Marxist

Marxism 2019 conference – wait til you see the program

Little surprise that the Democratic People’s Republic of Victoria is set to host a Marxism 2019 conference to extol the virtues of socialism. Oh the irony of having tiered pricing structures to attend. Those pigs more equal than others can show ‘solidarity’ by paying a higher price. The program is so good that it’s worth clicking on. Some spoiler alert topics CM is desperate to attend:

“Do Nothing and Do it well”

“Marxism 101: what is so special about the working class?

“Is there anything good about the United Nations?”

“Being a workplace agitator”

Why go to stand up comedy? This conference will provide days of entertainment. Just wondering how many Marxists will openly admit they are “high wage”? Most likely most will select “unwaged” to live up to sensible Marxist ideology. Will the organizers be forced to pay the police $50,000 for protection against conservative protestors? Of course not. The protestors will be too busy rolling on the floor laughing.

Dr Kerryn Phelps MP misdiagnoses the cancerous white patriarchy

Dr Kerryn Phelps AM MP posted the following graphic on Twitter to howl at the patriarchy on International Women’s Day (IWD). She posted these figures from a (pre-Channel 9) Sydney Morning Herald article from April 2018.  Most of the statistics above are inaccurate or misrepresented but when it comes to bashing middle aged white men, no-one dares questioning the accuracy when it comes to this demographic.

The basics.

1. Whites in Australia make up c.80% of the population. This is census data. No room for much conjecture.

2. Men make up 63% of all full time employment in 2018. In 2000 this was 75%. 13% of those aged 65 and over still participate in the workforce, 65% of those are men. This is down from 79% in 2000. By pure logic, if men were 75% of FT jobs two decades ago, stands to reason they’d have a higher chance of being in positions of seniority today.

3. We stick to the SMH’s definition of ”middle age’ of 40-60 which equates to 2.8mn white men, or 10.7% of the total population.

4. In the Australian Federal Parliament there are 150 lower house & 75 upper house seats. 225 positions up for grabs during election cycles (longer terms for senators). On Phelps’ SMH derived assumptions that means 160 of the seats are occupied by white middle aged males. 160 seats means that federal politics as a profession at present is only 0.0057% of their representative demographic. Phelps might reflect that 30 out of 75 senators are women, or 40% of the total. 60% are males. 17.5% of all Senators are white males over 60yo meaning only 32.5% of senators are middle aged white males.

30% of the House of Reps are women. Yet 17% of the white males in the lower house are aged over 60. So only 53% of our lower house is middle aged white male. Not 70%.

5. There are 2,185 stocks listed on the ASX. If 75% are run by middle aged white men then 1,638 companies fit Phelp’s parroted profile. 0.059% of the all middle aged white men run listed corporates. Although the average age of CEOs in Australia is around 54, or at the upper bound of the 40-60 cohort. Going back to point 2, the higher proportion of men in FT roles seems consistent with this. There should be no surprise.

6. There are 1,054 state and federal judges and magistrates in Australia. Of that, 63% are white men according to SMH. The actual figure is 62%, or 405. Close enough. So 669 members of the judiciary would fit the claim. To hit the top echelons of the judiciary requires long service. Even if we took the SMH at its word, 0.023% of the white middle aged male cohort would take those roles. Note 42% of judges on the High Court of Australia are women.

7. In our tertiary education system , APH notes only 21.6% of university academia in Australia were women in 1985. It rose to 39% in 2002 and is just over 50% today. Today tenured females at universities exceed tenured males. Over 50% of all associate lecturers and lecturers are women. Male senior professors make up 75% of the total. Their average age is well above 50. Senior professors are able to get a higher percentage of research grants because they are mainly in STEM fields.

8. There are 39 Vice Chancellor positions in Australia. 12 are currently held by females. 70% are males. 66% are held by white males. Phelps mistakenly thought that 85% were middle aged white males. In fact the article mentioned that 85% of Vice Chancellors were of Anglo-Celtic background. Still it sounds better if it attacks middle aged white males.

9. Phelps believes the claim that 80% of highest paying jobs are held by white middle aged males. Assuming that 85% of the population was white two decades ago and the Australian Government claims 90% of executive roles are full time roles with men a higher proportion of the workforce back then it should make for little surprise. It is representative.

Labour participation rate among males 15-64 is 82% vs 71.7% for females. Note in 1978 these figures were 85% and 50% respectively. The highest quintile of compensation was 48% of the total in 2017/2018. This quintile also paid 78.7% of total income tax. The top 10% of income earners paid 44.9% according to the ATO. The top 1% paid 16.9%. So the bottom 90% pay less than 56% of total income tax. Middle aged white men pay more tax.

