In Australia - size matters!

Never mind the housing boom in Australia; here is another angle. Australia is on average building the biggest homes in the world.

According to CommSec chief economist Craig James, the reason is:

"Certainly it makes sense that Australia builds bigger homes than in other countries, given that population density is far smaller than in other parts of the world".

Actually that is too much of a generalisation; and a very inaccurate one. There are plenty of countries with adequate space; the US being a prime example. I would suggest a different motivation:

1. Australia has more Greeks than most countries, and they have a liking for Colosseum and other such grandiose architectural features that adhore the facade of monumental displays of egotistical pretense.

2. Australia has a great many mining millionaires who got rich publishing false drilling results or false quarterly reports; and then let's not forget they have friends besting them in other industries. That is why they are called 'besties'.

Australia might have the lowest population density, but most of that land is tied up in reserves for the sake of aborigines and fauna. In fact, Australia has among the most restrictive zoning regulation in the world - despite the paradox of vast lands - which go some way towards explaining the ridiculously high prices for land in the country. i.e. 500m2 some 100km north of Sydney will cost $US220,000; then add another $150,000 for the house. You'd have to wonder why coastline is so valued given the 14,000 odd beaches in the country, but we are all compelled by our need for services, if not our desire to live near water.

I frankly can't believe that the Chief Economist at Commonwealth Bank said that our houses are bigger because of our low population density. No Craig, its because local government will not allow us to subdivide our land. i.e. We need to protect the trees to preserve the green credentials of Sydney. But then listen further and you will hear more gaffs from Craig:

"Gen Y places less importance in home ownership than past generations, preferring to maximise life experiences".

This is nonsense of course. Yes, apartments do have their advantages in terms of city proximity, easy of renting; but most Australians simply buy apartments because they can only afford the exorbitant $320-400K price tag for an apartment compared to $500-750K for a house & land. That is why many are moving 100kms to the Central or South Coast where they can still afford a house. This is pretty ignorant for a 'Chief economist' at a major bank. Aren't banks in the lending business? I guess he is in the securities department. But then aren't banks supposed to know something about the economy? Apparently credentials at Comsec don't include an education. But then I gathered that when I used to trade securities with them. Serious acts of incompetence cost me a great deal of money.

I guess the last time the size of Australian houses was so large was during the 1880s gold boom.

-------------------------------------------

Andrew Sheldon www.sheldonthinks.com

Extortion in Australia - applied pragmatism

The Australian economy is of course faring well; but that is not to say a moral crisis is not impacting on Australia, as in other democracies. The popular resentment in of course against the major parties. There is of course a lot of angst with business. And to be fair, a great deal of 'big business' does involve some form of extortion. I cannot however bring myself to blame them for their pragmatic idiocy because they don't to be the 'moral agents' that politicians profess to be. After all, politics is 'applied morality'. Politicians enact laws; they decide the relationship between you and your neighbour; and they have a collectivised monopoly on the 'legitimate' use of force. There are types of applied force:

1. Initiation of force - such as forced taxation, subsidies using extorted wealth, unfair imprisonment without trial.

2. Force in defense or as a custodial measure, i.e. When the police protect people, or when govt regulation is intended to protect, as opposed to distorting markets to achieve some desired outcome.

The moral crisis becomes evident in the following article. About 10 years ago, Pat Corrigan and the National Farmers Federation used their collective financial muscle to break the unions who were using their labour union organisation to extort wealth from the shippers and taxpayers. Today, we have a different form of thuggery. We have a group of thugs 'encircling' Canberra. You might say they are there to protest. Well I say, why does a minority or majority matter? The debate should be not about physical extortion, but about the quality of ideas. Why does this become about 'numbers' or 'sacrifice' (as in the case of the protesters time, or the Indian currently on a hunger strike in that failing democracy). The problem with democracy is that its all about the wrong things. Its not about objectivity or ideas; its about the power of money and 'numbers'. We ought to be vetting the ideas of genius; not the thuggery of the mindless extorters who could bother less whether principles apply. They have concrete interests, and its mostly about protecting their previous privileges. Some of them might well be legitimate, but extortion doesn't make them any more righteous.

