Sunday, February 26, 2012

Friends of Science in Medicine: Hypocritical call to action

[Post moved to other blog.]

Update: 17-Jul-2012: There is now considerable blowback from the Medical Community towards Dwyer and his "little Friends". The MJA [Medical Journal of Australia, behind a paywall] of 16-Jul had multiple articles on this topic.

From a report on the Editorial and associated articles.

Professor Stephen Myers, SCU [Southern Cross University]:
“the real benefit of an appropriately mentored and approved university education is the exposure of students to the biomedical sciences, epidemiology and population health, differential diagnosis, safe
practice and critical appraisal."
Professor Paul Komesaroff, Monash University, on MacLennan's MJA in editorial in March-2012:
“exceed the boundaries of reasoned debate and risk compromising the values that FSM claims to support”.
Professor Komesaroff:
"while there was now an extensive evidence base in relation to complementary therapies, the concept of evidence-based medicine was highly contested and debated within Western medicine itself." 
"It is not appropriate for doctors or scientists with a particular view of medicine to impose those views on the whole community; rather, they should respect the rights of individuals to choose the approach to health care they feel is suitable for them." 
“It is important that those who seek to be friends of science do not inadvertently become its enemies. We call on the members of FSM to revise their tactics and instead support open, respectful dialogue in the great spirit and tradition of science itself”

In writing an inadvertently long piece on the Irrelevance of Marron and Dwyer's "Friends of Science in Medicine", I had to reflect on what what a convincing "short version" would be. Here's an attempt:
  • Dwyer, as a respected and long-serving medico, has to be aware of the estimated 18-35,000 preventable deaths in Australian Hospitals each and every year. [1995 QAHCS report, disputed.]
  • He must also be aware of the lack of good data on Adverse Events (AE) and Iatrogenic Injuries.
  • Similarly, the extra $2B/year estimated additional cost of treating AE's in hospitals.
  • He should also be aware of Dr Brent James reports (2001) from Intermountain Health, Utah, that only "3.5% (of patient injuries) resulted because of a human error" and from the APSF report on Iatrogenic Injuries (2001)  "The causes of iatrogenic injury appear to be systemic".
  • There is also a 2004 report on the effects and additional preventable deaths from overcrowding in Accident and Emergency. 
All of which could be used to suggest by Dwyer and friends:
Australian Medicine and Hospitals do very well in the face of insurmountable odds and lack of Political will and funding. [A justification used by AMA President Rosanna Capolingua in 2008, below.]
Only it isn't so...
Compare the complete lack of an Evidence Base for Patient Outcomes for Australians and any coherent, credible, co-ordinated plan to address this with the UK's Civil Aviation Authority's current Safety Plan. 
Secondly, Dr Brent James reported a 20% reduction in costs by reducing Patient Injuries through a "Do it Right, First Time" approach to Quality. This corresponds with the 2002 results from Ehsani, Jackson and Duckett. As Berwick suggests, organisational change is required to address systemic issues. Unless the system is changed, results won't change.
The CAA's Safety Plan [excerpted below] conspicuously shares a feature unknown in Australian Medical literature and seemingly in Hospital improvement plans: The Most Important Problems List.

The CAA has its "Significant Seven" and Dr James his "Bg Six List".
These seem unknown and unreported in Australian Hospitals and Health Department Plans and Operations.

Where this line of reasoning leads to:
After 50 years of large jet aircraft being used in Commercial Aviation, 'we' know exactly what has to be done to economically achieve good, reliable and safe Public Services, so why isn't this approach being advocated and adopted by Medicos and Hospitals?
From Dr. James, we also know that it is cheaper to fix systemic issues through a "Get it Right First Time" Quality approach, so after more than a decade of being known in Australia is this not being done?
How many "Adverse Events" are there in the Australian Hospital system? We don't know.
But the best evidence available is that they are not reducing. [below]
The most conservative estimates, "Sentinel Events", counts around 270 adverse events/year.
The QAHCS report estimated 18,000, the difference being direct, provable causality.
While the Australian Doctors Fund (ADF) would like us to use the American UTCOS report figure of 3.3 times less, of ~5,500 per year.

From Dr. James definitive work, the number of patient injuries is around 30 times the number of Adverse Events reported, reasonably 165,000 per year.