10. Phelps the SMH article that says 80% of film directors and writers are white middle aged males. According to the Australian Directors Guild’s (ADG), ‘Gender Matters – women in the Australian screen industry‘ report, 21% of writers and 16% of feature films are directed by women. There is no “age” breakdown for either gender. 34% of documentaries since 1988 have been directed by women, 41% of producers and 37% writers. The in-house analysis by the ADG shows that teams with at least 50% female creative teams gets 58% of all funded projects. In 2017, the Australian Director’s Guild started a female scholarship mentor program.

In an industry that leans heavily to the ideological left, surely that is a self inflicted wound. In the arts and entertainment industry, the ability to source funds to make films is mostly based on a track record to convert that investment into box office revenue. The ability to write a movie script is based on the creativity of the author, regardless of gender. Page 8 of the report notes, “Anecdotal evidence indicates that women are far more likely than their male counterparts to underestimate and undersell their skills and abilities.” Supposedly this is caused by toxic masculinity?

Will striving for more politically correct measures improve things in the art & film world? America has been trying this path for quite some time now and the results have continued to drift lower and lower. More films but less revenue.

—-

Things have come a long way over the last 50 years. Yet some industries remain very skewed toward men, not because of some evil patriarchal conspiracy.

99.7% of bricklayers are men in Australia. 96.4% of truck drivers are men. 95% of miners are men. 93% of our fire fighters are men. 85% of our defence force is comprised of men. Isn’t this merely individual work choices rather than a deliberate plan to shun women in those industries?

Should there be a Royal Commission to find out why more women don’t want to be brickies, truckies, miners, firies, coppers or soldiers? Should we force quotas? That is what the ADF is now doing with disastrous results. The ADF missed its original gender targets so lowered them but missed by an even wider margin. The Air Force openly practices discrimination to such a degree that if the private sector adopted similar methods, the corporates would face harsh penalties and sanctions. Women in the ADF can achieve their service medal in half the time of men. Then they wonder why morale in the military is drifting lower every year. The irony is that almost 50% of women in the ADF surveyed think these affirmative action measures are meaningless.

On the flip side 98.7% of personal assistants are women98.4% of dental assistants are women94% of receptionists are women. 85.7% of special education teachers are women80% of cafe workers are female.  75.9% of nurses are female. Should we seek to redress the gender imbalance there? Men are 92% of the prison population in Australia? Should we equalize that?

Should we enforce quotas among politicians? Political parties place candidates who they think can win elections whatever their identity – gender, sexual proclivity or otherwise. If parties think women are the magic elixir to secure more terms in government, women will make up a growing proportion of the pre selection process. The patriarchy would be crazy not to run candidates that allow them to sustain their thirst for power.

Millennials & Socialism

Politics, Historical figures, CIS, Graph, education, millenials, familiarity with dictators.

How well do millennials know their tyrants? A CIS study in Australia showed that 58% of millennials had a favourable view of socialism. Unfortunately 51% did not know who Chairman Mao was. Another 32% did not know Stalin and 42% hadn’t heard of Lenin. If we combine with “know but not familiar” with “don’t know” we see almost 80%, 66% and 74% respectively. Oh how wonderful to learn in school about three men whose social policies led to the deaths of 10s of millions.

If their teachers won’t tell them, perhaps experience will need to give the test first and the lesson afterwards. There is a touch of irony that university degree holding millennials have the highest respect for socialism.

The wrecking ball reckoning

CM has said for quite some time that Alexandria Ocasio-Cortez (AOC) could be the best weapon the Democrats have but the lack of willingness to bring her inside the tent is causing the opposite to occur. She is nothing more than an internal wrecking ball.

As a social media darling for millennials she has reach. She’s doubled following in recent months. However her Green New Deal (GND) has just been costed by the Congressional Budget Office to the order of $93 trillion with a T. That’s more than global GDP. Nancy Pelosi slammed it as a Green Dream. The Speaker of the House was right but the problem is the less she is brought to heel the more she fractures the party message. Unity is the one thing the Democrats must show. They can’t be the party that hates Trump and show such disorder. Voters want a stable platform with sensible policies.

The other day she openly stated “I’m the boss” when referring to her GND proposals, even though it was torn down from her site. She even did a video in her kitchen about how climate change is out of control (eg bushfires – sadly 90% are accidentally lit or caused by arson) and postulated the point of being kids into this new world.

