The UK

Boris Johnson of course resigned recently, to no ones surprise. The man who agitated for Brexit by driving around in a bus with a lie on it, was of course too scared to become Prime Minister when what he agitated for came through. He was happy to leave such an important task to the Home Office minister who voted to remain – that is how much he cared. Because politics inspires trust and confidence, he was rewarded anyway, with the plum job of Foreign Secretary. And now he has quit at a time where he is driving the Brexit faction within the government and exposing how fractured his own government really is. That he is too weak to work within the system and too scared to lead it surprises no one. One would like to see him lead the country to a shambolic Brexit, but he would only do it if he had someone to blame when he fails.

Thus, the Brexit agitators remain in the perfect position – as victims. They know going for a hard Brexit will kill the country, but they can argue from the side that every deal is not going far enough. When it fails, their speeches and Op-Eds about not going far enough have already been written.  There is no end point – so every potential deal is something for them to tear down on behalf of the “people”. This is the new political strategy for all. Find a topic that you can never reach an actual endpoint and bang on about it. Be the victim. It is always everyone elses fault. If it reminds you of a 4 year old child, you would not be wrong.

The UK continues to be an example of chaos, topped only by the fact that it is a barely relevant country, and that the US is most obviously getting worse faster. A once great country in the throngs of political division and opportunism, a better example of the potential trajectory of places like Australia.

Of course, this has culminated in the Brexit but was built long before then through the long wave of privatizations, extreme media, sweet deals for big business, and of course the standard government response to the financial crisis caused by reckless financiers of propping up their banks with public money, and reigning austerity down on the blameless people. But the Brexit vote was the real tipping point. Johnson and his lying bus wouldn’t contest the leadership and the leader of the minor party most agitating for change immediately quit. “This must happen – but I don’t want to do it”. Heroic efforts. If you could set the stage for a more ineffectual government that people would tire at quickly, to the point where they would want to blow the whole system up (or start a war to bring back nationalism), you could not set it up any better than the UK has right now. To make it even better, the legislation that no-one in parliament wants, has to pass the house of Lords, which is literally the house of unelected elites – what can you expect from a country that still celebrates the monarchy like it matters? The anti-elite revolt is set to continue, led of course by elites like Boris Johnson.

The Prime Minister – the unconvincing Theresa May, did not vote for Brexit, and is barely liked. The Conservative party is a shambles, and it seems like the Labour Party is too. Similarly to the US, we have big business elites who destroyed unions, deregulated financial products and opened markets now in change of shepherding through legislation supposedly for the angry lower classes. The NHS being decimated is merely a sidenote, even though it was supposed to be improved through Brexit. What a surprise that the government is is not quite finding the mark. And so, a Brexit that most of those in government can’t pretend to want or believe in languishes in 12 hour meetings that go no where, making fantastical demands of an EU that has no reason to compromise. Of course, this allows more air time for a minority of members agitating at the side to leak to the press and have their resignation pity parties. To what end?

The gradual voting shifts are becoming more obvious and problematic for a system that works poorly at the best of times. The party of the rural and poor was never the Tory party, and yet that is who they are suddenly charged with representing. Like wise in the US and in other democracies. They are responding by taking the votes and ramming through legislation to make everyone’s lives worse. The only breakthrough of the last 5 years is the discovery of how quickly politicians will change their minds (rhetorically at least) based on political opportunism. The depressing part is how quickly people will believe them even as they make matters worse. The Brexit won on a lie, but not enough people seem to care – there have been no political consequences. The only reason the Tory party members care, is because they don’t want to be leader to push it through. Because whoever gets to push it through is rewarded with uncovering the lie, unequivocally for all to see. Do you think the Murdoch Tabloids will go easy on them?

It’s easy to blame David Cameron for allowing the vote, which was a stupid decision at the time and remains stupid now. Like allowing Trump to go through the primary’s we often think that if we let the extremists get their way they will be silenced when they ultimately lose. But we underestimate how much the current trajectory is depressing for so many people, or how much influence the chaos of the media has on impacting peoples view. Change is something, compared to more of the same, which is nothing.

