Great wall of Mexico

great-wall-mexico
South Australia dog fence Photo by Bob Wilson

There are precedents for President Donald Trump’s plan to build, or complete a 3,208 kilometre wall between Mexico and the US. The Australian outback features not one but two barrier fences, sprawling the length and breadth of the country.

A tour guide took us on a sunset tour out to the ‘dog fence’ near Coober Pedy in 2014. The South Australian section of the 5,531km fence which runs from the SA border to Queensland is 2,250 kms long.  Built in the 1880s, it’s the longest fence in the world and keeps wild dogs out (or in).

In Western Australia there’s also the 3,256 kms long Rabbit Proof Fence. Possibly because there’s a movie by that name, it is now known as the State Barrier Fence of Western Australia. Having done our share of outback travel, we can tell you that rabbits are still breeding away and undermining parts of Australia, despite myxomatosis, 1080 poison and vermin proof fences. Western Australia’s fence was completed in three stages in the early 1900s as an attempt to isolate the west from the national rabbit plague.

Just so you all know, dingoes and rabbits were not asked to pay for the construction of these fences.

Yes, it makes you think.

There’s no doubt that well-built vermin fences, extending a long way into the ground, have been successful at keeping rabbits and other pests from undermining Australia and also prevent dingoes from savaging livestock. So the cost is defendable, as is the ongoing expense of sending out boundary riders on weekly repair patrols. Feral camels do the most damage, so not surprisingly; there are plans for a taller (electrified) fence.

So what about President Trump’s wall between Mexico and the US? Despite the fact that a 1000 kilometre stretch was completed by George W Bush’s government, this is still going to be a $20 billion exercise. Crikey, that’s about 30% of the US education budget, right there.

And speaking of education, a Pew Research survey found that 61% of Americans think a wall between the US and Mexico is a dumb idea.

Our Albuquerque correspondent, despite living 693 kilometres from the New Mexico border at Juarez, thinks the wall is ‘insulting, a blight and really bad foreign policy.”

Thanks to Bloomberg and heavyweight sources like the Department of Homeland Security, here’s what we know about the challenges facing President Trump’s wall. The notoriously porous border between the US and Mexico is almost 3,208 kilometres long, two-thirds of it tracking the Rio Grande River. The border passes through cities including San Ysidro (California) and El Paso (Texas), rural farmland, desert, mountains and wildlife reserves. The border features 30+ patrol stations and 25 ports of entry.

Barriers already extend along a third of the border, giving President Trump’s contractors something of a head-start. Most of the California, Arizona and New Mexico borders have existing barriers. These range from 5.5m high iron and corrugated metal fences to what our Albuquerque correspondent calls “pedestrian fencing.’

Bloomberg reports that in 2015, the Customs and Border Patrol claimed an 81% strike rate for apprehending and turning back Mexicans attempting to cross illegally (or should that be irregularly).

No-one really knows how many undocumented Mexicans are living in the US but informed estimates figure around 11 million. There have been amnesties in the past, but that does not appear to be an option under a Trump administration.

A Pew Research Centre survey conducted in 2015 found that 72% of Americans (including 80% of Democrats, 76% of independents and 56% of Republicans), thought undocumented immigrants should be allowed to stay “if they meet certain requirements.

Most of the existing border fence was built after 2006, when President George W. Bush signed the Secure Fences Act. I hate to be pedantic, but the act specifically says “Fences” not walls. When President Trump talks about his vision, most of us imagine a Great Wall of China or the 8m high sections of the West Bank edifice.

Al Jazeera reports that the West Bank security fence is the largest infrastructure project in Israel’s history. Nearly 15 years old, the 706km long fence costs Israel $260 million a year to maintain.

The ‘separation barrier” as it is coyly known, comprises mostly 2m high, electrified barbed-wire fences with vehicle-barrier trenches and a 60m exclusion zone on the Palestinian side. But in densely populated urban areas with space limitations, the Israelis built an 8m concrete wall.

Walls built between countries or within countries are always controversial, and, well, brutally divisive.

