Industrial

Power prices hit $1200/kWh in SA

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When the wind doesn’t blow, South Australia’s 40% reliance on renewables gets exposed for it’s Achilles heel – lunatic power prices. At one stage today, power prices hit twelve hundred dollars ($1200) a kWh. Put into layman’s terms, if you accidentally left the porch lights on when you went to work and they were powered by two 100 watt light bulbs, in 10 hours each would rack up 1 kWh of energy. So that little mistake would cost $2,400 at those prices! So much for Elon Musk’s mega battery saving the day for South Australians during power shortages. No wonder Jay Weatherill’s government was turfed.

Staring at the dictator – redux

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In Feb 2017, CM wrote a piece titled ‘Staring at the Dictator’ which highlighted that winning hearts and minds comes from sensible and reasonable dialogue. Not from widespread activism where the sole purpose is to shut down debate. Hasn’t the left learnt that physically and verbally bullying people senseless and mocking them for their supposed ignorance doesn’t work? Yet they still keep screaming the same hypo-ventilated bile, as Robert Reich has below. Nothing would make CM happier if democracy does its job in any country. If we believe he speaks for the majority, he has absolutely nothing to fear. No need for protests of any kind. Yet he shouldn’t blame the constituents for overthrowing bad governments who believe in divine incumbency. Blame bad policy.

If Democrats hadn’t treated the last election as a coronation then perhaps Hillary Clinton may have got her wish. Things had obviously become so bad at the grass roots level that the establishment was rejected. Even after all of the p*ssy grabbing allegations had been brought to light, Trump still won. His vulgarity was on the ballot. His “no one respects women more than I do” lie after this revelation in the 2nd debate was broadcast to 100s of millions. It was also on the ticket. Despite his supposed racist demagoguery, he got a higher proportion of black and Hispanic voters than either McCain or Romney. Don’t hate the player, hate the game. These are facts, as much as we may not like what they portend.

The #whitelash arguments don’t rub either because the same people voted a black man in twice. Clinton didn’t lose because she was a woman. She lost in part because she ran on the basis she was a woman. Surveys may show that Republican voters don’t want a female president however should Ambassador to the UN Nikki Haley run in 2024 she would win their support on the basis of her strength, not her gender or her Native American/Sikh heritage. Ability should be all that matters. Clinton’s constant griping 18 months after her loss shows just how poor a president she would have made. It is so bad even Rasmussen reports that a majority of Democrats don’t think she would have been any better than Trump. Take that!

If Trump loses legitimately (assuming he runs) in 2020 then so be it. In the last 1.5 years in office, American citizens have had plenty of time to weigh him in their own minds, regardless of the media’s relentless onslaught of over-the-top sensationalist click-baiting. If citizens feel he has delivered in areas that affected them on a personal level, they’re probably on balance willing to vote for the same again unless the alternative offers something better. At the same time they have had plenty of time to weigh the Democrats. They’ve seen first hand the bitterness at the State of the Union plastered on the faces of Pelosi et al. They’ve heard Maxine Waters call to her supporters to gang up on the staff in the current administration. They’ve seen countless Hollywood celebrities chant vile hate from celebrating the decapitation of the President, calling Ivanka a “feckless c*nt” to hoping 12yo Barron is ripped from Melania’s arms and caged with pedophiles. Democrat supporters have gone so far as to shoot GOP politicians. CM is quite sure that however horrid the President may be, these are hardly the types of antics that will sway opinion of the swing voters to join the self-appointed ‘righteous’ like Reich. And no, not all Democrats think like this much like many Republicans don’t endorse stupidity from their own. It lets down both sides.

Republicans or swing voters do not respond well to being called intolerant, cruel, racist, misogynist, xenophobic or climate sceptics without fact or basis. Since when does one consciously vote for others over their own needs? It isn’t selfish. If one is buried under onerous tax legislation, red tape or financial destitution do they vote to put the interests of others above their own? No. As a long term Liberal Party (aka conservatives) voter in Australia, the current party has ‘left’ me. I didn’t leave them. They did not win my vote last election. It must be earned. They don’t represent my values. It didn’t take tribal beltings to force me to a conclusion. Nor negative media to discover it. Yet somehow the activists believe that constant bleating will cause me to change my mind.

