13th April 2005

- IRAQ -

It is now two years since the "Coalition of the Willing" deposed the Saddam dictatorship.

I have previously argued that Islam is intrinsically undemocratic.  (Then again, is there a real national democratic government anywhere on this planet?  Most nations, including USA, UK, France etc, seem to be ruled by democratically appointed dictators.  Real democracy would be participatory, in that any decision by elected legislators could, at the very least, be reversed by a vote of the population acting en mass, like the "propositional" system in California).  Islam is intrinsically undemocratic because it's founder ruled as a theocratic dictator.  Since Mahommed is the apotheosis of virtue, who would dare to claim that he could improve the system implemented by the Prophet?

Iraqi elections were held at the end of January 2005, and the fledgling democracy, despite terrorist propaganda directed at the Baghdad Sunnis, terrorist violence directed at Iraqi Shia, and predictions of failure by western liberal journalists, is on the path to control of it's own destiny.  The election was outstandingly successful, however opposition to the foreign occupation forces is again brewing in the Sunni triangle.

The Iraqi authorities have produced a hit with a TV show
on the Al-Iraqiya channel that has terrorist prisoners confessing their crimes.  They confess to rape, sodomy and desecration of Mosques, and that they are paid by Syria, or committing their crimes for financial reward.

This offensive is being denigrated by the Baghdad elitist bloggers (for the most part
hosted on public websites such as  One such blogger is university student Khalid Jarrar on blogsite "Secrets in Baghdad".  Secrets has complained that the Al-Iraqiya terrorists blacken the cause for "real mojahideen" (sic)

Another person publishes under the nom-de-blog "riverbend".  "A little bit about myself: I'm female, Iraqi and 24. I survived the war. That's all you need to know. It's all that matters these days anyway."  Her blog  is anti US, and extremely critical of the democratic process.  Riverbend writes fluent English (acquired, one suspects, in a country where English is the principal tongue).   The CIA world factbook reports that less than 25% of Iraqi women are literate (can read & write).

Riverbend bemoans
(and I sympathize with) the increasing pressure on Iraqi women to conform to the Muslim ideal. "It begins slowly and almost insidiously. You stop wearing slacks or jeans or skirts that show any leg because you don’t want to be stopped in the street and lectured by someone who doesn’t approve. You stop wearing short sleeves and start preferring wider shirts with a collar that will cover up some of you neck."  She also describes the feeling of horror after a conversation wherein her brother asserts that living in a theocracy might be alright:   "I wanted to answer, it’s not bad for *you* - you’re a man… if anything your right to several temporary marriages, a few permanent ones and the right to subdue females will increase. Why should it be so bad? Instead I was silent."

Both Riverbend and the author of "Secrets in Baghdad" appear to come from the "Sunni triangle" region of Iraq where voter turnout averaged 25%, as opposed to about 70% turnout in the rest of Iraq.  It is unsurprising that occupants of the region of Iraq that most benefited from Saddam Hussein's governance should complain about the new order.

Of course all is not sweetness and light in the state of Iraq.  I found the reports of atrocities committed by both sides deplorable, "Fatima's letter" is particularly moving.  However, In the history of Man's attempt at civilization hitherto there has never been any society whose progress in civilization has gone so far that, in times of revolution or war, it's members could be relied upon not to commit atrocities from Arnold Toynbee, "A Study of History" C1972 p 166.

I believe that intervention by a collection of states in another state's affairs is justified when the intervention is to prevent or correct a significant (defined as say 1% of the population) execution or extreme incarceration (defined as 10 - 20 years) of the citizens of the intervenee state when the crime is nonviolent & political.

Even when that precondition is satisfied, the virtue of intervention in a nation's affairs should be considered on a case by case basis.  On the best information available the balance of continuing harm with the existing status quo against the potential harm and forecast improvement during and following any intervention should be weighed.

In Iraq, I understand that more than 1% of the citizens were unjustly condemned for political crimes.  The intervention, on balance, was to the greater good of the majority.  I believe that we (the coalition) would have not fulfilled our duty of care to our fellow man if we had not intervened.

I also believe that history's lesson is that intervention where the US has been a party has usually been met with the subsequent approval of the intervenee population.  (Except perhaps, the Hillary Clinton inspired intervention in Serbia.)


It is now four weeks since I predicted that Australian interest rates would not rise.  I was wrong.  The reserve bank's board did raise interest rates in March by 0.25%, and the reason given was wage inflation.

Then again, the board did not raise interest rates a further 0.25% at it's scheduled meeting in April, despite having warned that such an increase was probable.  I think we can ascribe that failure to the business members of the reserve board outvoting the academic members of the board.  There are times when practice ("flying by the seat of the pants") is better than theory (instrument flying).  Theory is that wage inflation (due to a shortage of labour) can be controlled by increasing interest rates.  Practice is that if consumers have no money, then retail business will suffer.  Practice is that home mortgage rates increasing reduces the amount of money in consumer's hands.

How can we resolve this paradox?  Let me try to provide a theoretic basis.
  1. How can there not be price inflation when Australia gets twice as much for primary mineral exports (iron ore and other minerals)?  The Chinese are producing goods for practically nothing, but they do need raw materials.  For a long time their low cost production has kept inflation low. (no Martha, it wasn't MacFarlaine's clever management of the reserve bank).  So Chinese goods are now costing more because we charge them more for iron ore and other minerals.  That is price inflation.
  2. Another issue is that the statistical measure of the CPI (Consumer Price Index) has been artificially reduced. (fiddled, if you like).  The CPI is inaccurate for several reasons, but one important reason for reduction is that (as I recall) the government ordered the royal statistician to NOT include real estate inflation in the CPI.  This has led to the situation where housing costs have been progressively excluded from the CPI.  (Do I need to expand on real estate inflation?  I thought not.).  Consequently cost of living has risen faster than the government produced CPI would seem to indicate.
  3. Another issue is the unemployment statistics.  The government, perhaps because unemployment statistics are politically sensitive, has instructed the royal statistician as to which data to include in unemployment statistics.  Consequently there are many unemployed citizens who would like to be employed (usually I suspect, having superior qualifications) but who cannot be bothered with the aggravation of registering as unemployed, and confronting the various government officials and their intrusive questions and demeaning demands.
The inference that can be drawn from (1) is that unless wages rise faster than the CPI, then workers will be obtaining a reduced real income, because the CPI is not a measure of real price inflation.  Therefore (since the government resistes real wage increases larger than the CPI) employees are probably having to work overtime or a second job, just to pay the same bills that they paid last year without overtime.

I believe that (2) and (3) are government-inflicted "corrections" that the reserve board theoreticians ignored when performing the calculations on which they increased interest rates.  I believe that if they had excluded the government specified corrections, then they would have realized that there was, after all, no wage inflation.

Because if there is wage inflation, where is it?  Who is paying the over award wages?