Circumstances meeting our prejudice = proof, in politics. Or, Kevin Rudd does what unions tell him to do

John Howard is spending billions on finally doing something about infrastructure, social and otherwise, in Australia’s Indigenous communities. From my perspective it is for all the wrong reasons – claming there is a national emergency out there, etc. Indigenous Australians have suffered a national emergency ever since we landed more than 200 years ago.

From the Prime Minister’s perspective it is for all the right reasons: squeezing indigenous community groups, undoing decades of progress on Indigenous land rights and, of course, the election. Fortunately most people can see through that one. At last, 11 years in, the dirty tricks of John Howard have become punches well-enough telegraphed for the general public to understand.

In other arenas, though, there is still game to be had. Specifically, the old canard that Labor belongs to the unions. I liked the SMH’s take on the ‘story’ (“Another leak casts Rudd as a puppet”), although the Australian’s was also good (“We’ll tame Rudd, union vows”). Get it? The unions are so confident that they can run the Labor party that they say so to their members.

Here are my headlines:

Labor policies keep unions onboard

Unions will never support Howard, Robertson says

Fire Howard, work with Rudd, union boss says

See, the theme of my headline is the theme of what union chief John Robertson told his bloody members: that whatever Labor is doing, either to position themselves for the election or because Rudd actually means it, they’re better off with Labor in charge than the Liberals. So for now they’re better off not rising to the bait of Labor’s electioneering, focussing instead on the harm done by Howard’s governing. It was rather a good rallying of troops, I thought, and rather a good playing of cards, because Robertson is right. There may or may not be former bosses of the ACTU on Labor front benches anymore, but it doesn’t matter. Labor is still the better party for the interests of the worker, and Robertson’s constituents need to remember that, for their own self-interest.

But then the story would be “Nothing has changed” – hardly as much fun as leaked tapes, weak leaders, parties in bed with unions, and so forth. Howard will be desperate for it to stick, though, because his Indigenous Emergency is no Children Overboard or Interest Rates. It didn’t work well and it’s already backfiring.

If marching the army in and victimising Indigenous Australians the last 3 inches they have left in this country is the best he had up his sleeve, Costello will be waiting even longer to become Prime Minister.

There is an 11-year wait for public housing in Sydney?

That was my piece of interesting information, from this story in something called the Fairfield Champion.

I don’t place great importance to human interest stories (these count, statistics students, as anecdotal evidence, not actual evidence. When people refer to “proof by evidence”, make sure they aren’t actually bulking up anecdotal evidence). This one is fascinating, though: Iraqi immigrants, handyman husband never had a full-time job in their 11 years in Australia (I can imagine Howard voters loving that one), but offered a fully-leveraged mortgage, which they’ve finally run out of chances to keeping paying. Husband has left, photo of wife with 3 kids, evicted at the end of the month.

Like I said, what really hit me was the throw-away line about the wait for public housing. Bloody hell. Those who remember the days of the Thatcher’s “right-to-buy” homeless families (not me, no) will pause at that one. Big shortages of public housing does not portend well when we’re expecting an increasing number of evicted bankrupts suddenly entering a rental market that is already at historically low vacancy rates – irrespective of their awful credit rating.

Continuing this latter point, the actual story I first spotted (much earlier today, but I had to go to the bank. Post-“9/11” laws here mean I can’t just get on the internet to wire money to Australia – like I can in every other country. It’s a more convoluted, and far more annoying, process).

There were a record 1400 auctions in the region in the year to March 31, nearly double the number in 2005, Australian Property Monitors figures show.

When I saw the heading for the story (“Surge in families forced to sell their homes”) I was more than a little skeptical, but I reckon that qualifies. Evidence that these were so-called ‘distressed sales’ (selling because the bank is foreclosing and you lose the house to pay off the mortgage – the woman in the story at the top had tried this already) is in the prices, as much as the numbers – tens of thousands of dollars below averages in other areas/regions/times (the woman in the story at the top had failed because the offer she got did not satisfy the bank. So she doesn’t ‘just’ lose her house, she goes all the way to bankruptcy (I’ve mentioned this trend developing).

This is a phenomenon seen here in the US, also – something I spotted Bloomberg (wireless) calling the Housing Recession – home ownership dead while the economy at large still ‘goes along’, as it were. Sydney is about doing that, too.

The number of bankruptcies and debt agreements – which are binding on defaulters – have doubled in some parts of Sydney since 2000. There were 5250 personal insolvencies registered across the city between June and February, suggesting this financial year’s total could reach nearly 8000 compared with just 4544 in 1999-2000. Parts of western Sydney have been hardest hit, with an increase in personal insolvencies of 99 per cent in Blacktown and 70 per cent in the outer west.

