About David Walker

David Walker is the principal of publishing consultancy Shorewalker DMS (shorewalker.net) where his current projects include editing Public Accountant magazine for the Institute of Public Accountants. David has previously been chief operating officer of publishing firm WorkDay Media, director of communications and advocacy for the Business Council of Australia, director of policy and communications for the Committee for Economic Development of Australia, site director for online finance start-up eChoice and an editor and columnist at The Age. He has written professionally on economics, business and public policy since 1987 and spent three years in the Canberra Press Gallery. Contact him on 03 8899 7790 or email [email protected]

Happy 20th birthday to blogging!

Just a note to record the fact that blogging is 20 years old this month, maybe. New media legend Dave Winer, a rare combination of great writer and programmer, started posting at DaveNet on 7 October 1994, as Philip Greenspun points out. There was no announcement that Winer had invented a new genre, but I can’t really find anything that looks like a blog going back much earlier than that – though writer Jerry Pournelle’s Chaos Manor got started around the same time and Justin Hall was also getting busy.

DaveNet started as the web version of Winer’s email newsletter, but having found the web-based format was popular, he started pushing through classic weblog fodder – short thoughts, links, and reflections on stuff other people were saying.

Having invented the weblog, Winer then helped to develop RSS and co-invented podcasting, proselytised for proper web content management systems, built outliners and basically helped invent the media landscape we have today. What a guy.

As Greenspun puts it:

The standard HTTP/HTML Web was and is great for 3-30-page ideas. Winer was perhaps the first person to see that the world needed some different technical standards to deal with three-paragraph ideas.

People frequently see blogging as something completely new. In fact, though, it has quite a few media predecessors, notably the personal diary. From one perspective, a blog was simply a way of publishing your own diary to a mass audience. But it also had a number of new aspects: for instance, it frequently used links to exploit the availability of huge numbers of online media sources.

Blogging was also one of the first online media products to showcase online brevity. Facebook and Twitter* then came along and underlined this unexpected development. Indeed, for all the talk about the wonders to come from ultra-fast broadband, the big online media developments of the past two decades have to a surprising degree been about short written content.

* Fun online media “fact”: I read somewhere long ago – and perhaps it’s even true – that the average Victorian-era diary entry would fit comfortably within Twitter’s 140-character limit.

Matt Levine helps you understand the bank regulation problem in 1800 words

If you want to understand what bank regulators were doing in 2008, and what people like APRA and the Reserve Bank worry about here, try reading Matt Levine’s latest column.

Leviine’s piece is nominally about a weird court case involving AIG, the insurance behemoth which almost blew up the world financial system in 2008. But in the process of explaining the court case, Levine sets out with admirable clarity why our current banking system doesn’t allow easy, perfect regulatory solutions to banking problems like we faced six years ago. (A different banking system might do that, but so far no-one has come up with anything even faintly convincing enough to make us re-architect the entire financial world.)

Extract:

Simplifying a lot, a bank is a thing that allows some people (“savers”) to put money somewhere, get paid interest on it and be confident that they’ll get it back, and that allows that money to be invested in the real economy. That is: Banks have risky claims on the real economy and hand out risk-free claims to their savers.

This is a bit of magic that works most of the time, but not all of the time. Sometimes people realize that their risk-free claims are backed by risky assets, and might be riskier than they thought, and then they panic and pull their money out of the banks and that’s a big problem for the rest of the economy. This has been an extremely well-known problem for centuries, and the solution has been extremely well-known for about 140 years. It’s for the central bank to lend the banks money until the crisis passes.

This has nothing to do with subprime, or derivatives, or too-big-to-fail banks. It’s just a feature of banks, which are where the money is, but only in a probabilistic sense. Sometimes they are not where the money is, and that’s a crisis. But if the central bank (or, sort of equivalently, the government) lends them money, then the crisis will pass, and they’ll be able to pay it back with interest.

Many people dislike this, and it is sort of unseemly, but it really is a well-known set of facts. You can reduce the risk of banking crises happening, but not to zero, because of that core mismatch between banking’s risky assets and savers’ expectations of safety. And if crises do happen, central-bank support seems to be the only effective way to solve them.

Among other things Levine points out, in his copious and typically excellent footnotes*, that what we call “bail-outs” are less about helping bankers and more about helping the people (“bank creditors”) who have lent a lot of money to banks. In Australia these days, of course, people who have lent a little bit to banks are generally covered by a government guarantee.