There’s no space at this time to delve into the tragedies of the Berlin Wall, which divided East and West Berlin for 27 years, for reasons which now seem specious. History shows that barrier walls built for whatever reason are destined to become decaying tourist attractions,

Visitors to Britain often schedule a visit to Hadrian’s Wall, a fascinating relic of 122AD when the emperor Hadrian demanded a wall be built east from Wallsend on the River Tyne to Bowness-on-Solway in the west. Hadrian’s Wall was the north-west frontier of the Roman Empire for nearly 300 years, built by the Roman army (to separate the barbarians from the Romans). Hadrian’s Wall was made a World Heritage Site in 1987.

In 2010 English folksingers Julie Matthews and Chris While joined a group of songwriters to write songs inspired by Hadrian’s Wall. Their song which emerged from the All Along the Wall project, Rock of Gelt, imagines a bored centurion who has been dragooned, if that is the appropriate word, into “building the Empire’s last frontier.”

There are only a handful of inscriptions to be found along the remains of the stone wall, including a piece of graffiti found in the Gelt Valley. It translates to: “Daminius didn’t want to do it,” which becomes the repeated refrain at the end of the song.

So will Donald Trump persist with a plan to build/complete a wall that 61% of Americans do not want? No doubt the 39% who want it would argue it will employ large numbers of people, through the building phase, then on maintenance and security.

Maintenance of walls and fences is an ongoing issue – just ask a fencing contractor called in to repair or replace fences wrecked or washed away in floods. The annual maintenance bill to keep the Dingo Fence in sound repair is around $10 million, according to an article in The Conversation. The authors argue for a re-think of the country’s vermin fence policies, including a plan to move a section of the fence to test whether the now endangered dingo can help restore degraded rangelands.

The humanitarian question is, if you must build a barrier wall or fence, surely you should have to justify the exclusion of a species?

As poet Elvis McGonnagal wrote, inspired by the Along the Wall project:

“Walls entomb, walls divide

Walls barricade the unknown

Berlin, Belfast, Gaza

Walls set difference in stone

 But the same sun that sets on the west bank

Rises up on the eastern wall

A man’s a man in Mesapotamia

A man’s a man in Gaul.”

*thanks to Julie Matthews for the insights

Elephant captured on Nullarbor Plain

elephant-nullarbor-plain
Photo by Mario Micklisch https://flic.kr/p/peLSQA

An African elephant dubbed ‘Ferd’ by social media followers has been cornered in an industrial shed near a roadhouse on the Nullarbor Plain. Ferd escaped from the Perth Zoo three months ago and has been spotted variously in WA and the Northern Territory. Facebook posts claimed sightings on Groote Eylandt.

Shed owner Tony is making a bit of cash on the side charging travellers $10 to pose for an elephant selfie. The Grey Nomad website www.welikefreestuff.dot described this as “exploitation” and lamented the lack of a seniors’ discount.

“It’s weird,” said Tony. “Everybody takes selfies to post on Facebook but nobody actually wants to talk about the elephant in the room.”

At which point you can see this  story about Ferd the elephant is not unlike the proliferating fake news stories on social media which commonly use a  headline and intro like this to suck you in. The more insidious fake news items, however, are portrayed as legitimate news stories and are often picked up and shared.

Satire is not fake news and vice versa

Some of the fake news websites which churn out stories cast themselves as satirists, but it is a loose label, apt to blow off in the wind. A yarn about an elephant wandering the Australian desert is probably satire.

It is satire when someone suggests the Pope is marrying (famous female pop singer) and running for the White House. Fake news is a story about the Pope endorsing Donald Trump (quickly debunked by hoax tracking website www.snopes.com.

WTOE 5 News, which broke the story, claimed that news outlets around the world were reporting on the Pope’s unprecedented endorsement. But Snopes found that no reputable news publications confirmed it, because WTOE 5 News, masquerading as a local television news outlet, does not publish factual stories.

But social media is not so discriminating. As Harvard University’s Nieman Journalism Lab pointed out, this fake yarn, which appeared in July, was shared almost 1 million times, versus 36,000 shares for the story debunking it.

