Archive for August 7th, 2006

The cowardice of Australian Business Men and Women or: why they allow themselves to be pummelled into the ground.

August 7, 2006

The editor of Brookesnews writes, employers have committed a major, nasty blunder, and in doing so have played straight into the hands of the mobsters, aka the ACTU. They have surrendered sound principles for a quiet life. Mr. Jackson’s case is economic. The difficulty is, employers have a habit of curling up for a quiet life when they need to stand up to not only to the ACTU but also politicians and bureaucrats. I have in view, for example, taxation, which includes `regulation’.

The only businessman standing up to politicians over taxation is Trujillo. Canberra doesn’t like it. As some politicians declared: govts. set economic priorities, businessmen should execute those directives.Who were the politicians? Those words can trip off Beazley’s tongue or Senator Murray’s as easily off the lips of senior Coalition ministers. That pronouncement typifies central planning and Bismarck’s Cabinet in the 19th century.

Each time a government lays down a tax, too many scream in private only. The rare time some do stand up to politicians and bureaucrats is usually as beneficiaries of tax transfers, or those seeking a `tier of govt.’ to make transfers to them. An example is the disgusting conduct of the board of Woodside Petroleum in the face of Shell’s takeover bid.

Shell’s offer to shareholders was a generous price per unit and, $4-5 billion of capital to be injected into Woodside’s operations. The response of the Board was a complete breach of their duty to the owners, shareholders and worse.

Instead of producing an evaluatory report on the offer, and leaving it up to shareholders, the Board decided to overthrow the property rights of every shareholder. It engaged a retired Federal politician, a former ALP Member of Parliament to whip up a scare campaign in order to push Costello to overthrow property rights and stop the bid by nothing more than coercion.

They targeted be-wetting Coalition of W.A. to apply pressure. The campaign was a disgusting resort to nationalist emotion with three simple, crude, false messages:

‘Keep Woodside Australian, it’s a national treasure, and in the national interest.’

If Shell succeeds, it would run Woodside at a loss.’

‘It’s in the national interest to keep oil production ‘locally owned.’’

Drivel, rubbish and garbage. On the strength of all that tripe, the Board succeeded in getting its way. Costello panicked and declared apropos out of nothing,`I have found it in the Nation’s interest to stop the take-over bid.’

Let’s sum up what the Board did: it ran, on the advice of a politician, a scare campaign.

What is a scare campaign? While nominally pitched at the public, a scare campaign is actually directed against spineless, unprincipled, craven, sniveling callow politicians who can be counted on to scream their lungs out,`The sky will fall’. “Buk, buk, uk, Bwaark!’

Yet, as opposed to that act of property theft by the Board and Peter Costello and the gutless back benchers, Oz businessman don’t say boo against measures which should be opposed and just as vociferously.Let’s a give a case example:W.E.T. Tax imposed on wine producers.

The proponents were two:

1. Major beer brewers who, falsely believed they were losing beers sales to wine, on their entirely false assumption wine is a substitute for beer.

The major brewers believed imposing W.E.T. would induce consumers to give up large percentage of wine for beer. They were wrong, as only the stupid can be wrong. Moreover, it was new brewers who were taking over markets and for the reason: they were producing superior quality beer, and some of good quality at lower prices, as opposed to the expensive piss water the majors gush out.

It was a bleak type of justice that W.E.T quickly sliced into their sales – they were so stupid they could not see the obvious, W.E.T. would hit them too, and they screamed in public, `it hurts’.

Well, I’m glad it did, as predictable, hurt them. Sadly it didn’t hurt them enough. Unfortunately, it hurt the entrepreneurial brewers too.

Hell, with pals like that, why worry about the ACTU kneecapping capital in Australia?!
2. The politicians:They welcomed the major brewers, crying crocodile tears, with open arms, for obvious reasons. Their aim for the W.E.T. tax was, originally, to wipe out the majority of wine producers in Australia, and, out of their totalitarian `values’ they assert to be a higher morality, deny Australian consumers good and high quality wines at low prices.

Notice also the inverse snobbery. While they hector and moralise about Oz winebibbers, they, the politicians, enjoy wine, spirits and beer at token prices. Real Oz taxpayers are forced to supply those hypocritical socialist thieves the good juice for, effectively gratis.
So, it wouldn’t matter to them that, say, they drove up the price of even cleanskin wine to a hundred dollars a bottle because they would imbibe to their hearts’ content in first grade wine for `free’. The lying hypocrites.
The proposed rate was guaranteed to wreak the carnage the politicians, all parties sought to inflict. Then, the Democrats realised, if they did that, they would face a major revolt by voters. Why the Democrats, though?

South Australia is the core base of that party of sniveling socialisto drivellers. The wine Industry is one of the few large scale, profitable, wealth and job producing sectors in that mendicant state. No prizes for guessing what voters in that state would have done to the politicians. Forget about the elections, voters would have taken out their pitchforks and skewered every damned one of them.

So, they settled on a lower starting rate, but at a level that could be trusted to still do much damage to wine producers and it has.

So, what was the wine producers’ response?

Unfortunately for them, most are members of ‘The Australian Wine Industry Association.’ Which amounts to nothing much more than a clubhouse for those wimps called PR men.

The first rule of thumb is pr types have no incentive to fight politicians and bureaucrats. They make their ‘careerahs’ and their pay packets not serving those who pay their backsides, they make them by pretending to be insiders in, say, Canberra, or Spring St., and pretend they sit in `high councils’ `bringing influence to bear on policy’.

