There’s been some discussion of late about what’s wrong with the housing market in Australia here and here.

The simple facts are these, house prices have grown enormously over the past years, but inflation has remained very low in global terms (~3% or 4%). Inflation cannot account for the rapid increase in house prices.

Many property owners went through a spate of renovations in the early naughties, whilst a renovation will add some value to a property it can’t account for the tremendous increase we’ve seen in this country – after all you can’t transform a $250k house in to a $400k house just by putting in new floor boards and giving it a lick of paint.

The cost of actually building a house (i.e. the materials and labour) is pretty affordable (and always has been) and costs have not risen much at all in the last 10 years. The cost of building cannot account for the rise the price of houses.

Land is the commodity that has risen dramatically in price. Why? Do we have less of it than we use to? Has our population suddenly spiked as during the baby boom? No. Average lot sizes are now 1/8th of an acre, the ¼ acre block is a distant memory. Land prices have grown even in those states that see net emigration to other states outweighing their net immigration from other states.

The only rational explanation for the rapid rise in the cost of land is speculation. Very little real value has been added to the cost of land over the past ten years and such value as renovations might have added cannot account for the continued increase house prices because a after a period of time the market will have priced those renovations in to the price of houses and prices will plateau, especially if they were widespread and some time ago.

This situation is aided and abetted by governments of both persuasions and at both federal and state levels. First home owners were given $7000 of money for nothing under Howard and this continued under Rudd. Indeed this was tripled for a period of time during the GFC and the $7000 giveaway continues to this day. In addition, federal governments of both persuasions have retained negative gearing (a tax practice that is illegal in most of the rest of the word barring New Zealand and Canada) and kept Capital Gains Tax at absurdly low levels, even as incomes and asset prices rose. Both of these things encourage speculation, as does the government’s 100% backing of virtually all bank accounts. It might have made sense to sure up confidence in the banks by backing deposits during the GFC but it makes very little sense now. States seem uninterested in promoting density, instead releasing land that was previously zoned as semi rural thereby promoting urban sprawl and which doesn’t attract first home buyers who presumably would like to have something approaching a reasonable commute to and from work.

We hear screams from the property developers about a piddling 1.9% decrease in house prices in Perth, the way they were carrying on you’d think it was the end of the world. First home buyers are told to “get in now” so they “don’t miss out” on the market even though the price (not the cost mind you) of houses continues to outstrip yearly incomes manyfold and is continuing to grow. All of which is classic bubble behaviour.

When a capital strike is suggested (which will probably be ineffectual in itself) those baby boomers who have benefited most from the status quo turn around and sneer that the people signing up to it on the website couldn’t afford it anyway (I could for one but that’s besides the point). If that were genuinely so, the reaction would have to be described as pretty hysterical, as you’d except when prices are overinflated – a collapse in the value of their investment properties would do them serious financial damage and in a bubble, perception is everything. Herd psychology doesn’t have to be rational but damn it’s powerful.

It seems unlikely that either the Labor or the Liberal parties would be brave (in the way that Sir Humphrey Appleby would use that word) enough to tackle the negative gearing and CGT rorts on their own, let alone be mature enough to put the national interest first and adopt a bipartisan policy of enough’s enough when it comes to negative gearing and CGT so we’ll be waiting for some little psychological spark like, say an online capital strike petition to bring down the ponzi scheme that is the Australian real estate market. Here’s hoping…

Today is the 20th anniversary of the Chinese Communist Party’s brutal suppression of the pro-democracy demonstrations in Tiananmen Square in Beijing. It’s fascinating to see just how successful the successors of the Commissars who sent the army in to kill their own people have been in erasing the memory of their evil amongst the current generation of Chinese youth. Foreign media have been banned from the Square for today, gangs from local neighbourhood watch committees are being paid to patrol the Square, prominent dissidents have been sent on enforced ‘holidays’ outside Beijing, Twitter and other similar services on the internet have been shut down and the Great Firewall of China is vigorously censoring all sorts of key words like “June 4th”, “6/4”, “4/6” etc and any coverage of the events being staged around the world to commemorate the massacre or any report that shows footage from it.

