To all readers of What Sam Learnt,
You will have noticed by now that my daily election diary has fallen into a terminal state of disrepair. There are a variety of reasons for my tardiness, the main one being a non-eventful and uninspiring election campaign.
What Sam Learnt will return to usual service after the election. I hope you all enjoy the next few weeks of the election campaing (if that's possible), I'll see you on the 'other side' of the madness,
And, for the record, I'll join the long list of commentators who are predicting a Labor win. By how much is anyone's guess, but I'm of the opinion that the Labor party will emerge from the November 24 poll with a majority of at least 5 seats.
See you in a few weeks for my first post with K Rudd at the helm.
Sam
Thursday, 15 November 2007
Tuesday, 30 October 2007
Week 3
Weekend 3, November 3-4
Labor's housing plan for first home buyers generated some good press over the weekend and once again saw K. Rudd on the front foot against a tyring Coalition attack (yes, I'm looking forward to the cricket starting). The plan, dubbed the first home saver account, will enable first home buyers to deposit up to $5000 of pre tax earnings into the account and be taxed at only 15%. The money can only be accessed after four years and will only be released if it used towards a deposit on a home. Regardless of the merit or otherwise of the scheme, Labor continue to respond to the concerns of the electorate with innovative policy responses. Verdict - a win for Labor
Cumulative Tally - Coalition 5, Labor 11
Friday November 2
Campaigning was once again put on hold today while both leaders attended the funeral of SAS soldier Sergeant Matthew Locke. Sergeant Locke was shot and killed during a gun battle with Taliban fighters in Oruzgan province, Afghanistan. It was the second funeral of an Australian soldier attended by both leaders since the election campaign began. Verdict - a draw
Cumulative Tally - Coalition 5, Labor 10
Thursday November 1
Will me-toosim enter Australia's political lexicon in the same way that 'L.A.W Law', 'The Recession we had to have' and 'Core and Non-Core' have? After yesterday it's almost a certainty. Yesterday Kevin Rudd adopted nearly all of the government's plans for the aged and pensioners. Labor's announcement came on the same day that John Howard launched a scheme for GP super clinics that seemed strangely familiar. The familiarity probably has something to do with the fact the plan is almost identical to Labor's. I've started to wonder if Labor and Liberal could form a more effective coalition than the Libs and the Nats. Verdict - a win for The Fishing Party, because at least they're proposing something different. And fishers have feelings too dammit!
Cumulative Tally - Coalition 4.5, Labor 9.5, TFP 1
Wednesday October 31
Tony Abbott grabbed the headlines today for all the wrong reasons. He was forced to apologise to Bernie Banton for suggesting that the mesothelioma sufferer was not pure of heart. Then Abbott was half an hour late for a televised debate with his Labor opponent Nicola Roxon. Despite having a legitimate reason for his lateness, the image of the health minister's empty chair during the first half of the debate was an embaressing one. He was then caught by the cameras swearing as he shook Roxon's hand. Abbott's indicrections overshadowed a major Coalition health announcement and only served to aid Labor's criticisms of the government as arrogant and out of touch. Verdict - a Labor win.
Cumulative Tally - Coalition 4.5, Labor 9.5
Tuesday October 30
The past few days have probably been Labor’s worst of the campaign, but the Coalition has been unable to capitalise because of its own Turnbull inspired ructions. On climate change policy Kevin Rudd sounds strikingly similar to J W Howard; another sign to voters that there is little difference between the two parties. Both have now publicly stated that any post-Kyoto climate agreement must include targets for developing nations in order for Australia to be a signatory. This may enrage environmental activists but their votes are more than likely to head in Bob Brown’s direction. Rudd’s me-tooism might not make for the campaign fireworks that we all know and love, but for a man looking to depose one of the nation’s most successful politicians it makes sense. Verdict – a draw.
Cumulative Tally - Coalition 4.5, Labor 8.5
Monday October 29
Kevin Rudd was in Queensland today announcing an injection of funds aimed at protecting the Great Barrier Reef. Labor has been busy emphasising its green credentials at the beginning of this week, a task not made easy by their environment spokesman Peter Garrett. In interviews with the Fin Review and ABC Radio earlier in the day, Garrett had said that Labor would sign a global agreement on limiting greenhouse emissions even if developing countries were not signatories to the same agreement. After sustained Coalition attacks over his statement, Garrett was forced to make an embarrassing clarification late in the day. The shenanigans raise legitimate concerns about Garrett’s ability to manage the critical environment portfolio should Labor win government on November 24. However, despite Labor’s blundering, the Coalition appears to be in even more disarray with Malcolm Turnbull missing in action following the suggestion over the weekend that his office was responsible for leaking the story that he had urged the PM to ratify the Kyoto Protocol. The Verdict – a draw.
Cumulative Tally - Coalition 4, Labor 8
Thursday, 25 October 2007
Tuesday, 23 October 2007
Election 2007 - Week 2
Weekend 2, 27-28 October 2007
Interest rates and Malcolm Turnbull grabbed headlines this weekend. Labor have Howard on the ropes over his promise at the 2004 election to keep interest rates at record lows. The suggestion that Malcolm Turnbull, in an attempt to improve his green cred in Wentworth, may have leaked the story that he urged the PM to ratify Kyoto has placed coalition disharmony in the spotlight. The Libs are spending too much time on the defensive as Labor continues to set the agenda. The signs for Howard get more ominous by the day. Verdict - a Labor win
Cumulative Tally - Coalition 3.5, Labor 7.5
Thursday 25 October, 2007
As expected the inflation results dominated the start of the day. However, Kevin Rudd's last minute decision to attend the 43rd anniversary of a Tasmanian senior citizens club soon shifted the story of the day. Apparently Rudd's arrival mid-way through the celebrations put some members of the seniors' choir off-side. Baritone David Vowles felt compelled to dish out the best abuse of the campaign thus far, calling Rudd and the Labor candidate for Braddon "ignorant bastards" for politicising the celebrations. It was a welcome distraction to an otherwise uneventful day.
However, the cut and thrust of politics was again put into sombre perspective this evening with the news from Afghanistan that another Australian soldier had been killed in action. I'd expect the campaign to be pushed aside over the weekend as the nation comes to terms with the loss of the second soldier in as many weeks in Afghanistan. Verdict - A draw
Cumulative Tally - Coalition 3.5, Labor 6.5
Wednesday 24 October, 2007
Today's campaigning was overshadowed by the release of the latest inflation figures. It now looks certain that the Reserve Bank will lift interest rates when it meets on Melbourne Cup day, Nov 6. It will be the sixth rate rise since the 2004 election when John Howard promised to keep interest rates at record lows. A rates rise so close to polling day would be disastrous for the government and could see the Labor party celebrating no matter which horse in first past the post on November 6. Verdict - A Labor Victory
Cumulative Tally - Coalition 3, Labor 6
One of Australia's best political journalists, Dennis Shanahan analyses the inflation figures for The Australian here.