So why isn't Prof. Dwyer advocating and campaigning for the Medical Profession in Australia to adopt known, effective Evidence-Based Systems for itself preventing thousands of deaths, eliminating hundreds of thousands of injuries and reducing needless waste, rather than what appears to be a distracting side-show of "look at all those Bad Guys over there!".

This is the nub of his hypocrisy: Everyone else is doing it wrong, but we are beyond reproach.

Friday, February 24, 2012

Rudd versus Gillard: Everyone loses.


A copy of a letter I sent today to my local ALP senator.




Dear Senator,

Not sure if you care what one of your constituents thinks about your internal party matters, but here goes.

Julia Gillard is, IMO:
  • a competent legislator,
  • a good administrator, and
  • outstanding at achieving 'meeting of minds'
    • negotiating with many competing parties,
    • with conflicting aims and differing agendas, and
    • hence achieving legislative aims in a hung parliament.
Her record of accomplishment in the actual business of government is, again, very good, doubly so in that it's a hung parliament. Not 'revolutionary' like Whitlam and his many reforms, not 'breakthrough' like Keating floating the dollar (because we aren't in those times), but solid important stuff that matters now and matters for the future - balancing the budget, creating the next century's infrastructure and improving our intellectual competency and competitiveness.

So what's wrong that she doesn't have the 60-70% voter approval rating that she should have??

There is a serious disconnect between what Gillard does and her perceived performance in the electorate. It's worth at least 30-40% in her approval rating, IMO.

I have no idea why this is so. My best guess is that it is somehow related to the advisers around her in the PMO.
 [PMO = Prime Ministers Office, her personal unit staffed by her vs Dept. of Prime Minister and Cabinet, a normal Public Service Agency]

Howard had Arthur Sinodinos and together they made a formidable team, unbeatable for a decade. Proving the point that Great Leaders have Great Teams around them. But that's speculation on my part.

What Gillard is experiencing (approval vs performance gap) seems to me to be the political equivalent of business' "glass ceiling".

Women work incredibly hard, are exceptionally competent and do very good work but regularly get overlooked for promotion by their managers. I've personally worked with a number of mid-level Managers in the Public Service who've been trapped this way, but never were any of them men.

This can't be blamed solely on bias, nor solely on "Men do this to us".
Part of the effect, at least, has to be something in the way that Women approach work and promotion. A side-effect of this is that Women Entrepreneurs coming from this group are hugely successful in the plethora of small businesses they create.

There's such a weight of evidence about this 'overlooked for promotion' effect that I'm surprised it hasn't been studied extensively and that 'remediation' courses/training aren't available for it.

None of which might help Ms Gillard right now :-(

But this is my attempt at explaining why one of our most competent and apparently most broadly knowledgeable and informed political leaders isn't getting due recognition from her 'employers', the electorate.



Rudd:
Plays well to the public and sprouts lots of great sounding stuff.
Unfortunately, has proven to have very limited ability to 'execute'.

Or to sell difficult decisions.

After 3-4 attempts to get up Carbon pricing legislation, he quite rightly said, "enough time wasted on this now, we'll  defer it until after the next election when we should have better upper house numbers".

If he'd been up against Nelson or Turnbull (whom I'd call 'reasonable men'), that would've been the end of the matter...

But Abbot creamed Rudd, and easily so, quickly bringing him down.

Abbot has beaten two Labor leaders - Rudd lost office and Gillard didn't win the unloseable election.
But Abbot doesn't understand there's a difference between beating an opponent and winning over them.

A Rudd vs Abbot election will be another debacle for the ALP.
As would currently, a Gillard vs Abbot election.



I talk to my friends, most of whom like me have been voting since Whitlam or before and cover a spectrum of political persuasions, and we all would like to vote "None of the Above" if the next election is between Abbot and either Rudd or Gillard.

The consensus is: "Not ALP, not Liberal, Not Greens, but WHO?"

And many wish we could vote for Independents as gutsy as Windsor and Oakeshott, or a little less wild-eyed than Wilke. Katter is just plain crazy, but so one-eyed pro-QLD his electorate must love him.



If I was in your shoes, I wouldn't know which potential Leader could get the ALP over the line at the next election - at least not against Abbot.