But the rise in bankruptcies and debt agreements is not confined to the urban fringe. Sydney’s inner west experienced an increase of 83 per cent over the past six years and there was a 74 per cent rise on the northern beaches and 60 per cent in the eastern suburbs.

The credit agency Dunn and Bradstreet released figures last week showing those defaulting on debts were getting younger, and failing to pay off smaller amounts. Half the defaulters referred to the agency, which monitors creditworthiness, were younger than 32. NSW residents were most likely to default on debts and had the largest average value of unpaid debt. Many consumers are failing to pay phone, internet and pay TV accounts.

Score. Wouldn’t it be amusing if that desalination plant comes online just when the number of people buying/occupying houses is declining because of this mess?

Funnily enough the call to end easy credit continues. Which is fine. I’ve said before this is all happening because people who shouldn’t, on paper, own homes were given mortgages anyway. Chickens are pretty much coming home to roost in the house the bank just took away from them, and it isn’t fair. I’d say more needs to be done than close the bank door after the horse bolted (it is “fun with metaphors” day). Like build public housing and a statue for Jack Lang (the Australian politician, not the French one).

Sadly, like the US, we still need consumer spending to fuel (or prop up, depending upon your mood) our economy, too. Take away the unsecured lending that pays for that and a real recession is on the offing. Leave the credit there and you risk a bigger one anyway.

End of South African strike: ‘not quite win-win’

Only Canada’s Mail & Guardian had it in their heading. The public sector strike in South Africa (mentioned previously) is over, after 4 weeks. Impressive, no? Interestingly, I saw a comment that the teacher’s union had called an end to the strike because school holidays had begun. Which would be hilarious.

It is not quite win-win because the wage increase in the end was pretty well what it was in the beginning: 7.5% (recall that the government had initially gone to 6%, the unions had demanded 12%, and gone on strike when the government wouldn’t go higher than 7.25%. There are of course other elements not tied to the wage increase, including one interesting structural change:

The deal also contains a framework for setting up a minimum service agreement with essential-service workers. This will ensure that minimum services will be maintained during strikes.

“Definitely we would see a situation during a future strike that essential services would not be as severely affected. There would not be any loss of life,” said Success Mataitsane, of the National Union of Public Service and Allied Workers.

The majority of unions have signed on – a few (the teachers) have not yet, but will continue negotiation (they won’t themselves strike, because their numbers will now be too small – one hopes). My original open question answered, with regard to the 600-odd nurses fired for going on strike:

The deal also makes provision for dismissed workers to return to work and receive a written warning instead of being fired.

What isn’t yet addressed – and might not be for a while – is the skills deficit implied by emergency service workers taking this action in the first place. The current ones will return to work (after 4 weeks of no-work-no-pay you either return or start a new career fast: that’s a long time to earn any money), but the next generation may not, for these conditions, go to the effort.

Also not yet apparent is who won in the broader context of this strike, with regard to the strained relations between the Congress of South African Trade Unions and the ANC. Again, 4 weeks is a long and punishing action, and a few groups were beginning to turn on Cosatu for its apparent avarice in not taking the 7.5% when it became clear that it was the ceiling (probably a week or more ago). The cost to the economy has been estimated at around USD418m (GDP in 2006 was only USD587.5bn), and food has pushed inflation to 6.4%. Mbeki could win politically if it appears he’s protected the economy and rewarded workers. And if he can keep is leadership of the ANC at all.

I don’t like Tony Abbott

I just figured I should start with that, so that my prejudices are known. As are, to be fair, his. His reaction to the government’s response to the national emergency of Indigenous communities?

“We need to get the police in and the booze out.”

“You aren’t going to stamp out the child abuse and violence without a strong police presence in these communities.”

“That’s how it starts, and that’s why the most significant aspect of the prime minister’s announcement is getting the police into these communities on the ground as soon as possible.”

Yes, police. Because when Indigenous people are 11 times more likely to be imprisoned, in the Northern Territory with its mandatory sentencing, after we’ve stepped in and started telling grown adults what they can and cannot consume, with the welfare upon which we’ve made them dependent, and of substances upon which we’ve made them dependent (we can debate this another time), more police are going to really smooth those tensions over.

Unless what the Minister for Health meant to say was that the police ought to be boosted there to enforce this daft idea – preventing the sale of alcohol to Indigenous people all over the Territory, and following everyone else home to make sure they drink it themselves. Surveilling indigenous communities to make sure they aren’t getting it or making it some other way and drinking it on the sly, or drinking anything else they think will blow their brains out for an evening. Will his police be able to do something about mere neglect, or only substantiated child abuse? And why does he suspect more police will help a problem whose existence is not due to under-policing in the first place?

