The Thinking Man's Fridge

KEVIN BRENNAN
Claim: It is claimed the junior minister had a £450 widescreen television delivered to his family home in Wales and then claimed it on his allowance for his second home in London.

GERALD KAUFMAN
Claim: Veteran Labour MP Sir Gerald Kaufman is alleged to have claimed £1,851 for a rug imported from a New York antique centre and tried to claim more than £8,000 for a television.

It seems that so long as you pay for delivery, you can steal what you like. One man’s suit is another man’s hoodie.

Despite the expenses system limiting claims to those things which are essential for the parliamentary duties of politicians, some claimed expenses that are simply well beyond the lifestyle of the average person, yet were happy this lifestyle to be funded at the taxpayers’ expense.

DOUGLAS HOGG
Claim: Submitted claims for more than £2,000 to clear a moat around his Lincolnshire estate.

SIR PETER VIGGERS
Claim: Claimed £30,000 in gardening expenses, including £1645 for a "duck island" in his pond.

SIR JOHN BUTTERFILL
Claim: Did not pay capital gains tax after making a profit of £600,000 from a house funded by the taxpayer. Lodged claims under second home allowance for his six-bedroom country house, complete with swimming pool and extensive grounds. He was reimbursed to the tune of £17,000 for servants' quarters.

AUSTIN MITCHELL
Claim: Expenses submitted by the Grimsby MP included 67p for Ginger Crinkle biscuits and 68p for Branston pickle.

FRANK COOK
Claim: The MP for Stockton-on-Tees claimed for a £5 donation that he made at a church service to commemorate the Battle of Britain.

JOHN GREENWAY
Claim: The MP was reimbursed for a 59p box of matches, and two boxes of firelighters worth 99p each.

SIR ALAN HASELHURST
Claim: The deputy speaker claimed £142,119 in second homes allowances since 2001, despite having no mortgage on the property.

DAVID CHAYTOR
Claim: The MP claimed nearly £13,000 for a mortgage he had already cleared. Between September 2005 and August 2006, the Labour backbencher claimed £1,175 a month in interest on his Westminster flat. However, Land Registry records show the mortgage was paid off in January 2004.

ELLIOT MORLEY
Claim: The former environment minister claimed £16,000 in mortgage interest payments on his home in his Scunthorpe constituency even though the mortgage had ended 18 months before.

DAVID MACLEAN
Claim: The former Tory chief whip claimed £20,000 for renovations on his farmhouse under the second home allowance. However, he avoided paying thousands in capital gains tax by declaring to Revenue and Customs that it was his main home when selling it for £750,000.

BARONESS UDDIN
Claim: Claimed at least £180,000 in expenses by designating an empty flat, and previously an allegedly non-existent property as her main residence.

“Tony Blair's expenses were shredded 'by mistake' when they were the subject of a legal bid to have them published.”

SHAHID MALIK
Claim: Claimed £66,827 from the second home allowance - the maximum allowed - over three years towards the cost of his London flat, bought in 2001 before he was elected. Claims over the period included £2,100 for a flat screen television, £1,420 for a bathroom, £671 for a fireplace and £730 for a massage chair.

SHAUN WOODWARD
Claim: Taxpayers contributed almost £100,000 to help pay the mortgage on a £1.35m flat owned by the Northern Ireland secretary. The money went on mortgage interest payments and council tax between 2004 and 2008 for the flat. Married to a member of the Sainsbury family and worth an estimated £15m, Mr Woodward is the richest member of the cabinet.

PAUL GOGGINS
Claim: Claimed £2,800 for a settee and £2,000 for a carpet to furnish his second home. Also accused of "flipping" his two houses in London and Manchester to make a profit. Mr Goggins also allowed a university friend to live rent-free in a home paid for by the taxpayer. Mr Goggins defended his household purchases by saying he liked to ‘live by decent standards’. "I do not lead an extravagant lifestyle, people should remember that we have to furnish our first home with our own money.”

KEITH VAZ
Claim: The chairman of the Home Affairs Select Committee claimed more than £75,000 to fund a second home in Westminster, even though his family home is just 12 miles away in Stanmore.

BARRY GARDINER
Claim: The MP for Brent North made a profit of almost £200,000 from a flat mortgaged and renovated with the help of taxpayers' cash.