Gillard doesn't sell herself well enough to the electorate and has been kicking far too many 'own goals' recently, and Rudd is like week old fish, flashy but well past its Use By.

Crean was leader for a time, but the "Anyone But Crean" sentiment is still strong.

There are many other fine people serving in Parliament who, in time, might make outstanding leaders - but anyone contesting and deposing  an incumbent ALP Prime Minister for the second time, no matter how good or well respected, will be hated by the electorate, just for the act.

If the ALP was in Opposition, this would all be moot. We, the electors, expect there to be jockeying amongst the contenders for 'a shot at the title' (to use a boxing analogy, appropriate for Abbot).

But the electorate, wrongly, presume "we vote for the Prime Minister", as I saw stated in a voxpop last night.
That's a direct outcome of Australian political parties succumbing to the 'Presidential style' of campaigning and government.
We aren't the USA...

While a single, strong 'all-powerful' leader is an easier sell to the electorate, this situation we find ourselves in is its inevitable conclusion.

Why are all these unpleasant stories and opinions about Rudd and his poor performance/personality only coming out only now? Why not when they were happening?

Because the Parliamentary wing of the ALP collectively and consciously created and maintained the fiction of "one good all-powerful leader", possibly telling itself that "Disunity is Death" (the flip-side of "Workers, United, can never be Defeated").

Being caught out in "the Big Lie" is also "political Death".  The electorate are just finding out about being sold "the Big Lie" and are NOT at all happy about it.

As Richo said, "Politicians Lie" (that's what they are forced to do by our Political and Media System).
We, the electorate know that, but don't expect/condone such monumental constructs, hence the massive rebound effect.

You'd think that the way to cut this Gordian Knot is for Gillard, not Rudd, to revert to Radical Honesty.

There'd be an immediate backlash for sure, but it would completely destabilise and confuse Abbot.
And given time, might win over a bunch of the disenchanted electorate.

It also needs Open, Honest, Transparent comment/opinion from inside the rest of the Cabinet and potentially the Caucus.

There's a time for a rigidly controlled, disciplined "single message", and perhaps a time for close-to-genuine Honesty.

For evidence, I offer Bob Hawke. A hard-drinking womanising larakin if ever there was one, that we still applaud because he can scoff down a beer faster than most.
He was forgiven these indiscretions by the public because he announced them, unlike the damaging backroom succession deal with Keating, or the unfulfilled Howard/Costello agreement, reported to the public by others.

If the Liberal party can get behind a good Leader, someone besides Abbot who thinks constant whining is a strategy, before the next election then the ALP, if it doesn't do something very different, could well be in the wilderness for another generation.

But I don't expect changes like that in Politics, just like I don't expect a fuchsia Airborne porcine division to swing by here. [A squadron of Pink Flying Pigs]





All the best in whatever happens.

regards
steve jenkin

--
Steve Jenkin, Info Tech, Systems and Design Specialist.
0412 786 915 (+61 412 786 915)
PO Box 48, Kippax ACT 2615, AUSTRALIA

stevej098@gmail.com http://members.tip.net.au/~sjenkin

Monday, February 20, 2012

Friends of Science in Medicine: Irrelevant and Inconsequential?

[Post moved to other blog.]

Peter Jean, Health Reporter for the Canberra Times, wrote a good piece (clear, informative, balanced) about FoSiM, Sunday 19th Feb, 2012: "Accessing the Alternatives".

In researching a follow-on piece to Peter Jeans', I took 4,500 words of notes - without covering anywhere near the number of topics I wanted to bring together. I wrestled with:
a) how to meaningfully condense such a wide field, and
b) Just what is the story here?
The crux of my dismay and discomfort with FoSiM, Marron and Dwyer is their outrageous attack on a relatively benign and low-impact Healthcare Services ("Complementary and Alternative Medicine" [CAM]), whilst ignoring massive, real and pervasive fundamental problems with mainstream Medical Healthcare.
FoSiM, Marron and Dwyer are asking us to shutdown and prevent from practicing those who account for under 1% of Medical fatalities and errors, whilst comprehensively ignoring the major problems. What is going on here???

Loretta Marron, CEO and the apparent Power behind the Throne, is the medical equivalent of Pauline Hanson: industrious, opinionated, loud, self-promoting - and ultimately mostly irrelevant.

