Super-Cannes, Now!

"In the hills above Cannes, a European elite has gathered in the business-park Eden-Olympia, a closed society that offers its privileged residents luxury homes, private doctors, private security forces, their own psychiatrists, and other conveniences required by the modern businessman." Wikipedia

Super-Cannes is the name of a 2000 J.G. Ballard award-winning novel.

I won't tell you the details of the novel, as I highly recommend it: no one reads a story after knowing the details of its plot or how it ends.

Still, I will advance that it's a story about violence, crime, madness and highly unusual suspects. You know, the pillars-of-society kind of suspects.

If you have read the novel, you'll understand why Ben Stein's piece on the Dominique Strauss-Kahn affair, is powerfully evocative of Super-Cannes.

Being fair with Mr. Stein: he reminds his readers that "in this country, we have the presumption of innocence for the accused."

Fair enough. Mr. Stein is right on that: Mr. Strauss-Kahn has the right of being presumed innocent. He also has the right to have his human rights protected, and to be placed in safety. Mr. Strauss-Kahn's health must be a concern for his custodians.

Although less clear, Mr. Stein might also have some reason asking why Mr. Strauss-Kahn was sent to Rikers Island, instead of "been given home detention with a guard".

But if Mr. Stein intentions were only to advocate for moderation and impartiality, then why cast doubt on the hotel chambermaid?

And this is what Mr. Stein does here:

"People accuse other people of crimes all of the time. What do we know about the complainant besides that she is a hotel maid? I love and admire hotel maids. They have incredibly hard jobs and they do them uncomplainingly. I am sure she is a fine woman. On the other hand, I have had hotel maids that were complete lunatics, stealing airline tickets from me, stealing money from me, throwing away important papers, stealing medications from me. How do we know that this woman's word was good enough to put Mr. Strauss-Kahn straight into a horrific jail? Putting a man in Riker's is serious business. Maybe more than a few minutes of investigation is merited before it's done."

I'm no professional writer, but as a reader, Mr. Stein's protestations of love and admiration for hotel chambermaids, when paired with denunciations of lunacy, dishonesty, and irresponsibility sound not only dubious and disingenuous, but also cumbersome and unconvincing. It sounds like Mr. Stein is trying really hard to appear sympathetic to chambermaids, in spite of their unworthiness.

So, even if I am no professional writer, I will try to help Mr. Stein with this awkward problem. The first thing he needs to realize is that no law requires him to love and admire chambermaids or anyone else.

I've known personally chambermaids and on occasion I had to work with them. And I have no difficulty saying that I don't love each and every one of them. Neither do I believe they all are wonderful human beings, or beautiful, or smart or anything, for that matter.

Some of them are alright, some others are not.

See? No need to feel guilty about that.

But if Mr. Stein is ineffectual pretending a sympathy he can't feel, he's much more ineffectual hiding his true sympathies:

"In life, events tend to follow patterns. People who commit crimes tend to be criminals, for example. Can anyone tell me any economists who have been convicted of violent sex crimes? Can anyone tell me of any heads of nonprofit international economic entities who have ever been charged and convicted of violent sexual crimes? Is it likely that just by chance this hotel maid found the only one in this category? Maybe Mr. Strauss-Kahn is guilty but if so, he is one of a kind, and criminals are not usually one of a kind."

 "In what possible way is the price of the hotel room relevant except in every way: this is a case about the hatred of the have-nots for the haves, and that's what it's all about. A man pays $3,000 a night for a hotel room? He's got to be guilty of something. Bring out the guillotine." (My underlined in both paragraphs)

So, what Mr. Stein appears to be desperate, but unable, to say is that it's the word of a chambermaid, a has-not, a nobody, against the word of a big time economist, a has-a-lot, someone who is one of a kind. And that should be enough for you.

So, again, it's not difficult to say, Mr. Stein.

What you seem to believe is simply the logical conclusion of the notion of meritocracy: you get what you deserve, and if you get little, you're fucked, and it's your own fault. Isn't that what inequality is all about?

And there's an even easier way to say it. As Mark Taibbi, from Rolling Stone, put it admirably: "crime is defined not by what you did, but by who you are". Which sounds a lot like Super-Cannes.

As for me, I'll say it simply: I don't know what happened between the chambermaid and Mr. Strauss-Kahn. And Mr. Strauss-Kahn has rights.

But to the chambermaid I'll say: if you feel you were the victim of a crime, fight for your rights, because you have rights, too. And you have also earned my admiration, not because I love all chambermaids, like Mr. Stein, but because it takes guts to stand against the powerful.


PS:

Some bloggers took the trouble of answering Mr. Stein's question ("can anyone tell me any economists who were convicted of violent sex crimes?"). See:

Answering Ben Stein's Question.