Read the whole thing.

* I have no idea why so few journalistic articles in online-only publications have footnotes. They seem like a terrific idea for dealing with thoughts that aren’t core to your main narrative. Levine’s footnotes are a series of tasty hors d’ouevres sprinkled through the main meal.

Offences against good government: a Troppo list challenge

So the Senate will conduct an enquiry into the Queensland government – on the pretext that, to quote Senator Glen Lazarus, it has made “many questionable decisions”. Never mind that state governments are elected by the same people who elect senators, or that senators are elected to conduct national business. A bunch of senators is going to go poking around state affairs, because the Queensland government did things with which some of those senators disagree.

This silliness comes courtesy of a deal between the Palmer United Party, Labor and the Greens. The Greens’ Senator Larissa Waters was on Radio National this morning doing a great job of not answering questions about her party’s trampling of good governance while gabbling about Newman’s “brutal agenda” – but to her credit, she at least put her head up above the parapet. Labor initially seemed mightily embarrassed, as they should be.

The excuse they’re all using for this departure from convention is that Queensland has no upper house. (Back in the day, much of the left was dedicated to eliminating upper houses as unrepresentative, but apparently this is now Not Canon, as they say in the comic-book business.) In real life, a more important factor appears to be that Clive Palmer hates Campbell Newman’s guts.

The senators’ decision is a procedural obscenity not just because it is transparently payback but because it builds a path to a future where parliaments inquire endlessly into each other simply because they are run by different parties. I disagree with a bunch of the Newman government’s decisions, but the medicine for that illness is an election, which is actually not that far away.

This sort of convention-busting idiocy traditionally gets debated for a few days, decried by commentators from one side or the other, and then buried. There’s no real constituency for maintaining decent conventions and processes of government, compared to the constituency for, say, cutting taxes.

But it’s worth an occasional attempt to remind everyone that our existing system of government has its good points and that slowly degrading it does the country no favours. Especially since we seem to be getting more of these breaches of convention over time.

So here’s the challenge to Troppodillians: Name one or more actions of governments over recent years which have junked useful conventions and eroded the capacity of governments to simply govern prudently and well.

Nominations in the comments, please. Continue reading

Iraq: 10 things that seem to be true

As we head back to Iraq, I’m struck by the way in which those making the case both for and against are avoiding certain ideas which seem to me to be true:

This is not 2003 all over again. At least on a moral level, and at least as far as action in Iraq goes. We have been invited in by the Iraqi government, giving the military campaign a legal and moral basis for action that the 2003 war lacked, and IS is thoroughly dominated by murderous zealots. Tony Abbott has been careful to say that attacking IS in Syria would be very different to what we’ve signed up for so far, which it would, and he deserves credit for that.

IS is not an existential threat to Australia. No kudos to George Brandis, who claimed this week that IS “represents or seeks to be an existential threat to us”. Brandis’s statement avoids outright lying only by his addition of the phrase “or seeks to be”. This has strong echoes of the 2003 b.s. about how Saddam could threaten the world with nuclear weapons, It is not quite as stupid now as it was then, but that’s not saying much. Lots of loony zealots seek to be an existential threat to the Australian state. There’s a world of difference between the wish and the capability. IS currently appears weak on capability, though that could change. There’s more chance of Australia being seriously damaged by a mutated Ebola virus, and we react to that threat with a few million dollars every so often.

We have some responsibility to help make Iraqis’ lives better. In 2003 we invaded their country and failed to do what we said we’d do. The military did its best, but we needed other tools in the kit, didn’t have them, and like some blundering amateur, didn’t even know we needed them. We helped make their country vulnerable to the violent zealots. Those violent zealots are now trying to impose upon millions of Iraqis a particularly nasty brand of theocracy. We seem to have alarmingly little national shame about this, and remarkably little sense that by creating the mess, we created a lasting responsibility to fix it. This is what Colin Powell once explained to George W. Bush as the “Pottery Barn principle” – you broke it, you own it.

We will run into unintended consequences. The idea of unintended consequences is hard enough to keep in people’s minds in the economic debate. But in the foreign policy debate people seem ready to discard it at a moment’s notice. And when things go wrong, instead of reassessing, they defend the purity of their motivations. Chris Berg of the IPA has dubbed this the “it’s the thought that counts” school of humanitarian intervention. It is probably too much to expect, but we ought to conduct this debate with an honest acknowledgement that things are not likely to go to plan. To use Donald Rumsfeld’s admirable observation, we face both known and unknown unknowns.

