Politicians who deny economic reality destroy their constituents

Mandurah

The local mayor, state MP and federal MP for Mandurah, Western Australia, have attacked the Interests Of The People (IOTP) show “The Economic Massacre of Mandurah” for exposing that their city is the leading edge of Australia’s housing and economic crisis.

The show featured independent economist John Adams and CEC Research Director Robert Barwick briefing host Martin North on their recent visit to Mandurah, where they witnessed streets littered with For Sale signs, and were informed by locals of the area’s serious economic and social problems, including the worst drug problem in the state. Martin North shared his comprehensive survey data of Mandurah’s 30 per cent house price falls, and more than 40 per cent unemployment and underemployment.

In the 17 July Mandurah Coastal Times, Federal Liberal MP for Canning, Andrew Hastie, attacked the show as “over the top”.

By contrast, the show struck a chord among WA locals, with many expressing that they know the show is right. “We’re seeing exactly what they say as fact in this town”, said local sport store owner Hayden Burbidge to Perth’s biggest radio station, 6PR, on 12 July.

The online Daily Mail also covered the show, in an 18 July article headlined “Economists drive through WA town counting endless ‘for sale’ signs on properties revealing the true extent of Australia’s housing crisis”.

The problem for Andrew Hastie, who is known to be personally very concerned about the situation in Mandurah, is that if he publicly acknowledges the crisis, he will be contradicting the claims of his own government. The Morrison Coalition government is both denying the crisis, and hustling the population to scam them into thinking that another housing boom is about to start and so they should rush out and buy houses.

They are preying on young households in particular, to lure them into thinking now is the right time to buy their first home. To do so, Assistant Treasurer and Housing Minister Michael Sukkar is trying to spread fear among young families—fear of missing out!

He is urging them to rush out and buy their first home now, before the government’s 5 per cent deposit scheme starts in January. Prices will skyrocket, Sukkar is implying.

“Housing Minister Michael Sukkar has urged first-home buyers to try to snap up a property now, ahead of the government’s signature loan deposit scheme starting next year, warning that housing prices are likely to increase”, Rosie Lewis reported in The Australian on 18 July.

“If you’ve got an opportunity to get a foot in the market before then you should take it, given I think the market is starting to improve,” Mr Sukkar told The Australian. “People who buy now I don’t think will regret it at all. A re-elected Morrison government has put a lot more confidence into the market. We’re seeing green shoots in Melbourne and Sydney in the last quarter and I think with low interest rates, with APRA reducing service-ability buffers, all those factors combine to confirm that optimism.” (Emphasis added.)

Sukkar might be confused. There are green shoots in the housing market—green shoots of weeds taking over abandoned greenfield developments in Sydney and Melbourne from the more than 25 per cent defaults from people walking away from their deposits, unable or unwilling to pay the balance and start building a home.

More likely, Sukkar is not confused, but along with the rest of the government is desperate to con people into the market, in the hope that a rush of buyers will start pushing up prices again.

The question is, if it doesn’t work to drive up prices, and the thousands of buyers who’ve followed Sukkar’s advice find themselves trapped in negative equity, will the Morrison government pay their debts for them?

WA shows that negative equity is a very real danger from these low-deposit schemes. The state’s Keystart program helps people into the housing market with a 2 per cent deposit, but a higher introductory interest rate. After a few years of building equity, the borrowers would refinance at a lower rate with a commercial bank. It worked for years… while prices were going up. Since prices have been plunging, however, all it is doing is trapping borrowers in negative equity and high interest rates, because commercial banks are unwilling to refinance their loans if they have no equity.

The insanity of the Morrison government’s approach is that it is trying to put off a crash by reinflating an already overstretched bubble. In reality, the bubble will burst, and it must burst, and house prices must fall a very long way so that once again they become truly affordable, without households chaining themselves to huge, unpayable debts. The longer politicians put it off, the worse the eventual crash will be, and they will destroy their constituents.

Solutions

What politicians should be doing is implementing economic solutions before the crash. The CEC has drafted a number of pieces of legislation:

to reform the banks and protect their customers through a Glass-Steagall separation of banking from speculation;
to put a freeze on foreclosures on family homes and family farms while the unpayable mortgage debt is reorganised and written down to affordable levels matching the true value of the property;
to direct the Auditor-General to urgently audit the banks to ascertain their true exposure to this crisis, and what needs to be done to clean up their books; and
a national bank to invest in productive infrastructure and industries, in order to restructure the economy away from its current focus on financial services, housing construction and raw materials exports, and back to being a powerhouse of manufacturing and agricultural production. 

To fight for these solutions, join the CEC!

Click here to watch the IOTP response: The Mandurah Establishment Attacks Adams and North https://www.youtube.com/watch?v=et8N33RbOzw&feature=youtu.be

Adani, the Corporate Gangsta

Corporate Gangster: Adani’s Pursuit of Scientists
https://www.counterpunch.org/2019/07/18/corporate-gangster-adanis-pursuit-of-scientists/
by Binoy Kampmark  July 18, 2019

The Adani conglomerate should be best described as a bloated gangster, promising the earth even as it mines it. Like other corporate thugs of such disposition, it will do things within, and if necessary outside, the regulatory framework it encounters. Where necessary, it will libel detractors and bribe critics, speak of a fictional number of as yet non-existent jobs, and claim that it is green in its coaling practices. It will also hire legal firms claiming to be trained attack dogs and hector the national broadcaster to pull unflattering stories from publication and discussion.