STEPHEN BYERS
Claim: The former Trade Secretary used the expenses system to claim more than £125,000 for the London flat owned by his partner.

ALAN AND ANN KEEN
Claim: The Labour MPs Alan and Ann Keen, who are married, have claimed £137,679 between them towards a central London flat despite the fact their family home is less than ten miles away.

RUTH KELLY
Claim: The former cabinet minister claimed £31,000 of taxpayers' money for flood damage to her second home, even though she had a building insurance policy at the time.

IAN GIBSON
Claim: Dr Gibson claimed for a flat which his daughter and her partner lived in rent-free. It also claimed the Norwich North MP then sold it to them for less than he paid and well below market value.

BOB MARSHALL-ANDREWS
Claim: Claimed £118,000 for expenses at his second home, including stereo equipment, redecoration and a pair of Kenyan carpets.

JOHN AUSTIN
Claim: Claimed more than £10,000 for the redecoration of his London flat, which was just 11 miles from his main home, before selling it for a £30,000 profit. After buying a new property, he claimed £10,000 in stamp duty and other expenses incurred in the move and a further £15,000 for a new bathroom, kitchen, carpets, and appliances.

MARK TODD
Claim: Claimed £24,877 in expenses to refurbish his second home in London. Kitchen units, lighting, bathroom items, carpets, tiles leather chairs and a marble table were all among the goods for which he claimed.

ROGER GODSIFF
Claim: The Labour backbencher made claims for a bath mat, gardening equipment and more than £7,000 for property repairs at his home in Birmingham, labeling them as office costs.

CHARLOTTE ATKINS
Claim: The Staffordshire Moorlands MP claimed more than £35,000 for renovations to her second home, which included £20,000 for windows and £4,000 for pulling down and rebuilding a chimney.

BILL CASH
Claim: Mr Cash used parliamentary allowances to pay about £15,000 in rent to his daughter in 2004-5 after nominating her London flat as his second home. He did this even though he owned a flat closer to Westminster in which his son was staying rent free.

BERNARD JENKIN
Claim: The Conservative MP Bernard Jenkin used £50,000 in expenses to pay his sister-in-law rent for the property he uses as his constituency home.

FRANCIS MAUDE
Claim: Shadow cabinet office minister Francis Maude claimed almost £35,000 in mortgage interest payments on a London flat that he bought, close to a house he already owned and then rented out.

ROBERT SYMS
Claim: The former shadow minister for local government claimed more than £2,000 of furniture for his second home in London but had it delivered to his parents' home in Wiltshire.

CHRISTOPHER FRASER
Claim: The South West Norfolk MP claimed over £1,800 in expenses to buy 215 trees and fencing to mark out the boundary of his house. Mr Fraser stated "I have been conscious whenever claiming that my costs must be wholly, exclusively and necessarily incurred for the purposes of my parliamentary duties."

SIR ALAN BEITH
Claim: Sir Alan, the first MP to declare an interest in succeeding Michael Martin as Commons Speaker, claimed £117,000 in second homes allowances while his wife, Baroness Maddock, claimed £60,000 from the House of Lords for staying at the same address.

The planning profession needs to narrow its perspective. Regardless of its roots in various social fields throughout time, it exists to perform a very specific role and fulfil a specific need. As the profession is continually watered down with other concerns and goals, it is doomed to fail, and will only succeed in churning out and endless supply of urban environments which will be a jack of all trades, and a master of none.

Planners need to make the decision as to whether they are going to create a Functional City or a Foolproof City. The only problem with trying to create the latter, is that as soon as you make something that is foolproof, someone designs a better fool.

Planners need to abandon the responsibilities hoisted upon them by other notional groups in society who either have little or no understanding of what the planning profession is all about, or have given up trying themselves. We need to build functional cities – cities that work. Not walkable, thin, healthy, visually attractive, crime-free, pollution-free cities. We should not concern ourselves with the principles of CPTED – we have police and a judicial system for this. We should not concern ourselves with redesigning cities to be ‘walkable and healthy’ – we have basic education and a health system for dealing with this.

