Retailers “doing it tough”. Again.

It seems every year, in the lead-up to Christmas, we hear about how “retailers are doing it tough” and that the Christmas period is crucial for retailers, so we, as consumers, had better “spend, spend, spend”.

This year was no different, except the “global financial crisis” had “hit retailers hard” and that, more than ever, we needed to spend, spend, spend. Never mind the fact that families might need the Rudd government’s handout for bills and savings – it was our duty to spend to save the economy.

Before the Christmas rush I commented to Ang (though I wish I had have blogged the prediction here) that by the time Christmas was over we’d hear that spending was up this year, if not to record levels. Why? Because I’ve noticed that this happens every year.

Last year it was the weight of growing interest rates denting consumers’ spending. This year, the economic crisis. I forget what it was the year before that.

I did entertain the thought that the financial “crisis” might, in fact, have an impact this year – but I posited that we’d still see a surge in spending all the same.

Well… the scare tactics appear to have worked.

According to the salesman at The Good Guys near my Mum’s home, large LCD TVs have been “walking out the door” (hardly an objective measure I know). And Gerry Harvey is surprised that sales had increased 8.7% over the same period last year.

Mr Rudd must be very pleased that his bonus is being spent so wisely…

Now, I am aware that retailers have experienced a significant decrease in spending over the past few months and that some, especially I suspect smaller operators, will actually be “doing it tough”.

I don’t know about you, but I just find the whole “it’s your duty to spend” line a little sickening and that the justifications for why we should are wearing a little thin when retailers continue to report record profits even after claiming that they’re “doing it tough”.

I’d like to see journalists, when reporting such statements, take a look at the profit figures across the previous year and put it all in a bit of perspective: “Despite the fact that David Jones posted a record profit last year, the best in it’s history, the retailer says its preparing for ‘tough times’.” (tough times = “net profit after tax … in line with previous guidance of five to 10% growth” – emphasis mine.)

I think it’s all very much a sign of our myopic focus on growth at all costs (hilariously captured by this YouTube video) as though the environment is just a never-ending source of resources and that permanent, endless growth is possible.

It’s quite simply not possible – the environment has limits that are already stretched by our current consumption habits. Sooner rather than later we’re going to have to face that fact.

Perhaps we should be looking for alternative models and starting to look at the economy from a different perspective? Models and perspectives that don’t rely on infinite, unsustainable growth fueled by private, debt-enabled spending – which, after all, got us into this mess in the first place.

Daily Tele’s irresponsible reporting

The past few days I noticed that the Daily Telegraph was on an all out campaign against the current NSW Government, with headlines lambasting their mini-budget.

Admittedly, it’s quite a state we’re in. The Government has admitted it’s nearly broke, but the Telegraph would no doubt cry foul if the Government increased taxes. Of course, by cutting the budget, as the Government did, they also get hauled over the coals.

When I read a Telegraph piece on the mini-budget, it a) proposed no alternatives to how the Government would cut expenditure and b) did not actually show any analysis as to where else in the budget where cuts could have been made. How we’re meant to be “informed citizens” from what passes as journalism over there is beyond me.

But that wasn’t the worst of it. I was going to write a blog about how the Telegraph had basically set itself on a campaign to oust the Labor government and that this was irresponsible journalism. I was going to say “just come out with it and call on the premier to quit”, which was obviously what they were aiming for.

Well, at least they had the courage to put their agenda on the front page. That article, however, points out that the Telegraph’s editor is leaving their post. I’m interested in the details: was this because they stepped over the line and were sacked?; or because they felt the direction of the paper was heading in the wrong direction?

In either case, perhaps the change of editors will restore the paper to some semblance of journalism, rather than activism. The Telegraph has, of course, for a long time been less about news and more about headline grabbing and entertainment, but recent events go far beyond what I consider journalism at all.

In my opinion, good journalists report the news, not set out on politically motivated campaigns. Especially so when they continue to pretend that they’re “unbiased” and “have no agenda” as so many journalists do.

In a global credit crisis, with the State nearly broke, we don’t need this kind of bullshit passing as journalism. We need to actually get some analysis and some help understanding how we can realistically get out of this mess.

Sacking the premier and calling an early election (which I’m informed via @neerav on Twitter is wishful thinking) is not the solution.