What would be nice is to see properly supported factual (not subjective rhetorical) evidence that 63mn Trump supporters are as one when it comes to all the claims they make. I would love to see the arguments in all their gore should they exist. Not a one off event. Happy to see where my own arguments hold deep flaws.  Many Trump voters detest him on a moralistic level yet are happy to champion his achievements if they feel they get a direct benefit from them. So often claims are made to undermine his followers. Every time (and often) these assertions prove to be baseless, the journey to sway the other side to see reason gets thwarted even further. Time magazine issuing a confession over the photo-shopped cover of last week ended up at the bottom of a long article. It just shows just how unapologetic they are. Kathy Griffin was sorry until she wasn’t again. Talk about self serving.

To the comments made by Robert Reich today:

“My friends, this is a dark hour. Intolerance, cruelty, racism, misogyny, xenophobia, and environmental destruction have been let loose across the land.

Trump controls the Republican Party, the Republican Party controls the House and Senate, and the Senate and Trump will soon control the Supreme Court.

Republicans also control both chambers in 32 states (33 if you count Nebraska) and 33 governorships. And in many of these states they are entrenching their power by gerrymandering and arranging to suppress votes.

Yet only 27 percent of Americans are Republican, and the vast majority of Americans disapprove of Trump. The GOP itself is now little more than Trump, Fox News, a handful of billionaire funders, and evangelicals who oppose a woman’s right to choose, gay marriage, and the Constitution’s separation of church and state.

So what are we – the majority — to do?

First and most importantly, do not give up. That’s what they want us to do. Then they’d have no opposition at all.

Second, in the short term, if you are represented by a Republican senator, do whatever you can to get him or her to reject Trump’s Supreme Court nominee, or, at the least, postpone consideration until after the midterm elections. Urge others to join with you. 202-224-3121

Third, make a ruckus. Demonstrate. Engage in non-violent civil disobedience. Fight lies with truth. Join the resistance. Participate in http://www.indivisible.org and https://swingleft.org.

Fourth, vote this November 6 for people who will stand up to all this outrage. Mobilize and organize others to do so. Contact friends and relations in “red” states, and urge them to do the same.

Fifth, help lay the groundwork for the 2020 presidential election, so that even if Trump survives Mueller and impeachment he will not be reelected.

Finally, know that this fight will be long and hard. It will require our patience, our courage, and our resolve. The stakes could not be higher.”

Perhaps what Reich fails to get is that he is almost backhanding his own supporters in his rant. It is more than likely that a majority of Republican (and no doubt many centrist Democrat) voters want the liberal left to give up because it has become nothing but white noise. The more they protest the more tuned out they become. Control of the Supreme Court? I encourage you to read the cake shop transcript where Associate Justice Sotomayor shows without a doubt she is a political activist, not a judge. It is embarrassingly obvious. The Supreme Court is only supposed to apply impartiality around current laws (or those at the time of the legal action), not make a song and dance about wish lists and try to piece a verdict around how nice it would be if things were different. She was trying to argue 2018 laws around a 2012 issue. One doesn’t have to be a lawyer to work that one out.

To the assertion that a handful of billionaire funders lean the GOPs way, he should reflect that most of the billionaires in America reside in blue states. In today’s world, the big corporations win more by backing Democrats because more onerous regulation benefits their ability to squeeze out the smaller competition thanks to red tape. Laissez faire? You’ve got to be kidding.

Perhaps in closing, the most compelling argument Reich makes is the one which stands out above all others – “we, the majority.” If he wants to stop Trump, he just needs the majority to vote on the shared basis of his beliefs – case closed. No need for protests. After all he says that Trump’s base is so small. If almost 3 years of negative spin on the sitting POTUS has failed to convince the majority, nothing will. Screaming in public may seem therapeutic to the masses but should the GOP win the mid-terms then Reich will prove just as out of touch as he was prior to the election.