One such story prior to the US election suggested the Amish had committed their vote to Donald Trump. Only 10% of Amish vote at all.

Another story suggested Barack Obama was abolishing the oath of allegiance in US schools. Sounds believable but simply not true.

Before people caught on to the idea of making money by spreading fake news on social media, the so-called supermarket tabloids cornered the market.

Here you will see obviously misleading headlines like “Diana is still alive” or “Hillary Gay Crisis” or “Aliens settle in San Francisco”.

By contrast, fake news stories circulated on social media prior to the election were entirely plausible – until you read to the end or read the website’s disclaimer.

But who has the time to (a) read the whole article before (b) sharing it or (c) checking out the veracity via factcheck.com or snopes.com?

Fake news here to stay

David Glance, writing in The Conversation, says fake news is driven by advertising and is here to stay. Glance, Director of Centre for Software Practice, University of Western Australia, says a great deal of the recent fake news targeted at Trump supporters appears to have originated in the Macedonian town of Veles. Websites with legitimate-sounding names fed pro-Trump fake news, which in turn generated large revenues from traffic generated through Facebook shares.

Glance says it may be tempting to think that news from reputable media organisations is more reliable, but they too are still influenced by partisan opinion and the pressures to advertise and generate traffic and sales.

“Ultimately, there is no protection from fake news other than to adopt a sceptical view of all news and take the truth of it on balance of likelihood and confirmation from multiple reputable sources.”

Facebook and parent company Google say they are going to crack down on fake news sites. The New York Times reported last week that Google would ban websites that peddle fake news from using its online advertising service. Facebook updated its policy, which already says it will not display ads on sites that show misleading or illegal content, to include fake news sites.

Paul Who?

So who are the people who spend their days (and nights) churning out fake news? Some publications have identified Paul Horner, described by Wikipedia as an internet news satirist and writer. Horner confesses to being as described and highlights a few of the stories he has written that have been picked up and shared by internet news sites. The Amish was his, so too Obama banning the oath of allegiance and Horner has recently told the Washington Post that he helped get Donald Trump elected.

Horner’s various websites pose as legitimate websites, but if you jump to the disclaimer, the author leaves himself an out by clearly stating that “…all news articles contained within are fiction, and presumably fake news.”

As David Glance observed, mainstream media is not immune to fakery, or at least allowing embellished news to be published. The blame is placed upon gutted newsrooms, where veterans with 20 years’ or more experience are replaced by school leavers and interns. The Guardian quoted an (un-named) journalist who described the pressure to perform online:

“So much news that is reported online happens online. There is no need to get out and doorstep someone. You just sit at your desk and do it and, because it is so immediate, you are going to take that risk. Editors will say, ‘The BBC got that six seconds before we did.’”

Some editors defend the bull at a gate approach as online news can be instantly updated (or taken down), when errors become obvious. FOMM can confirm this strategy as we have occasionally corrected minor errors on our website (it’s Hillary with two l’s, Bob).

Fake news is nothing new. As David Glance says, quoting French philosopher Michel de Montaigne (re the turmoil and divisions of 16th century France):

“Is it not better to remain in suspense than to entangle yourself in the many errors that the human fancy has produced? Is it not better to suspend your convictions than to get mixed up in these seditious and quarrelsome divisions?”

Fake news stories only a problem if you read them

Facebook has been blamed by some commentators for helping The Donald get elected, but it’s a specious argument. Filmmaker Michael Moore said people in America’s forgotten ‘rust belt’ made their minds up about Trump years ago.

Moore was interviewed in July by www.cnn.com (a real news website), where he talked about the reasons why Trump would win.

If he’s able to pull it off, it will be because on that day, a lot of angry white guys, a lot of guys who have a justifiable right to be angry — guys and women– who have suffered during the last decade,” Moore said.

The Pew Institute says 13% of Americans (about 41 million, 41% of whom are over 65); do not have internet access because: the internet is too difficult to use (34%), they have no interest in going online (32%), or internet access is too expensive (19%).

