Category Archives: Current Affairs

Same old economic crises?

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Amid the current turmoil surrounding tariffs and trade wars, I have been re-reading “Economics: The User’s Guide” by Ha-Joon Chang.

First published in 2014, this highly accessible introduction to economic theory and practice was written in the wake of the GFC, and the fallout that ensued from the US housing bubble and the consequential collapse (and public bailout) of major banks and financial institutions. The US bubble was largely caused by an imbalance in housing supply, poor lending standards, and over-engineering of mortgage-backed securities that quickly unraveled when banks lost confidence in each other, causing a major credit crunch and a lack of market liquidity.

Chang couldn’t have foreseen COVID and the knock-on effect on global supply chains and the impact of lock-down policies on overall productivity. He overlooks (ignores?) Bitcoin, a key ideological and technological response to the GFC, and he downplays the role of innovation in economic growth. However, his historical survey, his analysis of major economic theories (or “schools”) and his explanation of the roles that governments and the private sector play are all spot on and serve as a great resource for anyone wanting to try and make sense of the world.

Given the credit crunch at the heart of the GFC, the recent sell-off in the US bond markets reminds us that:

1. History repeats itself time and time again (albeit for different reasons)

2. Global markets are deeply interconnected, despite various attempts at de-coupling and policies designed to challenge globalisation and bring about increased protectionism

3. The US housing market is heavily reliant upon foreign investors since US treasuries both create market liquidity for new mortgage lending, and set key interest rates for borrowers – and major holders of US treasuries are foreign governments and institutional investors

The US mortgage market is underpinned by a near-socialist funding model (in the form of Fannie Mae and Freddie Mac), a propensity for long-term fixed rate loans, and a significant volume of non-recourse mortgages.

If a global trade war results in higher cost of goods for US consumers, and a bond sell-off results in higher interest rates, could we see a repeat of the GFC but driven by different causes?

Regulating Social Media….

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The term “mainstream media” (or MSM) is generally used as a derogatory term to describe traditional news services (print, broadcast, on-line), especially by anyone who thinks that MSM does not reflect what’s “really going on” in politics, society and the wider arena of current affairs. Depending on which conspiracy theories or political agenda you follow, if MSM doesn’t agree with or express your viewpoint, it’s become very easy to dismiss the Fourth Estate as an instrument of the (deep) State, or merely serving the interests of an oligarchy of wealthy media owners and press barons. This dialectic is sometimes described as the Fifth Estate – those bloggers, podcasters, citizen journalists and marginalized voices that seek to pursue their version(s) of the truth via new content platforms.

Although the tradition of the counter-culture as represented by this Fifth Estate has a very long history, its growth has been accelerated and amplified thanks to new digital technologies in general, and social media brands in particular. The problem is, not only is social media challenging (and ignoring) many of the rules and conventions that underpin the social contract between the public and the traditional media outlets, our governments and regulators cannot keep up with the pace of technology.

In the late 1980s, when I studied sub-editing and basic journalism at night school, the ethos of The Five Ws of Journalism were still taught as the essentials of any credible news outlet or publication. This was also a time when the media was going through significant changes, from new content technology to cross-border ownership, from multi-channel narrow-casting to 24-hour rolling news formats – yet the principles of source verification, fact-checking, libel laws and the right to reply were generally still seen as crucial to instilling public trust and confidence in the media (alongside a healthy dose of scepticism to not believe everything that we read in the paper!).

Now, with social media grabbing more of our attention, and with large, global and engaged audiences on their platforms, who are getting more of their news from these channels, the term “MSM” could easily apply to social media itself. Hence the term “legacy media” has emerged to describe traditional news services.

Whether it’s Facebook wanting to be the “world’s newspaper” or X positioning itself as the global “public square”, it’s clear that these new media barons are in many ways no different to the aging media moguls they seek to displace. Newspapers don’t make money from their cover price or even subscriptions – most revenue comes from advertising and the “rivers of gold” it represents. Now, those advertising dollars are on-line, and tied to our social media accounts and the proliferation of posts, “likes” and “shares” (as well as our personal data).

So how should we think about regulating social media, if the old rules no longer apply?

First, the policy, regulatory and industry framework to oversee social media needs to be simplified and streamlined. In Australia alone, based on a cursory internet search, I identified more than a dozen entities (government, agency, association) that have some form of oversight of social media. Apart from being highly inefficient, surely it doesn’t have to be this complicated? (And complexity and ambiguity can embolden those who seek to flout convention.)