Not least of which because the opposition is a ridiculous mess – I don’t even know who the opposition leader is, let alone what the Liberal’s policies are and how they plan to get us out of this mess… (The two party preferred system is broken at the best of times, but it’s especially poor with such an appalling group of pollies that this State has.)

*Sigh*

Update: Just a quick clarification: I mention the Liberal leader and policies as I know that, in the end, a swing away from Labor means a win for the Liberals. And this “two horse race” view of political races continues to be propagated by mainstream media, further perpetuating the myth.

With this in mind, even with a significant swing to another dominant party such as the Greens, the preferential system is likely to install either Liberal or Labor into Government.

Personally I vote on the basis of the local candidates’ strengths and approach to things, not on party lines. But I’m aware enough to know that in the current system such a backlash is likely to result in a Liberal win – thus my comments above.

Further thoughts on “Reboot economics”

A couple of other thoughts popped into my head after writing that last post.

In no particular order:

  • I wonder if the lack of credit available is a result of foreign governments, such as China, basically decided to stop propping up the US spending spree? If so, this looks a lot like the scenario George Monbiot outlined in his book Age of Consent.
  • Given that the market has decided that these loans are too risky, why on Earth does it make sense for the public to underwrite risky investments like this?
  • I wonder if now is the time for the public (and US politicians) to get behind the Code of Corporate Citizenship – does this crisis open a window of opportunity to push this through?

Reboot economics

I was chatting to Ang the other night about the economic crisis, and I can’t help but think this is just a big “reboot” – the market correcting itself after years of abuse.

And if you’re a true believer in market economics, now is the time you should be arguing that we need to let this happen, as it is “the way of the market”.

What’s interesting is that’s not what’s happening. Instead we’re seeing what amounts to the biggest nationalisation project the western world has seen in a long, long time. (As Wade says: “So the AU govn’t is assuring all credit. Now all these private companies are publically funded. Remind me again why privatization is good?”)

We need this correction – to stem the tide of greed that has flooded the economic system over the past few decades (in this sense I agree somewhat with what Marc says on the matter – it’s not just the CEOs and banks at fault).

I’m actually fairly liberal (note the small “l”) when it comes to markets. Testament is the fact I’m starting a business as my method of achieving social change. With that in mind I say let the market do what it does best – let it balance itself.

Maybe I’m naive, but I think that such a correction would see a blossoming of sustainable businesses to fill the voids left by the unsustainable ones that toppled the market. In “sustainable self reliance as David Ransom puts it [via Wade]). Perhaps that’s part of the “balancing” process – a recognition that business does not operate in a vacuum with infinite resources and growth.

Yes there will be significant fallout that will affect a lot of people – some who can afford to “ride it out” and others who can’t. But instead of investing billions in banks (essentially supporting those who can afford it) why not funnel those dollars into support mechanisms for the people that are most directly affected, in their day to day lives, by the crisis. i.e. the ones who will need assistance with their rent and food bills, not bolstering their spouse’s trust fund.

That could take the form of state-run services – which, after all, is what the state is meant to be for (to pick up the pieces where/when the market fails). But could mean many things – I suspect many of them better than propping up corrupt executives.

The great firewall of Australia

As most folks know, I’ve long railed against the Chinese government’s internet censorship regime, commonly referred to as the “Great Firewall of China”.

Seems that the fight is about to take off in earnest to stop Australia from introducing a similar scheme.

The Australian Government has announced that they will introduce filtering for all Australians. Ostensibly this is to stop child pornography, but don’t be fooled – this is not what it’s about. Crikey explains it well:

The Government is fond of yelling kiddie p-rn every time anyone disagrees with their censorship policies, but there’s always been a problem with that line: that content is already illegal, and the AFP works with international agencies to target that content at its source, and to target Australians who view it. The real problem with the censorship regime (besides the economic burdens it will cause) is the extent to which the Government wishes to control what Australians can view online, and its chilling effects on free speech.

What the Government has proposed is a blanket censorship regime with no “official” opt-out (these measures are likely easily circumventable using TOR or similar anonymous proxy services). The censorship extends to anything deemed “illegal”.