Moore’s angry white men were never going to be swayed by fake stories about the Pope or the Amish, if indeed they read them in the first place.

 

Newstart or job-share?

dad-needs-job
https://flic.kr/p/5YepYQ Image by Dane Nielsen

There are times when I’m grateful my conventional working life is behind me and I can wait (patiently) for the next humble pension payment. My needs are small – I can sit on the front veranda with a cup of coffee made on our machine for about 15 cents, enjoy my banana toasty, share the crumbs with the birds and do the crossword. Some may call me a leaner, but I’ve done my share of lifting, mate.

Meanwhile, out there in the thrust and parry world of staying in work, where HR is a growth industry, workers are lobbying for their next short-term contract, working out how long their redundancy payment will last or (forgive me for thinking this), shafting a colleague so they can get a better-paid job. Some, who make life plans based on aforementioned contracts, find said agreements withdrawn without notice for budgetary reasons. Yep, the veranda is better.

For one thing, the pension is linked to wage increases, which is more than you can say for Newstart (Australia’s unemployment benefit), which is indexed to the CPI. The September indexation will be calculated at 0.18%, which, on the single/childless fortnightly rate, is less than $1.

Surveys have repeatedly told the government of the day that half the 700,000 Australians who rely on Newstart are living below the poverty line. A 2015 study found that on any given day there were fewer than 10 rental properties in Australia that were affordable for people on the allowance.

Australian Council of Social Services chief executive office Cassandra Goldie told New Matilda the Newstart payment ($527.60 per fortnight for singles without children), had not seen a real increase since the Keating years (1991-1996). The major parties seem disinclined to increase the allowance, even when prompted by the Business Council of Australia. In 2013 the Greens lobbied for a $50 per week increase but failed to find sufficient parliamentary support.

This is a shameful state of affairs, the iniquities of which were plainly stated by Asylum Seeker Resource Centre founder Kon Karapanagiotidis. He tweeted on a Q&A TV debate about welfare that what a politician could claim for one night for staying in Canberra for work was equivalent to an entire week on Newstart. The Conversation fact-checked this statement and found it to be fundamentally true.

It might not seem like much, but after September 20 (next Tuesday), Newstart recipients will lose the twice-yearly $105.80 “income support bonus” added by Labor as part of its “Spreading the Benefits of Boom” package. In 2013, the Coalition announced the bonus would be scrapped from a range of benefits as Labor had funded it through the minerals resource rent tax (which the Coalition has since abolished). The Palmer United Party agreed to the bonus being scrapped on the condition it stayed until after the (July 2016) election. So rather than increasing this egregiously low payment, the Coalition is (let’s use a Tele headline word here), slashing it an amount which for a single person on Newstart provided a choice between a bacon and egg burger, a subsidised prescription, a pot of beer or an escapist video to watch after the Saturday ritual of circling jobs in the newspaper that by Monday will have already gone.

The ABC reported yesterday that Australia’s unemployment rate had dropped from 5.7% to 5.6%, but the rate of part-time work remains at an all-time high.

Since December 2015 there are now 105,300 more persons working part-time, compared with a 21,500 decrease in those working full-time.

In this country, part-time employment is defined as people in employment who usually work less than 30 hours.

The Australian (owned by an expatriate billionaire well-known for expecting senior employees to work long hours for a fixed salary), wrote that part-time work was ‘good for the over-40s’.

Economist Jim Stanford of the Australian Institute’s Centre for Future Work told the ABC in July the proportion of Australians working part-time has now reached a record 31.9%.

“Australia’s part-time employment rate has surged 4 percentage points since the GFC (2007) and is now the third highest in the OECD,” he said.

There are a few questions we should be asking about part-time work, chiefly: can you live on part-time income? If you are working part-time, is it by choice, or is that all you could find? Inter alia, did you know if you are on Newstart, and have found a part-time job as dish pig at a local café, you can earn up to $104 per fortnight before the allowance is affected? Break out the wine cask.

Let’s just imagine life on Newstart (equivalent to a night’s claimable accommodation for a working politician, remember?)

