Thursday, January 27, 2005

The debt millstone grinds on
From time to time I've warned that Kiwis face a debt crisis. It may not hit us this side of the election (if it did, it would change the political landscape significantly), but it is going to arrive sometime soon. I am thoroughly aware of the very poor track record of prophecies like this, but my guess is no later than the end of 2006.
I appear to be backed up by political columnist Colin James, in a NZ Herald column headed "We love debt to bits but the party can't go on forever".
James says the belief that our personal finances are as safe as houses has fuelled an impressive consumer boom. But who is really paying for the boom and what does that mean for the future? Household debt has tripled to around 130% of household income over the past decade and a-half. By that measure it is among the highest, if not the highest, in the developed world.
"This is not quite as alarming as it looks because household assets, notably houses, have risen fast, too. But that is on paper: house prices are in a bubble. Over time house prices move roughly in synch with rents but over the past few years they have soared far ahead of rents. Because rents relate to real incomes, which cannot boom as house prices have, house prices will have to come back into line sometime - either by falling or by going sideways for a long time until incomes rise enough to allow rents to catch up. Moreover, a lot of the new household debt has been spent on leisure and goods - that is, on a consumption binge. We have been pawning the family silver to pleasure ourselves.
"The upshot is the buoyant economy [Michael] Cullen is basking in. But the upshot is also a big red deficit in the balance of payments current account with the rest of the world."
James says the current account deficit is poised to deepen. Moreover, the capital coming in from abroad to balance the account mostly goes not into productive investment but to pay for consumer imports and to fund mortgages and other personal borrowing.
The bubble will burst, and a lot of people are going to get hurt, particularly those reliant on two incomes to maintain the mortgage. For what it's worth, my advice is quit your mortgage as fast as possible, and only buy what you can pay for out of this month's income. Those who don't live within their means are going to face some torrid times.

Dorm brothels
An educational trend that is having a profound effect on culture in the USA is the liberalisation of co-ed dormitories in American colleges. Once strictly segregated, in the dormitories these days virtually nothing is off-limits, even encouraged by the colleges. Teens no longer date, they "hook up", which is a purely sexual exercise. Relationship, commitment, whatever, is no longer desirable.
While it might look like freedom, it is actually a new prison, particularly for women, because there is no longer anywhere for them to hide if they want to say no. The pressures to conform by giving in to casual sex are enormous. Some would appear to be adopting temporary lesbian lifestyles in an attempt to escape pressure from men.
The implications are deep and will be long-lasting. Vigen Guroian, a professor at a typical college, is particularly disturbed at the way in which the educational institutes (including religious based ones) are not only abetting but promoting this. His critique is both thoughtful and hard-hitting.

The growing China influence
Of the many competing forecasts of the century now unfolding, all agree that the rise of China will be a central determinant of its course. So great is China's potential that some have prematurely termed this the "Chinese century."
Henry J. Hyde, a US Senator, has analysed the implications in a speech he gave in Hong Kong recently.
"In its scale and speed, in the ambitions of its leaders and hopes of its people, this development is unprecedented," he says. "Far from maturing into a more settled pace of change, the rate appears to be accelerating and broadening as more and more of the country is drawn into the modern world. The process can be compared to the birth of a new and enormous star, its internal temperature soaring as a critical mass rapidly accumulates to the point of ignition, its gravitational waves already beginning to realign the heavens around it.
"Were China a country of modest size, this process would be an interesting, even fascinating, one, with soft ripples of influence confined within nearby horizons. But China is one-fifth of humanity. Its enormity ensures that there can be no insulating boundary between its internal transformation and the world outside. Our attention is focused on the dramatic developments within that country, but we are simultaneously witnessing the emergence of a new and powerful actor on the global stage, one whose actions and decisions will reach deeply into every country on the planet.
"Whether that impact will be positive or negative, cooperative or combative, cannot yet be predicted with any confidence. That will in large part be determined by the evolution of China's political system, which is being pried loose from its moorings by the swirl of the enveloping currents. But the leadership has yet to set a clear course for itself or the country or to identify a safe anchorage.