I was amazed to hear that ‘Tank Man’ picture, famous around the world is practically unknown in China. I’ve even heard it claimed that the picture below is a fake! Odd how I can clearly remember watching it happen on the television at the time then.














Not so easy to dismiss is the footage of Zhao Ziyang, the then Secretary General of the Chinese Communist Party apologising to the students for the Party’s sloth in loosening up society and asking them to disperse because he feared what his fellow Politburo members were about to do to them. The title of this post is a quotation from the opening part of his speech to the students in Tiananmen Square it means "students, we came too late. We are sorry."

Chinese people travel more now than ever, they study and live overseas, radio stations in Hong Kong broadcast directly to millions in the mainland and truth is not an easy thing to keep under wraps even if this posting gives them another site to block.

Messages have been circulating asking bloggers in China to turn their blogs grey on the anniversary to commemorate the crack down. I’ve done likewise as a gesture of solidarity.

民主自由万岁！

After a bit of argy bargy New Hampshire has legalised same-sex marriage. Marriage certificates will be obtainable regardless of whether a couple lives in New Hampshire or not. The legislation distinguishes between civil and religious marriage, a religious marriage being a civil one with additional mumbo jumbo for added effect that doesn’t have any legal impact.

The Governor sought to have the legislation clarify that Priests/Pastors/Rabbis/Imams etc don’t have to marry people if they have a theological objection to doing so, which was basically the situation anyway, it’s not like an Imams marry Catholics as it is now. The other aspect of what the Governor demanded is that religious bodies don’t have to make property they might own available to host a same-sex wedding if they object to it. This might be more contentious if the property or the body that runs it receives state funding for its upkeep or renovation. Nevertheless it is another step forward.

It comes just U.S. Secretary of State Hillary Clinton officially recognised June as Pride Month and pledged to "advance a comprehensive human rights agenda that includes the elimination of violence and discrimination against people based on sexual orientation or gender identity." Now attention will shift to New York where the Bill to legalise same-sex marriage is before the state Senate. One Senator has said he already has the votes to get the Bill passed, something that opponents of the Bill have said amounts to a mind game, but since when were mind games off limits in politics? Watch this space…

I was fascinated to hear on the radio last week that the Victorian Charter of Human Rights and Responsibilities Act creates no rights that are enforceable in a court or tribunal nor does it empower the Victorian Equal Opportunity and Human Rights Commission to do anything about a breach of human rights, it’s simply a compliance reporting tool for the government. It can only be hoped that any federal Charter doesn’t go down this path and actually creates rights that can be enforced against the government and others, otherwise what’s the point? It’d just be smoke and mirrors.

It amazes me what passes for political analysis in the Australian media these days. Ex DLP professional talking head and former Chief of Staff to John Howard Gerard Henderson has favoured us with his analysis of Saturday’s Fremantle by-election in today’s Sydney Morning Herald. The first thing that struck me was that this was being published in the Herald and not in his syndicated column in the West Australian. Given that he ignores some facts that are patently obvious to any Western Australian in his analysis, this might not be accidental.

For anyone who missed it, the Greens defeated the ALP in a seat that Labor had held for more than 80 years. Even better for the Greens/worse for the ALP, the Greens polled higher on the primary vote than the ALP did – a first anywhere in Australia. One’s things for sure, I wouldn’t want to be the WA State Secretary of the ALP at the moment.

The gist of his piece is this – the Libs have a policy of putting the Greens ahead of the Labor Party which helps the Greens in inner city seats where they are a serious challenge to the ALP (seats like Sydney, Melbourne, Grayndler get mentioned and I would add Kingsford-Smith to the list as well) – this is true. The Greens however do not return the favour in marginal seats in the suburbs, at best running spilt tickets which give equal amounts of preferences to Labor and the Liberals and then only in safe Liberal or Labor seats – also true. Therefore according to the man who was once the principal advisor to an opposition leader and hence someone who ought to know a thing or two about elections, the Libs should demand a preference swap in winnable seats or put the Greens below the ALP on their how to votes.