In the UK, the Labour party is half-assed the party of the mostly remain, although their history lies in protectionism, because they were always the party of the people. Like most parties of the left though, they have gradually sold out “the people” for privatization and big business. So no one really knows what they represent anymore. They are indicative of the crisis of the left – tepidly defending the status quo that made everyone so angry in the first place. Jeremy Corbyn seems radical, but he divides the party, and if he didn’t vote for Brexit, he certainly would have in the past. A protectionist tepidly leading the remainers, and a free marketer pushing through the Brexit. Boris Johnson is happy to watch it all burn from the sidelines like a true hero of the people.

No one in the Tory party wants to argue against Brexit, because it was the will of the people, but no one wants to push it through, because they will be responsible for the calamity. No one knows what the left represents. The only constant is Rupert Murdoch continuing to agitate everyone from his seat at the head of the media. That is a constant everywhere in the world. And so the UK marches faster forward into a government that represents no-one, and nothing, with no real alternatives, all whilst the edges get increasingly angry.

To what end?

 

World Cup troubles

The world cup – the greatest and most popular sporting event that exists is starting, but no one seems that excited about it this time. Which is strange. There are a few factors as to why though, and it all starts with the organising body.

FIFA

You don’t have to follow the news closely to know that FIFA is pretty corrupt. There have been numerous scandals over the years, and an incredible amount of vote buying and bribery. But at the very least, the places where the tournament was hosted generally made sense, so we all collectively swept it under the rug. 1994 was in the US, a growing market for football / soccer and a place with numerous stadiums fit for World Cup matches, a safe place with a decent time zone for Europe and South America, the heart lands of football. France 1998 made sense because France is in Europe, the home of football, where all the best leagues are, and again has a lot of stadiums and a love for football. France even won the event, proving that it was a worthy place to host it with a burgeoning team of insane talent (peaking with Zinadine Zidane a player for the ages). 2002 in Japan and Korea was a little weird, but football is pretty big in those countries and trying to make football a more ‘world game’ by heading to two of the most populous countries in Asia that are first world and have the right kind of facilities made sense. Football in Asia makes sense. 2006 was back to Europe and Germany, their first major global event since the fall of the Berlin Wall, a reward for a unified country and again the heartland of Europe with bevvy of worthy stadiums and a local team loaded with talent.

2010 was when it started to get a little more sketchy (literally). South Africa. But the arguments for South Africa made some sense – football is huge in Africa and it seemed timely to reward the continent with a major event like this. South Africa is one of the more developed countries in Africa (which helped it’s cause), and Nelson Mandela was around and about, which made their bid fairly influential and acceptable for the global stage. The time zone was very friendly to European audiences and it helped the game feel like it was truly global. The event was a bit of a sham (who can forget those brutal trumpet things), with a lot of money spent on stadiums that were questionably built, with money that probably could have been spent on better things. Generally, it feels a bit weird having these types of events in countries where a lot of people live below the poverty line. Sure, you can say that most stadiums anywhere are a bit of a waste of public money (even in the US), but it is particularly true in places where there are high levels of poverty and the juxtaposition of very rich players and fans from rich countries flying in to first class stadiums for a few games and then leaving again, all whilst the people continue to live in poverty, is a bit jarring. Which takes us on to FIFA’s 2014 decision to go with Brazil.

Brazil made a lot sense on the surface – they have won the cup (albeit the trophy is not literally a cup) 5 times, South America is the other home of football apart from Europe, and Brazil is not known as a poor country (it’s part of the what was a cool acronym of “BRIC” countries that were once all rapidly rising). But it turns out the government is super corrupt (no wonder they got along with FIFA), and there was (again) a lot of money spent on barely used stadiums that will never be used again. Little did we know, that whilst Brazil “made sense” based on the above criteria, what really made sense about it was that the Brazilian government lined the pockets of FIFA to get the deal done. So this built on the South Africa problem – another country that is not quite first world spending a lot of money on stadiums to house rich fans for a few games, whilst people live in poverty. Not ideal. If you are counting at home, we now have Brazil and South Africa, both have stadiums that now lie dormant, because they are built in locations that have no requirements for 40,000 person plus stadiums, whilst the countries are mired in poverty and corruption. Brazil had the double whammy of useless stadiums for the World Cup and then more useless stadiums for the Olympics two years later. What a time to be a Brazilian. They even lost 7-1 to Germany to top of the high of the World Cup hosting.