Every time one of the government opens their mouth, policy moves ever farther away from the Inquiry’s very intelligent recommendations concerning community empowerment – let alone community enrichment or development.

Meanwhile, Indigenous life expectancy is still 17 years less than White Australia, Indigenous mortality rates are still around triple that of White Australia. Perhaps our Minister for Health could concern himself with those statistics.

Someone in the city/Gets a piece of paper/Someone in the bush/Holds the law in their hands

Hello, new readers who followed Crikey’s blogwatch. I’m sorry you came for Kevin Rudd vs. John Howard and mostly found a tonne of stuff about mining, Peak Oil and Merrill Lynch last night.

I also discovered one of my posts (Dr. Price, if you’re there) re-posted in full at some blog called green.bligblog.com. With no attribution (really, even politeness dictates a link, something). It got back to me only because I linked myself in the same post (which is not why I do it. Self-refernece is pure ego). I confess to feeling somewhat put out by such behaviour.

But onwards. I’ve noticed there’s a pattern to my posting, and it begins with Australian stories (I always start with Australian media, and their news cycle ticks over just after I’ve gone to sleep, so it’s usually on in the morning that I find anything). So now as ever. Speaking of Crikey, I hadn’t bothered pointing to them over their wonderful dissection of the report Little Children Are Sacred, because I didn’t have much to say, let alone add.

There has been a big to-do (not that there shouldn’t be, but bear with me) over the findings concerning child abuse in Indigenous communities in the north. Our gaily bedight Prime Minister declared

“This is a national emergency,” Howard told Australian parliament. “We are dealing with a group of young Australians for whom the concept of childhood innocence has never been present. That is a sad and tragic event.

“Exceptional measures are required to deal with an exceptionally tragic situation.”

We assume, no doubt, the worst (that is, the worst of Aborigines). Except that, as this article states later and Crikey discussed at greater length still,

Myth: Aboriginal men are the only offenders …It is the Inquiry’s experience that the s-xual abuse of Aboriginal children is being committed by a range of non-Aboriginal and Aboriginal offenders …The Inquiry…remains concerned that, at times, Aboriginal men have been targeted as if they were the only perpetrators of child s-xual abuse in communities. This is inaccurate and has resulted in unfair shaming, and consequent further disempowerment, of Aboriginal men as a whole. (Report, p. 59)

I wake this morning to find Australia’s soft paternalism has hardened, somewhat. From the Guardian:

Pornography and alcohol will be banned for Aborigines in Australia’s Northern Territory, the country’s prime minister, John Howard, announced today, after a report found that “rivers of grog” were leading to rampant child abuse.

“This is a national emergency,” Mr Howard told parliament. “We’re dealing with a group of young Australians for whom the concept of childhood innocence has never been present.”

The sale, possession and transportation of alcohol would be banned for six months on Aboriginal-owned land in the Northern Territory, Mr Howard said, and sales would be reviewed after that.

It’s a national emergency now?! I will remind our non-Australian readers that John Howard has been Prime Minster since 1996.

Alcohol is an important part of the Inquiry’s recommendations, but only a part. The report also mentions

a number of individual non-Aboriginal “p-edophiles” had been infiltrating Aboriginal communities and offending against children …As is often the case, these offenders appeared to have offended against many victims. However, they…often held positions of influence or trust in a community rather than being a “stranger”. (Report, p. 63)

I wonder how restricting the availability of alcohol, something we’ve spent 2 centuries of neglect and cultivated welfare-dependency getting indigenous communities addicted to, will affect this? I wonder what such circumstances will do to the influence and trust non-Indigenous people will gain when they can brink alcohol in to communities without decent amenities, and who’ve managed to interest the government only enough to have them ban alcohol, rather than provide schools, expanded horizons and the same opportunities that the rest of us have?

The report also made a bundle of recommendations concerning education and community empowerment. I wonder how long before the Prime Minister notices that ‘state of emergency’?

Real research into indigenous communities can be found at places like CAEPR. I will leave you with Crikey’s original commentary. Squalor pornography indeed.

Aborigines are in the same predicament. So are people in East European cities like Kishinev, Moldova, where the 12-year-old crack whores will pester you all the way from the station to your hotels. Or half a hundred other places across the globe.

