In short: housing is extremely expensive in Australia; we may well be in line for a major correction in house prices; and there appears to be an oversupply of housing, not the oft-cited undersupply.

It’s very interesting to note that for all the talk of how Gen X/Y should just tighten their belts, learn some financial discipline and put in the hard yards to save money if they want to purchase a house, the ratio of income to housing in Australia is far, far worse today than it was in the 1980s, or indeed up until about 1997.  It will be a disaster for the future of the country if an entire generation is talked into excessive debt and then left with houses worth only a fraction of what was paid for them, rising unemployment and rising interest rates.  If that does happen I trust that the real estate institutes, bankers and politicians who constantly talk up the housing market will be the first against the wall.

Similar issues are canvassed in this piece in today’s Age, which is also a good read (and less economics-heavy).

However, as this article suggests, as is also the case with most Google services there are hidden catches which most users should, but probably won’t, be aware of.  I’ve written about EULAs before, and the Chrome EULA is a cracker.  The main issue is this clause:

7.3 Google reserves the right (but shall have no obligation) to pre-screen, review, flag, filter, modify, refuse or remove any or all Content from any Service. For some of the Services, Google may provide tools to filter out explicit sexual content. These tools include the SafeSearch preference settings (see http://www.google.com/help/customize.html#safe). In addition, there are commercially available services and software to limit access to material that you may find objectionable.

To understand what this clause is saying, we need to understand what “Services” and “Content” are in this agreement. Services are defined in clause 1.1 to include:

Google’s products, software, services and web sites

So Services would include Google’s web search, Picasa, Google Maps, and the Chrome browser itself.

Content is defined in clause 7.1 as follows:

all information (such as data files, written text, computer software, music, audio files or other sounds, photographs, videos or other images) which you may have access to as part of, or through your use of, the Services

Content would arguably include any websites or images you access via Google search, and anything at all that you access using Chrome as your browser.

Let’s assume, as seems to be the case, that the purpose of the majority of Google’s “Services” is to provide access to information in the form of “Content”.  The sting of clause 7.3 is in the following: Google “reserves the right … to pre-screen, review, flag, filter, modify, refuse or remove any or all Content from any Service.“  This is an extremely broad clause, and legitimises any number of actions Google might elect (at its discretion) to take with respect to “Content”.  In particular:

• “pre-screen” suggests that Content may be subjected to certain criteria before it is provided;
• “review” suggests that Content may be scrutinised after it has been accessed by a user;
• “flag” is one of the more disturbing words used, and is clearly not limited to flagging particular issues to the user – it could also quite reasonably be said to include flagging certain content to Google or to the authorities;
• “modify” suggests that Content may be manipulated from its original state (without the user necessarily being aware of that fact) before being provided to the user;
• “refuse” suggests that Content may simply not be provided in some circumstances; and
• “remove” indicates a degree of intervention in Content which has already been accessed.

On a generous reading of the intention behind this clause, it might be concluded that Google wishes to protect itself from lawsuits in circumstances where it, for example, does not transmit viruses or other malicious software to users, or where it automatically provides optional content filtering against porn and the like (e.g. “moderate safesearch”, which is turned on by default in Google Image Search).

However, a generous reading of intention does not limit the rights that you confer on Google when you agree to the EULA.  If you use Chrome as your web browser, then based on the clear terms of the agreement, you have agreed that Google has the right to:

• monitor what you are or have been looking at on the web and store that information (‘review’ or ‘pre-screen’);
• transparently alter websites or other information you access using Chrome so that you are in fact viewing a modified version without knowing it (‘modify’);
• report you to the authorities if you access specific content, identified solely according to Google’s own policies or arrangements with said authorities (‘flag’);
• make it appear that websites or other information is unavailable when in fact it is being filtered (‘refuse’); and
• delete information from your web browser (e.g. cookies, bookmarks, history) or arguably even from your computer (content downloaded via Chrome) at its discretion (‘remove’).