There is little time left to save her. Left to her own devices she will drag the party further and further left and alienate the middle ground. The Democrats don’t need in fighting to overthrow Trump. It’s bad enough that Kamala Harris jumped on the Jussie Smollett smear without thinking (even if it was her press officer) and Elizabeth Warren put “Native American” on her application form all those decades ago. It is such good advertising fodder into an election of how quick to judgement they are.

AOC could be mobilized really effectively. It would have been better to place AOC on the Democrats climate change panel to force her to tow the party line. Instead her devout disciples followed her lesson of several months ago by barging into Dianne Feinstein’s office with kids as young as 7 to protest inaction on climate.

These are seeds of disunity. The septa/octogenarians running the Democrats are looking at her as just an unruly step grandchild who will eventually grow up. Sadly at the rate she is going she will create growing waves of discontent supported by her 3.2 million followers (and growing) which will only hurt the chances for a 2020 Democrat win.

All the while this circus goes on, Hillary Clinton holds back until she smells the rotting carcass of the too numerous to count primary candidates and throws her Epi pen laced candidacy in the ring to challenge Trump.

Debunking Modern Monetary Theory (MMT)

Corp Profit

While the Dow & S&P500 indices grind back higher thanks to the US Fed chickening out on a rate rise in because the economy can’t handle it, many people still overlook the fact that core US profitability has tracked sideways since 2012. 6 years of next to nada. Sure one can boost profits by adding back unrealistic  “inventory adjustments” but the reality is plain and simple. If you search for inventory adjusted earnings they’re still marginally growing but there in lies the point. Real profits aren’t.

Record buybacks fueled by cheap debt is the cause for ‘flattered’ earnings. No growth in E  just falls in S.  EPS growth can look spectacular if you ignore 50% of US corporates have BBB credit ratings or worse.

The latest lexicon is “modern monetary theory” (MMT). The idea that the central banks just manipulate markets in perpetuity. Austerity is no longer needed. Central banks print money and extinguish debts the same way. Seriously why bother with taxation? The question is if it is meant to be a sure winner, why aren’t we all living in 5 bedroom mansions with a Mercedes Benz and a Porsche in the driveway? Why not a helicopter?

Logically if central banks can buy our way out of this debt ridden hellhole, why is growth so anemic? Why is European GDP being cut back? Why is German industrial production at its worst level since 2009? Why does Salvini want to jail the Italian central bankers? Why does the Yellow Vest movement in France carry on for its 15th consecutive week? If MMT works why would the EU care if the UK leaves with No Deal? MMT can solve everything for unelected bureaucrats in theory. Even £39bn can be printed

Last year the US Fed announced it had stopped reporting its balance sheet activity. In 2006 it stopped reporting M3 money supply. Curious timing when inside 2 years the world was flung into the worst recession since 1929. Transparency is now a danger for authorities.

The question boils down to one of basic sanity. All assets are priced relative to others. It’s why an identical house with a view in a nice neighborhood trades at a relatively higher price than one in a outer suburban back lot. The market attributes extra value even if the actual dwelling is a carbon copy. It is why currencies in banana republics trade by appointment and inflation remains astronomical. Investors don’t trust their ability to repay debts unless given extremely favorable terms. Market forces at work.

To put the shoe on the other foot, if all countries adopted MMT why bother buying bonds for retirement? The interest is merely backed by a printing press. Best consume 100% and save zero. The government has moved beyond moral hazard and hopes no one will notice

Take a look at Japan. It has $10 trillion in outstanding debt which is 2x its economy. The Bank of Japan owns 60% of that paper bought through a printing press. The market for JGBs is so manipulated that several Japanese mega banks have handed back their trading licenses because it has become worthless to be on that exchange. The BoJ thinks it can make whatever prices it chooses. The ultimate aim is to convert all of the outstanding debt into a zero coupon perpetual bond with a minor ‘administration’ fee in order to assign some value to it. To the layman, a zero coupon perpetual means you get no interest on the money you lend and the borrower is technically never required to pay the borrowed amount back. Such loans are made by parents to their children, not central banks to politicians (although one could be forgiven to think their behaviour is child like).

Yet the backdrop remains the same. Consumers are tapped out in many countries. Lulled by a low interest rates forever mentality, even minute rises to stem inflation (real is different to reported) hurt. My credit card company constantly sends emails to offer to transfer balances at 9% as opposed to the 20% they can charge if I don’t pay in full.

APRA recently relented on interest only mortgages after demanding it be tightened to prevent a housing bubble getting bigger. Now mortgage holders hope the RBA cuts rates to ease their pain.

Like most new fads, MMT can’t remove the ultimate dilemma that Milton Friedman told us half a century ago. Inflation is always and everywhere a monetary phenomenon. One can’t hope that putting money in the hands of everyone can be sustainable.