Prof. Dwyer and his other "Executives" are all well-known, reputable medical scientists and academics with an axe to grind. It appears they are upset that they don't control or regulate every aspect of Medicine, mainstream and Alternative. Appearing so very "50's" and "Doctor knows Best".

Plus you'd have to wonder if like "One Nation", people of the calibre of David Oldfield will move in and use FoSiM to further their own careers, pursue their own aims/agendas, damaging organisational credibility and undermining their goals.

Some observations on the FoSiM goals:
  1. Any call for Science in Medicine is fraught for mainstream medical practitioners. If the spotlight is turned on them and they are required to provide Evidence of Competency themselves, even expected to practice "Real" Quality, their life will get much more difficult.
     
  2. This appears solely to be a turf war. Since the 1950's Doctors have lost their high-standing in the community and automatic respect from the public. Doctors have lost the unquestioning confidence of the public, who decided to look elsewhere for compassionate, engaged care.
     
  3. This is mostly about money. Doctors don't practice solely for the love of it. GP's are small businesses who collectively try to both defend their income and look for ways to increase it.
    If this aspect isn't acknowledged and discussed openly, the whole debate will become very murky indeed.
     
  4. There is a real problem under all this: vulnerable people are conned all the time. They want to believe in miracles, snake-oil and panaceas and resist all attempts to be warned or enlightened.
    This isn't a recent phenomena, nor confined to Medicine of any description.
    FoSiM appears to be advocating for a unilateral approach: Ban the Bad Guys (practitioners).
    The 1920's "Prohibition" in the USA and the current "War on Drugs" shows that you can't just legislate problems away. This simplistic approach of FoSiM will not work - there is overwhelming evidence of this, which makes you wonder what sort of 'Scientists' these folks are.
     
  5. The Internet is a searchlight that illuminates dark corners everywhere.
    FoSiM should be calling for a definitive on-line wikipedia-style 'register', not registration, of all Health Practitioners. It would allow the relatives and friends of people entrapped by shonks of any kind (including AHPRA registered and certified) to uncover warning signs and to warn-off others.
     
  6. Mainstream Medicine gets a "free pass" from the ACCC with their business model.
    They don't have to refund the cost of "failing to provide the service advertised" as does every other retail business.
    If Doctors wish to enforce Accountability on others, they should be prepared to give up their privileged position and join the rest of us in ordinary business.
     
  7. What s Loretta Marron's motivation? I cannot understand her complaining and campaigning about other people's problems when she is not a Healthcare Practitioner of any type.
    Only in movies and comic books do people need "Super Heroes" to look after them and defend them from the ranged Forces of Evil. Adults in the real world need Information, Training and Support - not being "stood up for" by some self-appointed 'guardian'.
    There is a word for this in law-enforcement: Vigilante.
     
  8. Loretta Marron, interview on 4BC and her constant untested accusations of "voodoo and witchcraft", seemingly against all CAM (as MP3). Love her or hate her, you need to hear the lady in her natural element. I found it hugely ironic that she was preening herself over being the first person ever to be recipient of dual "Australian Sceptic of the Year" awards (2007, 2011) - an self-appointed organisation built on judging others and requiring evidence but the antithesis of "open and transparent" themselves. All while she threw nothing but untested, unproven accusations and innuendo around. One standard for her, another for everyone else...

Queensland Public Hospitals Commission of Inquiry, 2005:

While the site for the Davies Queensland Public Hospitals Commission of Inquiry is still on-line, that for its immediate predecessor, Morris' Bundaberg Hospital Commission of Inquiry is not, existing only in The Internet Archive.