So, to put the foregoing in the form of tangible (but purely hypothetical) examples, by agreeing to the EULA you have agreed that if Google wanted to, and so long as you are using Chrome, it could:

• prevent you from accessing information about euthanasia or abortions;
• prevent you from accessing the websites of specific political or social organisations;
• report you to the police if you access particular kinds of pornography;
• report you to anti-terrorism authorities if you are doing research into islamic terrorism;
• silently modify statistical or factual data on a website you are accessing;
• silently doctor photographs or maps;
• prevent you from accessing websites critical of Google (like this one, I suppose!);
• store everything you look at and mine it for commercial or personal data at a later date; or
• delete bookmarks of websites of Google’s competitors from your browser .

I am happy to admit that Google probably won’t do any of those things, at least in the West.  It would be commercially foolish at best.  But Google already has a track record of cooperating with nasty totalitarian governments in censoring the Internet.  So it should at least be assumed that Google might do some or all of the above.  It is also known that Google stores and mines all of your email sent or received via Gmail (don’t email me from Gmail addresses, god damn you) for its own commercial purposes, as well as storing it in random places where it may be subject to warrants or government spying.

There’s a simple solution, of course: don’t use Google Chrome.  When you have the choice of using a web browser which definitely won’t do any of the above, it would be insane to use one which exposes you to even a slight possibility of any of those things occurring.  Ideally, therefore, you should use Firefox or even Internet Explorer in preference to Chrome.

If you care about your privacy and having unfettered access to information, I would suggest that steering clear of Gmail, Google Web Albums and any other service where you actually upload or download data using Google products is a good idea.  If you use Firefox, you may also like to use the excellent CustomizeGoogle plugin to control how much information about you Google is actually collecting.

Until Google learns to totally respect its users freedom to access and use third party information anyway they see fit and without corporate oversight, they do not deserve your business, even with respect to their “free” browser.

Rather ponderously paced, but an interesting insight into the drastic effect the corporatisation of farming had in the U.S. The theme of vast, anonymous commercial organisations arbitrarily destroying productive industries and lives certainly resonates in 2009.

So why do we persist in calling trade agreements with countries that lack basic labour and environmental standards “free” trade agreements?

Prediction 1: in 20 years we will look back and wonder why the hell we didn’t realise that we were trading the basic modern standards we have fought for for and developed over the last century or so for cheaper goods and services in the short term.

Things are only “cheaper” to make in these countries in instant dollar terms – the actual costs are borne by the workers there who suffer extraordinarily poor conditions, the workers here who lose their jobs or have their conditions eroded in the name of ‘competitiveness’ and ‘efficiency’, and by all of us who live in a degraded and polluted environment thanks to outsourcing our productive industries to countries with poor environmental standards.

Prediction 2: at some point in the future, the notion of ‘protectionism’ will be revised to permit the imposition of tariffs on countries whose standards fall significantly below our own in order to defend those standards in our own country and remove the economic incentive to exploit labour and destroy the environment.  It will be recognised that there is a distinction between using trade barriers to protect inefficient industries and using trade barriers to protect legitimate human rights and environmental standards.

As Robert A Heinlein put it, TANSTAAFL (“There ain’t no such thing as a free lunch”, a theme in Heinlein’s novel The Moon is a Harsh Mistress).

I find it very disturbing to read words put forward by Telstra which closely mirror my own views.  I wonder if I have woken up in some kind of parallel universe, or perhaps I have become a being of pure evil myself and suddenly Telstra’s views and my own coincide for that reason.  There are also odd overtones of A Christmas Carol – has the Ghost of Christmas Present touched Telstra’s cold, corporate heart by showing it the sight of Australian families weeping around their Internet bills for $12,323 in excess use charges for December?  Anyway, Telstra says, for example, that the common law alone is too ‘soft’ to support human rights and:

The more responsive but equally unsatisfactory notion of responsibility to parliaments – the slim convention of ministerial responsibility – is also no substitute for clearly articulated, enshrined, human rights protections.

The notion of ‘speaking truth to power’ usually gets applied to the courageous little guy fighting for what is right, not the hive-mind megacorporation fighting for… well, something:

The available data suggests that Australia’s human rights record does not compare overwhelmingly favourably with other countries.

There is a hint in the article linked above to Telstra’s true motivation: corporate self-interest, of course:

However, Telstra says in its submission that apart from a general concern for human rights, the company is particularly interested in values such as due process and free speech, “given the highly regulated nature of much of its business”.