Several things stand out about this masterpiece of close reasoning:

Firstly and most importantly, what Gerard doesn’t seem to realise he’s calling for is for the Liberals to put the ALP ahead of the Greens in marginal seats, thereby giving their principal opponent a leg up on their preferences. I can almost hear the pundits at Liberal Party HQ laughing at him now. Take the seat of Swan in Perth for example, in many ways it typifies what a marginal seat looks like, it takes in the posh, yuppie filled riverside suburb of South Perth and also takes in some very working class areas in Belmont, Victoria Park and Bentley with a bit of a mortgage belt in places like Karawara thrown in. It’s not hard to guess which suburbs vote for which party. The balance of demographics makes it extremely marginal and it has flip-flopped between Labor and the Libs for ages, at the last election the Libs won it off Labor by only 164 votes out of 76,173 votes cast. For the Liberals to put Labor ahead of the Greens in such a contest, because the Greens wouldn’t put them ahead of the ALP elsewhere would spell electoral doom for the conservative candidate, the Labor candidate would effectively be elected off the back of their preferences. The preferences of other rightwing parties (i.e. the religious ones like the Christian Democratic Party and Family First) would not be strong enough to counteract the flow of Green preferences to Labor and in this case, the Liberal preferences to Labor. So there’s a key marginal seat that they would loose and have only themselves to blame for it. The Liberals don’t have much of a choice when it comes to preferences and the Greens know it, why should they play ball when they’ve got the Libs by the balls?

Secondly Gerard makes much of the Greens being “Australia's only left-wing party”/“Australia's only genuinely leftist party” (aside from the fact that there are lots of micro parties that are on the Left – the Communist Party of Australia, the Socialist Party, the Socialist Alliance and the Socialist Equality Party all run candidates in various elections and even right wingers would concede that the ALP was centre-left at least some of the time) but then thinks preference swaps with the people who are the Greens’ main opponents in the political (as opposed to the electoral) process would seriously be entertained. These preference swaps would be for the Greens what putting Labor higher than them on their how to vote cards would be for the Libs – electoral suicide. Labor would have a field day showing how voting Green equates to supporting the Liberals. In Victoria furtive attempts were made at a Greens/Liberals deal at the state election in 2006 and it was a disaster. The Greens got into bed with the Liberals in a short lived coalition in Tasmania between 1996 to 1998 and are rumoured to be considering doing it again if Labor doesn’t win the next Tasmanian state election (due next year) because they’re mightily pissed off about Gunns' pulp mill. The last time they did it, the government was unstable (because chalk and cheese don’t mix too well) and it alienated much of the support base of the Greens. Doing these sort of preference swaps would not be a good idea if the Greens want votes.

Thirdly whilst the Greens would love to pick up seats in the lower houses, they’re perfectly happy to be a balance of power party in the upper houses around the country, what’s more, in Australian politics you don’t need many seats to become incredibly powerful. Then Senator Harradine had a one man veto over government legislation during the early years of the Howard government as long as the other parties opposed it, which was most of the time. He used this to great effect get reactionary policies and pieces of legislation in which have only just been rolled back. What Harradine could do for the right, the Greens can do for the left, who cares if they win lower house seats? Three quarters of their upper house vote comes from Labor preferences (the rest from the doctors’ wives crew who vote 1 Liberal and 2 Greens) so they’re potentially sitting pretty anyway, why alienate the base?

The great bonus for the Greens comes not from Liberal preferences but from when there is no Liberal candidate, at the Western Australian state election last year Jim McGinty, Labor’s long serving MLA for Freo got exactly the same primary vote that his would be successor got on Saturday, but the Liberals out polled the Greens on primary votes in 2008 and Labor got back in. This time round, the Libs didn’t field a candidate, some of the Liberal vote went to Liberal-leaning independents; virtually none of it went to the religious parties so most Liberal voters voted for the Greens to deny Labor the seat. As Gerard points out, this was what happened in the federal seat of Cunningham in 2002, although the seat went back to Labor at the next election in 2004 when the Libs did field a candidate.