So the FIFA decision trends were not good (I’ll save the thousands of words on corruption, that story has been written), and then they announced before the 2014 World Cup that the 2018 bid would go to Russia (over England, Spain and others), and the 2022 bid would go to Qatar (over the USA, Australia and others). Two countries with low football history, autocracies or other problematic “governments”, issues with human rights violations and a history of trying to pay their way into positive global recognition. More on this later (eg. like Qatar is in the desert and its 45 degrees all the time), but needless to say, the enjoyment of an event that makes FIFA money is starting to feel directly like helping them be corrupt and helping people like Vladimir Putin profit more from it. We can’t even pretend anymore. This is not a great vibe.

RUSSIA

Which brings us nicely to the focus on this World Cup’s host nation. Russia is a dictatorship, led by a guy who may or may not have helped rig the US election that gave us Trump, who is helping the world and the environment come apart at the seams. In Russia, he has turned a promising democracy into an autocracy where it seems he can stay in power forever. Maybe he could be a benevolent dictator? Apparently not. He has likely embezzled loads of money for himself, helped a bunch of his mates get rich, and continues to do things like take over parts of other countries and claim them as Russia, kill people in other countries with poison, and support rebels who shoot down commercial airlines. By all accounts not a great bloke.

Russia as a location is also not a great scene either. Sure the architecture looks cool, but unfortunately Russia has a hooligan problem. In Russia, people go to games just to fight, and they are brutal fighters. This has happened and will continue to happen. At the Euro 2016 this was demonstrated after the England Russia game. Everyone collectively shat themselves knowing that Russia 2018 was on the agenda next. And here we are.

Russia is also a bit racist. Danny Rose, an English player (who is black) has said he will not take his family for concerns about that. It is also wildly homophobic, and although no players are openly gay, the stats say that a bunch of them would be, so they are going to a place where their natural orientation would get them beaten up and worse. If you are a gay person and happen to like football, there is little chance you would make the effort to head over there. Further hanging over all of this is that Russian law is pretty sketchy, and if you get in trouble there, you are probably pretty screwed as there is no semblance of fairness, (and the if you are from a rich country that can afford to go there, you government is likely not friendly with the host nation).

Some of that is hearsay (although not that much of it), but one Russian story that is not hearsay at all – Russia has just been caught in one of the biggest state sponsored doping scandals in memory. It all came out at the Sochi Olympics (another event sketchily “acquired” by Putin’s Russia), where it was found that there was a state sponsored effort to switch urine and blood samples and get around a lot of the drug laws. All in the name of restoring Russian prowess on the sporting field. So, if you are counting at home, it seems like we might have problems with homophobic racist fighters who cheat. Luckily Russia has mismanaged the football team so badly that they would have to have the the Walter White of sports doping on their side just to win a game, let alone win the World Cup, so we are safe there.

Finally, it just sucks to support an event which will be a propaganda event for Putin’s Russia. Propaganda is rubbish, and lies, and its easy to switch our brain off. And that is what Putin wants. For us all to watch the World Cup and think “this is normal and good”. And the football probably will be. So it will be easy to fall into normalising Russia and autocracies and all the above problems. But that is bad. Russia is a bad system that is destabilizing the world. We should not reward this by giving these countries world sports events.

It hurts my head to think about how to enjoy the World Cup whilst rejecting Russia, which is exactly why the World Cup just doesn’t seem that fun.

QATAR

Looming over all of this is World Cup 2022 in Qatar. This remains confusing. Even when South Africa was a bit weird, it was easy to think, “well, the next one is in Brazil, which is pretty sweet” (at the time we didn’t know that was like looking forward to 2016 election being over). If you thought Japan and Korea was a bit odd, at least you could think “well Germany 2006 is next”. But Russia is a bit of a problem as previously stated. And when you think well, Qatar is next, then everything gets worse. Qatar is in the desert, and it is over 40 every day in “summer”. Of course this means that the World Cup must be held in Qatar’s “winter”, disrupting every domestic football season in existence (except Qatar’s, because they don’t have one). So the World Cup will be in November / December, which is weird. So much for that summer event.

Of course Qatar gets worse in many ways. It seems like the people building the stadiums might be slaves, or at the very least wildly underpaid semi slaves with no legal working status who commit suicide flat out. I wish that was a joke. FIFA has outdone themselves again. Qatar is also involved in a proxy war at the moment with Saudi Arabia and others that might turn hot at anytime. Sure, Saudi Arabia are the ones being the real jerks, but it is not ideal that there are missiles potentially flying across the border (Middle Eastern disputes don’t have the history of being sorted out nicely and efficiently). It just makes no sense the World Cup being in Qatar – Russia looks like a natural place for a World Cup in comparison.

