correct him; not even the opposition, because on interest rates he’s got them bluffed.

If you care about the impact of indebtedness on Australians then this is the information you need to consider. The proportion of income that households pay out in interest started to increase in the mid 1980s. It was -1.7% then (in other words, interest received on savings was greater on average than interest paid on loans) and it’s been going up ever since. It currently stands at over 5%.

Putting this in perspective, in 1985 the average household earned $1.70 in interest for every $100 of disposable income. In 2006, they paid out more than $5 interest for every $100 disposable income. Well at least now I know why interest rates have become such a media obsession.

What, me lead?

Continuing with my comments on the Prime Minister’s failure as a leader, here are two excerpts from his latest press conference. The first one demonstrates his lucid position on the economics of alternative energy sources in the struggle to reverse global warming:

JOURNALIST:

Power stations won’t use clean coal technology Prime Minister unless they have to surely?

PRIME MINISTER:

Well it would depend and these are the sort of judgements we’ve got to make. It would depend on whether there were incentives, whether there were rules, there were this that and the other, these are all part of the debate and these are very serious things that we need to debate.

Ummm you’ve been there for more than 10 years mate, how much longer is the friggin’ debate supposed to go on before you can do your job and decide what needs to be done?

The second excerpt reveals that he’s equally informed on issues to do with making more efficient use of water resources:

JOURNALIST:

With the Government’s solution to water, the Government accepts the principle of the market-based mechanism in water trading, why not emissions trading?

PRIME MINISTER:

Well I haven’t said I don’t accept it, I haven’t said that. I’m not, what I have said is that in an environment where the science does support that the globe is getting warmer, I mean, how much warmer and at what rate is far from conclusive and I am less embracing of the doomsday scenarios than many others. I think as time goes by some of the economic underpinnings of the Stern Review are going to be continually and increasingly questioned. That is not to say that it doesn’t make a contribution but it is still another report, we should not get mesmerised by one report, but I do accept that we need to take steps, take out insurance, be certain that we do reduce greenhouse gas emissions.

In other words, with respect to the urgent issue of our times - whether Australia can survive as a place where human beings can live in reasonable comfort - our prime minister is clueless. He’s still beset by scepticism, and considering reports, and weighing the arguments, and doing anything but showing leadership. The Liberal Party prides itself on being able to manage the country as if it were a ginormous business undertaking. I tell you what John, if the chief executive of a private company stuffed around over a critically important issue the way you have over global warming he’d be a laughing stock.

What accounts for this clueless, spineless behaviour? Well showing leadership would mean taking a firm position, and taking a firm position would upset some of his core supporters, who are convinced that global warming is a figment of the socialists’ imagination, invented to help governments take away our freedoms (yes Virginia, the people who adored Pauline Hanson are still alive and voting for John Howard).

John Howard is not now, nor has he ever been, interested in showing leadership on issues of national significance. He’s interested in boosting his own self-esteem. Period.