Oops.

Dodgy Recovery and Pundits

So, a terrifying labour/skilled labour shortage is strangling Australian businesses and driving soaring wages, uh?

I'd say nope (in fact, I did so before), but you don't need to take my word for it.

According to the latest ABS employment figures, released today:

"The ABS reported the number of people employed decreased by 22,100 people to 11,436,500 in April [seasonally adjusted]. The decrease in employment was driven by a decrease in full-time employment, down 49,100 people to 8,056,800. The decrease in employment was partially offset by an increase in part-time employment, up 26,900 people to 3,379,700.

"The number of people unemployed decreased by 9,800 people to 583,000 in April, reported the ABS.

"The ABS monthly aggregate hours worked series showed a decrease in April, down 14.7 million hours to 1601.6 million hours.

"The ABS reported labour force participation in April of 65.6 per cent, a decrease of 0.2 percentage points from March."

For American readers: a similar result in the US would have shown a loss of 308 thousand fulltime jobs, after discounting part-time jobs. [*]

But the great loss is in hours worked: -0.9%.

Barring any perturbing factor (statistical error, external positive shock, miracle, etc.) I'd say Australia's economic recovery looks dodgy, right now.

And our esteemed pundits, experts, journos, bloggers and others still claim Australia desperately needs either higher interest rates, imported workers or both. See here.

Note:

[*] Australia had (midyear 2009) a population of 22 million people, according to World Bank/Google figures; the USA had (same time) a population of 307 million (US Census Bureau/Google figures).

Foolhardy and Ill-Advised?

Here is Rolling Stone's coverage of the "ill-advised" and "foolhardy" US intervention in Afghanistan, as Nick Dyrenfurth called it, while accusing the Left for bringing progressives into disrepute.

(WARNING: A separate link in the page linked below leads to a photo gallery. Before the reader gets the idea of seeing those photographs, I advise to take Rolling Stone's warning seriously.)

Mark Boal. The Kill Team. 27/03/2011. Rolling Stone.

I am sure equally gruesome photographs can be presented as genuine evidence of the Taliban/Al Qaeda savagery and barbarism against innocent people, committed in Afghanistan, Iraq, and elsewhere.

But I haven't seen those photographs, yet. If the reader has, do as I did: post a link to them.

However, unlike the Taliban and Al Qaeda, aren't we supposed to be the "good guys", the civilized ones, in this movie? If "we", too, perpetrate the same kind of atrocities, what makes "us" different from the "bad guys"?

Can we dismiss this as just a matter of being "foolhardy" or "ill-advised", as Mr. Dyrenfurth seems to do? Is this just a matter of creating suitably neutral-sounding euphemisms? "Collateral damage" instead of "victim of murder", "police action/pre-emptive strike" instead of "war of aggression", "captured enemy combatant" instead of "prisoner of war"?

No, Mr. Dyrenfurth, and I say this with regret, it is "progressives" like you who bring the Left into disrepute.


Update:

After posting this message, I remembered the particularly gruesome murder of the American/Israeli journalist Daniel Pearl, by Al Qaida terrorists.

Mr. Pearl, reporting for The Wall Street Journal, was abducted in Iraq and beheaded in 2002.

Although I haven't seen the video, it can be easily found on Google videos.

Incidentally, that search also points to other beheading incidents.

Inflation? Where?

Last Wednesday (27/04/11) the RBA released its quarterly inflation figures. After a 0.4% increase in the previous December quarter, in the March quarter inflation rose 1.6%: shock, horror.

The reaction was immediate:

"The dollar soared [by an 'astounding' 0.5%!!!] to a new high yesterday [Wednesday, that is] after inflation increased by more than economists expected.  [emphasis added]

"The currency breezed past US108¢ to US108.52¢ (...)

"Analysts said the Reserve Bank might now consider raising rates.

" 'We've now seen the market pricing in a higher chance of a rate hike in the next 12 months,' a foreign exchange strategist at IG Markets, Chris Weston, said." (See here and here).

That increase puts the yearly inflation figure on 3.3%, against the 2.6% estimated for the year to last December.

So, people would feel justified to believe "soaring" wages are having the catastrophic inflationary effect mentioned in the last post, right?

Not quite. According to the ABS:

"The most significant price rises this quarter were for automotive fuel (+8.8%), vegetables (+16.0%), deposit and loan facilities (+4.6%), fruit (+14.5%) and pharmaceuticals (+12.5%). (...)

