Royal Commission guns for those who are “able but not willing”

The Financial Services Royal Commission is in theory a general inquiry into the financial system. In practice, however, something else is on trial: Australian regulatory systems.

As I set out in my latest column for The CEO Magazine, many of our regulators, including ASIC, AUSTRAC and the ATO, are influenced by a philosophy of regulation called “responsive regulation”. This philosophy says that you treat more gently those offenders who are trying to comply with the law – willing but not able – and more harshly those who seem able but not willing.

The lesson of the Royal Commission so far is that some very big businesses are able but not willing. That seems likely to have far-reaching effects on regulation of businesses throughout the economy. The logic of responsive regulation is that we should be seeing more fines, licence withdrawals and gaol time.

We have plenty of laws regulating financial advice; the bigger problem seems to be enforcing them. Watching the Royal Commission, it seems credible that a bunch of executives would have moved a lot faster and done a lot better if they had been facing the possibility of a year or two in a small barred room. It works wonders in the corporate decision-making process when a decision-maker under pressure is able to say: “if we do that, we might all end up in prison”. ASIC in particular is under the gun for not being tougher on banks’ breaches of  financial services law.

Why hasn’t ASIC come down harder? One reason: in our society, locking up people and fining companies hundreds of millions of dollars is expensive, takes years to do, and makes the regulated entities instantly defensive. A Senate inquiry into ASIC made this point in a 2014 report.

The government on Friday announced it would boost civil penalties for corporate law-breaking. What it really needs to do, though, is back ASIC to go hard against some big targets.

Posted in Economics and public policy, Politics - national | 2 Comments

Thought of the day: could there be an equilibrium of personality types?

Suppose you buy the idea popular in psychology that there are stable personality types largely formed in childhood and that the population has relatively stable proportions of these personality types. The Big5 personality types are agreeableness, extraversion, neuroticism, conscientiousness and openness. Often added to this list is Locus of Control. Other traits like analytical ability, empathy, and shyness are also often mentioned in the many lists of personality doing the rounds.

There is some indication that personality is heritable and partially genetic. Genes for shyness have been claimed, as for neuroticism and risk-taking (although there are of course lots of caveats and uncertainties about any claim). The prevalence of those genes differ by region.

If you buy this idea, then the question arises how the distribution of personality types came to be and what sustains it or changes it? What could the forces be that lead to an equilibrium of personality types?

  1. Perhaps some types are more likely to get killed in certain wars and others are more likely to survive, for instance shy and anxious people. Wars would then lead to increases in the proportions of the personalities that favour survival, whilst in inter-war periods other pressures might prevail that select against shyness.
  2. Social selection for breeding. Perhaps some types have more children or make more popular breeding partners.
  3. Social pressures and opportunities that favour proportions of types. One can here think of group types wherein there are ‘slots’ for different personality types in fairly constant proportions. Leaders, followers, creative thinkers, jokers, motivators, etc.

Options 1 and 2 would lead you to believe personality distributions change only slowly outside of catastrophic occasions, and are mainly genetically transmitted. Option 3 fits a more fluid view in which personality is not fixed at birth but more a kind of deep strategy picked up early on but particular to the environment. The possibility that personalities that are at the moment associated with low levels of happiness might be useful in various future eventualities is of course consoling in that some sources of misery might be functional in the long-run. It also raises the possibility that a national personality distribution tells us something about that countries’ history.

Just a thought.

Posted in bubble, Geeky Musings, Miscellaneous, Parenting | 9 Comments

The Death of Australian Children’s Broadcast Television Programming: by Patricia Edgar

The Director-General of the BBC has now conceded there is a crisis, with young people spending more time viewing Netflix and YouTube than they do BBC programs.  In July 2017 he announced the broadcaster’s biggest investment in children’s services in a generation – an additional £34 million across the next three years to enable the BBC to reinvent how it serves its youngest audience in the years ahead. The BBC’s plan is foundering and as well Australia’s children’s viewing through broadcast television, is tanking quietly.

Once, the envy of children’s television producers around the world, for its vast coffers, the BBC has been unable to stem the tide of children turning off their productions. At the same time, Netflix has announced that it will spend US $1 billion in 2018 on children’s productions, as part of its US $8 billion expenditure on original content. (Their widely praised adaptation of A Series of Unfortunate Events is but one example of their serious intent). The BBC budget, once viewed as a huge production resource, has been dwarfed by this media behemoth.

While the seismic shift to on-demand viewing crosses all demographic groups, the BBC affirmed, ‘it was the very youngest age groups that the corporation was at most risk of losing touch with’ (The Guardian, March 28, 2018). More than 80% of children go to YouTube for on-demand content. Half go to Netflix and only 29% go to the BBC iPlayer. Children spend more time online (15 hours and 18 minutes on average) than they do watching TV (14 hours). The average weekly reach of CBBC, the BBC Children’s Channel, once a dominant player in children’s TV among 6-12-year-olds, has fallen dramatically, from close to 40% in 2011 to less than 25% last year. 