Silence is golden. Let democracy take its course. Let us see whether the Russians consolidate their pick in the mid-terms…Putin has even more reason to ensure America sees more “red.”

Populism isn’t just for rednecks

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It is hard not to think of NY Democrat voters following in the path of what got Jeremy Corbyn cemented as UK Labour leader. Those tired of the Blairite Tory-lite Labour Party of old swooped in on a hardline socialist agenda. Tory’s pretending to be liberals. No thanks, they cried. Democrat-Socialist Alexandria Ocasio-Cortez (AO-C) romped home in NY booting 10-term incumbent Joe Crowley out. While NY has long been a deep blue state, clearly Crowley wasn’t seen as progressive enough. As a disciple of Bernie Sanders, AO-C embodies the idea that the only way the Dems stand a chance is to offer a proper “hard” alternative. Free education, healthcare, open borders and rattling cages in Texas tickled voters pink. Right out of the Bernie Sanders’ playbook. Full credit to her for nailing the mood of the electorate. No one can blame her for that. She even hammered progressive NY Democrat Senator Kirsten Gillibrand for not backing her prior to the primary, tweeting,

Unsurprising, but disappointing that @SenGillibrand didn’t even bother to talk to nor consider me before endorsing…You‘d think a progressive leader would at least be interested in how a no-corporate money Bronx Latina triggered the 1st NY-14 primary in 14 years on prog issues.

She has a point. It isn’t that Nancy Pelosi and Maxine Waters aren’t left. It is just that they, like Gillibrand, appear to be frauds of the faith the party proclaims it instills. Pretending to have a socialist progressive agenda while living it large behind huge gated mansions and in the pockets of the lobbyists funded by the major corporates. AO-C appears the real deal. Better to be an authentic socialist. Democracy ironically delivered her win. No doubt she’ll trounce her GOP opponent.

While AO-C is at this stage a one-off, her success could well pave the way for a blue-print for winning the true heart of the Democrat voters. Apart from self-professing that she ticks a lot of the diversity boxes there is something refreshing about what she represents. That populism is not just reserved for bigoted and racist angry white male supremacists. However this has unintended consequences for further polarizing a country. We only need look at Sarah Huckabee Sanders being asked to leave the Red Hen restaurant and chased across the street. Then to have Maxine Waters encourage people to hound Trump administration officials out of restaurants or gas stations. Is this the America Americans want? Surely most are appalled by such behaviours.

We might laugh at such a notion as fringe but Rasmussen Reports noted yesterday, “Thirty-one percent (31%) of Likely U.S. Voters say it’s likely that the United States will experience a second civil war sometime in the next five years…59% of all voters are concerned that those opposed to President Trump’s policies will resort to violence, with 33% who are Very Concerned. This compares to 53% and 28% respectively in the spring of Obama’s second year in office.”

Miriam Webster Dictionary tweeted that “‘Socialism’ has been our top search (+1500%) since Alexandria Ocasio-Cortez’s primary win last night.” There is a touch of irony in a recent CIS survey of millennials which showed that 63% of university graduates were in favour of socialism despite more than half (51%) hadn’t heard of Chinese communist revolutionary Mao,  responsible for as many as 45 million deaths during the ‘Cultural Revolution’. Similarly, 42% didn’t know of Lenin, the father of modern communism, or World War II Soviet leader Joseph Stalin, responsible for the deaths of up to 43 million people.

Of interest, such a wave of socialism delivered by AO-C will only serve to feed the mentality of the sharks that elected Trump. AO-C has exposed just how policy-lite the likes of Waters, Pelosi and Schumer are. They realise Trump will romp home in 2020 unless there is a real alternative. Whether we like to admit it or not, Trump still has the highest approval rating of any Western leader – Trudeau, May, Macron, Turnbull and Merkel included. Incumbent Democrats have only shown their jealousy. The previous State of the Union speech spoke volumes of the inane levels of bitterness.