Globally about 10 democracies are currently in a state of crisis, whether central bank crises, debt crises, civil unrest. The one's I can think of are: UK, Ireland, Iceland, Italy, France, Greece, Spain, Portugal, USA, Japan and the Middle East. This is quite an array of democracies and authoritarian regimes. I would actually argue that democracy is an authoritarian regime. Why? Two reasons:

1. No objective standard of value - 'numbers, not reason'

2. No personal sovereignty - you are a means to some public (i.e. non-self end)

Any system developed on those terms is a tyranny because you have no choice, and you have no basis to achieve justice or accountability.

-------------------------------------------

Andrew Sheldon www.sheldonthinks.com

Wake up Australia! Gillard must go.

Have you noticed how quickly government goes off track when you have a collectivist running government. Picture this story:

1. Climate change is bad - so need to invest in solar. Huge sums given to fund programs, a great deal of misdirect of money, overpriced panels and installation, and unsustainable subsidies driving taxpayers into the ditch

2. Humanity intrinsic - Need to treat all people with dignity, even if they don't act with dignity. Need to encourage illegal immigration so not to offend sensitive humans with an intrinsic concept of human worth.

3. Climate change is bad - Killing of wild camels to reduce carbon (i.e. methane) emissions.

There is a value system here Australia. But do you think this is a good one. Do you think this is life affirming public policy? I don't think so for several reasons.

1. There is no clear evidence that humanity is detrimentally impacting the climate. This is conjecture at this point, and I'd say the arguments would quickly evaporate if more than 5% of the scientific population used their deductive, critical thinking capacity. Unfortunately, most of them are empiricists, who studied science because they could not make it into economics, or their values were corrupted by a poor education system, or their parents. We are sabotaging the economy, i.e. distorting human decision-making in order to preserve a lie; just as occurred with Vietnam, Iraq, children overboard, etc. Now we are being fed a rationalisation of climate change to kill camels. Next, expect a Liberal govt to use climate change as justification for nuclear. Frankly, I support nuclear, but for the right reasons.

2. The debate is populism: There is no informed debate on these issues. The mob is being manipulated by a Labor government in concert with lobbyists; probably some group inside the ABC who thought this is an issue to drive decision-making. It does not require a conspiracy; it requires an alliance of ignorance.

3. There is no accountability: Smart people are being alienated by a mob who controls government.

The intellectual decay in Australia is remarkable. The Liberals are just better; they are far from satisfactory. Australia - please start electing some Libertarians to at least control the balance of power. Just 10-15 of them, least we descend into anarchy. Frankly, that is probably a good thing. We need civil war as even the Libertarians cannot think. People might need to see the implications of stupidity. I might stay in the Philippines for the next decade. Australia's populism is reaching a new level of stupidity. The same type of stupidity that impacted Europe prior to WWII. Watch a nation be destroyed. It is no paradox that the nation never had it so good. Just 5% of the population produces 75% of exports. The nation never had it so easy. This is why you are all going to hell....well not hell...but a bad place. The looters and thugs are taking over. Gillard is the principal of their school of 'non-thought'.

Great rationalisation. Hopefully the animal & climate greens will cancel each other out. More worrisome is that they might mutate/breed. Fortunately they are so anti-conceptual, they will destroy each other over this concrete political issue, just like the Muslims and Christians in the Middle East. Ok, so they survived. The strategic question is whether they will be sufficiently weakened by their destructive actions. Unfortunately, objective intellectuals are a bit thin on the ground because of our crap education system.

-------------------------------------------

Andrew Sheldon www.sheldonthinks.com

Australian housing ok guys

Australian home owners are the most indebted in the world, but you need not worry. There is no evidence to suggest a collapse in prices any time soon. A survey suggests they are comfortably paying off more than they need to, and there is no reason to expect any interest rate advance with such a strong currency. This is of course in accordance with our view that the economy is doing well, and there is no problems on the near-horizon, unless you factor in a bird flu, plague, etc.

That is not to say Australian property is cheap. Its well-overpriced, but it will stay so, and might even put on modest gains in coming years, with some softness as interest rates rise. It is more probable that yields will rise faster than housing prices fall.