Bad enough this is happening, worse that people are pretending it can be solved quickly, or that the report’s release will make any major difference. Thus Nicholas Rothwell, whose work veers between good sense and received wisdom:

“A LINE has been drawn in troubled sand. A taboo, long and artfully maintained, stands broken. From this day on, no one can say they do not know how deep the nightmare is in remote Aboriginal Australia, or how urgent the need.”

Empty pointless rhetoric. Most people will never hear about it and few will care for more than the space of a news bulletin. Aborigines are 3% of the population, most living far from the Californian hyperspace of white/Asian Australian suburbia. For the latter, anything happening north and west of Broken Hill is another country, and nothing that happens there to people white or black is of much concern, no matter how many bridges are walked over.

What we will get is more squalor pornography — thousands of words poured forth detailing this rape that beating at this camp this settlement, jaded playwrights and novelists making flying visits to cart away a bit of homegrown horror. The ostensible purpose will be to expose terrible conditions for which we are all etc, the real effect is to make people reading the Saturday papers feel good about their own lives. Catharsis sells, as does an implicit sense of racial superiority.

Wealthy Nations Should Increase Global HIV/AIDS Spending, Editorial Says

I thought I’d return to that AIDS story from India. From the Kaiser Network:

“Now that the Group of Eight industrialized nations has pledged to commit $60 billion to combat AIDS and other diseases around the world in coming years,” Congress and “other national legislatures ought to look hard for additional funds to close a looming gap between the funds committed and the needs of desperate patients,” a New York Times editorial says. Donor nations have “greatly increased their funding for AIDS programs in recent years in belated recognition that the epidemic threatens to destroy not just its victims but also the social and economic fabric of many countries in sub-Saharan Africa,” the editorial says.

Although President Bush’s recent proposal for a $30 billion, five-year extension of the President’s Emergency Plan for AIDS Relief is a positive move, the funding request “represents only a modest increase from the spending trajectory” the U.S. already was on, according to the Times. The U.S. has been “by far the largest AIDS donor in recent years, providing almost half of the funding commitments made by donor governments,” the editorial says, adding, “But when measured against the size of the national economy, the American donations rank only fifth. There is room to do more.”

The G8 pledge and Bush’s PEPFAR proposal will not be “enough to keep up with the devastating epidemics” of HIV/AIDS, tuberculosis and malaria, the editorial says, adding that tens of “billions of dollars more will be needed to provide treatment, care and preventive services for AIDS alone over the next five years.” As Congress this year “wrestles” with the fiscal year 2008 appropriations bills, it should “provide the full $1.3 billion being sought by congressional health advocates” for the U.S. contribution to the Global Fund To Fight AIDS, Tuberculosis and Malaria, the editorial says, concluding that Congress also should “set the nation – and by its example, the world – on course toward universal access to AIDS treatment by 2010” (New York Times, 6/18).

We know that AIDS funding is ever-increasing:

and putting that into some sort of context, from the same report:

The question is, is it making any difference? Talking to a friend (who reminded me that I wanted to revisit this), whose work is kind of related to this sort of thing, his perspective was that AIDS funding had gone a little IMF – in that it was used to impose “good governance” (caveat: he did say he thought this in his more paranoid moments). One can see pieces of this for themselves – the Bush administration’s horrid little gag rule a splendid case in point. Even above, the New York Times editorial tells us that Congress also should “set the nation – and by its example, the world – on course toward universal access to AIDS treatment by 2010.” What does that mean, on course toward universal access to treatment? Who defines what is ‘on’ or ‘off’ course.

The holders of the purse strings, ‘of’ course (bad pun. Sorry. I’m Australian, we can’t help ourselves).

If you go searching for longitudinal studies of HIV/AIDS, you’ll find a lot of first-world work, looking almost entirely at first-world concerns. Not so much incidence (or structure), or response to funding. We’re all more or less familiar with the pandemic,

but only in that static sense. Personally I don’t think my friend is as far off as he thinks he is: look at the response to the Indian story:

Millions of dollars have poured in from international donors, NGOs and the government for prevention and awareness programmes.

But today, this flow of funds could dry up. New estimates reveal that the number of people living with HIV could be much smaller than believed and ironically, activists fear the first casualty would be aid.

”Funding would be affected at their level. Small NGOs would be at the receiving end,” said Kaushalya, Positive Women’s Network.

That ‘small NGOs’ comment is telling. A UNAIDS’ Report on the global AIDS epidemic 2006 included the lines:

More leadership and more money are still urgently needed, and thus these two areas of focus remain essential, but now there is widespread recognition that a third focus is also vital: making the money work more effectively.