Americans are sick and tired of self-serving politicians. They want policy not public shaming and grandstanding. They want to see action not the use of children for political purposes. Whatever the stance of Americans on illegal immigrants at the border, decades of inaction has led to the sorry state it is in.

Of course it is easy to point fingers at POTUS for his insensitivity yet how soon it is they forget he has issued an executive order to ban separation from parents. How they overlook that countless numbers of innocent children used by smugglers that have died as they were abandoned in the desert across the border by their ‘supposed’ parents once ‘compassion’ was granted. All this prior to Trump taking office. That 80% of illegal immigrant girls and women are sexually assaulted before reaching the border, according to HuffPo. Hardly the type of humanity anyone with a pulse wants to see.

The viral Time Magazine photo-shopped cover of a little girl crying was used with great effect by the Refugee and Immigrant Center for Education and Legal Services (RAICES) to raise $20mn via crowdfunding! $20 million!! Even after it was revealed that the child – stolen from her father – was never separated from the mother (who left her other 3 kids behind) and paid a smuggler to get to the border, RAICES still shamelessly uses the picture to boost its funding target to $25mn. That shows the power of just how willing Trump haters will go to support organizers with questionable ethics. Oh the irony of Democrat Chuck Schumer rejecting the very changes to the immigration laws they themselves put forward. At least AO-C seems to be walking the talk, however misguided her altruism may be.

Michael Moore correctly said before the 2016 election that “Trump is the Molotov cocktail in the system”. Despite his often vulgar methods, he has merely publicized long festering wounds created by decades of indifference. One can shout from the  roof tops at record low unemployment, record financial markets and economic growth but beneath the surface poverty remains above that seen before the GFC and income disparity has never been wider. AO-C should be sending shivers down the spine of the DNC. The incumbents though the cost of derailing Bernie Sanders was a one off. Now AO-C has exposed just how shallow the status quo is. Maybe Nancy Pelosi summed her fears best herself,

They made a choice in one district. So let’s not get yourself carried away as an expert on demographics and the rest of that. Within the caucus or outside the caucus, we are — again, we have an array of genders, generations, geography, and there is opinion in our caucus, and we’re proud of that. The fact that in a very progressive district in New York, it went more progressive than — Joe Crowley is a progressive, but she’s more left than Joe Crowley, is about that district...”

Not even Pelosi’s record breaking 8-hr speeches talking about the pride felt in her grandson wanting to be Hispanic will ever trump someone like AO-C whom seems to carry the liberal cause with the type of fervor that matches their social virtues. Populism indeed works both ways.

CM always said at the time of Trump’s election that the best outcome of his victory will be that it causes more people to deeply rethink about how much their vote truly counts. Democracy delivers. From the richest to the poorest, everyone has equal say. More politicians are slowly waking up from the slumber that incumbency in politics is no longer a given. That is a good thing, even if CM is not a fan of what AO-C supports. Then again that is a matter for American citizens alone to make, not CM’s.

Israel – myths and realities

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You’ll never understand Israel until you visit it. Almost everything you read in the media is a falsehood. Nadav Tamir, former advisor to the late Prime Minister Shimon Peres, sarcastically quipped this week, “if Moses had possessed GPS there is no way he would have picked Israel as it is the only place in the Middle East without oil.” It might explain why this nation has had to work so hard to be innovative in order to survive. It has no natural resources. It had to invent drip irrigation so it could turn the arid chalky soil into fertile green pastures. Much of the technology inside your smart phone was designed in Israel. Household names Intel, Microsoft and Apple have all established their core R&D centers in the tiny nation state. Israelis are pragmatic and know too well that necessity is the mother of invention. Perhaps the great grandmother might be more apt.