So if you are tracking at home, we are going from an incredibly corrupt World Cup (Brazil 2014), to a country that is completely corrupt with a dictator (Russia 2018), to a country that is run by a Royal Family built on oil money that pays workers nothing and is having a border skirmish with the largest military in the Middle East (Qatar 2022). What is even weirder is that it is hard to know if the US getting 2026 World Cup (along with Mexico and Canada, countries they are openly feuding with) will be a relief from this trend or a continuation. What is there to look forward to in national team football?

VAR

Next off the rank is VAR. What is VAR? Video Assistant Refereeing. It seems logical, there are always bad decisions in football games, and why not make it more likely to get the decision right by having the ability to check decisions on replay and then make the right one? Well it turns out, it doesn’t make sense at all. A few leagues have started using it this past season, Germany and Italy and also in the FA Cup in England, and it has not been good at all. Here and here and here are some examples and there are plenty of others if you go looking. Not only have the time delays been brutal, disrupting the flow of the game – but the referees have not understood when to call for VAR and the VAR has often got the decision wrong and made everyone more angry. Not great. This is the first world cup it has been used, and a lot of the referees have no experience with it at all. This will definitely cause a bunch of controversy during the tournament, let’s just hope it doesn’t happen in the biggest games (although it is bound to).

THE TEAMS

Finally, and what should be most importantly (but isn’t as demonstrated above)), we get to the teams. You can read better football previews everywhere, this is a broad summary of the problems. In World Cups there are usually tiers of teams – the teams that can win, the teams that might make it out of the group stage and cause some trouble, and the teams that are trash and are just there for the party, (and because FIFA rewards being global more than being good). This is true this year as of any year.

The difference this year, is that the teams on the top tier just seem so much better than the mid-tier teams that it legitimately seems like only 3-4 teams can win it. That is unusually low. I can hear you saying that Portugal won the Euro’s and Chile won the most recent Copa de America. But still, this is different. The last time there was a first time winner was 1998, and that was a France team loaded with talent led by Zinadine Zidane with guys like Thierry Henry and Patrick Viera milling around. In Russia, it really seems like it is down to Spain, Germany, Brazil and maybe France (even though the coach is questionable). Even among that group, Spain just bizarrely fired their coach. But after that, there are a myriad of problems with the other potential contenders.

Argentina, who still have the best player in the world (Messi) lose to crappy teams a lot and never quite seem right (they barely qualified) and are completely reliant on Messi going nuts (not impossible but unlikely). Belgium is the hot “outsider” pick, but they are not deep enough, their coach is a bit of a spud and would have to get pretty lucky (plus their goalie slept with their star players Mrs. once). Also they had a team selection controversy that was nicknamed “mattressgate” because the coach hadn’t selected the team yet, but 23 mattresses were delivered each with players names on them. Weird (for interest – it turns out the mattress names didn’t match the team selected in the end). Portugal won the Euro’s but Ronaldo is older still, and they are just not as deep as the others (their keeper is Rui Patricia, hardly a household name). England are too young and not that good, and always seem to struggle at major tournaments (although it hard to deny there is a better vibe around this team with Harry Kane leading the way). Uruguay are good up front (Suarez, Cavani) but don’t have much else (I have not heard of their goal keeper). Italy didn’t even make it, nor did Holland. Egypt were not that great, but were exciting at least with Mo Salah (he is so popular is Egypt that he got 1 million presidential votes), but now he is injured and questionable. Columbia are the one team that aren’t quite in that top tier that seem ok, but they are relying on James (“Hamez”) Rodriguez a lot, and have Arsenal’s backup goal keeper as their starter (it’s not like Arsenal were a powerhouse of defence this year). It going to be one of the four, and likely one of the three.

So we have a lot of games that are likely a supporting act to a four team race for the World Cup in a dictatorship with corruption, racism and fighting issues looming, drug issues swirling, not to mention the next World Cup in the desert. Bring it on.

