Wednesday, January 25, 2012

Drum Piece and Inflation

My latest Drum piece is here. It has no graphs but lots of depressing cynicism. Enjoy Smile 

Incidentally in it I quote that the $1.5 billion figure the Government is claiming as the cost of switching to $1 bet limits comes from the Productivity Commission Report. I should have made more clear that it is cited in the report but is the PC quoting a submission by the Gaming Technologies Association, so I would regard is with about 1.5 billion tonnes of salt. My points, the PC even knew about that large figure and still recommended moving to $1 bet limits. The Australia Institute, meanwhile puts the figure at a rather more friendly $350 million. 

The CPI figures were announced today. Here’s the guts of it via the ABS:

THE ALL GROUPS CPI

    • was unchanged in the December quarter 2011, compared with a rise of 0.6% in the September quarter 2011.
    • rose 3.1% through the year to the December quarter 2011, compared with a rise of 3.5% through the year to the September quarter 2011.


OVERVIEW OF CPI MOVEMENTS

    • The most significant price rises this quarter were for domestic holiday travel and accommodation (+7.3%), rents (+1.0%), telecommunication equipment and services (+1.1%), beer (+1.2%) and automotive fuel (+0.7%).
    • The most significant price falls this quarter were for fruit (–13.4%), pharmaceutical products (–5.6%), vegetables (–5.0%), audio, visual and computing equipment (–3.4%), international holiday travel and accommodation (–1.9%) and motor vehicles (–1.2%).

If we look at the all-important for interest rates trimmed mean, the rate is at 2.6%.

Let’s have a look at a few graphs (of course!)

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There is hardly a more stark graph to show how our economy has changed since 1990. Of course inflation is only one side. Let’s have a look at inflation and unemployment over that same period

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Again you can see how during the 1980 when unemployment began to fall, inflation would as well, before going back up. What happened in 1995-96 is that after the recovery from the 1990s recession, inflation stayed down, and unemployment kept coming down. Praise whoever you want – Hawke, Keating, Howard. Praise them all, because all of the things in the 1980s and early 1990s that caused a hell of a lot of upheaval sure as hell bore fruit in the later 1990s and most of the 2000s. Is life perfect? Hell no. But on a macroeconomic scale, the differences is stark.

Now given the link with changes in inflation and the cash rate (and vice versa) I though it might be interesting to look at the gap between the cash rate and the Trimmed mean

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It gives a good idea of when the RBA is trying to pump the economy, and when it is putting on the breaks. You can see in 2000-2001 the gap closed as the RBA dropped the cash rate by 2% from 6.25 to 4.25. You can also see during the GFC how the RBA plunged rates relative to the inflation to a point where the cash rate was actually lower than the inflation rate. 

The actions of the RBA become more clear when we look at this cash rate-inflation gap since 2000 with unemployment at the same time:

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While not an exact mirror image it is pretty close.

In 2000-2002 the cash-rate/inflation rate gap dropped 3%, and unemployment went up 1%. During the GFC the gap dropped almost 4% and unemployment went up nearly 2%. What this suggests to me is that if the RBA believes the international conditions are such that unemployment will go up (and some pessimists are suggesting it could rise to 6%) expect the RBA to drop the cash rate to a point where it is about 0.5% above the inflation rate. That would mean a drop in the cash rate from the current 4.25% to around 3.0% – 2.35% – especially if they believe (as their GFC actions seem to suggest they do) that going in early is better than waiting if the economy looks to be stalling.

In other news – in his speech today Anthony Albanese plagiarised lines from The American President. I missed it because I was (ironically) watching the State of the Union speech given by the current American President. The Liberal party quickly got a video out on it:

I think whoever wrote that speech should be shown the door. Plagiarism – especially of such a well known movie – is an unforgiveable sin in a speech writer (or any writer for that matter). It makes Albo look a buffoon, and it will plague him when he attacks the Opposition in censure motions.

To whoever wrote it, you should have noted the final line of the speech in the movie:

“This is a time for serious people… and your fifteen minutes are up.”

As Possum said on Twitter:

What happened to Albo today is a good lesson for chunks of ALP stafferdom.You're not in the West Wing, wake the fuck up to yourselves

Thursday, January 19, 2012

Full-time up, part-time down: unemployment rate flat

The monthly labour force stats came out today. Here’s the key stats from the ABS:

SEASONALLY ADJUSTED ESTIMATES (MONTHLY CHANGE)

  • Employment decreased 29,300 (0.3%) to 11,421,300. Full-time employment increased 24,500 persons to 8,051,000 and part-time employment decreased 53,700 persons to 3,370,300.
  • Unemployment decreased 3,800 (0.6%) to 629,900. The number of persons looking for part-time work decreased 4,100 to 177,600 and the number of persons looking for full-time work increased 300 to 452,300.
  • The unemployment rate remained steady at 5.2%. The male unemployment rate decreased 0.2 pts to 5.0% and the female unemployment rate increased 0.1 pts to 5.5%.
  • The participation rate decreased 0.3 pts to 65.2%.
  • Aggregate monthly hours worked increased 5.6 million hours to 1,622.0 million hours.