"Fruit prices increased by 14.5% in the March quarter 2011 mainly due to an increase of approximately 100% in the price of bananas during the March quarter 2011 due to shortages following floods and Cyclone Yasi. Vegetable prices increased by 16.0% in the March quarter 2011, driven by price rises in cauliflowers, broccoli, lettuce, pumpkin and potatoes due to damage to crops as well as the usual seasonal price rises." (Emphasis added).

In other words: largely supply factors drove these price rises, not a "soaring" demand caused by "soaring" wages. Thus, interest rate hikes would not solve the problem.

You don't need to take my word for it: among others, Ian Varrender and Michael Pascoe, from the Fairfax media, have made the same point. Prof. Bill Mitchell has argued along similar lines, but going into deeper details.

Mind you, both Messrs. Varrender and Pascoe (as Mr. Weston, above) see the need for at least one interest rate hike before the end of the year. I myself can't see any immediate justification, except for the "terrifying" labor shortage/"soaring" higher wages spectre, that is.

So, you might find this surprising, but these three gentlemen are among the inflation-targeting doves.

Believe it or not, at the other end of the spectrum, the inflation-targeting hawks appear to see an urgent need for immediate interest rates increases!

Terry McCrann, arguing for an interest rate increase next June: "They [the latest CPI figures] were seriously concerning in their own right. (...) Especially as the clear surge in inflation pressures came despite the anti-inflationary impact of the strong Aussie."

With due respect to Mr. McCrann, I have enormous difficulty getting around the idea of the Aussie dollar reducing the price of Queensland bananas. You see, I suspect QLD bananas are not imported.

Further, although the AU$ rose fast, oil and derived products prices rose faster, accounting for the AU$ failure to fully compensate the increase in oil prices.

For instance, in the month 30-03-11 to last Thursday, Brent crude oil spot rose from US$ 115/barrel (30-03) to 126.3 (ICE Futures Europe), for a 9.86% increase. In the same period, from US$ 1.0309, the Aussie increased to US$ 1.0974, in London: +6.45%.

Another inflation targeting hawk, Christopher Joye, has also argued about a likely interest rate hike, maybe as soon as May. His main argument is that core inflation has increased more than expected last year

He is right on that: nobody, last year, foresaw the Libyan crisis, or Cyclone Yasi. But this, to me, is irrelevant. The relevant questions are whether a higher interest rate would counter their effects, whether those effects are sustained and whether those effects are not simply adding noise to the series.

Mr. Joye does not consider those points, and I don't blame him: the answer could be negative to him.

But Prof. Mitchell (see link above) did consider these subjects. Speaking on noise::

"The special measures that the RBA uses as part of its deliberations each month about interest rate rises – the trimmed mean and the weighted median – also showed moderating price pressures.

"So what has been happening with these different measures?

"The annual growth in the weighted median was steady at 2.2 per cent in the March quarter having been at 3.1 per cent in the March 2010 quarter. The trimmed mean rose modestly from 2.2 to 2.3 per cent the same period.

"What that means is that there is no underlying price spike. The factors driving the headline rate (which I analyse next) are all volatile and ephemeral (food prices and petrol)."

Surely, this means that I believe the RBA will keep interest rates steady for much longer, right? Unfortunately, I fear Messrs. McCrann and Joye could very well be right.

Being an autonomous body, with unelected leadership, the RBA doesn't need a sound argument to make a decision, just like Messrs. McCrann and Joye seem to hold their views without a sound argument.

In other words: the RBA might lift interest rates for no other reason than "that's what central banks do when there's too much money", just like physicians used to prescribe leeches when patients had "too much blood".

Guillaume van den Bossche.
"Historia medica, in qua libris IV". 1639.
WikiMedia.

Or maybe, as Dean Baker said, it's just because workers could be getting uppity; except this time it would affect not only workers and small businesspeople, as I remarked in the previous post, but mortgagors, because housing prices are falling across the board in Australia.

Update:

03/05/2011. In its May meeting, the RBA Board decided to leave interest rates unchanged at the current level of 4.75%. See here.

Apart from the natural disasters affecting Australian agriculture in January, producing a short-term shortage of produce (yes, you guessed it: largely Queensland bananas) and sudden spikes in commodity prices (read here: oil), the Governor statement says:

"Growth in employment has moderated over recent months and the unemployment rate has been little changed, near 5 per cent. Most leading indicators suggest further growth in employment, though most likely at a slower pace than in 2010. Reports of skills shortages remain confined, at this point, to the resources and related sectors. After the significant decline in 2009, growth in wages has returned to rates seen prior to the downturn." Emphasis added.

So, dear commentators, journos, talking heads, pundits and bloggers, for the sake of everything that's sacred, stop selling the nonsense that workers in Australia are making cartloads of money.

Like, pretty please, with sugar on top?

To the RBA guys: I love to be proved wrong. Keep it up. At least until the end of this year.