What this says is not that the Libs should reconsider their preference deals; they should consider whether it’s worth fielding candidates in inner city seats with high a Greens vote. Fremantle and Cunningham tell us that there are seats that the Greens can win if there’s no conservative candidate (at least in a by-election, what would happen in a general election remains to be seen) so is the loss of funding from conservative voters in those seats not voting 1 Liberal (parties get funding based on how many primary votes they get) because there is no Liberal candidate offset by potentially fucking up the ALP in what would otherwise be a safe Labor seat? I don’t know, but you can bet that question is being chewed over right now by Liberal politicians and strategists across the land.

Then there’s his analysis of Fremantle itself. Gerard seems to think that because the Greens won the state seat of Fremantle at Saturday’s by-election, its federal member Melissa Parke should be sweating on it at the federal election due next year. Probably not actually, because what Gerard’s failed to notice is that the federal seat is much bigger than the state one. Redistributions over the years have seen the state seat become more and more focused on the city of Fremantle itself whereas the federal electorate still takes in large areas of suburban Fremantle that have large numbers of Italian and Portuguese immigrants and second generation Australians who as a demographic are solidly Labor. A pretty obvious fact to most Western Australians but presumably not known to your average Sydneysider.

Finally he ignores the local factors that were at play on Saturday, Labor preselected Fremantle’s Mayor Peter Tagliaferri the same day he joined the party, his campaign was in trouble from the start, with letters going out to ALP members across Perth asking for money and volunteers, the Australian Services Union pointed out that he had cut wages for council employees whilst he was mayor – that didn’t help him in the left-wing cred stakes and he supported the North Port Quay development of posh apartments on due to build on 6 artificial islands off the coast of Fremantle – that didn’t help his green cred. In Cunningham, ALP rank and filers (mostly on the party’s left) were massively that a Labor Right member was being parachuted in from head office in Sydney and so was the community.

Gerard might want to get some lessons in how to parse over the wash-up from elections from Anthony Greene.

Maine's Governor signed the Bill into law not too long ago, with New Hampshire hopefully not far behind. They're coming thick and fast in the US at the moment.

The Prime Minister announced on the weekend that Australia will be increasing its surface fleet by one third and doubling its submarine fleet. In addition we are to get 100 new fighter jets in a move widely seen as being about moving to counter the rise of China. Several problems arise with this idea; firstly under no circumstances could Australia take on and defeat the People's Republic of China on the battlefield. This is a country that can field an army of 5 million if it really needed to, and it has the bomb.

Secondly the notion is not so much about defending Australia, but defending its interests which sounds a lot like code for following the Americans around to the next war, that is, imperialist adventurism.

Thirdly, with an expanded military, you get a true military industrial complex and that has severe repercussions for democracy as President Eisenhower warned in 1961:

…yet we must not fail to comprehend its (the military industrial complex’s) grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted.

America failed to heed this warning, these days war is big business and that in part drives its foreign policy. We would do well to give that kind of society a miss.

Fouthly, the fact is we can only put half our submarine fleet to sea on any given day as it is, where are we going to get the extra men and women to man these ships and planes from? Conscription? I dare say not. Most likely it will come from ramping up nationalist sentiment and viewing the military as something noble. In his speech making the announcement, Kevin Rudd called military service “our nation’s highest calling”. Expect more of this sort of thing if he gets his way.

Finally and most importantly, there are certain consequences for getting the nation into uniform, which Germaine Greer has spoken about.

In relation to the training that forms the building block of military life she says:

Armies are built on the premise that rage can be induced and manipulated, be careful what you wish for if you wish for the return of national service, I should know because I live near an English garrison town and there the squaddies regularly terrorise the civilian population using their training to inflict better and graver injuries on civilian boys and it’s quite interesting that when the police are called they almost never prosecute the squaddies, so there is a vein of poisonous rage that is exploited by civil society.

She points out that once the soldier has been high on rage chemicals, they can be triggered at will, but once triggered, they can’t be controlled, you can turn rage on but you can’t turn it off. She also notes the role alcohol and other stimulants play in warfare.