So in effect total employment went down 0.3%, but so too did the participation rate and thus the unemployment rate stayed the same at 5.2%.

Now 5.2% remains very good historically:

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I always like looking at that graph just to remind myself how damn lucky we are at the moment… and also to remind myself of what is was like in 1993 when I left uni and wanted to work for a living.

But let’s not get too happy about our current situation. Normally I would bother with looking at total employment on a graph because over a long term it doesn't say much useful, but a look at total employment since November 2007 does give a good view of how things are going:

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In a word – flat.

Now a look at the changes in employment over the same period also give a good understanding of exactly where we are at:

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The black line is the moving quarterly average and you can see it has be on or around zero since April 2010,m which is about as long a time as it was going along at that level during the GFC.

Now Tony Abbott might suggest this is all the failure of the Government but his response that "This is a very disappointing result, and it demonstrates how important it is that the government urgently gets debt and deficit under control" is not exactly credible, giving this figure has nothing to do with debt and deficit, and is just lazy. There is no evidence that the current budget deficit is causing job losses, and to suggest moving to a surplus will boost jobs requires a pretty idealised view of what a budget surplus can do. Our debt remains low, but the political concerns of returning the budget to surplus must remain  given these figures suggest tax revenue is more likely to be flatter than it is to be growing by the amount needed to get the economy going.

As ever the Australian economy remains dependent on the rest of the world, and overseas conditions remain terrible. The UK just hit  8.4% – its highest for 16 years – the US unemployment rate is just fell to 8.5%

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We do have China on our side, but China is not immune to what happens in American and Europe. The world is interconnected – someone has to buy the stuff made in China for them to need to keep buying the stuff we have in the ground they need to make it. And with the dollar remaining high (get used to it) industries here such as tourism will continue to struggle.

So the upshot is to expect the RBA to move on interest rates.

Trading Day No Change Decrease to 4.00%
9 January 0% 100%
10 January 0% 100%
11 January 3% 97%
12 January 0% 100%
13 January 16% 84%
16 January 3% 97%
17 January 16% 84%
18 January 11% 89%

Yesterday the market was factoring a strong chance of a drop. I do not expect that to weaken after these figures.

So not great news for the economy. Not terrible – we’re holding on, and as Possum has noted the drop in participation rate is somewhat expected to happen due to the aging population, and thus it is unlikely we can sustain the growth in that rate we have had over the past decades:

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But the issues associated with that are long term and require a hell of a lot more than just a drop in the interest rate or some stimulus in the economy to alter…

Enough of the dismal science. Here’s some nice news from America about a young kid with Down Syndrome who has been used in advert by Target – adverts which make no mention of him having DS. You can read a bit of the backstory here from blogger “Noah’s Dad”

Wednesday, January 18, 2012

Drum Piece –Movies and Pirates – and the APSC’s new Guidelines for Being a Public Servant on Social Media

My Drum piece today is on how the film industry keeps making crap and treats consumers like crap and then wonders why box office revenue is falling… oh yeah “it’s the pirates”.

The piece has a few graphs (but of course), but I didn’t have space to put in are I think quite instructive, which are posted below.

By the way long time readers – yes, you three – will know this has been a bit of a hobby horse of mine. I am a bit of a nut for box office data because, well I love data and I love film, so it’s kind of a perfect match. It all started because when I wrote my PhD thesis on satires of Hollywood I wrote this one sentence:

Thus even the once examined total gross figure has been replaced by a short term figure (opening weekend); one that reflects more the ability of the studio’s marketing department than the film’s artistic quality, or popularity.

It sounded good, but I realised I needed to be able to prove it or I had to cut it (such is the life of a PhD student). And so I spent the next week gathering the box office data on every film that had opened in America since 1981, did a few statistical things, made a lot of graphs, and then wrote a footnote. One week’s work to prove one sentence and to produce one footnote. Such fun.

Anyhoo here are the graphs.

The first shows the number of films each year in America that reach number 1 at the box office:

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The more films that reach this indicate more “blockbusters” and less time each film (including poor little Australian ones) to achieve success in the cinemas.

The other one is a comparison of the percentage of films released each year with an “R” rating (effectively like Australia's “M”) and also what percentage such films account for in Total Box Office:

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Even up till the late 1990s R rated films accounted for half of all releases; now they’re down to 30 per cent. If you think there are less movies aimed towards adults, you are right.

