Tuesday, December 30, 2008

The Ends of 2 Cricketing Eras

Shortly I'll switch on the TV to watch South Africa finish off Australia in the cricket. This will be Australia's first test series defeat at home since 1993, and South Africa have been pretty dominant so far. It's clear that Australia have lost their position as the top ranked team in test cricket, when you also consider their recent series loss in India.

Looking at the bigger picture, this might be one of the last times that test (5 day) cricket attracts much attention. The shortened Twenty20 (T20) game is taking over cricket in terms of television coverage and advertising, reflecting the fact that most people would rather watch a game lasting 3 hours than one lasting 35 hours.* Now the best young players are following the money and joining the lucrative Indian T20 league before they even come close to playing in their national test teams.

In the near future the best batsmen will concentrate on the quick, aggressive batting needed for T20 cricket, and neglect the patient, defensive batting that wins test matches. Meanwhile bowlers will focus on bowling accurately under the tight restrictions of one day games and won't work on the bouncers or wider deliveries that are permitted and necessary in five day games. Test cricket will soon be a secondary form of the game, populated by players who didn't succeed in the T20 leagues.

The ugly Australian supporter in me is amused to see South Africa take over the top spot just as test cricket becomes irrelevant. However it is poignant to think that this might be the final time that such a handover even matters much. I'll have to head out to the Sydney Cricket Ground next week to see if Australia can avoid the whitewash. Anyone else interested in seeing one of the last great test series?

*30 hours if you don't count the lunch and tea breaks.

Saturday, December 13, 2008

Corporate Welfare

I had an insight into why bankruptcy is so difficult in the US, sparked by my friend Vincent. He pointed out that a big sticking point was that the Republicans insisted the bailout strip away many of the benefits enjoyed by the GM and Chrysler workforce. The automakers' union wouldn't agree to all the concessions, and the Republican senators wouldn't vote for the bailout unless they did.

Hostility to government means that big companies in the US take on responsibilities that fall on governments in other developed countries, particularly health care and pensions. Elsewhere these benefits aren't tied to the health of a particular corporation, so its failure is less devastating. The current workers have to find another job and might lose the pay for their last week or two of work, but they still have health care and their accrued retirement funds (the latter might be diminished by poor investment returns, but don't disappear along with one particular firm). Conversely, a bankruptcy in the US leads to workers losing benefits accrued over decades. This injustice creates a strong political constituency for propping up a dysfunctional company, even when society as a whole would be better off if it failed and made way for a superior competitor.

It's an exquisite irony: the failure to put in place socialism for individuals leads to socialism for corporations.

OK, Bad Call

Looks like I was wrong on the implications of the decision not to bail out the Detroit car manufacturers. The US market didn't fall much, even before the Bush administration said they might be able to redirect some of the previously allocated financial bailout funds. Apparently all the bad economic news has already been priced in. I've gone back to thinking that we'll see a drawn-out recession through all of 2009, but nothing worse than that.

Friday, December 12, 2008

The Day the Depression Began?

Just wondering, after the U.S. carmaker bailout got rejected, seemingly pushing General Motors and Chrysler into bankruptcy. When Lehman Brothers declared bankruptcy after failing to secure a government rescue, that event battered economic confidence and moved the slowdown into a full-blown recession. I suspect GM and Chrysler together are more important than one mid-size investment bank. While their failures won't come as such a surprise, they will still be sufficient to drag the world economy even further down, at a time when it's already pretty low. I'll be morbidly fascinated to see what happens when the US stockmarket opens in a few hours.

Even with this grim outlook, I can't blame the U.S. Republicans for opposing the rescue. It must be tough choosing between between likely economic depression and certain crony capitalism. When did the American economy become unable to handle bankruptcies, anyway? And why?

It's also interesting to consider the geopolitical ramifications. Cars will still be made in the US, but in a few years most of the factories will probably be subsidiaries of foreign companies. All the automotive design and research will happen elsewhere, eroding American manufacturing. Maybe that's already the case, thinking about which companies got petrol-electric hybrids to market first. I suppose the U.S. is still a leader in aerospace and software.

On a more parochial note, I wonder which company will acquire Holden, GM's still-viable Australian subsidiary?

Thursday, December 4, 2008

Boutique Rats

There was an amusing article in the paper today, about a plan to reintroduce Australian bush rats to a posh Sydney suburb. There's more native vegetation now than in the period immediately after European settlement when the land was cleared, so the bush rats might be able to make a comeback. Only in Mosman would people worry about having a better class of rat.

The ecologists even speculate that the bush rats might displace the introduced black rats, but that's where I beg to differ. The native animals might thrive in the bushland and it would be great if they did, but my money's on the black rats in the residential areas.