Continue reading

An overarching theory of sexual abuse scandals

Ross Douthat in the New York Times presents a compelling theory about the waves of sexual abuse scandals, from Roman Catholicism to Rolf Harris to Rotherham. Remember that these scandals are scandalous precisely because their perpetrators all got away with rape and abuse for long periods of time:

[I]nstead of looking for ideological vindication in these stories, it’s better to draw a general lesson. Show me what a culture values, prizes, puts on a pedestal, and I’ll tell you who is likely to get away with rape.

In Catholic Boston or Catholic Ireland, that meant men robed in the vestments of the church.

In Joe Paterno’s pigskin-mad Happy Valley, it meant a beloved football coach.

In status-conscious, education-obsessed Manhattan, it meant charismatic teachers at an elite private school.

In Hollywood and the wider culture industry — still the great undiscovered country of sexual exploitation, I suspect — it has often meant the famous and talented, from Roman Polanski to the BBC’s Jimmy Savile, robed in the authority of their celebrity and art.

And in Rotherham, it meant men whose ethnic and religious background made them seem politically untouchable, and whose victims belonged to a class that both liberal and conservative elements in British society regard with condescension or contempt.

The point is that as a society changes, as what’s held sacred and who’s empowered shifts, so do the paths through which evil enters in, the prejudices and blind spots it exploits.

So don’t expect tomorrow’s predators to look like yesterday’s. Don’t expect them to look like the figures your ideology or philosophy or faith would lead you to associate with exploitation.

Expect them, instead, to look like the people whom you yourself would be most likely to respect, most afraid to challenge publicly, or least eager to vilify and hate.

Viewing the broadband future

The latest cost-benefit analysis of various Australian broadband proposals is out. It’s part of a report from an inquiry chaired by former Victorian Treasury head Mike Vertigan.

And it says in essence that Australia’s expected growth in demand for bandwidth is big enough to make the NBN viable, but small enough to make the government’s alternative look better.

I would have expected to hear the report’s authors out there defending it, but Mike Vertigan has never been keen to put himself forward in the public debate. So today much of the media I saw has been dominated by critics, and they’ve mostly been saying that a useful cost-benefit analysis is impossible, so we should just build the NBN. Paul Budde was making the claim this morning on ABC Radio, and lesser-known experts such as Sydney Uni’s Kai Riemer have been saying the same thing.

This claim – that we can’t usefully analyse the NBN’s costs and benefits – is hooey.

We can’t do a precise cost-benefit analysis, given how much Internet use is likely to change over the next decade or two. And whatever analysis we do should be up-front about how much guesswork is involved. But cost-benefit analyses are not just helpful; they’re also inevitable. Indeed, everyone who says “we should just build it” actually is doing a cost-benefit analysis. Typically they’re just doing a really sloppy cost-benefit analysis in their head, and setting their median estimate of the benefits at, approximately, Unimaginably Huge.

And Unimaginably Huge is almost certainly an overstatement.

“We can’t begin to imagine what people could do with upload speeds on an industrial scale,” Riemer told News Limited.

But of course we can begin to imagine that. Here’s how. Continue reading

Iran Air Flight 655: How did Australia react?

A question for Troppodillians: does anyone have a record of the Australian Government’s response to 1988′s accidental US shootdown of Iran Air Flight 655?

I ask because the parallels with the MH17 shootdown are so clear.

At a political level the government’s response has so far been well-judged. There are few negatives in getting upset about the deaths of Australians overseas, particularly at the hands of a group aligned with a nation whose policies we rightly dislike, whose statements we quite sensibly distrust, and with whom we have few important links.

But at a moral level, it seems to me difficult to judge this episode more reprehensible than the Flight 655 shootdown. MH17 was shot down by untrained yahoos informally but closely connected to the Russsian government, probably by mistake. Flight 655 was shot down by the USS Vincennes on the orders of a formally trained US warship commander, fairly certainly by mistake.

The US, remarkably, never apologised to Iran or anyone else over the shootdown.

And my dim recollection is that the Australian Government responded that it was all a regrettable accident. Hansard’s online search doesn’t return anything from 1988. Does anyone have more detail?