Tuesday 23 October, 2007
It was a day when Labor's 'message' was disrupted by, of all people, Kyle Sandilands, and the day Kevin Rudd demonstrated that he is just like any other politician. For those who held Rudd up as an icon of progressive politics, today was a day they would rather forget.
On a morning visit to the Sydney studios of 2Day FM, Rudd was asked by Sandilands whether he was a supporter of gay marriage. He's not, and the media were pushing him from the moment he left the studio. He looked particularly uncomfortable when asked by journalists if homosexual couples should have the right to adopt a child.
What was supposed to be a relaxed pitch for 'yoof' vote very quickly became the dominant issue of the day and disrupted what would have otherwise been a Labor victory.
You can listen to the 2Day interview here:
mms://66.70.119.243/kj_071023_kevin_rudd1.wma
Verdict - a tie
Cumulative Tally - Coalition 3, Labor 5
Monday 22 October, 2007
Another positive day for Labor with Kevin Rudd enjoying the headlines after his performance in Sunday night's debate. He appears strengthened by the victory and was at his best when he challenged Howard and Costello to a joint debate. The big challenge for both parties will be keeping our attention as the long campaign drags on. It's been just over a week and already I have a stitch and a blister - the finish line seems painfully far away. Verdict - A Labor win.
Cumulative Tally - Coalition 2.5, Labor 4.5
Interest rates and Malcolm Turnbull grabbed headlines this weekend. Labor have Howard on the ropes over his promise at the 2004 election to keep interest rates at record lows. The suggestion that Malcolm Turnbull, in an attempt to improve his green cred in Wentworth, may have leaked the story that he urged the PM to ratify Kyoto has placed coalition disharmony in the spotlight. The Libs are spending too much time on the defensive as Labor continues to set the agenda. The signs for Howard get more ominous by the day. Verdict - a Labor win
Cumulative Tally - Coalition 3.5, Labor 7.5
Thursday 25 October, 2007
As expected the inflation results dominated the start of the day. However, Kevin Rudd's last minute decision to attend the 43rd anniversary of a Tasmanian senior citizens club soon shifted the story of the day. Apparently Rudd's arrival mid-way through the celebrations put some members of the seniors' choir off-side. Baritone David Vowles felt compelled to dish out the best abuse of the campaign thus far, calling Rudd and the Labor candidate for Braddon "ignorant bastards" for politicising the celebrations. It was a welcome distraction to an otherwise uneventful day.
However, the cut and thrust of politics was again put into sombre perspective this evening with the news from Afghanistan that another Australian soldier had been killed in action. I'd expect the campaign to be pushed aside over the weekend as the nation comes to terms with the loss of the second soldier in as many weeks in Afghanistan. Verdict - A draw
Cumulative Tally - Coalition 3.5, Labor 6.5
Wednesday 24 October, 2007
Today's campaigning was overshadowed by the release of the latest inflation figures. It now looks certain that the Reserve Bank will lift interest rates when it meets on Melbourne Cup day, Nov 6. It will be the sixth rate rise since the 2004 election when John Howard promised to keep interest rates at record lows. A rates rise so close to polling day would be disastrous for the government and could see the Labor party celebrating no matter which horse in first past the post on November 6. Verdict - A Labor Victory
Cumulative Tally - Coalition 3, Labor 6
One of Australia's best political journalists, Dennis Shanahan analyses the inflation figures for The Australian here.
Tuesday 23 October, 2007
It was a day when Labor's 'message' was disrupted by, of all people, Kyle Sandilands, and the day Kevin Rudd demonstrated that he is just like any other politician. For those who held Rudd up as an icon of progressive politics, today was a day they would rather forget.
On a morning visit to the Sydney studios of 2Day FM, Rudd was asked by Sandilands whether he was a supporter of gay marriage. He's not, and the media were pushing him from the moment he left the studio. He looked particularly uncomfortable when asked by journalists if homosexual couples should have the right to adopt a child.
What was supposed to be a relaxed pitch for 'yoof' vote very quickly became the dominant issue of the day and disrupted what would have otherwise been a Labor victory.
You can listen to the 2Day interview here:
mms://66.70.119.243/kj_071023_kevin_rudd1.wma
Verdict - a tie
Cumulative Tally - Coalition 3, Labor 5
Monday 22 October, 2007
Another positive day for Labor with Kevin Rudd enjoying the headlines after his performance in Sunday night's debate. He appears strengthened by the victory and was at his best when he challenged Howard and Costello to a joint debate. The big challenge for both parties will be keeping our attention as the long campaign drags on. It's been just over a week and already I have a stitch and a blister - the finish line seems painfully far away. Verdict - A Labor win.
Cumulative Tally - Coalition 2.5, Labor 4.5
Wednesday, 17 October 2007
The Showdown begins
Apologies for the long time between posts. Work is busy busy.
So, November 24 is the day 'Australia decides.' I was reminded this week of a scene from the doco 'The War Room' about the Clinton campaign office during his successful presidential push. One of his staff judged each day as a win, lose or draw and I thought it would be interesting to keep my own tally during the campaign. So, here goes.
Weekend 1 October 20-21
The leaders debate dominated coverage of the weekend with most commentators awarding the contest to Rudd. Although I thought the debate too close to call, the night will benefit Rudd more than Howard. Despite a nervous start, Rudd appeared the more forward looking of the two. Howard failed to repudiate the charge that he is yesterday’s man – too often he was caught talking about his achievements during the past 11 years. This did two things. It reminded voters of how long he has been around for and reinforced Rudd’s image as a breath of fresh air and Labor as the party with a plan for Australia’s future.
Howard’s use of the forum to make two policy announcements – one concerning Iraq, the other climate change – was misjudged, particularly given the current mood of the electorate.
Rudd’s willingness to attack Howard’s record as treasurer (under Fraser 1977-83) was the most obvious sign that the Labor Party finally have a leader prepared to take it to the government on issues concerning the economy. Rudd continues to look like a man that is capable of leading the nation, and that is more bad news for the government. The Verdict – a strong win for Labor.
Cumulative Tally - Howard 2.5, Rudd 3.5
Friday, 19 October 2007
Labor's tax announcement today dominated headlines and will give Kevin Rudd a much needed boost as the election heads into its first weekend. The Labor plan, with tax cuts of $31 billion, embraces much of the government's own planned tax cuts and will strengthen Rudd's image as an economic conservative. However, despite the echo, the distinction between the two parties when it comes to tax is an important one. Labor has ignored the government's tax breaks aimed at those who earn over $180 000 per annum and has promised that money to health and education. The money for education will go the parents with children at primary and secondary school, the money for health will aim to reduce waiting lists for elective surgery. The package announced today will play well over the weekend and should have Labor in front come the start of next week. Verdict - Labor's first win of the campaign.