Need we be reminded of the sedition laws that are in force currently, a result of the alarmist response of the Howard regime to the London bombings. The following excerpt from Sedition Law in Australia published on the Arts Law website:

The classic definition of sedition is that it is a political crime that punishes certain communications critical of the established order. Sedition crimes have been enshrined in state and territory based Australian laws since before federation and inserted into the Commonwealth Crimes Act in 1920. Under the Commonwealth Act, seditious behaviour that intended to: (i) bring the government into hatred or contempt; (ii) excite disaffection against the government, constitution, UK parliament and Kings Dominions; and (iii) bring about change to those institutions unlawfully, was criminalised.

One reading of this suggests that content on this blog, and many others, could be considered “seditious”. Some may argue that this is absurd and that it would never happen.

Supposedly we’re meant to set aside the fact that the “absurdity” of other anti-terrorism laws being used for political purposes was also claimed. Need we mention Hanneef?

The fact is, there should not even be the possibility of free speech being curtailed in such a fashion.

Even if we concede (which I clearly don’t) that we need a filtering mechanism in place, the best place for this is in the home – in a decentralised manner, and by educating parents on how best to protect their kids. The choice is a parental one, not one for the state.

Update: just came across the No Clean Feed site that provides some actions (and a sample letter) if you oppose this legislation.

High petrol prices

Well, those of us that have been focused on the environment have known that petrol prices were likely to rise significantly, so all the hand-wringing and shouting comes as little surprise.

It’s a shame that the emphasis has been on short-term relief by the way of the government dropping the excise on petrol. Although I really feel for the folks that are finding it tough with daily commutes etc. I think that dropping the excise is a terrible idea.

Even if the petrol companies don’t see it as an opportunity to wrestle more profit out of the market (which is a likely scenario) – the price of petrol will only continue to rise, making this a very short-term solution.

Instead the government should announce that it is funneling the revenue generated from the excise into alternatives – public transport in particular, but also better planning of areas to alleviate the need for car transport in the first place.

Another area the government could invest in is building Australia’s R&D capacity in car manufacture. It’s a pet subject of mine – I’ve ranted enough on the topic here that regular readers will know my views. But in a competitive market I find it incredible that the industry, and government in general, continues to subsidise big car development for the middle eastern market at the expense of alternatives like hybrids and electric vehicles.

I did have to laugh, though, reading this article by Richard Glover a few weeks back: Here’s to high petrol prices. Some choice quotes:

HOORAY for high petrol prices. No one wants to say the unpleasant truth, so I’ll say it again. Hooray for high petrol prices. They are changing our behaviour faster than decades worth of hand-wringing over the environment.

… What’s frustrating is that there are real ways in which our politicians could help; not by making false pledges of cheap petrol but by helping us permanently adapt to this new world of highly priced energy.

… Whatever we do, we won’t be able to avoid pain. Australians of past generations showed great fortitude in the face of the global challenges of their time; they proved themselves to be resilient and adaptable.

… Will we need to make sacrifices? Of course. Will those sacrifices be as difficult as those faced by the generation who lived through the Great Depression, or World War II? Um, no.

The biggest irony, of course, is that when I viewed this article, this was the ad that came up:

high-petrol-prices-suv-ad.jpg

An ad for a petrol hungry 4WD…

Ban the bombs

GetUp’s latest campaign action: Ban the bombs:

As the international community is meeting in Dublin to ban cluster bombs – that saturate the ground with mini-bombs awaiting innocent civilians – our government is going out of its way to frustrate the process.

They’re calling for their own stockpile to be excluded – and for the treaty to be watered down. We’ve got just a few scarce days left before the fragile international agreement is drafted.

The petition calls on Kevin Rudd to support the ban without loopholes or exceptions…

Sorry

Priscilla does a wonderful job of not only eloquently expressing her feelings about saying sorry, but also mine (thanks P.)

I too have set my Facebook status to say I’m sorry – but I’ll also repost what Priscilla says ‘coz it’s exactly what I want to say too:

I regret that this happened to you, and I realise that it caused suffering and anguish for you and your family. I hope this never happens again.

P.S. I feel like this new government is sorting out a whole bunch of unfinished business. Still lots to do, but we’ve signed Kyoto, and now said sorry (both of which are far too long overdue). In the coming weeks WorkChoices will be scrapped. It’s progress – but back to the starting-line, not forward. Hopefully the momentum will continue to push across the line…