It is perhaps one of the best kept secrets in the world. Sadly also one of the most misreported countries on the planet. Make that the most. Israel wants peace with its neighbors. Yet the mainstream media will not report the fact that Israeli hospitals are treating wounded Syrian troops of Assad as CM writes, The media won’t report that the local Druze population is livid that their fellow Israelis are doing this. Where are the media reporting the fact that hospitals not far from the Gaza Strip are caring for children who can’t get proper access to medical attention because Hamas is only concerned with spending on more rockets and building tunnels using the supplies given to it by the people supposedly oppressing it? Unfortunately the press seem to be stuck in the “if it bleeds, it leads” narrative.

The Israeli Foreign Ministry has launched a program of soft force. PM Benjamin Netanyahu launched a website in Farsi with full details of how to overcome drought gripping Iran through drip irrigation for free. While Iran shouts “Death to Israel”, Israelis shout, “we want to give life to the Iranian people.” Who is the aggressor? The Foreign Ministry is also gaining huge traction with Iraqis with an Arabic Facebook page discussing Iraqi-Jewish history. It launched in May 2018 and has 34,000 followers. Israel believes that the ‘digital embassy’ is an impactful way to get around the hatred often espoused by the regimes.

Then people miss out on news of amazing people like Tanya Oziel,  CEO of the Trans Tasman Business Circle who led a delegation from Australia & NZ to investigate tech fusion in Israel. Tanya, a Sydney based Jew of Iraqi origin, is someone of such passion and foresight that she arranged for AFL legends like Ron Barrassi to come to Israel to train local and Palestinian kids to play a game with a ball they’d never seen in mixed teams. All of a sudden the noise of the two peoples supposedly at each other’s throats was replaced by a sense of common purpose. While some of the Palestinian kids have been pilloried by some quarters in their community they still remain actively engaged with Tanya. They look beyond the hateful rhetoric so often fueled by the media. She has every right to be proud. The idea that this is some sort of jackbooted police state is engaged in apartheid and genocide is patently untrue.

Apartheid is a strange word to be used in an Israeli context. In a tiny country of just under 8 million citizens, the country’s 1.5 million Arabs, whatever challenges they may face enjoy full freedoms, voting rights and serve in the Knesset and the Supreme Court. Ask yourself how many Jews serve in any capacity (much less live) in Egypt, Morocco, Syria, Iraq, Algeria or many other countries? Egypt had 75,000 Jews once upon a time. Algeria 140,000, Iraq 135,000 Jews. Syria 30,000 Jews. Next to none now. Where is the apatheid? Where are their Jews?

Palestine is often a point of deep criticism. At the time of the State of Israel in 1948, 90% of Palestinian Arabs lived in Transjordan. A movement to create a Palestinian state never existed at the time. In fact it wasn’t until 1964 that the PLO was first established at a time the West Bank belonged to Jordan.

What is conveniently forgotten is that of the c.4mn refugees scattered across 60-odd refugee camps, the Palestinians have automatic rights to Jordanian citizenship yet they only covet Israel. Even though 21 Arab nations share a common language, they won’t offer asylum to Palestinian refugees which seems rather calculated. It provides a convenient excuse to maintain hostilities to Israel using the suffering of Palestinians as the bait.

Jordan doesn’t actively push Palestinians to take up citizenship which is their right to do so. While Israel remains an open, democratic and multi-ethnic society the PA has proven itself to be an intolerant, corrupt and self-serving dictatorship which has little interest in serving its constituents as the comptroller of its first ever audit revealed. International aid money lined the pockets of the leaders of the PLO. The French money laundering authorities discovered that Arafat’s wife’s bank account had amassed $3bn over 20 years. It is ironic that most of the original founders of the PLO didn’t live in the Palestinian Mandate when Israel was created. Arafat was born in Egypt. 

How is it that the army of Jordan’s King Hussein murdered thousands of PLO militants in 1970 yet the PLO has never called for the overthrow of the Hashemite monarchy? How is that even with the Oslo peace process coming into effect in 1993 that the PLO carried out 4,000 attacks till 1999. The Israelis so desperate (under Ehud Barak of all people) for peace gave the PLO 95% of their territorial demands yet they still kept up the attacks killing more than 1,000 Israelis, a total exceeding the previous 25 years combined. 