Why is this necessary? As more money has become available, more government,international, civil society and other organizations have been responding to AIDS in many of the low- and middle-income countries most heavily burdened by the epidemic. Often, there have been no mutually agreed-upon strategies or mechanisms guiding, coordinating, monitoring and evaluating their efforts. The result has been duplication, waste and serious gaps in the national AIDS response in many countries.

Often, for example, there has been insufficient surveillance to identify the people whose behaviour places them most at risk of infection and consequent failure to reach these people with prevention, treatment, care and support services.

This is the beginning of chapter 11, Getting the Best Out of National Responses. It continues into stake-holder, guiding principles, action framework speak (not my bag).

I’m not suggesting funding be cut. I do get as annoyed as any other healthy-in-a-rich-country welfarist at the popularity of one illness over another, and Bono really does send me spare. Returning to the India story Anjali Gopalan, Executive Director of the Naz Foundation, said

”I see this as a very political disease. This kind of response has not come from communities in cancer and malaria, even if studies show that numbers are lesser. Donors can’t pull back now. It’s opened a Pandora’s box because we are also looking at opportunist infections. For the first time because of HIV there are health initiatives that have gone down to the district level.”

I mean, good, but that’s a fine demonstration of the problem – funding for AIDS has increased as though it is funding for aid. Little is known about the impact of this funding, but little enough even seems to be known about the implementation of it. With the bodies involved it is not surprising: governments and the strings that they attach to their funding, the UN, WHO and down through all of the NGOs at work in various countries.

It strikes me though that, in an age when the NHS won’t consider a treatment without some idea of its cost-effectiveness, we could do with some of that waste-not-want-not attitude in our response to the AIDS/HIV pandemic. Again, thank God, I don’t have it and I don’t need access to treatment while having no running water. Which is why I’m not suggesting funding simply be cut when a country’s numbers go down – because as I said the other day, numbers are remarkable fungible, to the point of being meaningless, things. I just think we’re spending some rather inefficient dollars on the problem.

When does a housing slump become a bust?

From the IHT:

In the stock market, we have a pretty good idea what a crash is. Among stock market experts, there is a consensus that a 10 percent decline in a major index is a correction while a 20 percent decline is more significant: a crash or a bear market, depending on the time involved.

For the macroeconomy, there is also agreed-upon terminology. For example, a recession means two consecutive quarters of declining gross domestic product.

But when it comes to declines in housing prices, there is no such framework. As experts debate whether we are headed for a housing bust, you would think that we should at least be able to define it.

I wouldn’t say something as vague as 10% and 20% point to definitions. Not with economists, anyway.

The author (Anna Bernasek) goes on,

More recently, there have been severe price declines in regional markets. The most severe was in the so-called oil patch during the 1980s. In the late 1970s, as global oil prices soared, oil-producing areas of Texas, Oklahoma, Louisiana, Colorado, Wyoming and Alaska experienced an economic boom. As oil prices collapsed in the early 1980s, those economies crashed, and housing along with them.

In the worst cases, nominal home prices fell 40 percent in Lafayette, Louisiana, and 33 percent in Casper, Wyoming, from 1983 to 1988, according to the Office of Federal Housing Enterprise Oversight. In Houston, prices fell 22 percent.

There were also sharp price declines in housing on both coasts during the early 1990s. At that time, a series of events, including the recession of 1990-91, the military downsizing after the Cold War and a commercial real estate collapse, led to a housing downturn.

She’s right: houses aren’t safe as themselves for nothing. As she also discusses, the decline in house prices isn’t distributed evenly through a macroeconomy, because a macroeconomy is nothing more than an aggregate of microeconomies. A national average of house prices doesn’t care that military bases are in dedicated, small areas. State-based averages will. The anecdotes above demonstrate this, but they also demonstrate something she did not mention in her article.

All of these significant declines in house prices followed (or at least corresponded to) exogenous economic shocks (oil prices, military downsizing – and how’s that working out, Mr. Rumsfeld?), or a recession.

This government, with its tax cuts for the rich, has managed to beat the definition of a recession, but you don’t need to be a Paul Krugman fan to have heard the words “jobless recovery” used as a popular macroeconomic adjective in the last few years. The reason, I believe, why the slump/crash issue exists here is that it doesn’t. This is a weird sort of economy, one that hasn’t been observed (at least in the US), because it is coupled with very large debt to manage, a government not particularly socially-welfarist to say the least (which is saying something at all, for the US) and the sort of financial deregulation and/or instrument not heretofore seen (or used to buy houses, come to that).

Jim Kunstler’s take on the ‘newness’ of the phenonemon is something else – and I don’t think his death of Happy Motoring is all that far off. Sub-prime lending, cheap oil, even (as I recently discussed) reverse mortgages have an effect. Wages that have gone exactly nowhere in several years now have most certainly not helped.