 

Readings and other things

It’s been a while, but there has been plenty of content in the meantime, so here goes:

  1. A cracking breakdown of the trends of authenticity that include the hipster movement, and all the shit people hate on but secretly do themselves
  2. This bizarre story about the 76ers NBA team executive who seems to have created fake twitter accounts to big himself up and criticize players
  3. A great piece that delves further into the reasons for the state of the world, and how the top 9.9% of people (most of who don’t like Trump, Brexit or fascist ideas) are a part of the problem (including me)
  4. How dirty Russian money ends up in Britain
  5. Commencement speeches are neither here nor there, but Ira Glass from This American Life did a pretty good one
  6. A fun read on the sports apparel companies (Nike, Reebok etc) fight to sign LeBron James back when he was 18
  7. An unsurprising but still depressing story about how economic austerity is destroying a lot of people’s lives in Britain
  8. The Irish referendum and how it was done quite well, and how the winning side fought back against the Trump / Brexit type strategies
  9. An interesting angle on the similarities of the growth of Ethiopia in Africa to China’s recent growth by the relentless Tyler Cowen
  10. Addictive drugs continue to evolve ahead of the pace of the authorities highlighting that the War on Drugs will never be won with force
  11. A brief summary of the GDPR (Privacy) law that you have been getting a lot of emails about, and has just been mandated by the European Commission
  12. The relationship between populism (..fascism) and an aging population (hint: they are positively correlated)
  13. Another reminder of the day to day discrimination people face in the US (and everywhere)
  14. The psychology of Japanese train stations (another efficiency we don’t have here)
  15. Some background to the chaos of the Italian government from the always on point London Review of Books
  16. A new sports franchise that connects with the community in Atlanta, which is interesting because a lot of these franchises have completely bombed
  17. Why does no one ever leave Facebook, even their top top executives? (The meaning they find from pursuing the company’s supposed mission explains a lot of how they can’t see the problems they are causing)
  18. Unsurprisingly, Scandinavian countries are dealing with the advent of new technology better than the rest of us. Who knew higher taxes and better services were good?
  19. The traditional watch magazine Hodinkee talking to Jony Ive about the Apple watch (he is a famous Apple designer)
  20. A brief summary of the “incel” culture (involuntary celibacy – angry guys not getting sex). This stuff is important to be written about and to understand, but it’s still hard not to be depressed by the prevalence of this kind of stuff.
  21. Steve Jobs had a way of understanding the issues at his organizations that seems pretty useful (useful for managers who invariably don’t understand their organizations as it’s hard for employees to be open about their issues for a multitude of reasons)
  22. The semi famous Mr Money Mustache, a very smart man with money – and what he is teaching his son about money
  23. The dream (for some, and for most at least rhetorically) of a two state solution in Israel / Palestine is over
  24. Why are farmers committing suicide in Australia? No surprises that dodgy finance practices are in the vicinity of the issue

Bill Simmons-ing

Any US sports fan that grew up in the 2000s would have read Bill Simmons at some point. He pioneered internet sports writing in a lot of ways, and made us all think that we could do it to (sadly it’s actually pretty hard). I am one of the people who always enjoyed and appreciated what he did, even if it was sometimes annoying – I guess I have learnt that creative stuff is never always good so appreciate the highs more than I think about the lows, like remembering a holiday you were on or a past relationship one pines for.

Like anyone successful, plenty of people resent the prominence he has been able to achieve, and criticise some of his views.  But it is hard to argue that he hasn’t worked super hard and continued to try different ways of getting his views out there. He didn’t take no for an answer like a lot of us do. And he paved the way for people to become writers about a topic of which they are passively observing, and ti use one platform to branch into others. Sports writers before him were all in locker rooms interviewing players and coaches, making interesting angles and detached views difficult. They stuck to sports. Simmons began as a non locker room guy writing as a fan, and turned writing into interviews, producing and broader content management.

No matter what you think of his views, Simmons has also done a better job than any writer I know at giving other people chances. Who else has given anyone an obvious chance? I am sure there are plenty of people behind the scenes (David Carr springs to mind), but to leverage his popularity to hire a bunch of people no one had mostly heard of to create a cool website that made people feel like the web could be hipster too and the corporate conglomerates could produce niche content. People called it a vanity project, but who even cares if it was?

Anyway, I like Simmons (obviously). Because his documentary Andre the Giant is coming out now, he has done a bunch of interviews, which is relatively rare (people asking him question that is). But they are worth watching or listening to for the insights he gives into the creative process, or how he ended up becoming what he is now. Like with most people who make it, it’s a bit of luck, but there is always a lot of working harder than everyone else (sadly). So as follows..