In other words, Telstra realises that it is in the difficult position of being a private company which, despite privatisation, is almost entirely controlled by the political whims of the Federal Government, and it wants to have stronger positive rights to throw back at its former masters when things don’t go to suit it.  No doubt it finds the idea that every ministerial decision be subject to a raft of reviewable rights which it can then unleash its extremely high powered legal resources on is very appealing.

Realising that strong systems of due process and accountability are an effective way to achieve independence shows an unusually high degree of insight and creative thinking for such a big, slow moving organisation.  I still loathe many aspects of Telstra – case in point, the guy I saw on TV in a story about the Victorian bushfires who had just returned to his destroyed home to find nothing but his mailbox with a Telstra bill in it (one assumes that Telstra’s billing department has some manner of robotic, fire-proof suit to deliver bills in firestorms and make sure that no-one can shirk their obligations through wussy excuses like “my entire home was razed to the ground”).

But if the push for a serious set of human rights in this country gets a boost from Telstra’s considerable financial and propaganda resources that’s absolutely fine by me.  I just hope no-one mentions to it that it’s not actually human, and therefore may find it hard to take advantage of human rights…

Well, it was – of course – too good to be true: the files may let you copy them freely, but they also contain personal information to allow anyone who cares to look to identify you (or at least, your iTunes customer details). What that inevitably means is frivolous lawsuits aplenty for anyone whose iTunes files somehow find there way onto a file sharing site.

To summarise:

• copyright is broken when it comes to personal copying and use of music and video
• the music industry still doesn’t understand its own market, even a little bit, and is waging war on its own customers
• Apple is just as much of a money-grubbing sellout of a company as Sony, Microsoft, and all those ‘bad’ companies despite its constant attempts to show how “different” it is

Guess which music download service I will continue not using?

(thanks to Karloskar).

Now, in what seems not to be a coincidence (perhaps a coordinated campaign was agreed to in some Bond villain-esque meeting room), the film studios have decided to have a serious crack at on-line piracy in Australia by suing iiNet in relation to the distribution of copyright material via bittorrent by its users.

I checked out the claim (Roadshow Films Pty Ltd ACN 100 746 870 & Ors v iiNet Ltd ACN 068 628 937; Federal Court of Australia action NSD1802/2008). There are an epic number of applicants (aka plaintiffs):

Beverly Blvd Llc
Buena Vista Home Entertainment
Columbia Pictures Industries
Inc Disney Enterprises
Dream Works Films Llc
Gh One Llc
Gh Three Llc
Internationale Fileproduktion Richter Gmbh ; Co Kg
Internationale Filmprodukition Blackbird Vierte Gmbh ; Co Kg
Lonely Film Productions Gmbh ; Co Kg
Mdbf Zweite Filmgesellschaft Mbh ; Co Kg
Inc Nbc Studios
Paramount Home Entertaiment (Australasia) Pty Ltd
Paramount Pictures Corporation
Patalex Iii Productions Ltd
Ringerike Gmbh ; Co Kg
Roadshow Films Pty Ltd (Acn 100 746 870)
Seven Network (Operations) Ltd Acn 052 845 262
Sony Pictures Animation Inc
Sony Pictures Home Entertainment Pty Ltd Acn 002 489 554
Twentieth Century Fox Film Corporation
Twentieth Century Fox Home Entertainment Australia Pty Ltd Acn 076 486 470
Twentieth Century Fox Home Entertainment International Corporation
Twentieth Century Fox Home Entertainment Llc
Universal City Studio Procductions Lllp
Universal City Studios Lllp
Universal Pictures (Australia) Pty Ltd Acn 087 513 620
Universal Pictures International
Universal Studios International B.V
Village Roadshow Films (Bvi) Ltd
Warner Bros Entertainment Australia Pty Ltd Acn 003 773 411
Warner Bros International Television
Warner Bros. Entertainment Inc
Warner Home Video Pty Ltd

iiNet is all alone as the respondent. It’s interesting to note that the plaintiffs picked iiNet as their target, rather than (say) Telstra.

The matter is before Justice Cowdroy, who is by all accounts a scrupulously fair and even handed Judge. His Honour has an interesting history as a barrister (including “air and space law”), although it’s hard to glean much information about his personal political or intellectual leanings. He has not delivered much in the way of judgments on copyright, other than one decision about toilet bowls.