A brash new world?
There's an interesting dividing line in the reactions to Don Brash's Orewa II speech on welfare. The usual people have lined up to slam Dr Brash for his beneficiary bashing. But the man or woman in the street appears to side with him. A TV1 Close Up poll gave the National leader 88% support, while the majority of the vox pops in The Press were also supportive. Neither of these polls are particularly valid as market research, of course, but I wonder whether the government and allies are as in tune with public opinion as they like to think? The next political polls might give an indication.
But on to the content. Several points are abundantly clear: The total number of people on benefits is astronomical and shows no sign of abating (even with the reduction in unemployment beneficiaries); while we can afford the Vote Welfare Budget in these healthy economic times, that will not be the case if there's a downturn; the cost is even higher in human terms.
An unknown number of DPB beneficiaries are also fiddling the system big-time. I have heard countless anecdotes of women collecting the DPB while living with a man, who may or may not be the father of her latest child. WINZ staff make some enquiries, but they are totally under-resourced to check up, and Kiwis dislike officials snooping around the neighbourhood even more than they dislike dole bludgers. And as the DPB woman interviewed by Susan Wood on Close Up eloquently exemplified, it's so much easier to go on the DPB than to stick around and try to make a difficult relationship work.
That still doesn't explain, though, why the numbers on nearly all benefits have skyrocketed since the 1970s. The amount of work available is at least equal to the amount of work available in the 1960s, when unemployment was virtually zero. So why could people work back then, but not work now? Is the NZ population so much sicker now that we have so many on the Sickness Benefit?
The underlying factors that have caused this benefit inflation were barely addressed by Dr Brash in his speech. And there is no indication from anywhere that they are going to change in the near future. To change the numbers, we have to change the reasons why the numbers have increased -- anything else will simply be like trying to tie down the cork of an overheating bottle of gingerbeer with a piece of rotting string.

Tuesday, January 25, 2005

Are we near the global warming point of no return?
I try to preserve a neutral stance about whether global warming is indeed a real threat (not all scientists agree). For the record, however, a major report has been published saying the global warming danger threshold for the world has been nearly reached.
According to the report, the climate can barely afford a 1C rise in average temperatures before massive climate changes hit the planet. These could include widespread agricultural failure, major droughts, increased disease, sea-level rises and the death of forests, the melting of the Greenland ice sheet and West Antarctica and the switching-off of the North Atlantic Gulf Stream.
A task force of senior politicians, business leaders and academics spell out the warning in the report Meeting The Climate Change Challenge - and it is remarkably brief. In as little as 10 years, the report says, the point of no return on global warming may have been reached. This point will be 2C above the average world temperature prevailing in 1750 before the industrial revolution, when human activities - mainly the production of waste gases such as carbon dioxide (CO2) - first started to affect the climate. But it points out that global average temperature has already risen by 0.8C since then, with more rises already in the pipeline - so the world has little more than a single degree of temperature latitude before the crucial point is reached. More ominously still, the report says a 400 parts per million concentration of CO2 in the atmosphere will make that two-degree rise inevitable - and the level is already 379ppm and rising at 2ppm every year.
The authors urge all countries in the G8 group of rich nations to generate a quarter of their electricity from renewable sources by 2025, and to double their research spending on low-carbon energy by 2010.