Initially I was going to start this piece with this bunch of aphorisms relevant to FoSiM and their performance and bias:
  • "by their actions you will know them"
  • "ends must match the means"
  • "first remove the log from your own eye"
While these are still relevant and appropriate, indicating that FoSiM, Marron and Dwyer are being driven by a hidden agenda, I was derailed by the next thought:
Just how Professional are Mainstream Medical Practitioners? (could they really withstand a serious Inquiry?)
For example Jayant Patel (JMP), "Doctor Death" of Bundaberg.
Reading the ~550 pages of the Davies Inquiry report I was struck by many things:
  • The only reason there was ever an Inquiry is that a single nurse, Toni Hoffman, sacrificed her career by whistle-blowing. Otherwise none of this would have happened, raising the question: "How many incidents like this had happened previously without comment?"
  • Although Patel's "Mortality and Morbidity" statistics implicated him in 30 or more deaths, the legal system requires proof of causality. Hence he was only prosecuted for a small number of cases.
  • Jayant Patel was by far not the only "renegade" practitioner identified by the Inquiry, nor the only person whom the Inquiry made recommendations about.
  • There were multiple other hospital districts found to be delivering unsafe care to patients. This is further evidence of wide-scale, systemic failures in Queensland Health.
  • There were serious systemic problems within Queensland Health, including its treatment of local medical graduates and GP's (as VMO's, Visiting Medical Officers).
  • These origins of these problems is complex and due to Political, Public Service Administration and Medical Profession issues - going back 30-40 years.
  • Margaret Cunneen SC, in "The Patel Case – Implications for the Medical Profession (Medico-Legal Society of NSW, 2010), points out:
    • Queensland has a "Criminal Code of Law" which made the criminal prosecution of JMP possible.
    • Patel, and any doctor acting maliciously, could not be charged with a criminal offence in NSW and most other Australian jurisdictions.
    • Cunneen says little has changed in NSW in over a century:
      She reviewed an 1893 case of a person practicing as a doctor, but not legally qualified. He failed to deliver a baby, causing it severe injuries and death - but the charges were dismissed because the man had no case to answer under the law then, or now.
    • Cunneen, a senior prosecutor, says:
      "because of this expectation that doctors will not do something maliciously against a patient, that they will only make a mistake which may or may not be civil negligence."
    • There have been no calls by the Australian Medical Profession to address these problems of Jurisdiction, consistent Medical Board judgements or malicious injury by doctors.
There is overwhelming evidence that Queensland Health has had pervasive, systemic problems for decades. Is that Politically acceptable or a proper use of Public Monies?

The most critical question is:
What has fundamentally changed so that any of this could not happen again, that these lives lost and unnecessary injury inflicted has not been in vain? [Nothing?]
My rubric for Professionals:
Is there ever a reason for any Professional to repeat, or allow, a known Error, Fault or Failure?
By this test, Aviation professionals and technicians, at least here in Oz, are overwhelming more Professional that every registered Doctor. Part of the proof lies in the Open and Transparent collection and reporting of critical outcome data.

The lack of demonstrated improvement, in fact the universal absence of critical outcome data, for Hospitals, GP's and specialists suggests a fundamental, systemic failure within Australian Mainstream Medical practice.

That's something definitely worthy of FoSiM, Marron and Dwyer's time and attention, and demonstrably of massive benefit to Australia.



"A primer on leading the improvement of systems"
Donald M Berwick. BMJ VOLUME 312 9 MARCH 1996
Institute for Healthcare Improvement,Boston, MA 02215,USA
Donald M Berwick, president and Chief Executive Officer.

Learning points:
  • Not all change is improvement, but all improvement is change.
  • Real improvement comes from changing systems, not changing within systems.
  • To make improvements we must be clear about what we are trying to accomplish, how we will know that a change has led to improvement, and what change we can make that will result in an improvement.
  • The more specific the aim, the more likely the improvement; armies do not take all hills at once.
  • Concentrate on meeting the needs of patients rather than the needs of organisations.
  • Measurement is best used for learning rather than for selection, reward, or punishment.
  • Measurement helps to know whether innovations should be kept, changed, or rejected;
    • to understand causes; and
    • to clarify aims.
  • Effective leaders challenge the status quo both by insisting that the current system cannot remain and by offering clear ideas about superior alternatives.
  • Educating people and providing incentives are familiar but not very effective ways of achieving improvement.
  • Most work systems leave too litle time for reflection on work.
  • You win the Tour de France not by planning for years for the perfect first bicycle ride but by constantly making small improvements.

THE CENTRAL LAW OF IMPROVEMENT
Not all change is improvement, but all improvement is change.
The relation derives from what I will call the central law of improvement:
every system is perfectly designed to achieve the results it achieves.
The central law reframes performance from a matter of effort to a matter of design.

The central law of improvement implies that better or worse "performance" cannot be obtained from a system of work merely on demand. [Therefore Inquiries and Political directives that mandate change without organisational redesign are doomed to failure. This is confirmed by the outcomes we've seen.]