I did find the following remarks (from his Honour’s speech upon his appointment to the NSW Land and Environment Court) interesting, and they might give some comfort to iiNet if his Honour ends up being the trial judge that he will not be taking a radically pro-property owner approach:

The environment belongs to us all. It is a recognition that has come to us as lawyers somewhat late in the day, yet the Indians recognised the beauty of the environment and its protection more than one hundred and fifty years ago. In 1854 the American President wrote to a Red Indian tribe offering to buy their lands. Their chief, Chief Seattle, responded. He was puzzled at the concept that someone could offer to buy the land and the environment which had been the ancestral home of the Red Indians. He responded in a statement which is regarded as the most beautiful and profound statement on the environment ever published. One statement in it reads:

How can you buy or sell the sky, the warmth of the land. The idea is strange to us If we do not own the freshness of the air and the sparkle of the water how can you buy them. This we know. The earth does not belong to man. Man belongs to the earth.

The applicants explain their claim thusly:

The companies seek a ruling that iiNet infringed copyright by failing to take reasonable steps, including enforcing its own terms and conditions, to prevent known unauthorised use of copies of the companies’ films and TV programs by iiNet’s customers via its network.

In other words, the complaint is that iiNet should have taken steps to stop its users from infringing copyright. There is some recent authority for this type of claim, in particular Cooper v Universal Music Australia Pty Ltd [2006] FCAFC 187. In that case an operator of a website which provided links to copyright material was held liable for copyright infringement. That case, and this claim against iiNet, raise significant questions about the degree to which a service provider must be involved in copyright infringement in order to be taken to have “authorised” that infringement within the meaning of the Copyright Act.

For example, it might well be argued that iiNet permitting the use of bittorrent traffic at all amounts to ‘authorisation’ because it is aware that many people use bittorrent for copyright infringement. In Universal Music v Moorehouse [1975] HCA 26, the High Court held that a university was liable in respect of copyright infringement committed by students using a photocopier located in a library. Gibbs J said:

…a person who has under his control the means by which an infringement of copyright may be committed – such as a photocopying machine – and who makes it available to other persons, knowing, or having reason to suspect, that it is likely to be used for the purpose of committing an infringement, and omitting to take reasonable steps to limit its use to legitimate purposes, would authorize any infringement that resulted from its use.

By analogy, it might be said that iiNet has provided the means by which an infringement of copyright may be committed (i.e. Internet access), made it available to other persons (its users), and knows or has a reason to suspect that it will be used for the purpose of committing infringements of copyright. A great deal will therefore hinge on whether iiNet is found to have taken “reasonable steps” to limit the use of the service to legitimate purposes. Another distinction which might be drawn by iiNet is that identified in Australian Tape Manufacturers Association Ltd v Commonwealth [1993] HCA 10:

It follows that manufacture and sale of articles such as blank tapes or video recorders, which have lawful uses, do not constitute authorization of infringement of copyright, even if the manufacturer or vendor knows that there is a likelihood that the articles will be used for an infringing purpose such as home taping of sound recordings, so long as the manufacturer or vendor has no control over the purchaser’s use of the article [...] It was the absence of such control in C.B.S. Songs Ltd. that constituted the critical distinction between the decision in that case and the decision in University of New South Wales v. Moorhouse, where the University had power to control what was done by way of copying and not only failed to take steps to prevent infringement but provided potential infringers with both the copyright material and the use of the University’s machines by which copies of it could be made Accordingly, in Moorhouse, authorization was made out.

It can only be hoped that the Court takes a practical and realistic view of the nature of the Internet and bittorrent, and tends to the latter view of the nature of iiNet’s actions as a result. The Copyright Act itself provides some assistance to iiNet. For instance s 112E provides that:

A person (including a carrier or carriage service provider) who provides facilities for making, or facilitating the making of, a communication is not taken to have authorised any infringement of copyright in an audio‑visual item merely because another person uses the facilities so provided to do something the right to do which is included in the copyright.

Section 101 of the Copyright Act will no doubt also be relevant, cryptically named “infringement by doing acts comprised in copyright”, as will the ‘safe harbour’ provisions enacted fairly recently in respect of ISPs.