Arafat was presented with an outcome he did not want – peace with the State of Israel. Despite this serious peace offering Arafat accelerated the intifada. These are sad truths.

We need only look at the siege of Masada, the tale of the final revolt of the Jews against the Romans in 73CE. It truly points to the stoic nature we see today. Despite burning the citadel atop Masada and the killing of their families to evade capture, the Jews left the grain and food stores untouched as a way to tell the invaders that they were never at risk of starving but preferred death to being bonded in slavery. It typifies their pride and refusal to submit to persecution.

Jerusalem, the nation’s capitol, holds deep significance as it has been for millennia. CM’s grandfather stood by the Western Wall in 1940. The Jewish people who saw his picture felt a sense of deep gratitude that he helped defend her. The walls were built around the summit of Mount Moriah, where biblically, Abraham offered his son, Isaac, as a sacrifice. In 1948, the Jordanians took control of the wall and it was only in 1967 that Jews were able to pray at the foot of the Temple Mount again. To witness prayers on the Sabbath is something powerful. There is not one whiff of hatred. The chants, songs and prayers resonate throughout the walls. There is nothing but love in what they do. There is no extrapolation of the ancient texts to take extreme measures to murder in the name of their religion.

To witness Judaism, Christianity and Islam in the one city, one can honestly sense and feel similarities than differences. Think of the prophets. Abraham to the Jews was known as Ibrahim to the Muslims. Same for David/Daoud, Mary/Miriam and so on. Indeed if the Jews were as intolerant, racist and deranged as made out surely they would use the pretext to flatten the Al Aqsa mosque built over the Temple Mount ruins and restore it to its former glory.

Modern day history has been tough for Jews. The horrors of the Holocaust are documented at Yad Vashem. Trans Tasman Business Circle leader Johnny Weiss told the tale of how one of the guides showed a series of pictures of supposedly murdered Jews. One of them was his mother who is still alive at the ripe age of 94. What is more amazing is that she cut the guide off to say that “You are wrong. I know that girl is still alive. She is me!” After revealing her tattoo the entire tour group were floored by the revelation. Powerful beyond words. Living history as it were.

So when people wonder why the Jewish state take such measures against those that threaten to “drive them all into the sea” forgive them for doing their best to protect themselves. The last time they did not push back, 6 million died. It has taken 70 years to replenish those stocks. 70 years!

CM could go through the depths of innovation that was the key tenet of this tour. The sheer intelligence of those kids who learn advanced computer coding from age 7. We could discuss a 35 year old university doctor who has over 20 patents to his name but there is so much more to Israel. Its history has forced it to be the most advanced nation on earth. The start up nation is exactly that. When PM Benjamin Netanyahu says “we want your business” at a cyber conference speaking of the $50bn sunk cost in critical cyber infrastructure in the Negev Desert, he means it!

To sum up two weeks in Israel with this simplistic blog doesn’t do it justice. Israel is a proud country. Often brutally direct. Israelis will argue that if you think you’re the smartest in the room then it is time to change rooms. They are confident in their future because they back themselves explicitly. Failure is a good thing. Failing big is even better. Israelis think that experience is a hard teacher: they get the test first and the lesson afterwards. They believe that hard work, persistence and thinking outside the box is what counts. The education ecosystem breeds brilliance. There is no other word for it. This is deeply cultural and exceptionally hard to master.

Perhaps the highlight (there were too many to count) from the trip came on the final day. A photographer at a Tel Aviv flea market showed a picture (above) he took which chronicled a security checkpoint in 1990. The Israeli soldier and Palestinian female look tired of the situation. Things are not like that today. It feels no different to Japan. Not for one second has there been a nervous feeling about personal safety and security. Everyone who visits Israel for the first time will leave with the opposite preconceptions that they came with. It is by no means perfect but name a country that is.

It is with deep regret CM must board a flight tomorrow and leave a country that surprised on pretty much every level. It really is that amazing. Forget what you read in the papers. It is seriously fake news. See it with your own eyes and be prepared to blow your mind. Do it,

We want your business!