Thursday, February 16, 2012

"Friends of Science in Medicine": Credibility, Claims and Transparency

[Post moved to other blog.]

Yesterday I wrote up what I'd been able to find out on the web about "Friends of Science in Medicine" (FoSiM) - but it only begs more questions without any good answers. For a lobby group espousing the Scientific method in its very name and demanding the highest standards of evidence and rigour of others, this absence of transparency, rigour and completeness should be anathema. That it hasn't been addressed in a month starts to suggest this is no accident.

It's a long piece (3,000 wds) and, disturbingly, I could find few hard facts, only rather a lot of uncorroborated snippets. It's mostly "all smoke and mirrors".

Monday 30th January, 2012, I heard Fran Kelly of ABC Radio National, interview Prof. John Dwyer and Dr. Kerryn Phelps in "New lobby opposes teaching alternative medicine" and audio download.

Really interesting and important stuff, more so that someone whom I respect and consider a 'serious' journalist should seek to interview a former professor of Medicine and Oncology [in places falsely attributed as "Cervical Cancer Vaccine creator" - that was Ian Frazer, also a member of FoSiM] and an ex-President of the AMA and a very high-profile leader of "Integrative Medicine" in Australia.

I jumped on the 'Net and tried to find out more, but drew a blank.

Even though there has now been significant coverage in the mainstream media and a veritable barrage on-line, it's very difficult to get any information, let alone good answers, on anything to do with this lobby group.

Even something as simple as: "Who are you and what do you stand for?"
On-line, they are a vague, shadowy, even slippery group.

The ASIC "National Names" database has them incorporated in NSW (INC9896756) on 13-Feb 2012, which isn't consistent with the claim from "Quack Treatments Duck for Cover" republished/included by Neil Johnston.
It is all welcome news to the Friends of Science in Medicine (FSM), an Australian organisation formed in December of 2011...

Wednesday, February 15, 2012

A busy retirement: Loretta Marron, CEO FoSiM

[Post moved to other blog.]

A shy, retiring stay-at-home person the new CEO of "Friends of Science in Medicine" (FoSiM) is not, twice being declared "Australia Skeptic of the Year", appearing on TV and being written up in the media.
She become well known by Australian media, a 2009 piece, "Loretta Marron, Health Hero, On Australia’s A Current Affair", describes her as "a science graduate with a business background".

All this leaves me with questions about Loretta Marron and her motivations.
  • Just what is Marron's background and expertise?
    She has no on-line CV, Publication list or Bio and makes a number of different claims about her expertise and working life.
  • Just who is funding "Friends of Science in Medicine"?
  • If FoSiM is a modern Association wanting to be taken seriously, where is its on-line presence?
  • Is FoSiM just one person, working from home without pay?
    Is this whole thing just Marron engaging in a media beat-up and outrageous self-promotion?
  • Marron demonstrated in her Crikey! piece that she has considerable networking and self-promotion skills and a fine ability to influence and persuade academics, researchers and medical experts to support her position and campaigns.
    Is FoSiM just the latest and largest version of this?
  • Is Marron and FoSiM a 2012 rerun of Sheryle Moon and "Alliance of Australian Retailers" in 2010?
    Articles: SMH, ABC radio, Lateline.
    AAR Website and Disclosure statement:
    • We are supported by:
      • British American Tobacco Australia Limited (ACN 000 151 100);
      • Philip Morris Limited (ACN 004 694 428); and
      •  Imperial Tobacco Australia Limited (ACN 088 148 681).
      •  Authorised by R. Stanton for the Alliance of Australian Retailers Pty Ltd (ACN 145 378 589) of 14 Ross Street, North Parramatta, NSW, 2151.
All my concerns and questions can be summed up simply:
Show me the same Evidence about yourself and "Friends of Science in Medicine" that you are demanding of others.

Friday, November 25, 2011

The Sky is Falling, the Sky is Falling. Australia is in massive Debt.

Here's a response to an email a friend forwarded to me.
The chain-letter had said "we'll all be ruined", like this:
The total Government debt could end up around $200 billion.
(plus some Big Scary calculations showing our grandkids would have to be indentured servicing this horrifying debt.)
It included quotes from trusted financial commentator(s) and well known radio personalities.
Things are actually pretty good here in Australia.
Not just compared to the USA, UK and Europe, but historically to ourselves.