-------------------------------------------

Andrew Sheldon www.sheldonthinks.com

Tiger Airlines on the back foot in Australia

It comes as no surprise to me that Tiger Airlines is on the back foot with respect to its ambitious expansion plans. The marketing side of the airline is bad enough without even looking at other issues. The airline has a number of issues:

1. Poor capacity to allow seamless travel through Singapore with a hopeless booking system

2. Misleading promotional campaigns which leave prospective customers snubbing their emails

In this respect, Jetstar has the right idea, though they have hopeless customer service. The good news is that Jetstar is showing signs of improving things. Air Asia X is another airline which is making the same mistake on marketing; though it probably has a lower cost operation given that KL is likely to be a lower cost hub. It is at an earlier stage in its expansion plans. It made the sensible decision to service the Christchurch market, which previously had no low-cost offerings to Asia. KL is a great hub because you can get a cheap hotel there for commuters.

-------------------------------------------

Andrew Sheldon www.sheldonthinks.com

Extortion in the Australian building trade

Years ago I was in a group of Australians studying the philosophy of Ayn Rand. We would get together every Sunday and listen to taped lecture courses. These courses were very good. You can probably still get them from the Ayn Rand Institute.

One guy who turned up to one of the club meetings was a previously successful demolisher in the building trade. The guy was impressive in several respects. He was a big fellow with a great deal of confidence and he just radiated charisma. Sadly, he was not terribly intellectual. He was however interested in taking some political action.

He often talked about how he was making a lot of money in the building trade; that he employed a lot of people, until he was forced out of the business, and faced a union black-ban. The guy's name was John Companion. He shot himself in the head as a result of the stress, family breakdown that resulted from these events. He impressed a lot of people; and I think if he had the greater intellect to develop or advance a better strategy, he would have had a very different life. He went off the rails at this time. The signs of imminent suicide was the decision to change his name to 'John Galt' - the character in the best-selling fictional novel by Ayn Rand 'Atlas Shrugged'. Of course the book was recently made into a movie. The trailer is on YouTube.

All this of course is important because at the moment there is a big trial attracting a lot of attention in Australia between the unions and Multiplex, the construction company. The trial is raising news of kickbacks and so forth. There were people around John who could say a great deal in this trial I suspect.

Anyway, the fact that such extortion can go on for the 2 decades that I have known about it; the fact that people feel compelled to take their lives rather than seek justice, I think it says something, not just about the quality of our society, but the institutions which drive it. The legacy of this of course will not be justice. Justice is never done. It is always some half-measure. The half-measure arises from the huge cost of taking action, the people lost in the process, the settlements out of court, the lack of accountability, the incidental issues which seem to undermine compelling evidence. The problem of course is the nature of our government.

-------------------------------------------

Andrew Sheldon www.sheldonthinks.com

The future of Qantas

The future of Qantas. What does one make of the current problems in Qantas. The airline appears to be having a lot of mechanical troubles on flights...running at about one problem a month. The unions attribute the problem to the outsourcing of jobs to Singapore. I am inclined to agree. There is of course the possibility of union staff sabotaging the reputation of Qantas in order to get the airline to resume maintenance in Australia. Would airline unions resort to extortion to protect their position in the industry? I think so ...particularly if it was merely to change perceptions rather than actually 'down an aircraft'.

The reality was always that this was always bad policy for Qantas. It should not have outsourced to Asia. This is fine for 'discount airline' Jetstar, but it was bad policy for Qantas. The problem is also that Qantas probably had no experience handling the cultural shift to Asia, and its track record is suffering as a result.

Oil fire may have caused engine failure on Qantas jet nydailynews.com

It seems only a matter of time before there is a serious accident. Then I think we can expect the government to buy back into Qantas to restore 'Australian jobs'. The problem was probably that it never really lost its 'public sector' culture after privatisation...like Commonwealth Bank.

The Qantas A380 passenger jet after it was forced to make an emergency ...guardian.co.uk

-------------------------------------------

Andrew Sheldon www.sheldonthinks.com