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Israeli Prime Minister Binyamin Netanyahu ran through the nation’s commitment to cyber noting the country has 200x the next country in per capita revenue in the area. They are 20% of global cyber revenue. Very scary outlook for the capabilities that cyber can do if in the wrong hands. In closing though the Prime Minister said four words:

We want your business!

It would be nice to see the Aussie PM shout as loudly for investment at home.

Oi vey Australia! Time to develop innovation

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While the Australian school system seems obsessed dealing with LGBT awareness, gender fluidity and social causes, a day in the most up to date Israeli cyber park in the Negev Desert shows just how seriously the small nation deals with the real world and preparing future generations for it.

It should come as no surprise that Israel lives under constant threat. The Jewish State is happy to leave LBGT 20yr celebrations to rainbow flags on the beachfront in Tel Aviv. When it comes to education it is all about working kids hard to be competitive, hungry and innovative. Primary school students learn computer coding and mathematics. They don’t hold cross dressing presentations or participate in Family Day as a replacement for Mothers Day to show inclusiveness for minorities. Survival matters.

Those same primary schoolers learn even more skills when they hit high school. The government monitors 13yo kids for their cyber acumen to screen the best possible assets for the future. By 16yo the weeding out process is all but done.

The notorious IDF cyber unit 8200 is relocating to this cyber centre in Negev where over a dozen buildings are being erected to gather the finest innovators in the world. It’s a $50bn investment. Even the Israeli Defence Force standard cyber units will relocate there. As Israelis have compulsory military service from 18 years of age, the best and brightest get automatically assigned to these cyber teams.

The universities are collaborating with corporates and government. They work on real solutions that matter rather than shoot for research on questions nobody is asking. Companies like Intel are setting up R&D centres in Israel because the talent is there.

Australia may have a Department if Innovation & Science which has a billion dollar budget. The Israeli tech infrastructure organizers in places like the Negev encourage start ups. They award grants thru competitive processes based purely on merit. Instead of cutting grant cheques to all for participating in the Aussie “everyone wins a prize” mentality, the idea is that only the “best” idea out of 500 wins. The rest are forced to make more compelling arguments and work to secure alternative funding. That weeds out waste. If Australia just divvies out with fairness in mind, resources are misallocated and it is more likely the capital allocators are clueless.

The system is impressive beyond words. Listening to a dozen presenttions ranging across medical, cyber and agricultural fields, one cannot be thoroughly in awe of an early-thirties doctor from the neighboring university who has racked up 20+ patents for his inventions.

Then there is the tale of a 17yo intern who was given an asssignment to hack the vulnerability of a mobile phone manufacturer whose PR department lied through its back teeth to cover up a flaw in the system they boasted was secure. They cited the original hack wasn’t done over a secure VPN. In 3 days the 17yo kid hacked that too. Take about a face plant.

The same group told a large American corporate that it’s video streaming had a bug. Instead of admitting the lapse, the tech giant hunkered down and dug in its heels. They put a bandaid on it and were hacked again. They have managed to make a computer that is next to another but not connected in anyway, even via WiFi to make functions purely based on heat.

The answer is simple though. There are many cultural reasons why this type of education system works in Israel. While Australia has no hope of holding a candle to the Israelis there are huge lessons to be learnt about fostering a culture of individual excellence rather than move down the slippery slope that fails to prepare our kids for the future. It maybe too late.

The repeated folly of the 外人 boss in Japan

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Several weeks back a foreign private equity firm asked what was CM’s opinion on gaijin (foreign) bosses in Japan. The answer was along the lines that an overwhelming majority end up failing for two main reasons:

1) failure to speak the language/understand the culture to a sufficient level and

2) thinking what has worked overseas will automatically apply in the domestic market.

Carlos Ghosn of Nissan-Renault fame could probably go down as one of the few that got it right. In his case Nissan was out of ideas, options and was prepared to listen to its new masters. Michael Woodford of Olympus fame was the other stand out gaijin CEO whose fate was cut short by a board coup after the Englishman uncovered massive fraud.