Post GFC, that rates as a considerable accomplishment.
Sorry to write such a long piece - it's meant to "pour oil on troubled waters", to address the concerns that previous piece might have raised.

Hope you like it and it restores some balance in your life :-)

cheers
steve

PS: why would Shock Jocks say 'Looky, looky, the Sky is Falling'?
Because it's a Story and Fear Sells...
Saying "it's all really good here" does nothing for their ratings.
Would I lie to you? :-)

PPS: [for this blog entry] The whole email was a "call to arms" to remove the Gillard Labor government. Obvious that the Shock Jocks would be quoted - they love bashing Gillard and Co.
Not so obvious that the email probably constitutes party political advertising and if deemed so, the issuer and those authorising it should be duly noted [or it's a prosecutable offence under the Electoral Act.]

The only problem is that it seems to have first appeared in August, 2010, just three weeks before the Abbott/Gillard Federal Election. Would have had to have been part of, or inspired by, the conservative election campaign. An electronic version of the infamous "push polling".

I feel sorry for the good folk who picked up this piece, especially for those that forwarded it on or posted it to the web, either back then or again now.
What's the chances that it is not unrelated to the conservative campaign against Labor's Mining Super Profits Tax, passed just this week?? Again, either initiated by people within an Opposition political party, known or affiliated to them, or just sympathetic.

Great technique and extremely cost effective!!!



The correct way to deal with/understand these large National figures is two-fold:
  •  Debt as % GDP.  ['normalised' and comparable across inflation, country and time]
  • Debt expressed as per household or per person.
If you look for "A history of public debt in Australia" from The Treasury, there are some hard facts in there. It seems to have been written in 2010.

Federal Government Nett Debt in 2010 was 1-2% of GDP, pretty good considering it was ~20% in 1992, the most recent peakl. And outstanding compared to the "G-7" USA, UK, Germany, France, Canada, Italy, Japan (the 7 largest economies in the developed world) - running between 50-100+% of their GDP's.

If you go back to 1900, Australia had over 100% GDP of Public Debt, reaching an all-time high of around 120% GDP at the end of World War 2.

The headline figure you passed on is 10-15% of GDP, depending on the date of "could end up" - inflation devalues the currency.
[I believe the 2011 GDP is $1.3T, or A$1,300,000 Million]

Without giving a date, the author is just scaremongering.
Is he saying "things could get bad within a year" or "within a couple of decades"???
There is no current sign that we'll borrow 20% of GDP within the next year.
Federal Tax receipts are around 30% of GDP.
They would have to increase spending at a rate not even seen during World Wars.
If any Government borrowed and spent at that rate, it would cause a massive over-heating of the economy and induce hyper-inflation only seen in our lifetimes in South America in the 1970's.

Neither side of politics is that ill-disciplined/reckless nor ill-informed. Nor does it need to be done. Federal Tax revenue has declined below expectations, but not by around 60%!!!

How to deal with understanding this %GDP is to make it personal-scale.
  •  -Compare to the average wage (currently ~$55,000/year)
    • If you knew a person with a mortgage of $5,000, you'd laugh,(in Sydney at least).
      That's a whopping 9% of their income.
    • The current Public Debt 1-2% is $550 - $1,000 equivalent. Small bikkies.
    • That completely headline reckless 10-15% figure is $5,000-$7,500 equivalent. Not something to cause incredible heartache or concern.
  • Median Household Income is over $70,000/year.
    • For the 11-12 million households in Australia, our current Public Debt is under $1,000 per house.
      And as %GDP, the headline figure is under $10,000.
    • For comparison, Americans, once the world's wealthiest nation, currently owe $100,000+/household in Public Debt.
      [Avg. weekly earnings are ~US$35,000]  
   Australia is in good shape.
  •  There are around 22M of us in Oz.
    Our current Public Debt is  under $1,000 each.
    That massive debt headlined isn't so scary at $10,000 each.
You might be wondering, how can I get a maximum of $10,000 per household (10-11M of them) and the same for individuals (22M of them)?