Cumulative Tally - Howard 2.5, Rudd 2.5
Thursday, 18 October 2007
Another day where neither party made significant progress in the race for our 'hearts and minds.' The issue of this Sunday's debate continues to simmer and demonstrates the power in incumbency. Howard is able to dictate his terms and Rudd can do little but go along with him. I still think he could be attacking Howard's insistence on only one debate so early in the campaign. Labor looks shaky on tax. The government's attacks on Labor's union links don't seem to be making much of a dent though. Verdict - another draw.
Cumulative Tally - Howard 2.5, Rudd 1.5
Wednesday, 17 October 2007
The funeral of Trooper David Pearce, killed last week in Afghanistan, meant that John Howard and Kevin Rudd were in Brisbane today. The soldier's funeral also seemed to take some of the spark out of the sparring that Howard and Rudd have engaged in during the first week of the campaign. Peter Costello launched a new Liberal advertisement that draws attention to the number of Labor shadow ministers with union links. Costello was particularly scathing when describing Julia Gillard's work for a socialist organisation when she was an industrial lawyer. Expect the attacks on Gillard to intensify as the campaign continues. Rudd announced plans to encourage nurses back into the workforce, but did so in a hospital that was manged by a local board - the Coalition model derided by Labor. Overall though an unremarkable day. Verdict - Draw
Cumulative Tally - Howard 2, Rudd 1
Tuesday, 16 October 2007.
Rudd announces a Labor plan to release more land on the fringes of major cities to combat housing prices. The plan was given a lukewarm response from the housing industry. The coalition enjoys continued traction from their tax announcement yesterday. Verdict - Draw
Cumulative Tally - Howard 1.5, Rudd 0.5
Monday, 15 October 2007.
Howard announces massive tax cuts if coalition reelected. The government is on the front foot early but Howard slips late in the day by getting the official interest rate wrong on ACA. Still a good first day for the government. Verdict - A win for Howard.
Cumulative Tally - Howard 1, Rudd 0
So, November 24 is the day 'Australia decides.' I was reminded this week of a scene from the doco 'The War Room' about the Clinton campaign office during his successful presidential push. One of his staff judged each day as a win, lose or draw and I thought it would be interesting to keep my own tally during the campaign. So, here goes.
Weekend 1 October 20-21
The leaders debate dominated coverage of the weekend with most commentators awarding the contest to Rudd. Although I thought the debate too close to call, the night will benefit Rudd more than Howard. Despite a nervous start, Rudd appeared the more forward looking of the two. Howard failed to repudiate the charge that he is yesterday’s man – too often he was caught talking about his achievements during the past 11 years. This did two things. It reminded voters of how long he has been around for and reinforced Rudd’s image as a breath of fresh air and Labor as the party with a plan for Australia’s future.
Howard’s use of the forum to make two policy announcements – one concerning Iraq, the other climate change – was misjudged, particularly given the current mood of the electorate.
Rudd’s willingness to attack Howard’s record as treasurer (under Fraser 1977-83) was the most obvious sign that the Labor Party finally have a leader prepared to take it to the government on issues concerning the economy. Rudd continues to look like a man that is capable of leading the nation, and that is more bad news for the government. The Verdict – a strong win for Labor.
Cumulative Tally - Howard 2.5, Rudd 3.5
Friday, 19 October 2007
Labor's tax announcement today dominated headlines and will give Kevin Rudd a much needed boost as the election heads into its first weekend. The Labor plan, with tax cuts of $31 billion, embraces much of the government's own planned tax cuts and will strengthen Rudd's image as an economic conservative. However, despite the echo, the distinction between the two parties when it comes to tax is an important one. Labor has ignored the government's tax breaks aimed at those who earn over $180 000 per annum and has promised that money to health and education. The money for education will go the parents with children at primary and secondary school, the money for health will aim to reduce waiting lists for elective surgery. The package announced today will play well over the weekend and should have Labor in front come the start of next week. Verdict - Labor's first win of the campaign.
Cumulative Tally - Howard 2.5, Rudd 2.5
Thursday, 18 October 2007
Another day where neither party made significant progress in the race for our 'hearts and minds.' The issue of this Sunday's debate continues to simmer and demonstrates the power in incumbency. Howard is able to dictate his terms and Rudd can do little but go along with him. I still think he could be attacking Howard's insistence on only one debate so early in the campaign. Labor looks shaky on tax. The government's attacks on Labor's union links don't seem to be making much of a dent though. Verdict - another draw.
Cumulative Tally - Howard 2.5, Rudd 1.5
Wednesday, 17 October 2007
The funeral of Trooper David Pearce, killed last week in Afghanistan, meant that John Howard and Kevin Rudd were in Brisbane today. The soldier's funeral also seemed to take some of the spark out of the sparring that Howard and Rudd have engaged in during the first week of the campaign. Peter Costello launched a new Liberal advertisement that draws attention to the number of Labor shadow ministers with union links. Costello was particularly scathing when describing Julia Gillard's work for a socialist organisation when she was an industrial lawyer. Expect the attacks on Gillard to intensify as the campaign continues. Rudd announced plans to encourage nurses back into the workforce, but did so in a hospital that was manged by a local board - the Coalition model derided by Labor. Overall though an unremarkable day. Verdict - Draw
Cumulative Tally - Howard 2, Rudd 1
Tuesday, 16 October 2007.
Rudd announces a Labor plan to release more land on the fringes of major cities to combat housing prices. The plan was given a lukewarm response from the housing industry. The coalition enjoys continued traction from their tax announcement yesterday. Verdict - Draw
Cumulative Tally - Howard 1.5, Rudd 0.5
Monday, 15 October 2007.
Howard announces massive tax cuts if coalition reelected. The government is on the front foot early but Howard slips late in the day by getting the official interest rate wrong on ACA. Still a good first day for the government. Verdict - A win for Howard.
Cumulative Tally - Howard 1, Rudd 0
Tuesday, 21 August 2007
The meaning of 'association'
In a decision that will intensify the debate over ‘activist’ judges, today in the Federal Court Justice Jeffrey Spender ruled that the decision by Immigration Minister Kevin Andrews to cancel the visa of Dr Mohammed Haneef was invalid.
Spender J ruled that s501 (6)(b) was incorrectly invoked by the minister when making his determination to cancel the Indian doctor’s 457 Visa. His Honour states that "the test which the Minister applied was not the test called for by s501 (6)(b). As a result of this misconception as to what the exercise of the statutory power entailed, there was a purported, but not a real exercise of the power conferred by s 501 (3)."
To help readers come to terms with the decision I have pasted the relevant section of the Migration Act below, and bolded the key sections. If you have more time on your hands you can read the full decision here.
As I write the government has announced that it will appeal the decision, so this will no doubt continue to be an issue right up until election day.
Section 501 of the Migration Act
Decision of Minister--natural justice does not apply
(3) The Minister may:
(a) refuse to grant a visa to a person; or
(b) cancel a visa that has been granted to a person;
if:
(c) the Minister reasonably suspects that the person does not pass the character test; and
(d) the Minister is satisfied that the refusal or cancellation is in the national interest.
(4) The power under subsection (3) may only be exercised by the Minister personally.
