It was informal what won it

Now, to the serious business:

The stewards have returned from the counting room with the declaration of the 2010 Australian Federal Election.

At the first whiff of election fever your humble correspondent immediately withdrew from public commentary, stocked up on tinned foods and a rather excellent and inexpensive scotch in a shack up in the mountains and stood by and observed what unfolded.

Now the result is, officially, in. Writs have been returned.

I writ for a living, so writs are dear to me.

The numbers are irrefutable. It was the informal vote that saved Ms Gillard’s posterior.

Jumping 1.6 percent from the last election it was only outdone by The Greens, who received a swing of just a smidge under four percent.

For the record, the party of The Pretender Abbott, the Liberal Party, received a swing of 0.76.

If Abbott had of been able to engage a quarter of the voters who voted informal he would be Prime Minister right now.

It’s swinga and roundabouts though, as thye seat of Macquarie had an inverse result to this received wisdom. There the AL would have won if they had of held the voters that were motivated by bthe rather successful Your Rights AtWEork camaign in the mountains end of that seat in 2007.

A booth-by-booth measure of Blue Mountains shows the informal vote (and Green vote) up from Lapstone to Mount Victoria: if 1,041 of the 5,067 voters who voted informal in Macquarie the result is an ALP victory. But if is a big word, and not a big part of the vocabulary of the modern political operator.

Such is life

Meanwhile, we are looking at interesting times.


This business about the crossbenchers is yet bto run its course. Back to the mountains I go...

Building the mortgage revolution

Most Australian households take home less than $50K a year. That’s not average wages, that’s average income per household. There are plenty of households, and people, that don’t pull a wage. See ABS stats if you’re curious.

Despite this, the vast majority of those households manage to acquit themselves financially. It’s called surviving, and the alternative is homelessness.

This is in stark contrast to the recent track record of the well-rewarded employees of some of the world’s largest banks during the global financial crisis.

I don’t capitalize the global financial crisis, because logic is hardly a proper noun.

It’s a banking crisis. It started when a whole bunch of people, a lot of them coked to the eyeballs, played pass-the-parcel with a whole lot of other people’s debt. They bundled these debts up and sold them as a bet – that the debts would be paid off.

Some very large banks bought into the bet and did their dough big time.

Corporate culture is wholly set against bad news. Bad news meant the sack, or at best, a transfer to somewhere harmless, and less lucrative. At the very least you were risking your bonus, which, as IPO shares picked up in contra deals with institutional investors – our superannuation, were almost certainly going to be a cashable asset, at a profit; certainly worth more than $50K a year.

So we leave a bunch of overpaid junkies in charge of this section and they all smile and nod and rake in the cash – then it all goes to shit.

The commodity was fundamentally flawed. It came from a drive to raise a whole pile of debt, and pass it on. It was a scam; a Ponzi Scheme (now there’s a proper noun!); a screw-up, and most certainly a poorly researched asset.

It came off the back of an explosion in credit for people previously considered a marginal security proposition, which morphed from easily available credit cards to mortgages on marginal housing acquisition; marginal in the sense that it relied on a housing bubble for people to make money and repay their mortgages. Joe Bageant was writing about it 2005. It was hardly a secret.

So the US housing bubble bursts and a chunk of assets are worthless. The debtors walk away from the wreckage and move to a trainer park outside Toledo. The banks stop giving each other money to get people into debt to make money to get people into dept to make money..,

As Kurt Vonnegut Jr. was wont to say: and so it goes.

In Australia we have four main banks. Outside of them there are a range of outfits from credit unions (some of which have aggregated over the last decade), community banks (which are more than Jimmy Stewart in It's A Wonderful Life telling everyone that their money was invested in their lives), to payday lenders and swarthy chaps in dark cars in supermarket car parks.

When the money dried up internationally the Rudd Government moved quickly to shore up the four main banks, the spine of Australia’s financial system. Our money.

Some people thought we would hit the wall hard, Steve Keen the most celebrated example. Australia was a country that has slashed employment in traditional primary industries, let its manufacturing industry roam free across Southeast Asia and kicked on with digging up rocks and a service economy which relies on the money churning around.

