Raising Hell: Issue 38: So Clever It's Stupid

There are a few things I like to bang on about probably all too often but one of these the raw horror of financialised thinking as it gets applied to the world. A good chunk of my recent book Just Money was spent dissecting how this way of thinking about the world has real consequences for the average person.

So it was with some interest I stumbled onto example of this playing out in real time while digging into a story about how the government is handling offshore wind farming. Along the way I met a lawyer who, while rattling off all the various deficiencies of a new bill that alleged regulates this new industry (go read the story for context), pulled it up on her computer and proceeded to read off whole sections in order to count how many times the word “may” appears in the text (406 in total). In a flourish, Dr Tina Soliman Hunter summed it up saying: “The bill is extremely weak, and relies on regulations that do not exist and may never be written, and is essentially placing an each-way bet on a two-horse race [between fossil fuels and offshore wind].”

At that moment I immediately recognised the situation for what it was: the Australian government was essentially taking out a covered option. It was a moment of clarity that was revealing for the way it showed to the extent to which the most significant change in our lifetimes — decarbonising the economy — is going to be run by a bunch of finance bros, some of the most cynical people to have stalked earth.

The oversimplified version of how this works is that, when faced with a choice between two options, you create a “win-win” scenario through either luck or creative accounting by ensuring that the risk of the choice you don’t make is still “covered”. Once you understand that, the next thing to understand is how the guy who is calling the shots thinks.

That guy is Minister for Industry, Energy and Emissions Reduction Angus Taylor - a man who, after Oxford but before politics, spent nearly two decades in the consulting world and like anyone who enters that world, he cannot fail to see reality through the prism of financial logic.

A good example is the moment, way back during the height of the pandemic, when Taylor was roasted for announcing with a certain glee that Australia was going to build its own strategic oil reserve - a piece of infrastructure that needed to be built decades ago. Those reacting critically to the announcement immediately pointed out the obvious: n a crunch, there was no way this fuel would find its way to Australia if it wasn’t first appropriated for use by the US government. What was missing from this critique is that the decision had nothing to do with Australia’s “strategic interest” but rather its “financial interest”. At the time, oil prices had collapsed, oil rigs in Russia were burning the stuff because they had nowhere to store it and so the old merchant principle of “buy low, sell high” applied. Australia could stock up now and sell the oil — or the rights to it — at a future date to make bank.

Framed this way, Taylor’s and his ministry’s response to the renewable energy sector to date makes much more sense — and we can see it in how the government has handled offshore wind. Though Star of the South was first proposed in 2012, it was only last month they moved to do anything about preparing for its arrival. The logic here is obvious: for a government that has invested so much capital making a heavy bet on “gas-fired recovery”, there is a certain amount of risk associated with any pivot to renewables — and especially industrial-scale generation of renewables. The solution? Buy time for your initial debt to pay off, but don’t stand in the way too much of the new industry so they pull out entirely.

The result is a covered option for a fossil fuel-friendly federal government. While the new bill makes it legal for new development to start, it also doesn’t create enough certainty to spark an investment rush. What it does do is preserve the government’s options by leaving everything open, long enough so that they can pivot if their original bet goes bad. The fact that many of the regulations have yet to be written becomes a useful bargaining chip in negotiating with industry down the line. In any negotiation it allows the government to say, "don’t be mad, let’s stay friends, tell us what you need and we’ll work on the regs together.”

In essence, this leaves open the possibility that in order to make up for failings in the past, industry may be allowed to right the rules — which is a problem as offshore wind is, like other industries, still dangerous. To date the industry has racked up 5632 safety incidents in the six years since records began. The only real difference between wind turbines and oil rigs, is that the latter sit atop an ocean of explosive hydrogen carbons, as seen at the Amur Gas Processing plant in Siberia last week:

Of course all this financial wheeling and dealing is all very clever and tricksy, but so far all it has secured is a carbon-shocked future. By 2040 Australians will be paying at least $72b each year just from the cumulative damaged caused by rolling natural disasters. And that’s just under the best case scenarios.

But then, what do I know? I just report the news. To that end, check out my story on offshore wind - and enjoy Issue 38 of Raising Hell.