(5) The rules of natural justice, and the code of procedure set out in Subdivision AB of Division 3 of Part 2, do not apply to a decision under subsection (3).
Character test
(6) For the purposes of this section, a person does not pass the character test if:
(a) the person has a substantial criminal record (as defined by subsection (7)); or
(b) the person has or has had an association with someone else, or with a group or organisation, whom the Minister reasonably suspects has been or is involved in criminal conduct; or
(c) having regard to either or both of the following:
(i) the person's past and present criminal conduct;
(ii) the person's past and present general conduct;
the person is not of good character; or
(d) in the event the person were allowed to enter or to remain in Australia there is a significant risk that the person would:
(i) engage in criminal conduct in Australia; or
(ii) harass, molest, intimidate or stalk another person in Australia; or
(iii) vilify a segment of the Australian community; or
(iv) incite discord in the Australian community or in a segment of that community; or
(v) represent a danger to the Australian community or to a segment of that community, whether by way of being liable to become involved in activities that are disruptive to, or in violence threatening harm to, that community or segment, or in any other way.
Spender J ruled that s501 (6)(b) was incorrectly invoked by the minister when making his determination to cancel the Indian doctor’s 457 Visa. His Honour states that "the test which the Minister applied was not the test called for by s501 (6)(b). As a result of this misconception as to what the exercise of the statutory power entailed, there was a purported, but not a real exercise of the power conferred by s 501 (3)."
To help readers come to terms with the decision I have pasted the relevant section of the Migration Act below, and bolded the key sections. If you have more time on your hands you can read the full decision here.
As I write the government has announced that it will appeal the decision, so this will no doubt continue to be an issue right up until election day.
Section 501 of the Migration Act
Decision of Minister--natural justice does not apply
(3) The Minister may:
(a) refuse to grant a visa to a person; or
(b) cancel a visa that has been granted to a person;
if:
(c) the Minister reasonably suspects that the person does not pass the character test; and
(d) the Minister is satisfied that the refusal or cancellation is in the national interest.
(4) The power under subsection (3) may only be exercised by the Minister personally.
(5) The rules of natural justice, and the code of procedure set out in Subdivision AB of Division 3 of Part 2, do not apply to a decision under subsection (3).
Character test
(6) For the purposes of this section, a person does not pass the character test if:
(a) the person has a substantial criminal record (as defined by subsection (7)); or
(b) the person has or has had an association with someone else, or with a group or organisation, whom the Minister reasonably suspects has been or is involved in criminal conduct; or
(c) having regard to either or both of the following:
(i) the person's past and present criminal conduct;
(ii) the person's past and present general conduct;
the person is not of good character; or
(d) in the event the person were allowed to enter or to remain in Australia there is a significant risk that the person would:
(i) engage in criminal conduct in Australia; or
(ii) harass, molest, intimidate or stalk another person in Australia; or
(iii) vilify a segment of the Australian community; or
(iv) incite discord in the Australian community or in a segment of that community; or
(v) represent a danger to the Australian community or to a segment of that community, whether by way of being liable to become involved in activities that are disruptive to, or in violence threatening harm to, that community or segment, or in any other way.
Friday, 17 August 2007
Market Jitters
Contagion, Correction, Conflagration.
Call it what you will, the past week has been a shocker for market watchers and investors. Even my modest portfolio has taken an absolute pasting. (I wonder, is it still a portfolio if you only own one stock?) And, this week, as I braved the business pages to try and find out what the hell was happening to my nest of eggs, I noticed a number of references to the crash of 1987. While none of the commentators were suggesting that the current correction could be as bad as 87, I think it’s always good to have an understanding of what’s gone before you. Especially when money’s involved.
As a Berlin tour guide once told me as we stood in the shadow of the Brandenburg Gate, "History doesn’t repeat itself, but it very often echoes." With those words of wisdom ringing in my ears, I tried to find out what had happened during the crash of ‘87, and whether we can learn anything from it as we come to grips with the current correction.
In 1987 I was in year two at a little school in the centre of Adelaide. I prided myself on my basic arithmetic and monkey-bar agility - the business of the ASX was of no concern. Life was simple. Bob Hawke was Prime Minister of Australia, Paul Keating was his loyal treasurer (yeah right) and Carlton beat Hawthorn in the VFL grand final.
As with most trends in Australia, to understand the origins of the ‘87 crash we need to look to the US. The US economy had enjoyed unbridled growth in the lead up to the crash and by mid-August the Dow Jones Industrial Average (DJIA) had climbed above 2700 for the first time in its history.
The strong growth was partly due to generous tax concessions for the interest paid by companies on the debt incurred during mergers and acquisitions. Confused….you’re not alone. The tax breaks stimulated a flurry of takeover activity and speculation and share prices responded accordingly. A number of large pension funds had also invested in the market, putting even more upward pressure on prices. As a result of these stimuli, the price to earnings ratio widened markedly in the lead up to the ‘87 crash and left many analysts wondering if the market was overpriced.
One of the most prescient analysts at the time of the ‘87 crash was economic historian J.K Galbraith. Writing in the October 1987 edition of the Atlantic Monthly, Galbraith warned investors that a financial storm was brewing just over the horizon. "America has let its infrastructure crumble, its foreign markets decline, its productivity dwindle, its savings evaporate, and its budget and borrowing burgeon. And now the day of reckoning is at hand." He didn’t have to wait long for his doomsday prediction to come true. The ink was barely dry on his article when things started to unravel on the NYSE.
On October 14, the US House of Representatives announced that it was dropping the tax concessions associated with mergers and acquisitions. Investors who had been factoring continued takeover activity into their value estimates were all of a sudden thrown a curve ball by the federal government. In an instant, investors were forced to reassess the value of some of the Dow’s biggest stocks.
On the same day, the US Commerce Department announced that the August trade deficit figures were far worse than it had originally forecast. It was a combination punch that split the market’s eye and left investors with a bad case of double vision.
On the 16th the exodus began. The Dow Jones fell by 4.6% and international markets followed its lead. But worse was to come. As traders retreated to the relative safety of their homes for a much-needed weekend, the perfect financial storm continued to strengthen.
Monday the 19th will forever be remembered as Black Monday. As the market opened, huge selling pressure forced 95 S&P500 stocks to halt trading (about 30% of the total value of the index). The futures exchange continued to trade and the losses were significant. The trading system was overloaded by the demand and it became impossible for those on the floor of the NYSE to get up-to-date prices. At 1pm, news spread around the trading floor that the chairman of the SEC wanted to discuss the possibility of temporarily shutting the NYSE to try and stem the bleeding. The news only made things worse. By the end of the day the S&P500 had plunged a record 18%. The futures exchange had fared even worse, losing 29%. Click here to see a graphic representation of the crash.
