Monday, 4 December 2017

Capitalism for Dummies.


Or Everything you Always Wanted to Know About the Turnbull Booby Trap Masquerading as Banking Royal Commission but Were Afraid to Ask.

Everybody who is somebody in politics, business, finance, and economics journalism in Australia has written about the Turnbull Royal Commission. This is a list gathered by All-Knowing Google. There you'll find the good, the bad, and the ugly.

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As is often the case, Ian Verrender is among the best. I highly recommend his latest:

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Verrender:
"Retail [for-profit, bank ran] funds, on the other hand, have their foot on far less than industry funds with just 29 per cent of the market. But their fees are much higher, accounting for half the $31 billion total. So, less than one-third of the market but half the fees.
"Extra fees for worse performance? How does that work? Simple, those huge fees the banks take come straight off the top of workers' retirement savings."
That's the reason retail super funds hate industry super funds.

I'd add the reason retail super promoters in government hate industry super is that, by law, unions get to control 50% of the governing boards of industry funds, keeping employers' power under check.

But there's more. Employers' representatives keep their considerable directorship fees. Union officers performing those duties, being paid by the unions, don't: that money goes to union coffers. By reducing union's representation from 1/2 to 1/3 the Coalition and their bosses want to break that balance.

In addition, incapable of physically strangling unions, the Coalition want to strangle them financially, creating in the process jobs for their mates.

Clever, huh?

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What exactly are those superannuation reforms Turnbull wants to smuggle into the banking inquiry? His underlings in the Coalition government were spruiking them a month ago. David Lipson last October:

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From that article:
Financial Services Minister Kelly O'Dwyer: "I'm only interested in members and their money and protecting it".

She would also like to sell you that big bridge across Darling Harbour.

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So, how did we get here? What's a royal commission? Who'll be in charge? A good summary:

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Okay, Kenneth Hayne will be in charge. It doesn't ring a bell. Who on Earth is the 72, conservative and former justice of the High Court of Australia Kenneth Hayne?

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I feel better now.

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Anne Barker and the odyssey of a Commonwealth Bank of Australia (CBA) whistleblower:

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Clearly, that pales in comparison to the need to intervene industry funds. You know, as police minister Dutton said, they have union members and whatnot.

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Credit where credit is due: journalists have a rather poor reputation, probably well-deserved in many cases. There are lots of columnists whose work is to write safe, insipid, pseudo-academic bullshit. You know, the popularisers.

There are exceptions, however. Verrender may not be in the cutting-edge of economic theory, but he does write honestly about the real economy. That's plenty.

But there's much more than that. Those who really plumb the depths of the septic tank we call capitalist economy deserve recognition. In Australia, two names in particular have done their best to expose it all to the light of the day: Adele Ferguson and Kate McClymont. Many a man would like to have half the balls they have.

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