Next, they also have one eye to their next job, so they can’t afford to offend politicians and bureaucrats one jot, and thus they will not take them on in public and come out fighting, wearing knuckle dusters.  So, we have a few good reasons as to why every damned time, politicians and bureaucrats trample over people, they get away with it.

It showed out:

The `Association’ held a `fight the W.E.T tax’ weekend, on the Murray River, in a nice conference centre.

Did anyone hear of it? No, I didn’t either.It was all very peaceful, all very innocuous. Not the stuff to terrify let alone politicians bent on larceny and arson.

The pr. men made a few nice speeches about how horrid the tax is, that they are resisting, thanked all who attended for attending and packed their bags and returned to Adelaide.Canberra didn’t hear about this mighty counter-attack. The press didn’t hear about it, in fact, the media didn’t have a clue about the W.E.T, when it was proposed.

No one heard a damned thing about the non- –resistance.

The pr. men claimed a victory; `We succeeded in having the proposed rate cut’. Big deal! Kepp in view, those retarded weasels, the Dems, claimed the same pyhrric victory. That leaves just the rest of that tax, and every other tax, `inclusive of  ‘licences’ and other regulations intact.

Why were Australian producers successful? Comparative advantage. The mercantilists, who also stuff theCoalition, just can’t get a grip on, the export trade was built out of the successful domestic production of wine for domestic wine consumers.
What the politicians and bureaucrats have done is to wipe out the comparative advantage of wine production in Australia. At this stage it is anecdotal but, Australian investors in wine production are sinking capital into China, the U.S. and Latin America, and no longer in Australia.

The demand for wine, in each grade, is highly price elastic. That means, to be profitable wineries operate within a narrow price range in which to make earnings. Wine producers are very alert to that, a winery’s products being taken into a higher price range only if consumers value that winery’s products higher than the producer estimated – and this set up a dynamic all through the 80’s until the W.E.T.:

As some prices for some wineries products were driven up that created the gaps for new wineries to enter. That meant consumers who could afford say $8-$15 wines were actually enjoying wines which today sell at $25 to $40 a bottle, with good, long term cellaring ahead. That meant, the wine lover of modest means could not only enjoy good and great wines, but also enjoy the pleasure of building a wine cellar. In moved the federales.

The next benefit was: because of the economics of production in Australia for Australian consumers, producers could not only supply wine to overseas consumers, but also supply superior quality on prices.

It wasn’t bloody central planners who launched wine exports; it was the economics of production here in Australia and, Auberon Waugh’s single-handed promotion of the delights of Australian wines in the Spectator.

The moralising kill joys in Canberra, all parties, are slaughtering wine production in Australia through their tax and regulate sprees and it hasn’t registered with the morons, an upshot is, exports will crash since they have wiped 0out the comparative advantage in producing here in Australia.

Let’s point out some further repercussions:

The successful slashing of wine production in Australia also means the following will be slashed:

Production of all factor goods supplied to wineries:

Bottles, labels, containers,
Machinery, and equipment

Which cuts demand for supply of inputs to producers of those goods.

Also cut: services, which cover an extensive array of services.
Needless to say, all that means jobs will be slashed in large numbers.
That last should have the politicians terrified because, unemployment is on the rise, as Oz continues the slide into recession. On top of, the contraction in manufacturing already long set in.
So, smashing wine production in the manner Oz’s stupid politicians are addicted to for many sectors, not just wine production, -and each tier of govt.  will only compound the bad news for Peter Costello.

Just to check, producers are taking large losses because they cannot sell product at the much higher prices dictated by stupid politicians and bureaucrats.  That is why large volumes are being dumped each week, to clear the stuff.

As for the mercantilist assumption: watch the exports dry up.

Now, what I outlined above is the stuff of the sort of campaign the Association should have run. It should have done exactly as Woodside did, but unlike Woodside; it would have done so for just reasons. A campaign to strike electoral terror into the heart of every politician.

Yet, that requires a solid grasp of economics too – as Jackson’s states in the article on the gutlessness of Businessmen on labour market pricing and contracts.
Neither does the gutlessness of businessmen and women stop at labour and wine markets. When a `tier’ of govt. is about to inflict pain in any way upon any business, it is the same old response:

Sit quietly in a corner and cry, hire pr. wimps, then complain in the privacy of the home.

Well, that is exactly what the socialists, every party, and empire building bureaucrats, including in the ATO, and `departments of environment’, rely on, cowardice. Cowardice encourages them to impose more pain, to eliminate more freedom, to impose more burdens.

What will it take before businessmen and women cry, `Enough!’ and come out fighting, teeth bared, bayonets for fingernails, and go for throats of the bastards, politicians and bureaucrats? It’s too late to resist when you are dead.
Here’s a starting tip:
Sack pr. types and hire bareknuckle fighters who will kick butt, and engage economists who are economists and not charlatans and Spencer Street Soviet Age communists pretending to be economists. Do the job properly before it is too damned late. For, right now, so many of them are just girly crybabies, They whine about what each tier of govt. is doing to them.

Whining is no damned good. Do something. Get out there and rip the throats out of every damned politician and bureaucrat. Terrorise the lying, hypocritical socialist thieves and gangsters.

Businessmen and women allow themselves to be pummelled into the ground because they want a quiet life. Well, the politicians and the bureaucrats are not giving them a quiet life, and they won’t cease until theveryone of those nervous Nelly type businessmen and women work up the spine and principle to stand up to the bastards.

I’ll supply chronolgy of W.E.T tax and sundry details in another item.