Prime Minister Kevin Rudd was ill-advised by the ABC, with the once independent ACTF (Australian Children’s Television Foundation) in tow, and made a disastrous and short-sighted decision, following his Vision 2020 Summit in 2009, to fund an ABC Children’s Channel. The evidence overseas, from Ofcom and the BBC, ACMA’s research in Australia and from the US Kaiser Family Foundation was already showing by 2007 that children were moving their attention away from scheduled programming to mobile devices and on-demand services. So unsurprisingly the vision has collapsed well before its due date. 

The ABC decided they would have not one, but two channels, for children aged 1-14. So now the public broadcaster is lumbered with two digital channels requiring more than 10,000 hours of scheduled programming to finance as their young audience bleeds out.

Quick action is required, but not that called for by a self-interested production industry, to slap Australian drama quotas across all media outlets. The arguments for quality children’s programming, when quotas were implemented, were never about the benefit to the industry – that was a side benefit – the arguments were and remain all about service to the child audience. Given the crisis for Australian content, visionary strategic thinking is required.

The ABC needs to consolidate its two-channel service to children to focus on the preschoolers and up to 7-year-olds where the need for local programming is imperative for them to grow up understanding their own culture. For children 8-14 there is a need for a new online service that is project-driven, that allows for their active engagement, their own productions, a youth news service that takes on the challenges and distortions of fake news, and a location that teaches them to leave behind a positive global footprint. 

We have known for a decade many kids prefer to engage with interactive technology, gaming, chat rooms, instant messaging, and the joys of online content they create themselves rather than simply watching scheduled television. Professionally produced quality, drama and comedy are important to children and they also help drive traffic. They should be in the mix, but they shouldn’t define the service. A few landmark titles would suffice. They don’t need to follow broadcast formats – short five minute dramas can be just as effective for this audience as 30 or 60 minutes.

A new service should be accessible across multiple platforms accommodating distribution to a desktop, online or to mobile devices. It should be a robust, flexible, platform that lets kids do what they want in the ways they want, when they want. This service could be used throughout the school systems as well as domestically.

The public broadcaster should be taking a lead here but the commercial networks should each pay an annual levy of $10 million in return for relief from quotas. By such an exchange, their responsibilities to the child audience, as holders of licences in public trust, would be fulfilled. 

The Australian and Children’s Screen Content Review is yet to report, so there is an opportunity now to correct our inertia regarding children’s programming. We were once an international leader in the field. Is there anyone left in charge with the vision and capacity to think outside the square? I can’t see evidence of them.

Patricia Edgar was the founding Director of the Australian Children’s Television Foundation, the producer of Round the Twist and multiple award-winning programs.

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Spanish Film Festival

Top Picks

Trailer Icon 03 Kiki, Love to Love (Opening Night)
Through five stories, the movie addresses sex and love. Paco and Ana are a married couple looking for reactivate the passion of their sexual relations. Jose Luis tries to recover the affections of his wife Paloma, who is on a wheelchair after an accident which has limited her mobility. Candelaria and Antonio are a married couple trying out all possible means to be parents. Álex tries to satisfy Natalia’s fantasies, while she starts to doubt if he finally will ask her in marriage. And finally, Sandra is a single woman searching for a man to fall in love. All of them love, fear, live and explore their diverse sexual paraphilias and the different sides of sexuality, trying to find the road to happiness.
☆☆☆☆☆ IMDB
☆☆☆☆ Queer Guru

In the summer of 1993, following the death of her parents, six-year-old Frida is forced from bustling Barcelona to the Catalan provinces to live with her aunt and uncle, her new legal guardians. Country life is a challenge: aside from the emotional upheaval, the nature that surrounds her is mysterious, if not dangerous. She also has a new little sister, of whom she must take care, and deal with new feelings such as jealousy. But it is the source of her parents’ passing that casts a shadow over how she is treated by the local community… Indeed, Frida’s life will never be the same.
☆☆☆☆☆ Film Blerg
☆☆☆☆ IMDB

Paesa, the shadowy, swindling real-life anti-hero, spent the 80s secretly purchasing weapons for the Spanish Government in their fight against the terrorist group ETA. When the scandal broke, Paesa was made a scapegoat and forced to leave Spain in fear for his life. In 1994, finally able to return albeit a ruined man, his chance for vengeance arrives on his doorstep in the form of a corrupt Police Chief seeking his aid to embezzle a fortune.
☆☆☆☆☆ Eye For Film
☆☆☆☆ IMDB

A tight-knit group of bank robbers made up of former army mates from Eastern Europe plan to break into the Swiss Credit Bank. A closed off group, who, in following the death of one of their own are forced to recruit a new member. The new recruit, professional thief Victor, is tasked with the most dangerous and vital job of all: breaking through the vault’s walls. As the pressure escalates, the group begins to fracture from within. On the other side of the law, a single-minded detective is hot on their trail and now has a small window to catch them before their most dangerous heist yet.
☆☆☆☆ IMDB