More generally an expansion of this kind cannot be done without militarism (or conscription) as Germaine says:

Militarism takes the vulnerability of human beings to both terror and rage and incorporates it into a system. Each year we encounter instances of the vileness of the procedures by which this transformation is effected. They include systematic humiliation and abuse of junior personnel, initiation ceremonies, bullying at all levels. At Deap Cut barracks in Surrey, four recruits have died of gunshot wounds, one of them who died in 1995 had been continually abused verbally and physically attacked by a gang wearing gas masks as he slept and thrown through a window after answering an officer back. His body exhibited five bullet wounds, only one from close range, yet the verdict remains suicide. The one woman among the four, who was shot through the forehead six months latter, was said to have been forced to have sex with an officer, the bullet that was in her head has since gone missing... The suicides or murders are all dots on the trajectory of rage as it is exploited by the military establishment.

And as to the well known effects of seeing service:

I don’t have to remind you I hope, of the psychological devastation that has driven Australian servicemen returning from Afghanistan it do away with themselves. In the United States, sixteen army recruiters have killed themselves since 2000; the usual explanation is post traumatic stress disorder, the soldiers were all being treated with anti depressants.

Depression is by far the commonest mental illness; very few of the vast number of depressed people in our societies will shoot or hang themselves. What is being overlooked in dealing with these cases is the pathology of rage itself. Rage is addictive, people dependant on rage body chemicals cannot settle down, they cannot just get over being poisoned for months on end by rage-cum-terror. Suicide has always been more common amongst soldiers than amongst the civilian population. As rage is engendered in them by a culture of systematic humiliation and then deployed in acts of extreme violence and cruelty in the field, we really can’t be surprised if they shoot or hang or drown themselves or cut their own throats. Though most of the recent army suicides had been on medication, none I think took the comfortable route of a drugs overdose. The level of violence involved in soldier self-destruction should treated as an important clue as to its aetiology, and the four letter word I use for that, is rage…if you treat people in a certain way rage is what you get and if you are tyrannical you can deploy it, you can use it, you can abuse it.

Closely allied to militarism is nationalism. Nationalism on the battlefield takes the form of the dehumanisation of the enemy. How else would any normal human being be persuaded to kill another than by seeing them as less than human? At home the philosophical idealism of nationalism fosters class collaboration which favours the rich and powerful at the expense of the rest of us – after all, we’ve all got to do our bit haven’t we? More dangerously on the home front nationalism takes a xenophobic turn to newcomers and usually a racist attitude to ethnic minorities, particularly ones from the countries we might be fighting. As these bellicose postures depend on hyper masculine aggression, misogyny and homophobia are never far behind in such a culture. Do we really want this in our society? Do we really want this aggression and the broken men it produces? Is this in our 'national interest'?

The notion of the Defence Department’s hawks of an Australia armed to the teeth and ready to send people to their deaths to further nationalist vanity and imperialist expansion is repellent in the extreme and completely unnecessary. All this says nothing of the financial cost, not just of the planes and boats, but of the social consequences this policy will produce. Taking a razor to the Defence Department itself will only fund so much, surely there are far more pressing expenditures to fund in these difficult times.

The President of Burundi needs to whip up the masses to help him get re-elected and what better way to do it than by a good old fashioned bout of gay bashing with a mass rent-a-crowd rally thrown in for good measure. Commendably, the opposition controlled Senate stood up to this bigotry and tossed out the news laws that would have amended the country’s criminal law. However the lower house has the final say and the laws went through a few days ago as you can read about here.

Yesterday was the deadline for Americans to file their tax returns. Conservatives have been trying to organise a mass protest that would supposedly be reminiscent of the Boston Tea Party, the idea was to hold small get togethers over a cuppa and then send the used tea bags in the mail to members of Congress. The idea has been heavily promoted in an astro turfing campaign by right wing media outlets, especially by the Chairman’s Fox ‘News’. Being the clever people that they are, they decided to call the protest ‘teabagging’, seemingly unaware that word already had a completely different meaning that wasn’t quite what they had in mind. Aside from being a spectacular flop like all astro turfing campaigns are (because no one actually supports them) the failed campaign has provided much mirth for the rest of the American media, as can be seen here:

Let's see if the 'teabaggers' put their money where their mouths are (nothing like a good double entendre) and refuse to lodge their tax returns.

Incidentally, here's what a real protest about a real issue looks like. Massive respect for these brave women standing up for their rights against oppressive sexist laws enacted in the name of Islam.

Another one! The Vermont legislature has voted to overturn the Governor's veto on equal marriage. Great stuff!