Sony under Sir Howard Stringer was different. Sony was not a cash strapped basket case on life support like Nissan was so the internal feudal structures could comfortably survive. The urgency to implement drastic change was not deemed an imperative. Stringer had no real command of culture or language and as such the machine below him functioned more or less as it wished. It is no surprise to see the man under Stringer is now the CEO and one can be sure almost all of the staff hitched their trailers to Hirai.

A chat with one of the Japanese dealers of a European auto marque last week highlighted the problems of gaijin bosses without sufficient cultural cut through. The company is struggling to compete with rivals who are simply leaving it for dust. The OEM has had 4 sales heads in the space of 2 years, For a country that prides itself on long term service, promotions based on tenure and stability, it was not a surprise to see the local staff keep their heads down. Why bother engaging with the new boss on what problems exist. Best stay silent. With any luck he’ll be gone and the next person will arrive and we can restart the game.

Yet these foreign bosses ask, “why don’t the local staff engage?” To the locals it is a simple matter of surviving til the next gaijin boss lands. Many gaijin bosses wonder why the Japanese staff spend a lot of time in glass rooms without them. They’re formulating the group responses which they think the boss wants to hear. Many seek to buy time. It is collective rationing on a life-raft.

The Japanese staff invariably prefer security over risk taking, So there is little incentive to be risk takers, even if some staff are bilingual. It isn’t a criticism but an acknowledgment that they don’t trust gaijin bosses. It isn’t even a reflection on the gaijin boss per se. Culture matters. If a gaijin boss can’t converse in a tongue that shows a commitment to understand cultural norms the likelihood of the message being conveyed (not withstanding another layer of translation) is almost pointless.

Another dealer mentioned that it has had the dealer margins recently slashed in favour of volumetric targets before bigger incentives kick in. While such strategies may excite the hungry salespeople outside Japan, the local sales teams here openly admitted the strategy change has had the opposite impact in terms of motivation. One sales member said, “dame, dame, dame!” (Dame = bad). He said it will more than likely mean that they push for selling cheap, low-end, low-margin product just to eat.

The irony is that if the OEM raised the initial margins for the dealers they would feel a margin of safety which would be seen as a way to sell even more bikes because they like the idea of predictability. The added pressure sedates not seduces. The dealer will likely struggle to the point of bankruptcy before trying radical maneuvers. The problem for the OEM is that reversing the strategy will create even less trust between dealer and OEM because it will highlight the lack of understanding. Gaijin strategies don’t apply.

The CEO of one American auto brand here has been crushing it for almost a decade. A gaijin with a mastery of language, culture and an understanding of the marketplace. In a decade, sales have quintupled and likely go up another 20% this year. Why? The dealer relationships are rock solid. They are treated as family. There is dialogue and communication and there is a shared sense of responsibility. If times get a little tight, the HQ makes accommodations so both end up in a win-win situation. In short – Trust!

The aforementioned European make effectively says that “you better make space for all the new cars coming your way next month” The dealers feel there is no relationship. The OEM seems totally dismissive of dealer issues. No matter how tough the market the OEM has no sense of loyalty to the dealers. That makes them feel uncomfortable about leveraging up or taking risk. They balk at buying too much stock because there is little to no flexibility.

Many gaijin CEOs need to know that when in Rome, do as the Romans do. Yet too many foreign bosses come in with the mentality they can swing the locals to their way of thinking. Usually that learning process occurs after realizing that hiring natives who speak their language doesn’t necessarily buy the skills they thought would help ram home the strategies that have worked in other countries.

While all the efficiency, profitability and success metrics make sense from a shareholders perspective, the local staff want security, longevity and shared accountability. The gaijin bosses that try to force Western norms before addressing the concerns of staff will find that both parties will have less of both desired outcomes.

A wise fund manager once said about Japan – “it isn’t capitalism with warts, but communism with beauty spots!” The sooner gaijin bosses understand that they will benefit from the collective strengths of the land of the rising sun.