For the Fortnight: September 29 to October 12

Reporting In

Where I recap what I’ve been doing this last fortnight so you know I’m not just using your money to stimulate the local economy …

Guys, this fortnight has been two-sizes to small. Lately I’ve been working weekends and pulling extract hours to clear the various projects I have on the boil - including advancing a Raising Hell inspired story that I still can’t talk about yet - so if I’ve been all over the shop I apologise. In other life news, my contract with the Guardian has been extended until March next year, which means I’ll be around cover to fire-season over summer. After that, I presume we’ll get back to business.

In the meantime, here’s my output from the last fortnight (with a couple I left off from the last issue):

• ‘Good seas, good grids and good wind’: Australia’s tentative first steps towards an offshore wind industry’ (The Guardian, 9 October 2021).
• ‘‘Eye-watering’: climate change disasters will cost Australia billions each year, study finds’ (The Guardian, 6 October 2021).
• ‘Running homes and cars on electricity alone would save households $5,443 a year, report finds’ (The Guardian, 5 October 2021).
• ‘‘Nothing happened’ in van, say prison guards involved in restraint of Wayne Fella Morrison before his death’ (The Guardian, 1 October 2021).
• ‘Conservationists say rocket launch site could push endangered southern emu-wren to extinction’ (The Guardian, 28 September 2021).
• ‘Exmouth Gulf: development plans stir up fears about future of Ningaloo’s neighbour’ (The Guardian, 26 September 2021).
• Future Of Local Journalism, Long Table Discussion, Context Festival (10 October 2021).

Projects

• Cracking COVIDSafe - An examination of the machine that made the COVIDSafe app, a piece of software that promised to hack the pandemic (complete).

• Laramba’s Water - Laramba is a remote Indigenous Community in the Northern Territory which has been drinking uranium-contaminated water since 2008. We tried to find out what why (on-going).

  1. ‘High levels of uranium in drinking water of NT community’ (NITV, 31 July 2020).

  2. ‘Company remains shtum on plans to filter Laramba's contaminated water supply’ (NITV, 21 October 2020).

You Hate To See It

A dyspeptic, snark-ridden and highly ironic round-up of the news from our shared hellscape…

• A Different Kind Of Trolley ProblemFresh of advocating for the establishment and acceptance of company towns, the fine scholars at Bloomberg have followed up their global trolling with a new provocation. Ben Schott, a columnist covering advertising and brands at Bloomberg has proposed a novel innovation on the path to rewiring societies into small government, corporate libertarian dystopia’s: don’t break up monopolistic behemoths like Facebook and Google — give them a seat at the UN. Unfortunately for Schott, his piece dropped right before Facebook went down for hours after the company locked itself out of its server farm.
• Some Things Never DieWhat does McDonalds, Tiffany’s and the Mob have in common? Answer: a shared hatred of Millennials. Senior mob figures have been lamenting to the law enforcement and media that the new generation of wise guy’s just aren’t what they used to be. According to the Washington Post, these elders complain that the new crop of gangsters are “softer, dumber and not as loyal as mobsters of the past. Plus, they’re always texting.”
• Didn’t See That ComingMeanwhile, in the middle-of-nowhere-USA, a man dressed as a ninja wielding a katana ambushed a group of special forces troops from the 160th Special Operations Aviation Regiment while they were on a training mission. The ninja approached a staff sergeant at 1am on 18 September while he was outside having a cigarette. The ninja asked the solder, "Do you know who I am?” and, “Do you know where my family is?” before beginning an assault that saw several soldiers take cover in an office building. Though the man was arrested at the scene, the US military should probably just bring the guy on staff.

• A Matter Of Perspective, Really

  Jamie Dimon is the chief executive of JP Morgan Chase, the largest of the big four US banks. To fill this role, Dimon is paid $31.5m a year. With the US government cutting social security support for millions of Americans - similar to how Australian authorities rushed to slash social security payments even as the pandemic remains ongoing - Dimon was asked whether he should consider taking a pay cut. Dimon’s response? Such a thing would “offend the board”.

• Six Degrees Of Schadenfreude

  The Pandora Papers - the third massive trove of tax data to date - dropped this fortnight showing once more how the world’s richest people use slush funds and tax havens to hide a sloshing ocean of cash. Take heed though, while you might imagine that all those yachts, pleasure palaces and private jets might buy you happiness, billionaires are capable of experiencing the same misery as the rest of us. Jenny Paulson spent 21-long years married to John Paulson, the 65-year-old hedge fund whose net worth stands in the region of $4.7 billion. Unfortunately for Jenny, she learned John had filed for divorce to run off with a 33-year-old influencer by reading about it in Page 6.