A reminder of the response to Flight 655, from the careful-with-the-facts for Age journo Tim Colebatch (who was a foreign correspondent in Washington at the time): Continue reading

Ben Hills’ monument to newspaper journalism

Ben Hills has a new book out – Stop the Presses! How Greed, Incompetence (and the Internet) Wrecked Fairfax. It’s published by (surprise!) News Corp’s HarperCollins. Its essential thesis is that the Fairfax media group, owner of The Sydney Morning Herald and The Age, is in trouble because it has been run by nongs. Boards and managements have been too dumb to exploit the opportunities of the Internet, Hills reckons. He thinks Fairfax should have bought Seek and carsales.com.au and realestate.com.au. Fairfax also needs to be run by “people who know about media”, he complains.

Hils has done some great journalism over the years, notably on the asbestos industry and medical scams. But this book looks like a mis-step.

Since Hills is making a virtue of plain language, I’ll copy him: Hills’ theory is tripe, and I’m surprised more people aren’t calling him on it. In the media, most people seems to be treating him very politely.

But Stop the Presses! also has its lessons – though perhaps not the ones Hills draws.

Continue reading

Shorewalker’s flotsam, April 2014

An experiment in occasional linkage to insights that might outlast the daily news cycle. If you find any of it interesting, let us know in the comments.

  • Prepare for the knowledge automation transition to take decades (ABC Radio National Future Tense) – How long might it take for developed economies to make the transition to knowledge automation in the 21st century? One answer, from Tyler Cowen: About 60 years, the same as it took to transition to muscle automation from 1780. Cowen adds: “In the very long run it will be splendid, but along the way it’s not always going to feel splendid.” The program quotes Erik Brynjolfsson, co-author of The Second Machine Age, noting once again that in the US around the mid-1990s productivity and wealth became decoupled from employment and median income, which stagnated. The concentration of reward in a knowledge economy was neatly predicted by the late Sherwin Rosen in 1981′s The Economics of Superstars, but more and more people are coming to understand it.
  • flakeJust say “no” to flake (Australian Marine Conservation Society) – Never mind the WA shark saga. Misguided as the WA government’s actions may be, they are insignificant next to the issue of commercial shark fishing. Try something else with your chips.
  • Teach your kids to keep trying (Farnam Street blog) – How does a US public school chess program keeps winning national competitions? By teaching grit: “I really believe that’s why we seem to win girls’ nationals sections pretty easily every year: most people won’t tell teenage girls (especially the together, articulate ones) that they are lazy and the quality of their work is unacceptable. And sometimes kids need to hear that, or they have no reason to step up.”
  • Ask yourself whether you want happiness or meaning (Roy F Baumeister) – Psychology professor Roy Baumeister on creating a meaningful life: “Time spent imagining the future was linked especially strongly to higher meaningfulness and lower happiness … If you want to maximise your happiness, it looks like good advice to focus on the present, especially if your needs are being satisfied. Meaning, on the other hand, seems to come from assembling past, present and future into some kind of coherent story.” Baumeister suggests four “needs for meaning”: purposes that guide your actions, justifications for your actions, actually making a difference (efficacy) and feeling you’re a good person. What is the meaning of life? There are thousands of different ones, but they respond to these four needs. A shrewd commenter asks: is it tautological to say that the meaning of life is to find meaning, without deciding what the good meanings are?
  • Opternative wants to bring the eye exam online (Digital Trends) – The range of services challenged by online services grows by the day. The US-based Opernative startup offers online and app based eye tests on your desktop and tablet computer. They are targeting a cost of $20 for an exam. (Optometry offers an interesting pointer to how the market can deliver lower-cost health solutions, since it does not have the same regulation as other medical fields.)
  • Australia is a global payments system leader  (Public Accountant) –Beverley Head on an unexpected success, driven in part by the RBA’s desire for more payments innovation. We lead the world in contactless payments, and new payments mechanisms are proliferating here. “The RBA’s 2012 strategic review of innovation in the payments system made a series of recommendations … [It] spurred the creation of a collaborative payments hub, allowing near real-time settlement. There are also now plans to establish a central addressing hub that could let people transfer funds knowing only the payee’s mobile phone number … The major banks are racing to mobile payments.”
  • Productivity has had its best two years since 2001-02 (AAP) – Remember how the Gillard Government was a disaster for labour productivity? No, it wasn’t. Labour productivity has just recorded its fastest two years of growth since 2001-2002. It’s a productivity boom! So a triumph for Labour then? No, not really that, either. The real answer to the puzzle is the one Bob Gregory put forward some time ago. The worst labour productivity performances are in mining and utilities, and that’s mostly because of all the investment they’re doing which hasn’t yet paid off. Business-people mostly keep going on about labour productivity as a problem because they want to convince us of the need for further labour market deregulation. But as the Grattan Institute’s John Daley has pointed out, there’s no evidence this will provide much of a transformation.
  • Don’t start environmental measures by assuming stupidity (Eric Crampton) – Why carbon pricing works better than fuel standards: “Imagine that you set a fuel economy standard instead of a carbon/petrol tax in a world where customers are forward-looking and not idiots. Well, once they’ve bought the more efficient car, the value they derive from burning another litre of petrol increases substantially: they can drive farther, and they’re not charged any more for that litre of petrol. And so a lot of the reductions in carbon emission you might have expected get whittled away by that people drive more. If you’d done it instead with a petrol tax, the marginal cost of another litre of petrol is higher. People still flip to the more efficient vehicle, but petrol usage doesn’t rebound as much as a consequence because the marginal cost of a litre is higher.” Greg Hunt almost certainly knows this, but the same story applies to direct action efficiency measures promised at some industrial facility.
  • carparkProtecting historic buildings costs nothing, right? Wrong (The Urbanist, Alan Davies) – Uses the debate over Melbourne’s Total Car Park to tell some preservation truths. First, not all ageing buildings will end up loved. Second, “historical significance” is not worth endless money. “Most of the claims to historical significance are arcane [and] aren’t compelling either; in fact they verge on the inconsequential when compared to the cost of protection  … Compared to how most history is recorded – in books, on film, on a plaque, or in a museum – protecting buildings is an extraordinarily expensive exercise.” Maybe it’s time for Edward Glaeser’s idea of a a fixed annual “preservation budget”. (I’d pay good money to preserve Dr Davies intact forever, though.)
  • We can graph stories (Kurt Vonnegut on Youtube) – Kurt Vonnegut explores the shape of stories – an idea which started off as his rejected masters thesis – and explains why Cinderella is like The Bible. “Anyone can graph a simple story if he or she will crucify it, so to speak, on the intersecting axes I here depict.”