‘The Exile’ harks back decades to the ethical frontline of the Spanish Civil War, a time that still resonates in the Spanish consciousness today. A nationalist soldier, Teo, is transferred to a remote mountain outpost where the brutally cold climate and inhospitable surrounds reflect the demeanour of his station partner, Silverio. Tensions between the pair steadily escalate in the confined quarters, and the unforgiving environment takes a toll on their states of mind. But when Silverio discovers an unconscious, young Polish insurgent, Chloe, their already fragile relationship is stretched to breaking point. Once Chloe is nursed back to health, the decision on whether to turn her over to their superiors or keep her hidden and jeopardise their own lives is complicated by the feelings both men have developed for her.
☆☆☆☆ D Movies
☆☆☆☆ IMDB

Adrián Doria, has just been named Man of the Year for his work at a prestigious tech company. At the top of his game in both his professional and personal life, his life is thrown into chaos when he awakens after being struck in the head and finds his lover dead in the bathroom. To complicate matters, the hotel room is locked from the inside and there isn’t any way in or out of the room. Adrián turns to Spain’s best defence lawyer, Virginia Goodman, and the pair race against the clock in order to construct his defence. Reluctant to share the details of his affair, Goodman must carefully manipulate the truth out of Doria and their face-to-faces as they circle the truth make up some of the film’s truly memorable moments.
☆☆☆☆ IMDB

What could be better than winning the Nobel Prize for Literature? For Barcelona novelist Daniel Mantovani, everything, as it turns out. To become part of the establishment and someone whose work everyone can agree on, signals, for him, the end of his career. Opening with his hilariously ungracious speech as he accepts the award in Stockholm, the film jumps forward five years where we find the taciturn author turning down every award that comes his way. But when a curious offer appears, to accept the “Distinguished Citizen” award from the small Argentinian backwater of Salas, Mantovani’s birthplace, the writer senses a chance to reconnect with his roots and maybe even find inspiration in a town he hasn’t stepped foot in for over 40 years.
☆☆☆☆ IMDB

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Free digital goods promote wellbeing:SHOCK!!

Using Massive Online Choice Experiments to Measure Changes in Well-being
by Erik Brynjolfsson, Felix Eggers, Avinash Gannamaneni – #24514 (EFG PR)


GDP and derived metrics (e.g., productivity) have been central to understanding economic progress and well-being. In principle, the change in consumer surplus (compensating expenditure) provides a superior, and more direct, measure of the change in well-being, especially for digital goods, but in practice, it has been difficult to measure. We explore the potential of massive online choice experiments to measure consumers’ willingness to accept compensation for losing access to various digital goods and thereby estimate the consumer surplus generated from these goods. We test the robustness of the approach and benchmark it against established methods, including incentive compatible choice experiments that require participants to give up Facebook for a certain period in exchange for compensation. The proposed choice experiments show convergent validity and are massively scalable. Our results indicate that digital goods have created large gains in well-being that are missed by conventional measures of GDP and productivity. By periodically querying a large, representative sample of goods and services, including those which are not priced in existing markets, changes in consumer surplus and other new measures of well-being derived from these online choice experiments have the potential for providing cost-effective supplements to existing national income and product accounts.

Posted in Economics and public policy, Public and Private Goods, Society | Leave a comment

Sam Harris and Ezra Klein venture within nano-metres of the gaslighting event-horizon

As I tweeted:

I was gripped by this 2 hour intellectual brawl

Would Ezra articulate compelling reasons for Sam Harris to rise to self-reflection?

Or would Sam keep him at bay with his magic “I’m just after timeless scientific truth that scales” wand?

Anyway, you may not be as fascinated by this as I am, by the limits of human explanation and comprehensibility as the interlocutors move ever closer to the gaslighting event-horizon, but if you’re half as fascinated as I am you’ll listen. And you’ll tell us all what you thought.

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A Personal Comment on Syria

Setting aside the question of evidence, there’s a serious problem with the contention that Syria carried out the recent chemical attack in Douma. It requires us to accept not only that the Syrian government is evil but also that it’s comically stupid. It was on the point of liberating the area after years of jihadi occupation and Trump had announced only a week before that the US was looking to get out of Syria, and soon. There was really only one way to screw things up and that was by conducting a chemical attack.

The remaining jihadis, on the other hand, had much to gain. They had refused the Syrian government offer to be bussed out together with family, hangers on and small arms (but minus serious weaponry) and were therefore planning on one of two things. Either a fight to the death or some sort of changed circumstances that would allow them to persist and perhaps even, in their best of all worlds, triumph. Since they were surrounded and unable to access fresh supplies or fighters, that could only mean some kind of external intervention. How could that be brought about? Given the power of the anti-Assad narrative, a false flag chemical attack would do nicely. Et voilà.

To me it seems like obvious Kabuki theatre but most in the West still buy the “Assad did it” story. That’s probably not surprising. Continue reading

Posted in Politics - international | 38 Comments