I’m inclinded to say neither a slump nor a crash besets us (unless house prices really do go off the side of the cliff if a recession hits later this year – although that will be standard macroeconomics, give-or-take. Certainly we dismal scientists will easily explain it away), but rather a correction – a return of housing to levels of price and ownership that match the state of the economy. We’ve been living in the emperor’s new clothes, or the cake we’ve been having and eating, probably as long as we could have expected to get away with it. Low low interest, sub-prime lending, cheap-oil commutes, all contributed to a boom not only in house-building but house-price-paying, and it had to end when those drivers ran/run out of steam.

My hope is just that it does so slowly enough, and under a government competent enough, to avoid the ‘crash’ of the crash.

Affordability

Meanwhile, even as houses become less pricy, they are becoming less affordable (empathy, Australians!). From CNN (via the Big Picture):

According to the 2007 State of the Nation’s Housing report from the Joint Center for Housing Studies of Harvard University, 17 million of American households in 2005 were putting more than half their income into paying for shelter – a rise of 1.2 million from the prior year, and a jump of 3.2 million from 2001.

Mortgage rates have generally been a favorable part of the equation. Since the start of 2001, they’ve ranged from an average of 5.23 percent for a 30-year fixed in June, 2003 to 7.16 percent in June of 2006. Even after the Federal Reserve started raising its rates in June, 2004, mortgage rates stayed low.

Median income, however, has dropped. Real wages fell from 2000 to 2005, according to the report. By 2006 household income was 1 percent below 1999 levels, according to stats from the Current Population Study of the U.S. Census Bureau.

Quite a different beast than that faced in Australia. Here prices may fall, but mortgage rates have to leave their fantasy land of the last few years, and nothing, apparently, can compete with this administration’s war on real wages.

The “Greening” of New York City

From the June edition of The Brooklyn Rail (a recent discovery):

Much of official New York’s present-day confidence rests on a tidy but triumphant narrative of its recent political past. It goes like this:

In the 60s, the city began to live beyond its means, offering generous wage and benefit packages to unionized workers, and spending too much on welfare and other public services. Its coffers drained, the city by the early 70s had turned to the short-term bond market to cover everyday expenses. Sensing trouble, Wall Street cut the city off. The Feds’ reaction to the city’s pleas for help produced the now iconic Daily News headline, “Ford to City: Drop Dead.” The banker Felix Rohatyn and other civic-minded business leaders stepped to help the city put out the fire now known as the Fiscal Crisis of ’75. Working through independent, state-sanctioned bodies like the Municipal Assistance Corporation (MAC) and the Emergency Financial Control Board (EFCB), Rohatyn and company dramatically cut social spending and reined in the unions. As a result, the city started to get back on its feet.

The article is nomically a review of a recent book, From Welfare State to Real Estate: Regime Change in New York City, 1974 to the Present, by Kim Moody. The book’s specific contribution to the ‘story’ of New York City is to delve a little more deeply into the structure of the city’s income and expenditure during that period, to demonstrate that, in fact, the city’s cash problem was more a result of serious tax-payers buggering off to Long Island, etc., while something like 40% of the real estate in the city had come in free of property taxes.

There is still not an argument that the conventional narrative was so wrong as to be a banker’s coup. The unions as well as federal, state and city entities still did nut out the solution to the crisis, but there is no denying the ‘crisis’, such as it was, served a recognisable coterie very well indeed.

Richard Wells (author of the Brooklyn Rail piece) proceeds from this point into discussion of the future, specifically Bloomberg’s PLaNYC (I think I have that right). He notes the lopsidedness of New York’s renaissance (short version: good for Manhattan, bad for the Bronx and Queens). He notes that PLaNYC is mostly the same story: sustainability is market-based, city-sweetened and underwritten. I’ve written elsewhere about the dual nature of congestion charges, although I still like them – hopefully the plan doesn’t go for too much privatisation of the enterprise, though.

Similarly the housing issue. Bloomberg’s plan is administrative, i.e. simplify and streamline the process by which developers can develop, rather than structural, providing better links between boroughs, doing something about the varicose vein of the Lincoln Tunnel, and so forth. Inclusion of affordable units in new developments appears to be voluntary also, rather than compulsory, which makes one question the strength of the city’s commitment.