So what was the Australian experience during October 1987? As Australian economist Andrew Charlton says, "when the US economy sneezes Australia catches a cold." This was certainly the case in ’87. Just like the US market, the All Ords had climbed to unprecedented levels prior to the crash. Deregulation had lead to a significant credit boom and commodity prices were lifted by the growth in the South East Asian economies. The market rose by 60% in the nine months before the crash and was loaded with debt. That’s not the case today, the fundamentals are stronger. The price to earning ratio of the current market is far healthier than it was prior to 87 and, despite the ongoing volatility, it looks like the bargain hunters are starting to put some upward pressure on prices again. That’s a good sign.
Friday, 27 July 2007
The Sunni Shia split
Friday, July 27 2007
Last weekend my partner and I were reading the papers over breakfast (one of my Saturday activities) when she asked me if I knew the difference between Sunnis and Shi’ites.
I paused. I felt like I’d read about the two major denominations of Islam, but as usual I was unable to recall the information when asked and bumbled some answer about a familial dispute, like some kind of middle eastern episode of Jerry Springer.
Further research on my behalf established that my answer was wrong, but that I was on the right track. And hey, I had something to write about on this blog after two weeks of silence.
I’ll try my best to simplify what I’ve learnt.
It’s important to note from the outset that most Sunnis and Shi’ites regard each other as Muslims and both worship the Prophet Mohammed.
The schism developed following the Prophet’s death in 632. Essentially, those that would become known as Shi’ites believed that the Prophet’s son-in-law and cousin, Ali, had been selected by Mohammed to succeed him as the leader of Muslims (known as the caliph) and that the leadership of Muslims should be passed down the Prophet’s bloodline. Shia is a contraction of the Arabic words ‘Shiat Ali’ which means ‘Partisans of Ali.’ I guess you could liken the Shia to monarchists.
Sunni’s disputed Ali’s right to the caliph and backed Abu Bakr, who they believed was the man most qualified to succeed the last Prophet. It is said that as Mohammed lay on his deathbed he asked Abu Bakr to lead the prayers - a signal to Sunni’s that Bakr was the anointed one. With the weight of numbers in their favour, the Sunni’s had their way and Abu Bakr became the first caliph. The Sunni’s have continued to be the dominant faction of Islam ever since.
It is estimated that 90% of Muslims today are Sunni’s.
The Shi’ites, however, faced centuries of persecution and submission following their initial defeat and, as a result, themes of death and martyrdom have become focal points of their identity as Muslims.
The divide between Shi’ites and Sunnis can be crudely likened to the differences between Catholicism and Protestantism. Shi’ites, like Catholics, have a more rigid leadership structure and follow a supreme leader who is regarded as divine and a perfect interpreter of the Koran. Sunni’s have a more diverse and ad hoc hierarchy and regard their leaders as human and fallible.
Over the centuries the differences have also become theological in nature, with both camps differing on the interpretation of the Hadith (the Hadith is the words and deeds of the Prophet). Shi’ites give preference to the interpretation of Ali and Fatima (Mohammed’s wife) and now defer to a living scholar for their religious guidance and instruction. The Sunni’s consider the twelve thousand narrations of the Hadith as equal but tend to follow the interpretation of 7th and 8th century scholars.
The divide is most obvious today in Iraq, but the bloodshed seen between Sunni and Shia in Iraq is regarded by many scholars as a distortion of their divergent theologies. In many countries Sunni and Shia live side by side with little problem.
Last weekend my partner and I were reading the papers over breakfast (one of my Saturday activities) when she asked me if I knew the difference between Sunnis and Shi’ites.
I paused. I felt like I’d read about the two major denominations of Islam, but as usual I was unable to recall the information when asked and bumbled some answer about a familial dispute, like some kind of middle eastern episode of Jerry Springer.
Further research on my behalf established that my answer was wrong, but that I was on the right track. And hey, I had something to write about on this blog after two weeks of silence.
I’ll try my best to simplify what I’ve learnt.
It’s important to note from the outset that most Sunnis and Shi’ites regard each other as Muslims and both worship the Prophet Mohammed.
The schism developed following the Prophet’s death in 632. Essentially, those that would become known as Shi’ites believed that the Prophet’s son-in-law and cousin, Ali, had been selected by Mohammed to succeed him as the leader of Muslims (known as the caliph) and that the leadership of Muslims should be passed down the Prophet’s bloodline. Shia is a contraction of the Arabic words ‘Shiat Ali’ which means ‘Partisans of Ali.’ I guess you could liken the Shia to monarchists.
Sunni’s disputed Ali’s right to the caliph and backed Abu Bakr, who they believed was the man most qualified to succeed the last Prophet. It is said that as Mohammed lay on his deathbed he asked Abu Bakr to lead the prayers - a signal to Sunni’s that Bakr was the anointed one. With the weight of numbers in their favour, the Sunni’s had their way and Abu Bakr became the first caliph. The Sunni’s have continued to be the dominant faction of Islam ever since.
It is estimated that 90% of Muslims today are Sunni’s.
The Shi’ites, however, faced centuries of persecution and submission following their initial defeat and, as a result, themes of death and martyrdom have become focal points of their identity as Muslims.
The divide between Shi’ites and Sunnis can be crudely likened to the differences between Catholicism and Protestantism. Shi’ites, like Catholics, have a more rigid leadership structure and follow a supreme leader who is regarded as divine and a perfect interpreter of the Koran. Sunni’s have a more diverse and ad hoc hierarchy and regard their leaders as human and fallible.
Over the centuries the differences have also become theological in nature, with both camps differing on the interpretation of the Hadith (the Hadith is the words and deeds of the Prophet). Shi’ites give preference to the interpretation of Ali and Fatima (Mohammed’s wife) and now defer to a living scholar for their religious guidance and instruction. The Sunni’s consider the twelve thousand narrations of the Hadith as equal but tend to follow the interpretation of 7th and 8th century scholars.
The divide is most obvious today in Iraq, but the bloodshed seen between Sunni and Shia in Iraq is regarded by many scholars as a distortion of their divergent theologies. In many countries Sunni and Shia live side by side with little problem.
Thursday, 12 July 2007
A Good-Win missed?
Originally posted Thursday July 12, 2007
John Howard’s ‘seniors’ moment’ on ABC radio yesterday will no doubt have a number of Liberal backbenchers wondering what might have been. It’s 12 months since Peter Costello came oh-so- close to challenging Howard’s leadership and, with the opinion polls continuing to predict a Labor victory at the coming election, the question has to be asked - did the Libs miss their one chance at installing a leader who could thwart the rise of Kevinism?
For a hint of what could have been, we need only look to Britain and the turnaround the Labour party has enjoyed since Gordon Brown moved into No. 10.
This week, journalist and Pulitzer Prize winning author Anne Applebaum described the post-Blair climate change for Slate.com. Prior to Blair's departure the Labour party was seriously on the nose with voters, but Brown's ascension to PM has demonstrated that much of the animosity towards Labour was aimed squarely at Blair.
As Applebaum says, "Brown isn’t exactly a new face. He had been the second-most-important person in Britain for the past decade and is held responsible for almost all the Labour government’s domestic economic decisions….and although he should rightly be identified with every unpopular decision Blair ever made, Brown is now going out of his way to sound as un-Blair-like as possible"
And it seems to have worked.