Look at Mexico City – it is a functioning city. It has nearly 30 million people, but you can still get from one side to the other on public transport in under 30 minutes. Perth, regardless of the criticism it receives due to its sprawl, is a functioning city. It houses over 1.5 million people, and yet you can still drive from its northern-most suburbs to its southern-most in less than an hour. There is a wide diversity of housing styles, from high-density towards the city, to an endless supply of the Great Australian Dream, to semi-rural style living within 20 minutes of the city centre. It may not be attractive, crime-free, healthy, or pollution-free, but it functions as a city, and that is the key.

What society wants planners to do is create the foolproof city, but we will constantly be undone by a more superior fool. We need to let go of the notion that we can simply trick people into walking to work by making the streets look attractive. We need to let go of the notion that we can trick people into being healthy by making them ‘accidentally’ get exercise whilst walking to an imaginary ‘public meeting space’. We need to let go of the notion that we can simply fool people into taking public transport and leaving the car at home. These are real people we’re talking about here. Society seems to forget that.

Planners are not here to pick up the pieces of a justice system which fails to deliver. Do they really think that the problems with Aboriginal gangs in Northbridge are the result of poor planning decisions? It is only blamed on planners because to suggest it’s the fault of the Aborigines is somehow racist. So we look for non-specific, nondescript groups to pin the blame on, like ‘planners’ and ‘the welfare system’. That way, no-one is offended, and we can go on complaining about it because no-one will be able to work out why we can’t seem to solve the problem by adding public lighting. They’re Aborigines, not vampires.

We are not here to provide exercise and health benefits when our food producers promote expediency and profit above healthy and responsible foods. We are not here to save the environment when the Capitalist system encourages profit before environmental sustainability. We are not here to save the environment when builder fail to use environmentally sustainable practices, like recycled materials, lightweight construction, and alternative solutions like hemp-based concrete. We will never achieve this as long as these methods are constantly referred to as ‘alternative’ building methods. They need to become the norm. They need to challenge how things are done, when they’re only done that way because they’ve always been done that way.

Planners need to focus on building a functional city. Once that is done, a functional justice system can work on providing the security and safety we need. After all, that’s what it’s there for. Once it’s there, the building companies can reduce the environmental impact. After all, that’s where the real damage is done. Once it is done, the food suppliers can provide all the healthy food we need, and the education system can empower people to make smarter choices. After all, that’s what they’re there for. And if that doesn’t work, and people still eat themselves into obesity and an early grave, well… who cares. That’s the best thing about a democracy. That’s their decision, and they’re free to make it. I’m not going to redesign an entire city because some fat bastard can’t get off the couch. I mean, shit, we even make shows like the Biggest Loser to get the message across, but it really just gives them another reason to spend another 30 minutes sitting on their asses. Does no-one get the irony?

Urban sprawl exists not just because we couldn’t see far enough into the future to realise the problems it would cause. It exists because it serves a purpose, and in serving that purpose, urban sprawl works. It provides space for those who value it as a necessity. It provides options of lower-cost housing. It provides a sense of living that some people value. It’s not everyone’s cup of tea, but people are not lemmings. They have their own needs and values.

A functioning city will also have roads. Lots of them. The notion of a ‘walkable city’ is entirely unrealistic. Goods will always need to be transported. Walking to the shop is fine for a litre of milk, but not when you’re doing the weekly shopping for a family with 3 kids, or shopping for a new fridge, or a 42” plasma. Or when it’s raining. Or when it’s a hot day. I’m fairly certain when the washing machine repairman comes around to fix my washing machine, he’s not going to come by bus, bringing his tools and spare parts with him. Neither is the guy who comes to mow the lawns, the guy who comes to clean the pool, or the guy who comes to install the Foxtel. And while I’m happy to live within walking distance of a sporting facility, I can’t vouch for all the other people in my team, or all the other people making up all the other teams who we play against.

Planning will ultimately fail when it blindly follows unachievable goals like those presented by theories such as New Urbanism. We laugh at people when they take a horoscope as gospel. We laugh at them when we point out that for a horoscope to be true, one-twelfth of the world’s population would have to have exactly the same personality traits and characteristics. Yet we revel in the notion that if we design a city to be visually attractive and walkable, 100% of the population will react the same way, and we can save society from itself and its obesity. This is nonsense. Such rhetoric and broad generalisations will get us nowhere.