  1. Simmons on a random Callaway golf show (does everyone have a show now?) talking The Ringer and other things for 30 mins
  2. Joining Marc Maron on the WTF to talk the life trajectory, ESPN and other things
  3. A little interview with ESPN about the Andre the Giant doc and how it came to be

Not a huge list, but still a list.

Recent reading and other things

Lot’s going on in the world, here is a list of my latest reading material and other interesting things:

  1. Let’s Talk About Why So Many Young Women Are Convinced Motherhood Is Going To Suck – why women don’t want to me mothers
  2. Beyond #DeleteFacebook: More Thoughts on Embracing the Social Internet Over Social Media – Cal Newport – a more strategic view of how to live in an internet age without being destroyed by social media ‘s hold on our attention
  3. Will HBO Stay in the Bill Simmons Business? – What Bill Simmons is doing for HBO and whether it makes sense for him to stay with them long term
  4. On Bill Simmons, an interview he did with some random guy from Callaway golf that is not much about golf and actually intesting
  5. Getting Rich: from Zero to Hero in One Blog Post – an old but great piece by Mr Money Moustache about how to live differently and have more control over your life and you time
  6. At Uber, a New C.E.O. Shifts Gears – Dara Khosrowshahi took over from Travis Kalanick when the organisation was in chaos which leads to an interesting New Yorker profile
  7. The End of Windows – from the Stratechery website and Ben Thompson, detailing the changes at Microsoft under their CEO Satya Nadella
  8. The Last Conversation You’ll Ever Need to Have About Eating Right – there is too much confusion out there about what to eat to be healthy, this is an entertaining conversation that doesn’t give quick fixes and points us in the right direction (more beans)
  9. Homo Orbánicus – I have no idea what is going on in Hungary, but I remember seeing in the news that they are pretty authoritarian these days, which is trending over in Europe as much as anywhere. This looks at how it happened.
  10. Two American Power Centers Are About to Clash – a good angle on an interesting trend in the US, the growth of DC and Silicon Valley as power centers and how they clash – from Tyler Cowen
  11. Thus Spoke Jordan Peterson – who knows why even Foreign Policy is writing about Jordan Peterson, but they are, and this sums up my feelings pretty well (the conclusion is a little extreme, but the process is right on)
  12. ‘Being Charlie’ – the sexual revolution of the 80s and 90s was hailed as a new era, and people like Bill Clinton were leading it. How does that look in the midst of the #metoo movement? Not that great.
  13. End of an Idea – this is a piece I want to read, but it is very long (my reading app tells my 87 minutes). It’s on the National Health Service in the UK, a service that has been the jewel of their political system that is being slowly gutted from the inside.
  14. For the Australia section – Batman: how it went wrong for the Greens – a look inside why the Greens lost the inner Melbourne seat they should have won (not a pretty scene)
  15. The fundamental operating model of Australian politics is breaking down – the trends of partisan voting in Australia (gradually voters are moving from the center to the sides) and what it means.

Excitingly, almost none of those mention Donald Trump. Happy reading.

What is going on in Saudi Arabia

Not the hottest topic in the world, but there is specific change happening in Saudi Arabia, and whilst oil is less important and the Middle East is less important to global stability that once in the past, significant changes in Saudi Arabia, an ongoing alley of western countries in the region has the potential to be significant. The changes centre around the new “leadership” of Mohammad bin Salmon, more commonly referred to as MBS. The nickname makes him sound cooler than he is and probably makes us cognitively take him less seriously.Meanwhile, he just purged the Kingdom of competitors to the crown (more difficult than it sounds) and become one of the closest allies of the Trump administration (as stupid as it sounds).

To  learn about MBS, some good pieces to read are

  1. London review of books on Saudi Arabian royal family changes within the context of the Trump administration
  2. Major profile of MBS by the most plugged in journalist in the Middle East – Dexter Filkens of the New Yorker
  3. A piece from Prospect magazine in the UK wondering if MBS will save Saudi Arabia

Royal families and oil money. The “Keffiyeh” doesn’t have the same ring to it as “The Crown”, and the definitive Netflix drama may never be made, but money and power and strange family relationships have their intrigue. You never know when the Middle East might be back in the thick of it again.