  — Michael Kofi A.||♤🇬🇭 (@MikeKofiA) 7:22 PM ∙ Oct 10, 2021

• Like Bond, But Weirder…

  As far as stories no one seems to care about go, this fortnight Yahoo News revealed in an explosive report that the CIA - sound the hip hop siren - were investigating the ways and means to kidnap and/or assassinate Wikileaks founder Julian Assange. Mike Pompeo, CIA director at the time, was said to be so “completely detached from reality” that agents were asked to “figure out the art of the possible” where “nothing is off the table”. The result were mooted plans to “drag him out” of the Ecuadorian embassy, and requests for “kinetic options” — government speak for “he’ll sleep with the fishes”. Whatever the absolutely batshit plans to abduct or bump off an Australian national in the heart of London, the situation has hardly raised a peep. If it fell from the headlines pretty quickly, Foreign minister Marise Payne says she “raised the situation” with her counterparts in London last month, while a spokesperson for the government says they expect their mates in the US and UK to be good mates and do right by Assange.

• Never Change, Straya

  Speaking of do-nothings, Prime Minister Scott Morrison took time out of his busy schedule dealing with a pandemic, shopping for nuclear submarines and running the numbers ahead of the next election to give a quickie interview with David Koch of Channel 7’s Sunrise program. Graced with his leader’s presence and with the subject of a federal Independent Commission Against Corruption so much the rage these days, Koch teed up an easy one, asking: isn’t an ICAC, like, totally unfair? Morrison’s response: “And you know, you've got to have processes that assume people are innocent before thought to be guilty and that is a real problem.”

• Don’t Say No Right Away, But…

  Own a trained Arabian hunting falcon? Well, UAE Exotic Falconry and Finance have an opportunity just for you. Through the magic of debt and financialisation, you can now effectively pawn your falcon on global financial markets in order to obtain - wait for it - more falcons!

  Already own a trained arabian hunting falcon? Collateralize it. Secure a loan financing another falcon. That falcon? Collateralize it too. There's no end to the number of falcons you can buy. The bank bundles its interests into a Falcon Backed Security and sells it. EVERYONE WINS

  — 𓅃 UAE Exotic Falconry & Finance (@FalconryFinance) 4:22 PM ∙ Oct 9, 2021

Failing Upward

Where we recognise and celebrate the true stupidity of the rich, powerful and influential…

• What can we say, that hasn’t already been said? By this point, you all know the story of Gladys Berejiklian: She had a deadshit boyfriend for a while; she looked the other way while said deadshit boyfriend tried to work the angles on various land deals; she resigned after ICAC said they’d be going after her and before long her phone was running hot with jobs offers. Within 48 hours she had been offered a gig with the federal Coalition in Tony Abbott’s old seat on the basis she would be a fine contribution to the team — and in a jurisdiction where no ICAC operates.The only thing that could perhaps top this classic example of failing upward is her successor Dominic Perrottet stepping into the leadership and immediately alienating every single constituency possible during those same 48 hours.

Good Reads, Good Times

To share the love, here are some of the best or more interesting reads from the last fortnight…

• Mother Jones have this really great read on how Facebook is killing the media industry, which very cleverly doubles as a fundraising ask — but that doesn’t change the quality of analysis.

Before You Go (Go)…

• Are you a public sector bureaucrat whose tyrannical boss is behaving badly? Have you recently come into possession of documents showing some rich guy is trying to move their ill-gotten-gains to Curacao? Did you take a low-paying job with an evil corporation registered in Delaware that is burying toxic waste under playgrounds? If your conscience is keeping you up at night, or you’d just plain like to see some wrong-doers cast into the sea, we here at Raising Hell can suggest a course of action: leak! You can securely make contact through Signal or through encrypted message Wickr Me on my account: rorok1990. Alternatively you can send us your hard copies to: PO Box 134, Welland SA 5007
• And if you’ve come this far, consider supporting me further by picking up one of my books, leaving a review or by just telling a friend about Raising Hell!