  • Most Australians don’t see God as essential to morality (Pew Research Center) – In Australia, just 23 per cent of people say you must believe in God in order to be moral. Only five of 40 countries recorded a lower percentage. And there’s a gulf between the attitudes of high-income and low-income nations. Even the US, an outlier amongst rich countries, recorded a lower percentage than any country poorer than Russia. With one exception – China. But in China the concept of “God” has long carried a different cultural package.
  • The Australian military should not take over the war on asylum seekers (John Menadue) – John Menadue gets it right: the Australian military has made a grievous misjudgment in allowing itself to become central to asylum-seeker policy implementation. “For political purposes the government has deliberately embarked on a policy and a language to militarise the asylum seeker issue in the same way the Howard Government did in the ‘war on terror’. It is designed to highlight the government’s resolve, to play to our fears about a threat and to lessen our rights to be informed … But the ‘war on terror’ and the so-called ‘war on asylum seekers’ would in fact be much better conducted by police, customs and our intelligence services … Senator Conroy has been criticised for saying that General Angus Campbell, the head of Operation Sovereign Borders, has participated in a ‘political cover-up’. In my view that is precisely what the government and General Campbell have done.”
  • Read the greatest opening in journalistic history (The Atlantic) – This essay, titled The Dark Power of Fraternities, loses its way quickly and fails to answer, um, fundamental questions. But the first four long paragraphs have a dementedly poetic dissonance between writing style and subject matter that elevate them to greatness. “It takes a certain kind of personal-injury lawyer to look at the facts of this glittering night and wrest from them a plausible plaintiff and defendant, unless it were possible for Travis Hughes to be sued by his own anus.”
  • Rent Much Ado About Nothing – Filming the original screwball rom-com in noirish modernity, Joss Whedon delivers the most watchable Shakespeare adaptation in decades. The cast, stuffed with Whedon regulars, clearly had the time of their lives filming on a tiny budget, in a 12-day gap before their director went back to editing the tedious Avengers movie. There have been versions with better line readings, but rarely a more convincing spirit. Ought-to-be-huge-star Amy Acker’s smart, vulnerable, wonderful Beatrice commands centre stage, like Whedon heroines before (or is that after?) her. BuffyFirefly and Dollhouse fans already know this, but Whedon takes a Shakespearean delight in wordplay and pace-changing, and it pays off hugely here. Watch with your significant other.