Who gives way?
What happens when the irresistable force of feminism meets the immovable object of Maori custom? In this case, it could mean the loss of a job.
According to the NZ Herald, probation officer says she broke Maori protocol by refusing to sit at the back of the room during a ceremony because it was degrading towards women.
Josie Bullock's protest, at a farewell to prisoners last month at the probation service office in Panmure, is being investigated by the Corrections Department. Ms Bullock was asked to move from her front-row seat to the back of the room after being told that Maori custom required women to sit behind the men. But she refused, insisting she would remain in her seat.
Ms Bullock says she made the stance in protest at the sexism of such ceremonies, which "relegates women to the back". Reasons she had been given for the protocol included that men were "like Gods" and that men sat in front to "protect the women". She compared the move to "blacks" being made to sit at the back of the bus, "as they were forced to do in the American South in the 1950s". What was particularly degrading, she said, was that a boy aged 10 sat at the front of the room while she was asked to move.
The Maori Staff Network said in a letter that Ms Bullock's actions were insensitive and created an uncomfortable situation, particularly for Maori staff members involved.
A letter addressed to Ms Bullock from Community Probation Service acting regional manager Paul Tomlinson said the matter was "very serious". The department's code of conduct said that there was a need to maintain a "politically neutral" public service. He warned her that if staff did not do this they could lose their job.
Whatever the merits of Ms Bullock's case, I fail to see how taking the side of Maori culture is being "politically neutral". But we await developments (if the outcome will ever be published).

Courting Ratana
I'm fascinated at the strenuous courting each year by all political parties of the Ratana Church. Once again we saw a massive turnout by Labour (some 30 MPs, most no doubt under strict marching orders from She Who Must Be Obeyed). But none of the other parties dared absent themselves.
On a strict numbers basis this huge effort doesn't make a great deal of sense. According the last Census, the Ratana Church had just under 49,000 adherents. If 30% of those are under voting age (about the national percentage for Maori generally), that leaves 34,300. Let's say that 80% of those vote (being generous), that leaves 27,440. We don't know how many will follow the Church heirarchy's lead, but let's be generous again and say 70%. We're now down to 19,200 votes.
Those votes are largely going to be concentrated in a few pockets, with the biggest in the Wanganui district. So in terms of electorate seats, we're talking about a bloc vote that will affect maybe a couple of electorate seats.
Presumably, then, the effort is all about image and being seen to be the friend of Maori at large. It's all rather selective, though. There are probably almost as many Maori votes in the Tikanga Maori branch of the Anglican Church, but I don't recall the political parties all queueing up to address their annual Synod.
It's even stranger when you consider the great cry for separation of Church and State whenever anyone wants to intrude the meerest sniff of religion into politics. But when it comes to politicking, garnering votes, and promoting multi-culturalism, no mix is too strange.

Monday, January 24, 2005

Unicef backing off abortions?
UNICEF, a UN agency devoted to helping children, has long been condemned by pro-life advocates for promoting abortion. However, someone new, who says abortion issues are "irrelevant" to the mission of the organization, is replacing the longtime director of the agency.
Outgoing U.S. Agriculture Secretary Ann Veneman will take over at UNICEF after being nominated by President Bush for the post. She has received support from UN Secretary General Kofi Annan.
Veneman says she will shift the agency's attention back to helping children combat hunger and disease and away from making sure teenagers can get abortions.

Civil unions, by definition, have no place in church
The Catholic Church in NZ says it won't allow civil union ceremonies in the church. Needless to say, protesters are immediately complaining about the policy, as we heard on Morning Report this morning.
Now hold on a minute! The Prime Minister and others campaigned vigorously for civil unions on the grounds that an alternative to marriage was needed that did not have religious connotations. You can't have it both ways. You cannot support a relationship that is legislated specifically to avoid religious connections and then complain that churches won't perform a civil union ceremony. That really is wanting to have your wedding cake and eat it, too.
These protesters also forget that the Catholic church (along with most other churches) is not a club that conducts its business by the voting preferences of its members. A church is founded on certain ideals and beliefs, which it proclaims as a witness to the world; if you don't like them, complain first to the Founder of the church. The church does not exist to serve up to society a dish to meet every whim of taste and fashion. Outsiders have no right to demand it, and the church would be very foolish to try and provide it.

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