Only days after Brown moved into No. 10, a poll conducted for The Guardian showed a stunning seven-point bounce in Labour’s satisfaction rating. And, while it would be easy to discount the result as a honeymoon poll, Brown is working hard to convince the electorate that Labour is different under his stewardship
It’s the same tactic that helped Nicolas Sarkozy succeed the deeply unpopular French President Jacques Chirac. Despite the fact he had been an important part of Chirac’s UMP government, Sarkozy successfully distanced himself from his predecessors more unpopular decisions during the election campaign and managed to convince voters that he was different.
Peter Costello could have presented himself to the electorate in a similar manner. A steady pair of hands with experience in government, but different enough from Howard to make it seem like a change of government had already occurred.
If the opinion polls are right then Peter Costello won't be the only one ruing a missed opportunity come election night.
[17/7/07 - Dennis Shanahan reports in The Australian today that Howard asked the party room if they thought he was the reason for the coalitions poor poll numbers. There is no suggestion that Costello is orchestrating a challenge, but this issue will continue to dog the Libs until election day.]
This item was edited/updated on 17/7/07
John Howard’s ‘seniors’ moment’ on ABC radio yesterday will no doubt have a number of Liberal backbenchers wondering what might have been. It’s 12 months since Peter Costello came oh-so- close to challenging Howard’s leadership and, with the opinion polls continuing to predict a Labor victory at the coming election, the question has to be asked - did the Libs miss their one chance at installing a leader who could thwart the rise of Kevinism?
For a hint of what could have been, we need only look to Britain and the turnaround the Labour party has enjoyed since Gordon Brown moved into No. 10.
This week, journalist and Pulitzer Prize winning author Anne Applebaum described the post-Blair climate change for Slate.com. Prior to Blair's departure the Labour party was seriously on the nose with voters, but Brown's ascension to PM has demonstrated that much of the animosity towards Labour was aimed squarely at Blair.
As Applebaum says, "Brown isn’t exactly a new face. He had been the second-most-important person in Britain for the past decade and is held responsible for almost all the Labour government’s domestic economic decisions….and although he should rightly be identified with every unpopular decision Blair ever made, Brown is now going out of his way to sound as un-Blair-like as possible"
And it seems to have worked.
Only days after Brown moved into No. 10, a poll conducted for The Guardian showed a stunning seven-point bounce in Labour’s satisfaction rating. And, while it would be easy to discount the result as a honeymoon poll, Brown is working hard to convince the electorate that Labour is different under his stewardship
It’s the same tactic that helped Nicolas Sarkozy succeed the deeply unpopular French President Jacques Chirac. Despite the fact he had been an important part of Chirac’s UMP government, Sarkozy successfully distanced himself from his predecessors more unpopular decisions during the election campaign and managed to convince voters that he was different.
Peter Costello could have presented himself to the electorate in a similar manner. A steady pair of hands with experience in government, but different enough from Howard to make it seem like a change of government had already occurred.
If the opinion polls are right then Peter Costello won't be the only one ruing a missed opportunity come election night.
[17/7/07 - Dennis Shanahan reports in The Australian today that Howard asked the party room if they thought he was the reason for the coalitions poor poll numbers. There is no suggestion that Costello is orchestrating a challenge, but this issue will continue to dog the Libs until election day.]
This item was edited/updated on 17/7/07
[25/7/07 - Paul Kelly, in The Australian, can't see the Liberal leadership changing this close to the election, despite renewed speculation of tension between Howard and Costello.]
[15/8/07 - This issue continues to haunt the coalition with renewed speculation over the Liberal leadership and new claims that in 2005 Costello vowed to challenge Howard. This is an issue that is unlikely to resolve itself before the election, but do voters really care?]
Friday, 6 July 2007
GetUp asks Howard to GetOut
6.7.07. Sydney
This week the political website GetUp.org.au launched an advertising campaign that features an Australian victim of the 7/7 terrorist attacks on London. During the commercial Louise Barry, who was on the Double-Decker bus that was blown up by Hasib Hussain near Tavistock Square, stands in an empty room and asks John Howard to withdraw Australian troops from Iraq.
[Update 19/7/07 - It seems that the US intelligence community doesn't agree with me though. The latest National Intelligence Estimate suggests that the terrorist threat to the US homeland has increased because of Iraq. See slate.com for a summary. ]
24/7/07 - But Middle East expert Martin Indyk told Kerry O'brien earlier this year that the consequences of a withdrawal could have major ramifications for the region.
This week the political website GetUp.org.au launched an advertising campaign that features an Australian victim of the 7/7 terrorist attacks on London. During the commercial Louise Barry, who was on the Double-Decker bus that was blown up by Hasib Hussain near Tavistock Square, stands in an empty room and asks John Howard to withdraw Australian troops from Iraq.
(I've posted the full spot above)
Barry sustained serious injuries in the London attack, including fractured vertebrae in her neck and serious burns to her legs. Her description of extricating herself from the torn wreckage of the bus is gut wrenching to say the least.
But Louise Barry is wrong to think that by withdrawing our troops from Iraq we will somehow be safer.
The fact is that Australians were targets of Islamic extremists well before Howard committed us to the ‘Coalition of the Willing.’ Sure, the extremists can add our involvement in Iraq to their growing list of grievances, but should we really base our foreign policy decisions on trying to appease extremists? Regardless of whether we withdraw or not, the sad fact remains that we will continue to be a viable target for islamo-fascists.
Nearly six months before Australian soldiers set foot in Iraq, 89* of our compatriots were slaughtered while holidaying in Bali. Most of them were young, enjoying a holiday with friends and family on the idyllic Indonesian island. The spiritual leader of the ‘men’ behind the attack, Abu Bakar Bashir, has said publicly that, "If they [non-Muslim people] want to have peace, they have to accept to be governed by Islam." For Bashir and other fanatics of his ilk, it’s all or nothing. There can be no negotiation with the ‘infidels’.
Whatever your views on our involvement in the invasion of Iraq, the threat of terrorism will not be reduced by withdrawing our 1500 troops. To argue for withdrawal on the basis that it will make us safer is both dishonest and misleading.
[Update 19/7/07 - It seems that the US intelligence community doesn't agree with me though. The latest National Intelligence Estimate suggests that the terrorist threat to the US homeland has increased because of Iraq. See slate.com for a summary. ]
24/7/07 - But Middle East expert Martin Indyk told Kerry O'brien earlier this year that the consequences of a withdrawal could have major ramifications for the region.
*13/8/07 - The Australian death toll was incorrectly put at 88 in the original post. Apologies.
Thursday, 28 June 2007
The Palestinian Split
The news of more strife in the Middle East nearly passed me by last week. I've almost become immune to the Israel/Palestine problem and the blood that has been spilt over the decades trying to resolve it. But the division in Palestine between Hamas and Fatah - and the bloodshed it has caused over the last month – left me deeply confused. I realised that I didn’t understand the ideological division that separated Hamas and Fatah. So this week I set about trying to understand what drives and divides the two major forces in Palestinian politics.