You are a 40-something male that has been “let go” – the latest in a succession of jobs that did not work out. You’ve spent your payout and your second wife has booted you out. You spend all day in the public library job-hunting, playing Solitaire and scribbling calculations on how you can live on $263.80 a week. A mate has rented you his caravan down the end of the paddock for $140 a week. Bargain. That leaves $123.80 for food and petrol (did I mention the caravan is 16 kms from town?)

Meanwhile, the rego is due, there was a letter in the mail with a photograph of you doing 122 kms in a 110 kms zone and then there is the dentist, who reckons you need two crowns and two root canal treatments.

You buy a packet of Panadol max and wash a couple down with the last lukewarm stubbie in the 20-year-old caravan fridge. Life’s great, isn’t it?

Australian society seems sharply divided between those who’d feel sorry for this fictional fellow’s plight and donate money to Lifeline and the hard-liners who’d say he’s a leaner who brought it all on himself (and how come he can afford beer?)

We need, if I may use a corporate weasel-word, a new paradigm. A UK think tank, the New Economics Foundation, proposed a utopian scenario for Europe that envisaged a society where those who can work are engaged for 20 hours a week. Anna Coote of NEF said there would be more jobs to go around, energy-hungry consumption would be curbed and workers could spend more time with their families. The model already exists in Germany and the Netherlands, the latter topping the OECD chart for part-time work. Coote mused about the rationale around jobs and growth and whether aiming to boost (insert country of choice) GDP growth rate should be a government’s first priority.

“There’s a great disequilibrium between people who have got too much paid work and those who have got too little or none.”

The Guardian’s Heather Stewart cited Keynesian economist Robert Skidelsky, who co-wrote a book with his son Edward: “How Much Is Enough?’ Skidelsky said the ‘civilised’ solution to technological change and fewer jobs is work-sharing and a legislated maximum working week.

There’s much need for a quantum shift/new paradigm, with youth unemployment at 13.2% in the UK and between 25% and 50% in seven Eurozone.countries.

It would not take much imagination to export these Eurozone ideas to Oceania (where youth unemployment is running at 13.5%).

Unhappily, Canberra’s politicians seem entirely lacking in imagination and worse, bereft of social conscience.

All 225 Federal politicians and Senators should think about this social issue on September 20, particularly if they are claiming overnight accommodation. Do claimable expenses run to the mini bar?

 

No interest at all

piggy-bank-1239661
Johanna Ljungblom/FreeImages.com

Though the headline might put you off, we must ask: why are interest rates dropping, who does it affect and where will it all end?

Few people would be unaware that the Reserve Bank of Australia (RBA) dropped the official cash rate to 1.50% on August 2, the lowest rate since records have been kept.

The supposed reason is to stimulate the economy (that is, to encourage spending and borrowing). It is theoretically OK to do this when inflation is low or falling as it is now. Conversely, as inflation rises, so do interest rates (RBA considers that this will restrain borrowing and spending).

An official cash rate of 1.50% is a huge problem for self-funded retirees such as yours truly and She Who Supports Ethical Investment. Four years ago we invested in a bank term deposit paying 5%, with interest paid annually. The annual payment dropped into our bank account this week. But where do we turn when this tiny golden goose gets killed off next year?

On current speculation, cash rates could drop to 1.25% by the second quarter of 2017. Given that inflation is currently 1%, that is a pretty skinny return.

The theory is we (self-funded retirees and younger people trying to save), will turn to the share market, where one can not only get better yields, but also the prospect of capital gains (and a tax break via dividend imputation). That means the company paying the dividend has already paid tax on it, so the franking credits (tax component) is refunded to the investor. But as we all know, the share market is volatile; you can lose money, companies can reduce or suspend dividends; gadzooks, companies can go broke and your modest $12,000 investment drifts away like steam from a kettle.

We’re told inflation has dropped from 1.7% in January to 1% in June, yet each week we seem to spend more at the supermarket and the petrol pump. House insurance premiums are rising, ditto rego, electricity and water rates. What’s really going on?

The low interest scenario, not by any means restricted to Australia, is set to continue for the foreseeable future.