The planning profession needs to abandon the notion of the foolproof city. So too, the notion of the ideal city, the perfect city, and urban utopia. These things can never exist, and never will as long as society continues to grow or change. We cannot succeed as long as we challenge ourselves to meet goals and expectations that cannot be measured. How can ‘sprawl’ be measured. Who is to say that the detached dwellings on 300m² R30 lots will not be the ‘sprawl’ of the future? Yet this is being heralded as evidence that urban consolidation is alive and working. We will never win a battle against an immeasurable entity. We can not win a war against a noun, just like the ‘war on drugs’ or the ‘war on terrorism’. We can, however, design a functioning city, and we can design it very well.

“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. Corporations have been enthroned, an era of corruption in high places will follow, and the money-power of the country will endeavor to prolong it's reign by working upon the prejudices of the people until the wealth is aggregated in a few hands and the Republic is destroyed” (Abraham Lincoln)

I can sum up my feelings on this one in one simple edict – Corporations are bastards because they actually believe that ‘globalisation’ should only work for them.

Corporations love globalisation (read ‘exploiting poorer nations’) as it allows them to bypass those tricky parts of national laws like Occupational Health and Safety, Minimum Wages, Union Representation and Environmental Responsibility, and manufacture sh*tty plastic goods for absolute rock-bottom costs. Megalopolis crap-merchant Wal-Mart have a very simple policy when it comes to this ideology: if it’s made in America, it doesn’t make it to Wal-Mart shelves. They serve as nothing more than a retail outlet for mass-producing Chinese factories.

However, when the consumer tries to use globalisation and the so-called ‘global economy’ to their own advantages, Corporations cry bloody murder, and try to grind it to a halt.

Case in point: Line 6. Line 6 are well known for making musical equipment, and perhaps their most revolutionary item was the famous Pod range, and its associated spin-offs. To buy a Pod Pro unit in Australia, it carried the RRP of $1600-$1950, depending on the unit. However, for me to buy one new from the US, and ship it over to Australia cost me $450. That’s even taking into account the paltry exchange rate. The question is, why would ANYONE buy locally when globalisation provides such a cost saving? Well, they wouldn’t, and everyone is happy.

Until something goes wrong.

And here’s the kicker… when something goes wrong, Line 6 Australia don’t want to know about you. They can’t help, because even though it was bought new from a licensed retail outlet, and even though it has a receipt, it wasn’t bought in Australia.

So f*cking what? It wasn’t built in Australia either, you dumbsh*ts. It was built in the same forced-labour sweatshop in Mexico as the ones which ARE sold in Australia. What’s the difference? But things get really strange when even the Line 6 in the US say they can’t help, because it was sent out of the United States. Again, they were shipped into the US from Mexico, so what’s the difference?

The difference is when consumers begin to use globalisation to benefit themselves through competitive pricing, the bastard Corporations don’t get to rely on the income from grossly inflated pricing structures used in the consumer’s native country to multiply their obscene profits. Line 6 Australia won’t be able to charge me $1900 for the exact same item from the exact same Mexican sweatshop which I bought myself for $450. Boo hoo.

The simple solution? Buy another item in Australia, switch it with the dud, and take it back for a refund. The unit now gets sent back to Line 6 for repair anyway. Way to go, corporations! I can, and I will, because f*ck you.

The truth is, behind all the hype about the global economy and the wondrous benefits of globalisation, it’s simply not meant for you and me. It’s meant for national Corporations to increase profit margins through the exploitation of poorer nations into mass producing sh*tty products at such a low price that dumbsh*t consumers will overlook the notable lack in quality. Anyone who sees it as more than this is quite simply kidding themselves…

Kevin Rudd made a very popular decision recently to increase the First Home Buyer’s Grant from $7,000 to $21,000 for newly-built homes. While this appears to be a generous bonus for first home buyers, in reality, nothing could have been further from Rudd’s mind.

One of the most reported outcomes of the Great Depression in the 1930’s was the ‘run’ on the banks, when people began to realise that the money they put in the bank doesn’t just sit there on a shelf gaining interest – it needs to be invested somewhere else to do that. This is how banks make a profit. Back then the banks relied on the fairly safe assumption that every person won’t want all of their cash at the one time. As we saw, people got scared, and the banks assumed wrong.