More good news from the Hawkeye state, the mechanics of ballot initiatives there require the proposal to be passed by both houses of the Legislature before it can be put to the people. Currently both houses are controlled by the Democrats and they've signalled their support for the Court's ruling so it's not looking good for a ballot initiative in 2011, the Republicans would have to take both houses just to have a referendum on a constitutional amendment in 2013. It's always possible, but it seems unlikely that the Republicans will be back in business two years from now to win in 2013 and even if they were, equal marriage would have been bedded down for four years at that stage and people will have realised that the sun continues to rise and civilisation hasn't imploded.

Australia and New Zealand have joined together to help fund the Burmese junta, Brunei’s absolute monarchy, Malaysia’s suppression of democracy, Singapore’s one party state, Thailand’s illegitimate government, and the Vietnamese and Laotian Communist Parties through the new free trade agreement with the Association of South East Asian Nations (ASEAN).

This is the first Free Trade Agreement Australia has signed since the onset of the global financial crisis and continues the government’s commitment to ignoring human rights abuses in other major trading partners like China and countries in the Middle East.

It seems despite all the talk coming out of the G20 meeting London and the hot air coming out of Rudd last week when he talked about how people had been worshiping the false god of “unfettered free markets”, (speak for yourself Kev) the old order isn’t quite dead, it’s just recapitalising.

“It powerfully demonstrates Australia’s – and the region’s – strong commitment to opening up markets in the face of this crisis.” Australia's Trade Minister Simon Crean said in his media release.

“Australian primary producers are now being guaranteed greater access to developing South East Asian markets, many of which have a growing appetite for high quality Australian produce,” Mr Crean said.

Like all free trade agreements there will be winners and losers. Winners will be sweatshop owners in places like Indonesia and Cambodia making cheap Nikes and electrical goods who of course are world-renowned for fair treatment of their workers, high wages and their strong support for unions and Occupational Health and Safety practices. Kleptocratic officials and politicians also stand to do well through growth in corporate tax revenues and kickbacks paid to ensure ideas of changing the system remain just that.

Not so lucky are the South East Asian small farmers, workers in general and migrant workers in particular who now will have to deal with a flood of imports and more pressure to keep wages low and conditions shitty. Australian and New Zealand workers can look forward to more outsourcing of their jobs as employers look to undercut wages and working conditions at home by moving to countries with cheaper labour and more…accommodating labour laws like Pacific Brands (makers of some of best known Aussie clothing brands) did a couple of weeks ago.

The Textile Clothing & Footwear Union of Australia is shocked that the Australian Government would encourage open trade with the Burmese regime. National Secretary Michele O’Neil deplored this policy stating that it sent a bad message to a repressive regime responsible for numerous grave human and labour rights violations. “How can you have so called free trade with a repressive regime?”

Aung San Suu Kyi has long called for a boycott of Burma.

“I am proud of this agreement, as it represents a historic milestone for Australian trade negotiations,” Mr Crean tells us.

Historic indeed.

It's been a while! I've been pretty busy and haven't had that much to write about but this week sees a major step forward in the fight for equal marriage, in one week both Sweden and Iowa have got same-sex marriage. Sweden would hardly be a shock but I must admit Iowa was a surprise - and no doubt disconcerting to reactionaries in the US, after all if the heartland states are falling...

No doubt there will be a fight to keep it, but a ballot initiative will be two years away by which time the change will be bedded down, plus activists will have learned a string of lessons as a result of Prop 8 in California, so here’s hoping.

It’ll be interesting to see what happens in Vermont as the Bill for equal marriage winds its way through their Legislature. Also keep an eye on New York, the Bill for equal marriage passed the lower house of the legislature before the election but was held up in the Senate by two hostile Republicans, both of whom lost their seats last November. For the first time in over 40 years the Democrats control both houses of the state Legislature in New York and the Governor has said he’s in favour of the Bill. This is New York after all. If Vermont and New York are won it will be a major setback for the forces of reaction, coming as it does on the heals of the tsunami that washed over them and swept Obama into office last year and of course the financial crisis.

It’s a pretty good time to be alive if you’re a lefty.