Pre the GFC (2008), self-managed retirees could obtain interest rates of 6% to 7% on term deposits so their SMSFs were earning a fair, tax-protected return, sufficient to pay pensions and preserve capital (thus avoiding the inevitable dip into the public purse).

In this low interest rate environment, the biggest risk is that naïve investors will be lured into higher-rate schemes which are either unsecured and risky or just outright scams. The best known of scams is the Ponzi scheme, where a promoter offers you 12% on your investment, making interest payments with new deposits and eventually fleeing to some country with no extradition treaty.

Caveat emptor, mate.

Nevertheless, an official interest rate of 1.5% looks generous compared to the UK, US and Japan, the latter entering negative interest* territory in February. In post-Brexit UK, the Bank of England cut the cash rate this month to 0.25%, its first rate cut in seven years. The rationale for doing so was to support growth and return inflation to a sustainable target of 2%. UK inflation was 0.3% in May, so we can see what they mean.

Steve Worthington, adjunct Professor at Swinburne University of Technology revealed an odd cultural reaction to negative interest rates in an article written for The Conversation.

One month after the Bank of Japan’s decision to unleash negative interest rates, applications to join the loyalty programmes of Japanese department stores such as Mitsukoshi, Daimaru and Takashimaya (which offer discounts on goods of 5% to 8%), were 100-200% higher than in the same month of 2015.

Such consumer behaviour undermines the intentions of the central banks. Prof.Worthington proffers that if the weapon of negative interest rates does not work as expected on currency values or domestic consumption and investment, what else is there left to deploy to prevent deflation and a further slowdown in economic activity?

Prof. Worthington says negative interest rates are intended to boost domestic demand by forcing banks to lend money out and encourage consumers to both borrow and spend.

But they cannot bank on the unpredictable behaviour of individuals and organisations. Prof Worthington referred to the unexpected result this week after New Zealand’s central bank cuts its cash rate to a new low of 2%.

“Rather than that lowering the value of the NZ dollar, it has actually sent their dollar higher – economics theory meets reality and is found wanting!”

Many Euro Zone countries are already in negative interest mode, Japan has just joined the club and the US (0.5%) and UK (0.25%) is as close to zero as you can get. There are even a few economists in Australia who believe we could be at zero interest within a couple of years.

A collaborative essay in the Wall Street Journal examined the trend to negative rates, uncovering some evidence the policy was backfiring. The authors wrote:  “some economists now believe negative rates can have an unintended psychological effect by communicating fear over the growth outlook and the central bank’s ability to manage it.”

If the primary motive of low or zero interest rates is to encourage citizens to borrow or spend, it appears to be a lost cause. The OECD index of household savings shows savings are high and likely to go higher in countries such as Germany, where the percentage of disposable income which is being devoted to saving rose to 9.7%, and is forecast to rise to 10.4% this year.  The OECD also forecasts the rate to rise in Japan.

While Australians now are saving just under 10% of their disposable income, in the noughties we were saving virtually nothing and gearing ourselves into unsustainable debt.

A Federal Treasury paper, The rise in household saving and its implications for the Australian economy, theorises that had household savings remained at  2004-05 levels, consumption would have been 11% higher than its current level – about 6% of GDP.

“The primary effect of the turnaround in household saving has therefore been to reduce the extent to which interest rates and the exchange rate have needed to rise to maintain macroeconomic balance.”

The paper noted that subdued household spending will also present challenges to the retail and residential construction sectors.

So what does the average punter do – buy a safe (apparently ‘trending’ in Japan), stash the cash under the mattress, buy gold bullion, collectables or vintage wines?

You can still find a few banks with term deposit rates around 3%, though the rate does not vary much between six months and five years.

Self-funded retirees who need a certain level of return to maintain their lifestyles have only a few options: take riskier investment strategies (hybrids, debentures, unlisted property trusts), dig in to capital; apply to Centrelink for a part-pension or (shudder) start job-hunting. (Either that, or forget about that trip overseas…Ed).

*instead of receiving a return on deposits, depositors must pay regularly to keep their money with the bank.