***

The other thing of note is today in the Canberra Times, Markus Mannhein writes about new guidelines introduced by the Australian Public Service Commission for public servants and use of social media out of work. The new guidelines include provisions which Mannheim writes have been dubbed “The Jericho Amendments” (as one on Twitter has suggested, that sounds like the next John Grisham novel).Now firstly, this will be covered in my book on social media that I am currently writing (so thanks APSC for the need to write a new section) and so I will hold most of my thoughts for that (also I’ve thought about this for about an hour so it’s not fully developed).

The news guidelines do include some good advice about commenting anonymously online – advice in fact that I lived by when I wrote under a pseudonym.

But then they also contain these “principles”":

Making public comment in an unofficial capacity—general principles

When APS employees are making public comment in an unofficial capacity, it is not appropriate for them to make comment that is, or could be perceived to be:

  • being made on behalf of their agency or the Government, rather than an expression of a personal view
  • compromising the  APS employee’s capacity to fulfil their duties in an unbiased manner. This applies particularly where comment is made about policies and programmes of the employee’s agency
  • so harsh or extreme in its criticism of the Government, a member of parliament from another political party, or their respective policies, that it raises questions about the APS employee’s capacity to work professionally, efficiently or impartially. Such comment does not have to relate to the employee’s area of work
  • so strong in its criticism of an agency’s administration that it could seriously disrupt the workplace. APS employees are encouraged instead to resolve concerns by informal discussion with a manager or by using internal dispute resolution mechanisms, including the APS whistleblowing scheme if appropriate
  • a gratuitous personal attack that might reasonably be perceived to be connected with their employment
  • unreasonable criticism of an agency’s clients and other stakeholders
  • compromising public confidence in the agency or the APS.

The first point is fine; the second is OKish, but can be subject to a wide view – you are always going to be in trouble if you start commenting on policies that you are working on. I wrote a couple times about the insulation scheme which was being run in the Dept of Environment, of which Arts was within (but completely separate from) and I commented on the program’s media coverage and response by the opposition rather than the policy itself. As a rule though I steered clear of the Department.

The third point though is utterly stupid. It is written by someone who does not understand social media, and bizarrely has no concept of what public service work is all about. It is written like the public service is a company. My work in the public service rarely had anything to do with politics or policy which was controversial. I first worked for the Howard Government, and thought as a whole his government was terrible – but I liked the policy/programs on which I worked and did my best to ensure they were implemented or advocated. This is actually how it often is. You think things the Govt does as a whole are dopey but you like your own area. Even if you think your own area’s policy is dopey you do it, and you don’t comment publicly that you think it is dopey. Like most workers in Australia you just complain about it over coffee at morning tea.

Pretty reasonable.

But now we have “Such comment does not have to relate to the employee’s area of work”. Which potentially means every Government policy, and because Government policy covers much of life that will mean that as well – pokies, internet filtering, gay marriage, media regulation, climate change…

We also have “so harsh or extreme”.

What is “so harsh or extreme”? Who defines this? In my experience all this will do is encourage trolls on the net to go looking for public servants on Twitter and threaten their jobs if they make any political statements. It will also encourage lazy “journalists” who are seeking a bit of kudos from their bosses in any lame anti-social media fight they wish to wage to go hunting for public servants as well.  The worst James Massola could come up with was me writing:

Greg Hunt "could write a PhD thesis on environmental political cowardice."

Opposition Leader Tony Abbott is "the master of spin" and, on the Rooty Hill leader's forum, "because it wasn't a debate Abbott was able to get away with an inordinate amount of bullshit".

Is that really harsh or extreme?

And as for writing about my own Dept again here’s the best Massola could find to damn me with:

"Garrett was demoted for no good reason" and that ". . . Garrett has been demoted, despite no-one in the media or the opposition actually being able to explain just exactly with any level of intelligence what he did wrong, he was deemed to have 'bungled'."

Not exactly policy specific – and also quite impartial because I was actually attacking the opposition and media for failing to show any intelligent reason why Garrett should be demoted and Rudd for demoting him!

But ahh such joys you can have debating such things – and if you are a public servant you are more likely to be debating them with your boss.

The guidelines won’t actually affect one bit how any public servant does their job; it will just mean people’s lives will be made hell for periods while the media or trolls (or both, as they can at times be indistinguishable) turn their attention on them. And then those public servants will probably create a new pseudonymous Twitter account and lock it.

The last four points are either so obvious or dumb as could only be written by a public servant. I’d like them to find one Tweet or blog post that could “seriously disrupt the workplace”. The only way that could happen that would not have previously been covered by the code of conduct is if media attention on a workplace occurred because of the third point. So in effect these guidelines will cause the disruption; not the social media comments.