The Australia’s big four banks injected a lot of money into the Australian economy by borrowing quick money, and lots of it, and lending it to people. That was where the American banks came in. Problem was the American Banks had run out of dosh. Unless the Australian banks got money, and got it fast, the whole joint was going to end up like a Steinbeck novel.

The Rudd Government, or more accurately Treasury, put together a plan that was equal parts devious and genius.

The Rudd government couldn’t give the banks cash, because this was a free-market economy and the banks were at the epicenter of free-enterprise through offering credit. At the very least they were creating money that people needed to pay the bills and make Gerry Norman richer, etc.

The government gave the banks a AAA credit rating, underwriting them and making them a safe haven for what money was still in circulation internationally, which was still substantial despite its epicenter, Wall street, watching its assets diminish daily.

And they gave a lot of money, something around the size of the entire NSW budget, to households.

Ken Henry said go big, and go households. And they did, and why wouldn’t they, politicians love to spend money, but for the last thirty years they’ve been no good at raising it.

Most Australian households earn less than $50K a year after tax. They get along by running a continuing line of credit with financial institutions. In recent years it has ballooned to over 100 per cent of disposable income. So the households gave it to the banks.

We are a service economy. A lot of people run around in white vans with ladders, and utes, while a whole pile of invisible others cram into trains and buses from 6am onwards in our capital cities. It has been pretty much business-as-usual for this part of the economy. The concerns they had in 2007 are pretty much the same concerns they have now.

The Rudd government decided to call this Keynesian act of largesse to the major banks names like The Building the Education Revolution, and the Home Insulation Scheme, and so forth. There’s probably a pile of others – all with the same object, getting people who have mortgages paying their mortgage. By a good old-fashioned bit of pump priming, jobs for blokes with utes and ladders popped up like mushrooms.

Even those that don’t have mortgages have helped by creating a jobs boom at our retail oligopolies. And those people with the name badge at K mart certainly have a mortgage, or want one. You must really need money if you’re prepared to work retail for it.

This explains why the Rudd government has seemed distracted about the detail of the implementation side of all this spending, because its not about the project – it’s about making sure the money go round continues, with the bottom sink, or sump, being the banks.

It’s the reverse trickle down effect and it has worked a treat. It’s objective was to shore up the financial sector, and its done that in spades.

Meanwhile, the structural problems – infrastructure bottlenecks, skills shortages, overpriced housing, bubble merrily along as if nothing has happened.

And for people on $50K a year and less, nothing has.

Lousy value for money

Dean Mighell was in the news. The Victorian Secretary of the Electrical Trades Union upstaged no lesser personage than Kevin Rudd, on talkback radio in Melbourne.

Those that care about such things will no doubt know the story. For those that came in late, a woman caller to (I think) the Neil Mitchell show was in tears with fear about what could happen to her.

She had insulation installed in her roof and was worried the whole place could go up in flames.

Rudd proffered an emergency response number. She said she’d tried that and it was unhelpful (fancy that, an unhelpful call centre. Who could have thought there’d be such a thing). In fact, they were more concerned about whether she owed them money.

Rudd is promising everything except going around there himself, when it emerges that the good Mister Mighell, a licensed electrician, had arranged to check to see if her insulation was safe. Militant unionist 1. Technocrat hack 0.

Mighell popped up in the Fairfax papers around the same time with an op-ed piece about whether the union movement should keep its links to the ALP. It’s an interesting point, but first some clarification.

One; the ALP was founded by the union movement around 120 years ago after a period of rapid growth in unionism hit a brick wall in the early 1890s when the Victorian land price bubble burst and the floor price of labour collapsed.

Two, not all unions thought tying themselves to a political party was a good idea, and even today most unions aren’t affiliated to the ALP.

Three, from the get-go the parliamentary ALP has tended to pretty much ignore the agenda of the organised labour movement. The primary relationship has been one of personnel. The union movement has employed most ALP politicians at some stage.

This is not to say that those politicians have ever been particularly attached to the principles of the union movement, it’s just that there is a strong history of partiality around unions when it comes to their employment selection practices.

That said, the links between the ALP and trade unions are pretty strong, in a networking rather than policy sense.