More fundamentally, this case highlights what I see as a critical problem with the current legal framework for dealing with copyright infringement: the Internet has made it trivially easy, and even people who are not in any sense tech-savvy can commit numerous, heinous breaches of the Copyright Act with a few mouse clicks. So many ordinary people were downloading US television programs via bittorrent that we (finally) have broadcasts in Australia which are nearly up-to-date with their US counterparts. Although this type of copyright infringement isn’t necessarily something to be completely ignored (depending on your point of view), there is a very great disparity between the magnitude of the conduct (click, click, minimise window), the harm created (possible arguable maybe hypothetically slightly dimished prospect of that person watching the same episode of that program when it is finally broadcast or buying the DVD), and the penalties which potentially apply (criminal conviction in some cases, and fines in the tens of thousands of dollars).

I will be following this case with interest and will provide updates in due course.

Markets, we are told, continually process available information to spit out accurate gauges of reality in the form of prices. That’s the theory. The reality: Markets are frequently inefficient, and dominated by humans, with all their frailties. “The view that people in finance are rational is wrong,” says Alex Edmans, a Wharton School of Business economist who studies behavioral finance. “They’re susceptible to emotion just like anyone.” In recent weeks, the emotions they have been expressing include anxiety, panic, rage, and resignation. In the Depression, skittish investors would cause runs on the bank by lining up on the sidewalk to withdraw cash. In the past several weeks, we’ve witnessed a 24/7 digital run on financial institutions as investors, banks, corporations, borrowers, and lenders worry that their assets simply aren’t safe. This panic has shown similar dynamics to previous ones. But because of the rapid shift in the structure of the global financial system, it’s also completely different. As a result, the amount of selling and declines are far greater than would be warranted by the erosion in the fundamentals. Call it the fear factor.

My personal view is that there is something inherently wrong with a system which permits ultra-short term speculation, and that one way to reduce the impact of perception and irrationality is to slow down the entire purchasing and, particularly, selling process. This would force investors to take the opportunity to consider reality in a composed and rational manner, rather than producing a fight-or-flight reaction to significant events.

Of course finance experts, merchant bankers and the ‘Business’ section of the Australian would no doubt tell me I have no idea what I’m talking about – but recent events tend to suggest that neither do they.

It’s written with a clear-eyed understanding of modern US history, and in particular highlights the twin sources of damage to the American ‘brand’ abroad represented by the apparent collapse of the laissez-faire approach to the financial system and the mistakes of post September 11 foreign policy. It also addresses the domestic political trends which have led to the present situation, whereby both Republicans and Democrats had bought in to a similar view on the need to regulate particular parts of the economy.

Fukuyama argues that there is a real prospect that America’s ability to project power, be it military power or ‘soft’ power, will be severely diminished, and that this may have long term implications for the promotion of liberal democracy around the world.

In the first instance the IRC ruled that she had been unjustly sacked, and (in essence) that what Telstra’s employees did in a hotel room in their own time was none of the company’s business.

However, on appeal the IRC has overturned that decision and ruled that the sacking was legitimate.  To summarise the reasoning, “it’s not because you had sex – it’s because you lied about it when Telstra asked you.”  Apparently refusing to answer questions about the incident when Telstra was investigating a harassment claim was sufficient to break the bond of ‘trust’ between the employer and employee and justify dismissal.  A less artful way of looking at it is that the IRC held that if your employer receives a harassment complaint then you are obliged to tell your employer who you f**k, and the circumstances in which you f**k them.

Although the phrase is often misused and is generally cringe-worthy, it’s hard to disagree with the employee’s lawyer when he calls the decision “un-Australian”.  It smacks of the philosophy of everyone’s favourite corporate state, the United States – your employer has an absolute right to control every aspect of your life, and if you don’t like it your only recourse it to get another job.  After all, it’s an employee’s market, as we’re so often told.

A right of appeal lies to the Federal Court – one can only hope that it is pursued, and our right to do whatever the hell we want, to whichever consenting adults we want, in privacy and outside of work hours, and without having to disclose the details to our employer is reinstated before we go too far down this path.

Another question: if we had a bill of rights, would this amount to impermissible discrimination on the basis of sexual preferences?