With the news of the ‘economic crisis’ spreading to Australia, Rudd made two moves to help support the banks. First, he guaranteed people’s savings so that people would feel safe leaving their money in their accounts, which the banks actually have invested elsewhere.

Secondly, he announced that he would triple the First Home Buyer’s Grant.

Why is this such a bad thing? Let’s face it – two days before the announcement, if someone told you to go to a bank and borrow $400,000 to buy a house, you wouldn’t touch it. Now, first home buyers (generally those at the lower end of the economic spectrum) are going to be falling over themselves to take advantage of the offer.

Put simply, Rudd’s plan is to support the banking system by encouraging people, particularly those who can least afford it, to jump into massive borrowings and personal debt. He’s trying to solve the current economic problems caused by the banks by using a taxpayer-funded carrot to get everyday people to borrow more from them.

But perhaps the most conflicting news came two weeks after Rudd’s announcement to triple the FHBG, when the first of the Big Banks announced that even amidst the ‘economic crisis’ gripping the world, they’d cleared $8 billion in profit. That’s one company with a profit equal to more than one third of the entire nation’s budget surplus.

So wouldn’t it be fair to ask for some of that taxpayer-funded $21,000 back? After all, that $8 billion profit of just one bank is roughly equivalent to 381,000 First Home Buyer Grants, and I just don’t see there being that many first home buyers out there at the moment.

At the end of the day, a mortgage is an exclusive relationship between a home ‘owner’ and a bank. It does not benefit the greater society in any way. The home ‘owner’ gets to borrow a house to live in. The banks get to reap in profit from the repayments (a $400,000 mortgage at 7% over 30 years will reap in nearly $560,000 in interest repayments, on top of the original $400,00 which needs to be repaid – that’s nearly $1 million in total). This is then invested elsewhere, for even further growth.

I guess my question is, if the banks require lucrative carrots to be thrown about to keep them in business, why does it have to be the taxpayers funding it? I pay my taxes for the government to build roads, schools, hospitals and getting me a better seat at Subiaco stadium. Surely the banks can take $21,000, or even more, out of that $560,000 interest and still turn a healthy profit?

My post below outlines why I think the Paulson Plan is an outright terrible idea. But just when you thought the idea to dump US$700b into the failing banks in the United States couldn’t get any worse… it has.

Recent insight from an interview by Rep Brad Sherman provides some further clarity on the plan:

"It (the bill) provides hundreds of billions of dollars of bailouts to foreign investors… The Bank of Shanghai can transfer all of its toxic assets to the Bank of Shanghai of Los Angeles which can then sell them the next day to the Treasury. It had a provision to say if it wasn't owned by an American… the Treasury can't buy it. It was rejected.

“The bill is very clear. Assets now held in China and London can be sold to US entities on Monday and then sold to the Treasury on Tuesday. Paulson has made it clear he will recommend a veto of any bill that contained a clear provision that said if Americans did not own the asset… that it can't be sold to the Treasury. Hundreds of billions of dollars are going to bail out foreign investors. They know it, they demanded it and the bill has been carefully written to make sure it can happen."

Hmmm. This helps to explain why, for nearly a year, investors and foreign banks have been buying up billions of dollars worth of debt from US banks. They’ve been able to buy up huge amounts of debt, at bargain basement prices, with the intention of selling it back to the United States Treasury, to be dumped on the tax-paying American public.

Now, here’s the real kicker…

On September 29, the Bloomberg News reported that "the Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression. The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide”.

What’s that? The Federal Reserve has ALREADY dumped close to US$650 billion into the failing banks to prop them up, and it HAS NOT WORKED. Why then, is Henry “no Plan B” Paulson’s suggestion to dump another US$700 billion of taxpayer money into the problem going to make any difference, particularly when most economists estimate the true damage to be between US$3-5 trillion?

Wouldn’t the tax-payer money be better spent on education, health care and infrastructure? What are the odds that Goldman Sachs (the bank where Paulson worked since 1974, and who paid him an estimated US$35 million in 1995 alone as the CEO) gets a good seat at the table when it comes to dividing up the US$700 billion amongst the banks?