Because only around half the GDP is from wages/Individuals.
The Federal Government collects taxes from many sources, not just wage earners. The Government doesn't have to repay its borrowings just from our pay packets, though that is a significant portion.

But, Oh My Goodness!, look at "The Australian Office of Financial Management". The official government site that counts what we owe.

It says we owe Heaps!!! [As at 25 November 2011]


Total Commonwealth Government Securities on Issue - $219,102m
How can the Federal Government Accounts (and ABS estimates) say we have 1-2% Public Debt, yet they have loans of almost TEN TIMES THAT AMOUNT!!!

It's simple accounting without any fudging.
If you had a $10,000 mortgage and earned $70,000 a year, you'd have some savings as well if you were prudent and organised.

Especially if you knew you had some large bills (Insurance, Medical, Car Maintenance, Car payments, ...) coming later.
The Federal Government owes a lot on Bonds, but has around the same amount in the Bank.

Nett Debt is that low 1-2% of GDP.

The Government issues short- and long-term "Bonds" for a variety of reasons - these are the numbers listed on the AOFM site.
There is a very active market in, and strong demand for, Government Bonds, especially for a country in such good financial shape as Australia. It would be a very, very bad idea for any Government to have Zero Borrowings.

Why? Because Government Bonds are "Risk Free". And investors love that.
Government Bonds are, by definition, the very safest place you can put your money - much better than under a bed, your Aunt Flo or a Bank! They pay the lowest interest rate around, banks and everyone else uses them as the benchmark and adds a 'risk premium' on top.

This is the Risk/Return balance:

  • if you want NO RISK, you get the lowest return.
  • If you want HIGH RETURNS, you take a real change of losing everything.
This is what happened with the 2007/8 GFC:
  •   people invested in high interest 'instruments' and didn't understand
  • they were HIGH RISK. When things changed just a little, they lost ALL
  • their investment. It's Risk/Return...
But Bonds on issue are only half the equation, we can't see what they have socked away in their Reserve Bank of Australia account (yes, they really do have a Bank and an Account there.)

We've been told just *one* side of the ledger/story.
There's no Deep Dark Financial Hole waiting for our grandchildren.

If you want to go scary places, look at the Greek and Italian Bond markets (currently ~20% and 7% I believe).
Investors think there's a high risk of losing their capital ('a haircut').

Or the USA where they borrow 10-20% of their GDP every year to cover the shortfall in Tax collections, so they can pay for the necessities of Life.

You'd think both Political Parties might understand this can't go on indefinitely, but they don't.
Hence the recent news about the "Super Committee" not meeting its deadline. Things will get ugly there. We've already seen normal folk take to the streets with the "Occupy Wall Street" movement and it franchises. They seem yet to develop a set of demands or policy platform. If they ever do, it could be the start of a major chapter in US politics.

Sunday, April 17, 2011

The Real Deal on Not-for-Profit enterprises

Philip Greenspun in a piece on Early Retirement neatly summarises my experience with a multitude of Not-for-Profits...
Non-profit organizations exist to provide their staff with great jobs and the fun of making decisions and spending money.
The folks who work at a non-profit organization are very interested in drawing a salary higher than their skills and working hours would command at a for-profit enterprise subject to competition.
They are not especially interested in efficiency or accomplishment.
If you've come from the commercial world, in which McDonald's must be ruthlessly efficient for fear of being destroyed by Burger King, working with or in the typical non-profit organization will likely drive you to insanity.
Funnily enough, this aspect, nor the consequential intense internal politiking, doesn't appear in the definitive book on the subject, The The Complete Guide to Nonprofit Management by Smith, Bucklin & Associates.
The Complete Nuts-and-Bolts Guide to Managing Today's Bottom-Line Oriented Nonprofit Organizations

This significantly revised and expanded Second Edition of the highly popular how-to book identifies and addresses the unique concerns of nonprofit organizations. Cutting through the morass of mere theory, the experts at Smith, Bucklin & Associates, Inc., a leading nonprofit management firm, get right to actual practice with dozens of real-world examples and case studies, and up-to-date, vital, "combat-tested" strategies and techniques for dealing with virtually every nonprofit business management issue, including:
* The daily role of boards of directors
* Fund development and marketing
* Public and government relations
* Educational programs and certification
* Information services
* Human resources management
* Using the Internet