Wells’ critique of PLaNYC is welfarist. Which is fine, but he is talking about New York. As he points out himself,

What is it that makes New York City truly exceptional these days, asks Moody at the start of his analysis? Not its leading position in the parade of global cities, but rather its poverty rate, which at 22% is twice that of the nation. In Manhattan, the top 20% of earners make more than 52 times what the bottom 20% makes, more than five times the national rate. How often do we hear that New York is home to poorest county in the United States, the Bronx?

I don’t see that changing. Manhattan costs a fortune, and great (and every greater) swathes of it are for properly rich people. Housing previously held for essential servicepeople (teachers, nurses, cops) are no longer so reserved. Yet this is New York: people still wake up to clean streets and shelves filled with cheap food and shiny goods. It doesn’t seem to matter the sort of restaurant to which you go, the kitchen is probably staffed by Mexicans (and South Americans).

Manhattan is a rich borough serviced by people earning very little and living in other boroughs. That isn’t going to change, and property owners are making far too much to allow the city to provide the means for workers to live elsewhere and comfortably commute. I keep getting told that new train-lines out into Pennsylvania are coming, but I’m not holding my breath (it’d be the best thing to happen, frankly, but that’s just because I’m from Sydney). Essentially though, Bloomberg’s 25-year vision for New York, at the street level, really isn’t all that different from the last 25 years.

And the police make it hard wherever I may go/And I ain’t got no home in this world anymore

Two stories catching the eye just now:

In Australia, the rapidly-expanding reverse mortgage sector is probably another disaster in the making.

In the US, reverse mortgages promoted by Washington lawmakers, specifically:

Support and encouragement for the use of Reverse Mortgages is coming from Washington DC. The Centers for Medicare and Medicaid recently gave the National Council on Aging a financial grant to promote the use of reverse mortgages to pay for long-term care and long-term care insurance.

The Department of Housing and Urban Development (HUD) is offering a 2 percent discount on closing costs for reverse mortgages that are taken out to buy long-term care insurance.

The SMH story points out something that I actually didn’t know – that no repayments are one of the keys to the reverse mortgage:

In a recent review of reverse mortgage providers, ASIC found five cases of misleading advertisements that made claims suggesting reverse mortgages did not need to be repaid. The statements used in the advertisements included “there are no repayments”, “no loan repayments ever” and “no need to make repayments!!”.

That is, no periodic repayments. The loan is paid out when you die or move to a nursing home. But pay a little and pay often is, as I always understood it, the rule to borrowing money (or saving, or writing a thesis). Take that rule away, and

As no repayments are made until these triggers, the interest compounds and the debt builds quickly. According to the consumer lobby group Choice, a couple who borrow $100,000 secured against their $500,000 house, paying 10 per cent interest, will owe $755,000 in 20 years.

Hence the warning: this is rather a problem, if your’re spending your house on retirement, and end up with nothing left for a nursing home (not recommended in Australia, but probably not recommended anywhere). It strikes me as more pernicious in the US, where the government is actively just trying to save money.

Lenders make a committment not to come after you if the loan ends up greater than the value of the house (making it a little like life insurance, I guess, gambling-wise). But one wonders how long that will last, particularly if we start living longer than the banks realise they’ve made a bad bet. A Congress whoreish enough to pass the recent Bankruptcy bill is clearly not one to be trusted to work for the common good, so much as the private campaign-contributing good. In any event, if you have to sell your house to pay for care, so be it – it’s a cruel world. But I would say financial prudence says sell that house, put the money in a financial asset that serves the intended purpose, and move forth.

Perhaps I’m just conservative and old-fashioned, but surely you will get more money than handing over decades of compound interest to a bank? Reverse mortgages strike me as trying to have your house and sell it too. I just can’t see that working for long. Particularly when the parties involved (banks, agents, the government) clearly have their own, far shorter-term agenda behind getting you to sign.

I went out drinking with Thomas Paine/He said that all revolutions are not the same

Back when I was discussing the Australian Workplace Agreements (the neutrality of that Wikipedia entry has been disputed. Imagine) I had the only comment so far, from Gavin of the blog make/shift (which is a bloody great blog – and I say this not merely because of my hippie state-smashing vegan sympathies). He suggested I was a screaming leftie tit (I am) and that I should become a ‘wobbly’ – a reference to the Industrial Workers of the World.

Actually at first I though he suggested I throw one – in Australia a wobbly is a fit – i.e. a temper tantrum. At the time I said I’d discuss them at a later date – I figure now is as good a time as any.

(caveat: none of this should be taken as applying to notions such as income equality – in terms of economic theory they are not related nearly as closely as we tend to think)

From their wikipedia entry:

The Industrial Workers of the World (IWW or the Wobblies) is an international union currently headquartered in Cincinnati, Ohio, USA. At its peak in 1923 the organization claimed some 100,000 members in good standing, and could marshal the support of perhaps 300,000 workers. Its membership declined dramatically after a 1924 split brought on by internal conflict and government repression.