I'll start with Fatah, the older of the two movements.
Fatah was formed in 1958 (there is some debate about the exact year of formation) by members of the Palestinian diaspora, most of who were professionals working in the Gulf States in the lucrative oil industry. Yasser Arafat, who led Fatah for over 30 years until his death in 2004, is the best known of Fatah’s founding fathers. The party’s current leader, Mahmoud Abbas, was also there from the beginning.
Fatah is a secular socialist party that became the dominant player in Palestinian politics following Israel's victory in the Six Day War of 1967. Arafat used the power vacuum created when the Arab states were defeated to position Fatah as the pre-eminent Palestinian organisation. Although Fatah has been involved in terrorist acts against Israel, it’s important to acknowledge that senior members of the party have publicly acknowledged Israel’s right to exist. In this respect, Fatah can be seen as the more pragmatic of the two competing forces in Palestinian politics.
Hamas, formed in the Gaza Strip during the First Intifada (which began in1987), is an Islamist party that seeks to create an Islamic state across the lands of historic Palestine. Hamas believes that God bequeathed the land to Palestinians and, thus, it cannot be traded away. As a corollary, Hamas does not recognise the right of Israel to exist and seeks its unconditional destruction. As the Hamas charter states, "There is no solution for the Palestinian question except through Jihad." Put simply, for Hamas, there can be no compromise.
The rise of Hamas as a force in Palestinian politics really began with the signing of the Oslo Peace Accords in 1993. The end of the Cold War saw a renewed optimism for hopes of a solution to the Israel/Palestine problem. In August 1993 Arafat and Israeli PM Yitzhak Rabin secretly negotiated a ‘Declaration of Principles’ in Oslo, Norway that became known as the Oslo Peace Accords. The declaration was sealed by that iconic handshake in the White House Rose Garden a month later. Bill Clinton’s smile as Arafat and Rabin shook hands reflected the mood of much of the world on that sunny day in September as peace seemed one step closer.
But not everyone was happy – the declaration infuriated hardliners on both sides of the divide.
Two years later, a Jewish extremist opposed to the Oslo process assassinated Rabin. But by this stage the accords were already in tatters. Hamas, incensed by what it regarded as Arafat’s betrayal of the Palestinian people, began a campaign of suicide bombings against Israeli citizens in early 1996. The aim of their campaign was to derail the peace process, and it was a devastating success.
The Hamas-led violence saw Israelis emphatically reject the peace process and elect Likud hardliner Benjamin Netanyahu as Prime Minister. Netanyahu was a vocal critic of the concessions made by Rabin in the Oslo Accords and, as Prime Minister, cracked down on the Palestinians and forced Arafat to act against terrorists. However, his reign as Israel’s PM was short-lived and he lost office to Labor’s Ehud Barak in 1999.
In the closing months of his adminsitration, US President Bill Clinton attempted to bring the parties back to the negotiating table in a last ditch attempt at moving the stalled peace process forward. The summit he convened at Camp David in 2000 concluded without a suitable resolution to the impasse. Soon after Barak and Arafat left the tranquil surrounds of Camp David the second Intifada erupted in the occupied territories.
Israel's response to what became known as the Al-Aqsa Intifada was devastating, but only served to increase the popularity of Hamas among the frustrated Palestinians. They regarded Arafat’s reign as tired and corrupt and saw Hamas as a party of action and renewal.
The rise of Hamas as the new force in Palestinian politics was assured following Arafat’s death in 2004.
With the unifying figure of Arafat now lost, Hamas swept to victory in the 2006 parliamentary elections. The US, which regards Hamas as a terrorist organisation, withdrew its humanitarian aid program following the election in a bid to destabilise the Hamas led government. The civil war we have witnessed in the last few weeks suggests this destabilisation has worked, but the consequences for the Palestinian people and the Israelis remain uncertain.
This is an issue I’ll be watching with a great deal of interest in the coming months.
I'll start with Fatah, the older of the two movements.
Fatah was formed in 1958 (there is some debate about the exact year of formation) by members of the Palestinian diaspora, most of who were professionals working in the Gulf States in the lucrative oil industry. Yasser Arafat, who led Fatah for over 30 years until his death in 2004, is the best known of Fatah’s founding fathers. The party’s current leader, Mahmoud Abbas, was also there from the beginning.
Fatah is a secular socialist party that became the dominant player in Palestinian politics following Israel's victory in the Six Day War of 1967. Arafat used the power vacuum created when the Arab states were defeated to position Fatah as the pre-eminent Palestinian organisation. Although Fatah has been involved in terrorist acts against Israel, it’s important to acknowledge that senior members of the party have publicly acknowledged Israel’s right to exist. In this respect, Fatah can be seen as the more pragmatic of the two competing forces in Palestinian politics.
Hamas, formed in the Gaza Strip during the First Intifada (which began in1987), is an Islamist party that seeks to create an Islamic state across the lands of historic Palestine. Hamas believes that God bequeathed the land to Palestinians and, thus, it cannot be traded away. As a corollary, Hamas does not recognise the right of Israel to exist and seeks its unconditional destruction. As the Hamas charter states, "There is no solution for the Palestinian question except through Jihad." Put simply, for Hamas, there can be no compromise.
The rise of Hamas as a force in Palestinian politics really began with the signing of the Oslo Peace Accords in 1993. The end of the Cold War saw a renewed optimism for hopes of a solution to the Israel/Palestine problem. In August 1993 Arafat and Israeli PM Yitzhak Rabin secretly negotiated a ‘Declaration of Principles’ in Oslo, Norway that became known as the Oslo Peace Accords. The declaration was sealed by that iconic handshake in the White House Rose Garden a month later. Bill Clinton’s smile as Arafat and Rabin shook hands reflected the mood of much of the world on that sunny day in September as peace seemed one step closer.
But not everyone was happy – the declaration infuriated hardliners on both sides of the divide.
Two years later, a Jewish extremist opposed to the Oslo process assassinated Rabin. But by this stage the accords were already in tatters. Hamas, incensed by what it regarded as Arafat’s betrayal of the Palestinian people, began a campaign of suicide bombings against Israeli citizens in early 1996. The aim of their campaign was to derail the peace process, and it was a devastating success.
The Hamas-led violence saw Israelis emphatically reject the peace process and elect Likud hardliner Benjamin Netanyahu as Prime Minister. Netanyahu was a vocal critic of the concessions made by Rabin in the Oslo Accords and, as Prime Minister, cracked down on the Palestinians and forced Arafat to act against terrorists. However, his reign as Israel’s PM was short-lived and he lost office to Labor’s Ehud Barak in 1999.
In the closing months of his adminsitration, US President Bill Clinton attempted to bring the parties back to the negotiating table in a last ditch attempt at moving the stalled peace process forward. The summit he convened at Camp David in 2000 concluded without a suitable resolution to the impasse. Soon after Barak and Arafat left the tranquil surrounds of Camp David the second Intifada erupted in the occupied territories.