Which is why most of the leadership of the ACTU have been largely silent while Julia Gillard is, in reality, cutting wages for hospitality and care workers (amongst others) under the banner of Award Simplification.

Gillard, as she is good at, plays the clever lawyer and argues that it is possible for employees to negotiate their way out of a pay cut. But wasn’t that the whole point about why WorkChoices was bad? That people were expected to have to negotiate a solution rather than having the protection of an Industrial Award?

But the ACTU wants to be seen as a ‘team player’ in the eyes of their ‘friends’ in Canberra. The wooden Jeff Lawrence had a minor whine about it, Sharon Burrow doesn’t want to criticise her buddy Julia. So the whole situation has been largely ignored.

The problem is probably a lot bigger than the few news articles that have covered it would suggest. After all, these are people at the bottom of the labour market, so who really gives a shit?

I am meeting people caught up in it. Anecdotally, the vast majority are un-unionised casuals, so they just suck it up and wonder why Kevin Rudd is doing what John Howard did.

Unions that aren’t affected by it seem to be rather indifferent to the plight of these workers. The ‘I’m all right Jack’ principle is ascendant in the modern labour movement.

But most union officials must be, at the very least, slightly uneasy about how things have panned out. Wasn’t the Your Rights At Work campaign supposed to do away with the assault on working conditions at the perennially soft bottom end of the labour market?

A few things have improved, but there are also a large number of people who are still missing out. This is especially true of the unskilled, the casual and young people – the people who were at the pointy end of WorkChoices. The same people who got screwed under the Keating/Hawke reforms.

After the disaster of the Latham campaign, the Union movement knew it needed to get rid of Howard. So they brought in a PR firm, Essential Media Communications, to advise on creating a grass roots campaign. It’s called astroturfing, and it worked a treat.

Your Rights At Work got rid of John Howard, so after November 2007 it was allowed to fizzle, splutter and die.

Sure, there were a few half-arsed campaigns with little or no follow through at the local level and the odd mass email just to keep up appearances, but the union movement was never really serious about creating an ongoing community campaign.

The reality is that the union movement couldn’t organise its way to the shops, which is why they brought in the consultants.

How do I know this? I worked on the Your Rights At Work campaign.

This pattern is continuing with some unions now getting a contractor to do core union work – signing up new members.

In terms of creating a solid protection for working conditions the Your Rights At Work campaign failed. All it did was elect Rudd. Forget all the dribble about Kevin 07 and climate change, the only game in town in November 2007 was Your Rights At Work – it shifted tens of thousands of votes to the ALP where it mattered.

But it didn’t protect Award conditions – Julia Gillard’s Award ‘simplification’ is taking working conditions away. People that were screwed under WorkChoices will be screwed under Fair Work Australia.

Mighell is right; the union movement would be better off if it wasn’t just a work-experience factory for ALP staffers and would-be politicians.

The Liberal Party likes to foam at the mouth about the amount of money the union movement gives to the ALP, but they miss the point.

Most of this money is simply club membership to keep the union movement inside the tent pissing out. The politicians always end up playing the ACTU and their affiliates like a violin.

Club-busters like Mighell will go nowhere in the union movement, which is built on a scared rabbit inward, defensive, almost paranoid, consensus that totally misunderstands the nature of modern society.

In the meantime the money the union movement gives to the ALP, so that the Rudd government can keep kicking working stiffs like you and I, is pretty obviously lousy value. That is if the union movement’s core mission is to protect working rights, as opposed to getting on in politics.

Don’t get me wrong; this is far from an endorsement of the Liberals – especially under Abbott. It is merely pointing out that neither of the major parties are seriously interested in the lot of working stiffs as anything more than ballot fodder, and as consuming machines to keep the big mortgage holding banks and retailers happy.

Outside of that the government, whoever is in power, is hell bent on crunching down the price of labour. In a service-based economy where you don’t need anyone with too many brains or skills it spells bad news for future living standards for the majority of us.

Now, if we had a union movement that was prepared to oppose this economic ‘consensus’ - as Mighell suggests - the prospects for my friends working bar, waiting table and wiping old folks arses would be brighter.

As it stands, they are screwed whoever wins this election.