“What we are witnessing today is how empires end” (Buchanan, 2008)

The United States’ Treasury Secretary Henry Paulson’s plan to pour US$700 billion into the failed banking system is possibly the worst idea hatched yet under the Bush administration.

Firstly, forget that since mid-2007 thousands of home ‘owners’ around the US have lost their properties under forced foreclosure (a search of any foreclosure website will list hundreds upon hundreds of listed properties over the past 12 months alone), and that throughout this time the US government has not been able to find a cent to help these people out. Also, forget that the CEO of one of these failed banks walked away with a US$10 million dollar bonus, as the bank he ran into the iceberg slipped below the waves. And now that it's the people at the top who are in trouble, the US government has US$700 million to throw into the fray?

As with so many disasters, the banks are crying ‘Government, save us!’, even though it was not the government that got them into trouble. It was the Federal Reserve and its cheap money, reckless ‘gambling’ and inflated valuations of assets which got the banks where they are.

The first sign that something is awry here is that Henry Paulson has openly admitted that “there is no Plan B”. The second is that he is the ex-CEO of Goldman Sachs, one of the very banks he is trying to help out, as he watched others like Lehman wipe themselves out.

Economist Nouriel Roubini notes that "the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer”.

In many ways the United States' economy needs the recession-come-depression that is coming. It is built on money that, quite simply, does not exist. One of the biggest rorts in the history of the Wall Street model is the mortgage-backed derivatives market which has got the US into the situation it is now.

Derivatives are essentially bets. The problem is, however, that unlike investing in a tactile commodity, derivatives actually create nothing. Worse still, you can gamble with things that you don’t even own. And herein lies the problem. This process was essentially made legitimate in the 90’s by the Federal Reserve Chairman and general dirty sh*t Alan Greenspan, when the process was challenged as an illegal form of gambling. Basically, derivatives have no value, but derive value from something else. This is very similar to the modus operandi that brought down Enron, regarded as the corporate scam of the century.

To outline how grossly inflated the situation has become, the Bank for International Settlements recently reported that total derivatives trades exceeded $1000 trillion, which is remarkable given that the GDP of all the countries in the world combined is only around $60 trillion. The bankers have been free to bet as much as they want, even with money they don’t have (or doesn’t even exist). Warren Buffett refers to derivatives as "weapons of financial mass destruction". What we are seeing now is just the system starting to find its natural equilibrium.

Now, here’s the REAL catch. Why does this system need the US government to pour in US$700 billion? Because that’s a GUESS of the grossly-inflated value the banks put on their own assets.

The Bush administration AND the banks claim that the banks’ assets cannot be sold, but this in not true. These assets can be sold, but only for a fraction of the inflated value that the banks place on their OWN assets. Hence, to sell them at the real market price would leave the banks broke. And here’s the kicker – Paulson’s US$700 billion plan revolves around the US government buying these bank assets at the full inflated price. It’s really that simple. The banks then keep their grossly inflated value, but converted to cash instead of thin air, and the debt gets transferred to the taxpayer, through the hands of the US government.

The question that stands out is why should American households earning $50,000 a year subsidise the Goldman Sachs partners who earn $5 million a year, and who have been gambling at this insane rate for years, and bringing the current situation upon us?

And for those that still don’t feel that something fishy is going on, prior to their bankruptcy, 14% of Lehman Brothers’ assets fell into the 'imaginary' category described above, yet Goldman Sachs is still in business despite the fact that 13% of their assets are in the same boat. Perhaps if the Treasury Secretary claiming that Congress needs to endorse this plan immediately, and that there is no Plan B, wasn’t once the CEO of this bank, they would have succumbed to their own fraud long ago.

So why do I care what happens with this latest Wall Street collapse? I care because the media, particularly in Australia, is mindlessly spouting the virtues of this bailout plan without understanding what it’s all about. Just this morning, the presenter on Channel 9’s morning program dropped into an interview that “the US Congress need to consider this plan again, and we’re praying they accept it”. How did the media lose the ability to scrutinise what they spew forth? I’m not praying that Congress accept it. Maybe their initial decision to knock back the disgraceful Paulson Plan is the first step in restoring sense and order to an economic system built on thin air?