Second, if a social media platform wants to be taken seriously as a trusted news source, and if it aspire to be recognsied as a publication of record, it has to adopt some fundamental principles such as The Five W’s. It’s all very well saying that these platforms are anti-censorship, and pro-free speech, but those rights come with a heap of legal and social responsibilities. To argue that these platforms are merely conduits for public opinion (rather then being content publishers) undermines agency theory. Given that I am not entitled to a social media account (I don’t think it’s yet risen to being a fundamental human right?), and that I don’t own my account (often, not even the content I post), social media companies act as our agents. They give us permission to use their services, and they ultimately control what we post on their digital real estate. They also use algorithms to manipulate what is served up in our feeds. Social media should therefore be held accountable for content that it enables to be disseminated; take more responsibility for any libel, lies or dis/misinformation issued on its platform; and risk prosecution for any content that promotes, encourages or incites violence, insurrection and public disorder.

Third, the fact that much of the content on social media is user-generated should not absolve these platforms from having to provide a formal right of reply, as well as adhering to a recognised and independent dispute resolution service. This will enable alleged victims of on-line bullying, harassment, personal abuse and outright lies to seek redress, without having to embark on expensive legal proceedings. (Of course, if social media companies maintained fact checking and other verification tools, they should be able to mitigate, if not eradicate, the need to invoke these mechanisms in the first place.)

Finally, any reputable social media company should be willing to sign up to minimum standards of practice in respect of content originated or disseminated on its platform, as well as observing existing regulation around personal data, data protection, cyber-security, privacy, intellectual property rights and general consumer protections. At the very least, social media has to prove itself a credible alternative to the legacy media it seeks to displace, otherwise they are not the solution, just another part of the problem.

The wrong end of the stick!

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In a typical knee-jerk and censorial reaction, Australia’s Federal Parliament has recently approved legislation that will attempt to ban anyone under the age of 16 from accessing social media.

Knee-jerk, because the legislative process was rushed, with barely a 24 hour public consultation period. The policy itself was only aired less than 6 months earlier, and was not part of the Labor Government’s election manifesto in 2022.

Censorial, because Australia has a long history of heavy-handed censorship. I still recall when I lived in Adelaide in 1970 (aged 10), broadcasts of the children’s TV series, “Do Not Adjust Your Set” were accompanied by a “Mature Audience” rating – the same series which I had watched when it was first broadcast in the UK in 1967 during the tea-time slot!

As yet another example of government not understanding technology, the implementation details have been left deliberately vague. At its simplest, the technology companies behind the world’s most popular social media platforms (to be defined) will be responsible for compliance, while enforcement will likely come from the eSafety Commissioner (to be confirmed).

The Commissioner herself was somewhat critical of the new policy on its announcement, but has since “welcomed” the legislation, albeit with significant caveats.

From the perspective of both technology and privacy, the legislation is a joke. Whatever tools are going to be used, there will be ways around them (VPN, AI image filters…) And if tech companies are going to be required to hold yet more of our personal data, they just become a target for hackers and other malicious actors (cf. the great Optus data breach of 2022).

Even the Australian Human Rights Commission has been equivocal in showing any support for (or criticism of) the new law. While the “pros” may seem laudable, they are very generic and can be achieved by other, more specific and less onerous means. As for the “cons”, they are very significant, with serious implications and unintended consequences for personal privacy and individual freedoms.

Of course, domestic and international news media are taking a keen interest in Australia’s policy. The Federal Government is used to picking fights with social media companies (on paying for news content), tobacco giants (on plain packaging) and the vaping industry (restricting sales via pharmacies only), so is probably unconcerned about its public image abroad. And while some of this interest attempts to understand the ban and its implications (here and overseas), others such as Amnesty International, have been more critical. If anything, the ban will likely have a negative impact on Australia’s score for internet freedom, as assessed by Freedom House.

The aim of reducing, mitigating or removing “harm” experienced on-line is no doubt an admirable cause. But let’s consider the following:

  • On-line platforms such as social media are simply reflections of the society we live in. Such ills are not unique or limited to Facebook and others. Surely it would be far better to examine and address the root causes of such harms (and their real-world manifestations) rather than some of the on-line outcomes? This feels like a band-aid solution – totally inappropriate, based on the wrong diagnosis.
  • When it comes to addressing on-line abuse and bullying, our politicians need to think about their own behaviour. Their Orwellian use of language, their Parliamentary performances, their manipulation of the media for personal grandstanding, and their “calling out” of anything that does not accord with their own political dogma (while downplaying the numerous rorts, murky back-room deals and factional conflicts that pass for “party politics”). I can’t help thinking that the social media ban is either a deflection from their own failings, or a weird mea culpa where everyone else is having to pay the price for Parliamentary indiscretions.
  • A blanket “one size fits all” ban fails to recognise that children and young people mature and develop at different rates. Why is 16 seen as the magic age? (There are plenty of “dick heads” in their 20s, 30s, 40s etc. who get to vote, drive, reproduce and stand for public office, as well as post on social media…) From about the age of 12, I started reading books that would probably be deemed beyond my years. As a consequence, I by-passed young adult fiction, because much of it was naff in my opinion. Novels such as “Decline and Fall”, “A Clockwork Orange” or “The Drowned World” were essential parts of my formative reading. And let’s remember that as highly critical and critically acclaimed works of fiction, they should neither be regarded as the individual views of their authors, nor should they serve as life manuals for their readers. The clue is in the word “fiction”.
  • Children and young people can gain enormous benefits from using social media – connecting with family and friends, finding people with like-minded interests, getting tips on hobbies and sports, researching ideas and information for their school projects, learning about other communities and countries, even getting their daily news. Why deny them access to these rich resources, just because the Federal Government has a dearth of effective policies on digital platforms, and can’t figure a way of curbing the harms without taking away the benefits (or imposing more restrictions) for everyone else?
  • In another area of social policy designed to address personal harm, Governments are engaging with strategies such as pill-testing at music festivals, because in that example, they know that an outright ban on recreational drugs is increasingly ineffective. Likewise, wider sex, drug and alcohol education for children and young people. Draconian laws like the under-16 social media ban can end up absolving parents, teachers and other community leaders from their own responsibilities for parenting, education, civic guidance and instilling a sense of individual accountability. So perhaps more effort needs to go into helping minors in how they navigate social media, and improving their resilience levels when dealing with unpleasant stuff they are bound to encounter. Plus, making all social media users aware that they are personally responsible for what they post, share and like. Just as we shouldn’t allow our kids to cycle out on the street without undertaking some basic road safety education, I’d rather see children becoming internet savvy from an early age – not just against on-line bullying, but to be alert to financial scams and other consumer traps.
  • Finally, the new Australian legislation was introduced by the Labor Government, and had support from the Liberal Opposition, but not much from the cross-benches in the Senate. So it’s hardly a multi-partisan Act despite the alleged amount of public support expressed. It may even be pandering to the more reactionary elements in our society – such as religious fundamentalists and social conservatives. For example, banning under-16s from using social media could prevent them from seeking help and advice on things like health and reproductive rights, forced marriage, wage theft, coercive relationships and domestic violence. Just some of the unintended consequences likely to come as a result of this ill-considered and hastily assembled piece of legislation.

“Megalopolis”? More like mega-flop it is!

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Last week I went to see “Megalopolis”, the latest (and last?) film by Francis Ford Coppola. In the past, a Coppola production was usually something to relish, and I was looking forward to this addition to his canon of work. I purposely avoided reading any reviews beforehand; I was aware that this movie had endured a long gestation, and had experienced a number of challenges during production, so I did not want to arrive with any preconceived ideas. I wasn’t even aware of the plot or the cast.

Oh dear – what a disappointment. For something that was 40 years in development, and reportedly cost $120 million of the director’s own money, it was one of the worst films I have seen in a long while. No wonder it has attracted a very small audience, judging by the box office receipts. At the screening I attended, there were only 4 people in the entire cinema.

Despite the promising plot, the stellar cast, and the director’s own distinguished career, nothing can rescue this dog’s dinner of a film. It’s so bad on so many levels. First, the use of a voice-over to explain the plot is often a dodgy narrative device – especially as the narrator in this case is neither the main protagonist, nor an impartial observer. Second, the script and much of the acting is painfully bad – plodding, hackneyed, derisory, derivative and at times just plain over-wrought. Third, the set design looks cramped and feels claustrophobic. Many of the costumes are straight out of a Christmas pantomime, giving rise to an unintended comic effect. And as for the CGI images of the future city, it’s as if the design team simply gave Dall-E a few prompts and rendered the results on screen wholesale, without any editing or quality control.

At times, I wasn’t sure if I was supposed to be watching a Batman movie directed by Baz Luhrmann, or Christopher Nolan’s take on “Julius Caesar”.

I think part of the problem is that the characters and events that the film attempts to satirise are actually beyond parody. They are soft, obvious targets; and no matter how outrageous the story line, it can never out-do real life, or upstage current affairs. No doubt, the timing of its release is designed to raise questions about current social and political events, in the USA and elsewhere. Venal, vindictive, incompetent and impotent politicians; tech billionaires and media moguls who think they can determine election results; nepo babies who think they are talented just because of their family connections; social media influencers driven by a sense of their own entitlement and self-importance.

But it’s all been done before, and in many cases, far better.

Next week: Pudgy Penguins come to Melbourne