The one lesson that we should have learnt from GFC was that living at the expense of the future has rapidly diminishing returns. All we did was double down on that stupidity.

Do we think it normal that Sydney house prices  trade at levels the Japanese property bubble did in the late 1980s? Do we realize that we hold as much mortgage debt than Japanese banks did for a population 5x our size? Do we think that our banks are adequately stress tested? When an economy like ours has avoided recession for a quarter century, it builds complacency.

MMT is nothing more than a figment of the imagination. It preys on the idea that we won’t notice if we can’t see it. Unfortunately behind the scenes, the real economy can’t sustain the distortions. The French make the best modern day example of  a growing number of Main Streeters struggling  to make ends meet.

Central banks monkeying around with MMT smacks of all the same hubris of the past. It is experimental at best and reckless at worst. Markets can be manipulated for as long as confidence can be sustained. Lose the market’s trust and all of a sudden no amount of modern day jargon  can overcome what economists have known for millennia.

If you flood a global economy with cash at 5x the rate the economy can feasibly grow then it will ultimately require bigger and bigger hits to get the same bang before the jig is up. It’s a Ponzi scheme. Bernie Madoff got 120 years jail. Why not the central bankers?

So what is the best asset out there? Gold. It can’t be printed. It requires effort to discover it and dig it out of the ground. Of course the barbouros relic deserves to be consigned to the dustbin of history. If that were so Fort Knox might as well leave the gate open. The more it is hated only makes this contrarian investor want it more.

Why Ocasio-Cortez is the most powerful weapon in the Dem’s arsenal

Alexandria Ocasio-Cortez’s 5 minute “if I was a bad guy” routine in the House Oversight & Reform Committee went viral. 19m views. Such is the love of selective editing by the media that the video seemed to completely absolve her of the ridiculous Green New Deal plan which incidentally was pulled from her own website. She looked totally on message. However…

…Sadly, the unedited follow up saw the IFS Chairman Bradley A. Smith correct the record of the misleading questioning of AOC. She’s only 29 and on the fast track of learning the ugly world of politics.

The Democrats, as CM has said before, are missing a huge opportunity. She is a media darling. Instead of dragging her inside the tent and weaponizing her huge and growing following (especially millennials) with the pre-rehearsed party platform, Pelosi snubbed her from the Climate Change Panel and dismissed AOC’s manifesto as a “Green Dream.” Talk about eating your own kind. Better to have AOC on the panel to keep a leash on her media circle.

The longer they allow AOC to go off uncocked without the safety on, there will become a point where she passes the point of no return. The Democrats will lose probably their best asset. The longer she stays isolated, the more damage she will end up doing to the core of the party.

The Democrats need to show a united face in 2020. When lead candidate Kamala Harris endorses AOC’s plan without reading it, it only looks like a case of friendly fire. Is that what voters want to see? Expediency?

AOC is causing ructions. If the 70yo+ old guard party elites within the Democratic Party continue to treat her like a dotty 29yo, they’ll turn the weapon of their own making on themselves. That’s great news if you’re Republican.

If the Green New Deal bans air travel…

…CM looks forward to catching a train to Hawaii.

Alexandria Ocasio-Cortez also intends to get every fossil fueled powered car off the road in a decade. The US has 270 million registered vehicles, the overwhelming majority being petrol powered. The US sells 16-17mn cars a year (sadly slowing). Therefore in the US, 16 years would be required to achieve that target. That’s before taking into account auto maker EV capacity.

Global EV sales were 2.1mn last year. So her plan would take 128 years. That’s unfair as capacity would grow. Let’s assume auto makers could conceivably increase capacity by 2m every 2 years (plants take 2 years to build and those poor Congolese child slave laborers will be run off their feet digging for cobalt to go in the batteries) then conceivably 30mn.cumulative EV units could be built over 10 years. That’s 11% of her goal. Let’s not forget the fossil fuels required to power auto factories to satiate this plan not to mention the steel that goes into the bodies.

Global auto production is c.80mn units. That assumes that the world’s auto makers will snub the ROW to meet her demands.

Socialist mathematics is never quite up to the task. Is Ocasio-Cortez was a true patriot she’d demand GM, Ford & Tesla be the sole products that consumers are allowed to buy to support domestic jobs. They’ll need them because she’ll be causing the lay offs of a shed load of Boeing line workers if planes are banned.

When she finally gets into the Oval Office we should look forward to her catching Ground Force One from 1600 Pennsylvania Avenue Station to travel the country and tell Americans how much better things have become.