Tax cuts the sugar hit for our overweight economy

On the agenda in Australian politics since 2016 when Malcolm Turnbull was re-elected have been these corporate tax cuts. The current tax rate for corporations in Australia is 30%. The suggested cuts would bring that down to 25%. The idea being that it would stimulate investment, particularly foreign investment. Australia is being “left behind” from other countries who are “more attractive” to invest in, or have company headquarters in. The argument makes sense in a vacuum, just like choosing a hit of sugar over a grain bar does if you need instant energy.

Long term it is not better for anyone except big business. And the question is – are they they ones missing out in this changing economy? Is the goal of populist movements creating chaos in foreign politics to make life easier for big business? The opposite.  People feel like they are getting screwed, like the playing field is unfair. Tilted towards the elites. And yet in Australia, to keep destructive populism at bay, and the economy going, the big proposal is to make Australia more like other countries that are going through incredible upheaval. “Trump did it” and of course, any decision he makes is obviously worth following. Surely this is not the best we can do.

We want a financially healthy country, and a healthy world economy. Currently we have an overweight economy with housing and mining propping it up. In this complicated global world, everything is a competition. Manufacturing is dying because it’s cheaper to do in China. Retail is dying because ASOS is cheaper than Myer. And on and on. This is all made easier and more likely by free-trade, championed by both major parties, but particularly by the right wing.

Part of the reason it’s cheaper to do business in other countries is because the labor is cheaper. But another part (supposedly) of why a company would do business somewhere else is because of the tax rate they pay. We see this most clearly in Europe, where there is a free market within the EU but the tax rates vary wildly. This leads to some countries benefiting more than others. Ireland decided to become the “low tax” place, and as a result a lot of the tech company’s “headquarters” are there. But when is the last time you heard about Ireland’s economy killing it?

Ireland is still struggling. The smart people are leaving. The main staffs of tech companies are not in Ireland because Ireland is not London or Paris, and high skilled workers can afford to choose where they live. The “benefit” of tax arrangements mainly allow companies to funnel their money through Ireland for a marginal benefit to Ireland. Tax competition get’s Ireland tax revenue (although it’s still low because the tax rate is so low) but not that many jobs, or that much flow on stimulants to the economy. It also decreases the entire ability of the EU to benefit from all the profit companies are making from their citizens. It’s a slight gain to Ireland (a place where people are still leaving), for a net loss to everyone else.

This is how the tax competition works. You can see why big business pushes this idea of “missing out”, and countries (and states, and cities) needing to be “tax competitive”. Big business are the big winners from a global competition to lower tax rates and play governments off against each other. So the deeper question to tax cut is not about whether they will have the intended effect (this is questionable, at best maybe a sugar hit), but rather – do we agree with the rules of this game?

Is governments role to compete to win over corporations that are driven by profit objectives? Because if that is the goal, then ultimately the argument should not be able tax cuts, but about shifting the power to corporations – the government wants big corporations to define the rules of the game, that is the big picture of lower taxes. Here we all were thinking that democracy was about government setting the agenda. In the tax competition game shareholders are more important than citizens. Yet that is not the discussion.

So if we cut, and get some of that investment, and then others cut and it goes away. I think we all know what the government will say in response to that – “we need to cut corporate taxes to be competitive”. It won’t end. Therefore the argument should not be about cutting corporate taxes, but about what is an effective tax rate that we should be working towards. Why is cutting it by 5% beneficial? What is the ideal number that both stimulates innovation but also ensures businesses play fairly and treat employees and the society in which they profit from well. These discussions are unfortunately not being had.

Of course, the worst thing about black and white “tax cuts” conversations is that the fundamentals of successful economies are not being discussed. Australia (or anywhere) will be successful if they develop a skilled workforce that produces output that society values well. It will be successful if the best people want to stay here, and not (like Ireland) want to leave. California is one of the highest taxed placed in the US, but everyone in tech and entertainment is there. New York is the same and everyone in finance is there. Value based economies are more sustainable than competition based ones. Productive economies are better than ones with cash flowing through them (do you want to live in the Cayman Islands?). High taxing Nordic countries are hardly struggling, they are innovative and happier than other places. They are providing value to their citizens.

People want to live in exciting places with good transport good services and young people who drive culture. People are leaving Sydney because it has less of that. Business want’s tax cuts whilst at the same time saying they will leave if the infrastructure does not get better. $65 billion would pay for a few projects, wouldn’t it? Maybe we can kill two birds with zero stones.