As a marauder of the environment, the Indian mining giant has left little to chance. It has politicians friendly to its cause in Australia at both the state and federal level, but it faces an environmental movement that refuses to dissipate. It also has a problem with environmental science, particularly in the area of water management. Conditional approvals have been secured, albeit hurried in the aftermath of May’s federal election, and even here, further testing will have to be done.

Given the inconveniences posed by scientists wedded to methodology and technique, the company did not surprise in freedom of information findings by the environmental group Lock the Gate that it had asked the federal environment department for “a list of each person from CSIRO and Geoscience Australia involved in the review” of the Groundwater Dependent Ecosystem Management Plan (GDEMP) and Groundwater Monitoring and Management Plan (GMMP).

In a bullying note to the Department of Environment and Energy (DOEE) in January 25 this year, Hamish Manzi, head of the company’s environment and sustainability branch officiously gave a five day limit to the request, claiming that it “simply wants to know who is involved in the review to provide it with peace of mind that it is being treated fairly and that the review will not be hijacked by activists with a political, as opposed to scientific, agenda.” Manzi had noted “recent press coverage regarding an anti-coal and/or anti-Adani bias potentially held by experts reviewing other Adani approvals.” For Manzi, the only expert worthy of that name would have to be sympathetic to the mining cause.

The corporate instinct is rarely on all fours with that of the scientific one. The former seeks the accumulation of assets, profits and dividends; the latter tests hypotheses using a falsification system, a process that can only ever have fidelity to itself. The corporate instinct is happy to forget troubling scientific outcomes, and, where necessary, corrupt it for its ends. Where the science does not match, it is obviously the work of ill-motivated activists or those inconvenienced by conscience.

The Union of Concerned Scientists in February 2012, through its Scientific Integrity Program, supplied readers with a list of fields where science, and scientists, have been attacked or compromised. More importantly, it notes how governments become the subject of influence, their decisions ever vulnerable to wobbling. “Corporations attempt to exert influence at every step of the scientific and policy-making processes, often to shape decisions in their favour or avoid regulation and monitoring of their products and by-products at the public’s expense. In so doing, they often attempt to fundamentally alter the decision-making process.”

The methods of corrupting science are not exhaustive, but the UCS report suggests a view tried ones. Research, for instance, is either held up by the company in question or terminated. Scientists are intimidated or coerced through threats to job security, defunding and litigation. Defective methodologies in testing and research are embraced. Scientific articles are ghost written, with corporate sponsorship blurred. Negative results are slyly underreported; positive results are glowingly celebrated. And never forget good old fashioned vilification.

The FOI documents regarding Adani’s conduct show the company as a witchdoctor wooing the federal government into timed releases of information and an obsession with preventing a broader public discussion of findings. A January 9 email from Adani to DOEE demanded that CSIRO/GA reports not be circulated to third parties or the public. The next day, the department obligingly informed the company that it would only share advice with Queensland’s Department of Environment and Science.

The uncovered documents also show a certain degree of cyber stalking at play. On January 15, a staff member of Geoscience Australia wrote to DOEE expressing concern that the company had viewed LinkedIn profiles of employees. Such concerns did little to ruffle the growing accord between the department and the company.

The abdication of government to the corporate sector is one of the more troubling features of this tawdry chapter in Australian non-governance. Corporate giants know they must enlist the support of representatives who they can trust to be of sound mind. History is replete with successful lobbying efforts in the name of corrupted science.

In 2007, ReGen Biologics, a New Jersey company, faced a sceptical Food and Drug Administration (FDA) concerned with Menaflex, a device intended to replace knee cartilage. With the FDA’s rejection came a mobilisation effort. Politicians were sought and cultivated. In December that year, Senators Frank Lautenberg and Robert Menendez, and Rep. Steve Rothman all wrote to FDA Commissioner Andrew von Eschenbach. The Commissioner’s ear had been bended sufficiently to lead to a new review headed by Dr Daniel Schultz, head of the FDA’s medical devices division. Scepticism vanished; the product was approved. In 2010, a shamefaced FDA had to concede that it had erred and duly revoked approval.

Instead of defending practices of departments and professionals engaged in the task of assessing the merits of such ventures, individuals such as the Australian deputy prime minister suggest that Adani might have a point in is heavy-handed enthusiasm to root out contrarians. In Michael McCormack’s view, Adani “were made to jump through more environmental hoops than perhaps any previous project in the nation.” They merely “wanted to determine… that those arguing against their proposals were not just some quasi anti-development groups or individuals.” The thug’s narrative has found a home in the hearts of the anti-scientific representatives that currently rule the Canberra roost. Scientists have been warned. More articles by:Binoy Kampmark

Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne. Email: bkampmark@gmail.com

Not Just Any Old Rock

Not Just Any Old Rock

Dave Hole had tried everything. Rock saw. Drill. They all just bounced off. The damn rock would not crack. This was his last shot. He gripped the sledgehammer with two hands, raised it above his head, and brought it down as hard as he could. CLANGGG. Nothing. Not even a scratch. “What the hell is this thing?”, Mr Hole thought to himself. The answer, it turned out, was something not of this Earth.

https://www.theage.com.au/national/prospector-s-mystery-rock-was-no-nugget-but-something-much-rarer-20190716-p527pi.html