Today it is actively organizing and numbers about 2,000 members worldwide, of whom roughly half (approximately 900) are in good standing (that is, have paid their dues for the past two months). IWW membership does not require that one work in a represented workplace, nor does it exclude membership in another labor union.

Their membership alone is a decent commentary on what has become of the days of Woody Guthrie. The IWW has a couple of interesting features. First from the paragraph above is that the workplace does not need to be unionised – although this clearly limits the ‘standard’ powers of the IWW (‘standard’ in the sense of what a union usually does in/for a unionised workplace).

The preamble to the IWW constitution is here. They also organise according to industry, rather than trade, which is organised at a higher degree of removal(?). Specifcally:

Nice, eh? The reason, as far as I can discern, is because the IWW’s ultimate, marching-band goal is complete unionisation, organised under one committee. Yes, you’ll find it’s a little communist in the way it presents itself.

I see a point, particularly in this day and age. It makes more sense for an entire industry to be co-ordinated, and to work with built-in solidarity not (just) between dock-workers in Melbourne and Liverpool, for example, but between loaders and welders and forklift drivers all down at the docks.

I say a point: this is not the point. The IWW’s reasons are

(1) a classless union. One Big Union, under which every worker, whatever the trade, whatever the industry, from doctors to dockers, are equally valuable as labour (within that industry), and equally represented and protected.

(2) countering employer consolidation. As firms, industries, etc. end up in fewer and fewer hands, more and more power is falling to the employer. The IWW figures the way to confront that is centralise to a single point union representation.

As a union, they also employ what is called the wobbly shop model of workplace democracy. That is, democractically-elected officials within the union, recallable and under strict term limits – and earning no more than the industry average for IWW members in that industry. It also means workers vote upon policy (a model that would do the US no end of good, I think).

For me, anyone who came in for the sort of beatings the IWW got between the wars is okay in my book. In fact it took the red scare to seriously injure them (although injure them it did).

What I like the most about the IWW about which I read is that is so clearly anachronistic. It hasn’t really changed, but we most certainly have. The ideas they hold most dear, and protect most strongly, go right back to Adam Smith (he too despised, or at least distrusted, the corporation, and pointed out that all his invisible hand stuff only worked when they weren’t around).

Speaking practically, their model and their goal is probably the most sensible: bargaining power is ever more falling into the hands of employers. The trouble is, the reason for this is government. In the heyday of the IWW there simply weren’t laws banning emergency workers from striking. There wasn’t the sort of sophistication in legislation that an army of lobbyists bring to the halls of parliament.

I suppose the other difference is us, which is harder to pin down. There wasn’t an FBI, but there were plenty of arrests, and there were plenty of blackshirts kicking the teeth out populist organisers. The Espionage Act in the US during the first World War was practically tailor-made for dealing with anti-capitalist elements. So too the Palmer Raids of a few years later. Nowadays we decry the chilling effect of workplace anti-union propaganda, and of surveillance by the FBI, but that’s nothing compared to the door-kicking brown-shirting that was required in the previous century. Is it, as Carol Pier suggests, that workers are just not learning the benefits of organisation, at the same time as the government looks the other way while any attempts are crushed embrionically?

You will have noticed I’m clearly going to leave this as an open question. Students at my University are trying with a new President to explain the utter sensibility of affiliation with the Workers Rights Consortium. They had no luck with the last President, though I don’t understand why. Certainly ordinary awareness and activism are stumbling-blocks.

I believe it comes down to education. Once unions were smashed, they mostly stayed that way, all over. New terror laws, commercial sensitivity laws, and who knows what other laws, are steadily building walls in front of them ever coming back as they were.

It also comes down to electoral participation. We are in an era where the majority of the country around me right now honestly accepts that you get to elect a president once per 4 years, and anything he does in that period is his perogative. That the electoral college is just the way it works (hell, they probably think everyone elects leaders like this). We talk about people in power, rather than people in government. We talk about leaders in Congress, instead of representatives. Everything is wrong (with apologies to Moby), not just with the dialogue/debate but with the very language itself.

I hardly begrudge the IWW their successes – I celebrate them – but I do think the manner in which the workplace goalposts have been shifted means something quite radical needs to change, in terms of basic citizen awareness, solidarity and electoral power/control, before the principles of Adam Smith can be returned to the Workplace. Meanwhile we’ll continue to buy cheap shit from Wal-Mart, while working there because all the other stores in town closed down.