The rest are points that are obvious from any reading of the APS code of conduct, but only serve to murky the waters for example “gratuitous attack connected with their employment”. Is that someone who works for Centrelink or the Dept of Agriculture tweeting that Gillard’s policy on asylum seekers shows her to be absolutely soulless? Or someone writing that her not being in favour of gay marriage is a cruel act that smacks of homophobia? Probably not, but with these guidelines I wouldn’t make a habit of such tweets because they may get the attention of someone who thinks it’s fun and games to start sending off emails to the Secretary of your Department in the hope of having you sacked. (And believe me, such people exist.)

The thing about the APSC is in that not once in entire time since I have gone through what pretty much everyone acknowledges was a first for a public servant in Australia have they contacted me to seek any input on social media policy. It nicely ironic that “the Jericho Amendments” had no input from this Jericho.

Want to know how pathetic the APSC is when it comes to social media – take a look at their Facebook page. They have no idea what social media is or how it operates.

The public service is constantly being encouraged to be less worried about risk in order to free up bureaucratic process and to embrace social media. These guidelines are contrary to that.

Dumb move APSC.

Not surprising, though.

Thursday, January 12, 2012

Drum Piece–Winter is Coming

My first Drum piece for the year has a look at the year ahead… sort of.

God I hate those start of the year predictive pieces that do the rounds. When will Gillard be challenged? Will Abbott survive the year out? Honestly, who gives a damn. It’s all guess work and conjecture and standard pap churned out without any need to actually do any thinking (which is probably why there are so many of them written – churning out an article each day gets a tad difficult when most politicians are on holidays).

The thing about leadership challenges – even those for PM – is how little impact they actually have on the economy or on things going on in our lives. No one guessed Abbott would be leader of the opposition a week prior to it happening – hell no one even predicted Kevin Andrews getting the votes he got in his challenge against Turnbull. Did this matter? Not in the slightest. Abbott won and then things happened, and then our lives continued as they had before. Had anyone written about Abbott a week earlier or two weeks or 6 months (as they are all trying to do with Rudd v Gillard) nothing different in our lives, or even our understanding of issues, would have changed.

A leadership challenge isn’t an event where we all need as much warning as possible to prepare for the change. A week will do – ie “It’s on for this week”, anything too much earlier than that is just conjecture mixed with politics and reporting on it is just the New Idea masquerading as the press gallery.

Will Rudd challenge (update, a bloke from The Age on Twitter is now saying it’s on for Easter!!! – cue headlines about resurrections I guess…), will Morrison or Hockey? I don’t know, and until someone reports to me how their leadership will change the way the economy and aspects in people’s lives will be changed, I not really going to give a stuff. I might as well spend my time reading magazines that tell me Princess Kate is pregnant… or not... or is… or…

Enough rant – go have a read of Matt Cowgill’s blog post on George Calombaris’s latest whine about having to pay his staff a wage. It’s a good ‘un.

Oh and season 2 of Game of Thrones? Can’t wait.

Thursday, December 22, 2011

Drum Piece - PMs and presidents: in another leader's shoes

My Drum piece which went up yesterday is a rather silly-season bit of hypothetical that wonders how the leaders of the US and Australia would have fared under the other’s system of Government.

I’m having a couple weeks off writing for The Drum, which is good because otherwise I’d be forced to write again about asylum seekers and I think I’d prefer to stab myself with a rusty fork than do that.

Wednesday, December 14, 2011

Drum Piece–New blood, new targets… hello 2012

My latest Drum piece in which I have look at the reshuffle and think, “Geez, a few of you have got a fair bit on your plate…”

Wednesday, December 7, 2011

Drum Piece - The GOP race has entered 'The Tyson Zone'

My post today on The Drum is about the nuttiness of the Republican Party. Rather annoying for me is that as soon as I sent it off I realised I had forgotten to include mention of Herman Cain’s speech in which he announced his campaign was being suspended. Cain said this:

"I believe these words came from the Pokémon movie…

"I’m not sure who the original author is, so don’t go write an article about the poem. But it says a lot about where I am - where I am with my wife and my family, and where we are as a nation.”

"Life can be a challenge, life can seem impossible, it's never easy when there is so much on the line. But you and I can make a difference.”

The “poem” was actually the song played during the credits of the movie Pokemon: The Movie 2000.

I think that is just about the most wonderfully crazy thing I have ever heard a politician say.

Also the piece had this line:

“but with the winner revealing him/herself somewhat in the way Obama, Clinton and Reagan did when they defeated an incumbent president.”

Obviously Obama did not beat an incumbent.

You can find links to my other Drum pieces here