Israel's response to what became known as the Al-Aqsa Intifada was devastating, but only served to increase the popularity of Hamas among the frustrated Palestinians. They regarded Arafat’s reign as tired and corrupt and saw Hamas as a party of action and renewal.
The rise of Hamas as the new force in Palestinian politics was assured following Arafat’s death in 2004.
With the unifying figure of Arafat now lost, Hamas swept to victory in the 2006 parliamentary elections. The US, which regards Hamas as a terrorist organisation, withdrew its humanitarian aid program following the election in a bid to destabilise the Hamas led government. The civil war we have witnessed in the last few weeks suggests this destabilisation has worked, but the consequences for the Palestinian people and the Israelis remain uncertain.
This is an issue I’ll be watching with a great deal of interest in the coming months.
24/7/07 - Greg Sheridan sees a glimmer of hope in the schism between Hamas and Fatah.
24/7/07 - Martin Indyk, an Australian who was US ambassador to Israel during the Clinton administration, expands on this optimism for The Washington Post.
Tuesday, 26 June 2007
Thomas Hobbes
Tuesday 26.6.07. Sydney, Australia
In a speech to the Sydney Institute last night, Prime Minister Howard described the conditions in some remote indigenous communities as being akin to "a Hobbesian nightmare of violence, abuse and neglect." (see an excerpt of the speech here http://www.smh.com.au/news/opinion/duty-of-care-justifies-governments-action/2007/06/25/1182623817831.html.)
Howard's speech was designed to explain why the federal government has felt compelled to intervene in what is historically an issue for the NT government. But his speech got me thinking, who is this Hobbes fellow and what's this nightmare he's banging on about.
Thomas Hobbes (1588-1679) was a British philosopher who spent much of his life in self-imposed exile in Paris. He is widely credited for establishing the agenda for much of the Western political philosophy that followed the publication of his magnum opus, Leviathan.
Hobbes came late to philosophy - it wasn't until 1637 that he considered himself a true philosopher and scholar. In 1640, as tension between Royalists and Parliamentarians escalated in the lead up to the English Civil War, Hobbes moved to France so he could work without the risk of falling foul of either side.
In 1642 Hobbes was joined by other Royalist exiles who had also fled to Paris to escape persecution at the hands of the dominant Parliamentarians. They inspired Hobbes to start work on his theory of civil government, and thus Leviathan was born. (Leviathan is a biblical reference and means 'monster')
During the writing process, Hobbes nearly succumbed to a serious illness but recovered and in 1651 Leviathan was published. The reaction to it was immediate. The secular nature of the work infuriated his former Royalist colleagues, not to mention those dangerous French Catholics. Hobbes, fearing for his life in Paris, requested asylum from the Parliamentarians in London. Luckily he was granted it. (obviously the Brits were lacking their own version of the Pacific Solution.)
So, what was Leviathan all about, and how does it relate to the state of remote indigenous communities in 21st century Australia? Put simply, Leviathan is Hobbes' attempt to devise a theory of a social contract. Hobbes posits that the state of nature means each of us has a right to everything in the world but that, due to scarcity of 'things', there is a constant war of all against all to secure that right. He goes on to describe a life lived in the state of nature as "solitary, poor, nasty, brutish and short." How can one prevent this bleak outcome? According to Hobbes there is but one way. We must surrender our individual powers to the authority of an absolute sovereign and enter into a social contract. As Australian citizens, we are all signatories to a social contract - we live under a complex of laws that restrict human behaviour and make life, well, more livable.
Obviously, Howard believes the social contract has been voided in these remote communities and the only way to avoid continued brutality is to act immediately and decisively. Agree with him or not, Howard's actions are a drastic attempt to restore the social contract that Hobbes believed was so important in achieving a desirable standard of existence. That's an outcome we should all be hoping for.
[21/8/07- In his continuing series on religion for Slate.com, iconoclast Christopher Hitchens and author of God Is Not Great: How Religions Poisons Everything (see 2007 reading list), mentions Hobbes in this article]
In a speech to the Sydney Institute last night, Prime Minister Howard described the conditions in some remote indigenous communities as being akin to "a Hobbesian nightmare of violence, abuse and neglect." (see an excerpt of the speech here http://www.smh.com.au/news/opinion/duty-of-care-justifies-governments-action/2007/06/25/1182623817831.html.)
Howard's speech was designed to explain why the federal government has felt compelled to intervene in what is historically an issue for the NT government. But his speech got me thinking, who is this Hobbes fellow and what's this nightmare he's banging on about.
Thomas Hobbes (1588-1679) was a British philosopher who spent much of his life in self-imposed exile in Paris. He is widely credited for establishing the agenda for much of the Western political philosophy that followed the publication of his magnum opus, Leviathan.
Hobbes came late to philosophy - it wasn't until 1637 that he considered himself a true philosopher and scholar. In 1640, as tension between Royalists and Parliamentarians escalated in the lead up to the English Civil War, Hobbes moved to France so he could work without the risk of falling foul of either side.
In 1642 Hobbes was joined by other Royalist exiles who had also fled to Paris to escape persecution at the hands of the dominant Parliamentarians. They inspired Hobbes to start work on his theory of civil government, and thus Leviathan was born. (Leviathan is a biblical reference and means 'monster')
During the writing process, Hobbes nearly succumbed to a serious illness but recovered and in 1651 Leviathan was published. The reaction to it was immediate. The secular nature of the work infuriated his former Royalist colleagues, not to mention those dangerous French Catholics. Hobbes, fearing for his life in Paris, requested asylum from the Parliamentarians in London. Luckily he was granted it. (obviously the Brits were lacking their own version of the Pacific Solution.)
So, what was Leviathan all about, and how does it relate to the state of remote indigenous communities in 21st century Australia? Put simply, Leviathan is Hobbes' attempt to devise a theory of a social contract. Hobbes posits that the state of nature means each of us has a right to everything in the world but that, due to scarcity of 'things', there is a constant war of all against all to secure that right. He goes on to describe a life lived in the state of nature as "solitary, poor, nasty, brutish and short." How can one prevent this bleak outcome? According to Hobbes there is but one way. We must surrender our individual powers to the authority of an absolute sovereign and enter into a social contract. As Australian citizens, we are all signatories to a social contract - we live under a complex of laws that restrict human behaviour and make life, well, more livable.
Obviously, Howard believes the social contract has been voided in these remote communities and the only way to avoid continued brutality is to act immediately and decisively. Agree with him or not, Howard's actions are a drastic attempt to restore the social contract that Hobbes believed was so important in achieving a desirable standard of existence. That's an outcome we should all be hoping for.
[21/8/07- In his continuing series on religion for Slate.com, iconoclast Christopher Hitchens and author of God Is Not Great: How Religions Poisons Everything (see 2007 reading list), mentions Hobbes in this article]
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