Pete’s blog

I was supposed to be writing about governments this week, but I had some desperate pleas from my friends to explain what on earth is going on with everything at the moment.

I’m just going to touch briefly on South Africa’s politics at the moment, maybe I will do a longer blog on it later if I have some time. What is happening in South Africa at the moment is called democracy – it is a good thing, it is supposed to happen like this, stop worrying. Mbeki has set a very important precedent by leaving as easily as he did – in a democracy as young as ours, the precedent of the quick and easy changing of leaders is fundamental. Worried about South Africa becoming like Zimbabwe? Don’t. What just happened is everything that Zimbabwe is not. What if Mbeki had clung to power and refused to step down… would that not be typical Mugabe-style leadership? And compare what is happening in South Africa to what is happening in other developed nations – especially Britain. Gordon Brown is under considerable pressure from his own party to resign… sound familiar. The Israeli Prime Minister Ehud Olmert has just been forced to resign, because of – believe it or not – allegations of corruption. Change happens, change is important and the smoother that change is the better and the healthier the democracy is. As for Trevor Manual, have you perhaps considered that he has out stayed his welcome? You know that he is currently the longest sitting finance minister in the world? 12 years. And anyone remember how everyone said when his predecessor – Chris Liebenberg – left, the country would collapse? And when Tito Mboweni took over from Chris Stals, how the country would collapse? Change is good. How do you know that there is not someone even more brilliant waiting in the wings?

But onto what I really want to talk about – the end of America, the end of capitalism and the end of the world… You might have noticed that the world economy at the moment is in a bad state. Major banks are failing and the US government has just passed a bail-out package potentially worth more than South Africa’s GDP. What is going on and what does it mean for us?

First, what happened? This is the same ongoing credit crisis that was happening at the beginning of the year. Read my previous blog Buy Now Pay More Later -  for more details. But basically the banks created these really complicated financial instruments and then sold them all over the place and bought them from other banks and repackaged them and sold them again. Everything is now so knotted and twisted that no-one really knows how it all fits together. So at one end is a bunch of people that borrow money to buy a house or a car and at the other end is a financial instrument that is supposedly worth something. Unfortunately the people at the bottom end are having a lot of trouble paying for their houses and cars because they were given more debt than they could afford and the overall economic situation has not been good for them. In the good old days this was quite simple, there was the guy in debt and there was a bank. The bank repossesses the guy’s house, sells it on the market and offsets the amount that they get from the sale against the amount outstanding on the loan. Either the sale amount is more than the loan and the bank doesn’t take a loss or the sale amount is less and the bank shows a loss. Easy to work out. And you can also do a estimation of the number of people defaulting and the average house price and calculate how much money the bank is likely to lose in a year. Unfortunately you can’t do this anymore. The bank cut their loans into various sizes, repackaged them and sold them to other banks. So when Joe Soap defaults on his repayments, no-one quite knows which banks will be affect and by how much. Sound disturbing? It should!

So now you have all these banks who are going to have losses, but they have no idea how big those losses are going to be. If the losses are too much, the bank collapses. So banks have 2 concerns, they might collapse and other banks that they deal with might collapse. Paralysis. Banks are terrified to lend money out, because their current debt book might be bad, and because any bank they lend money to might collapse and not be able to pay them back. Unfortunately short term debt is the oil that keeps the system running. Companies borrow money from the banks at the end of the month to pay their staff, who then use their salary to pay their monthly bond repayments or other debt to the banks, closing the debt circle. If the bank does not lend to the company, the company cannot pay their staff, who default on their loans, which then affects the bank, making them less willing to lend out more money.

This is vicious circle the bail-out package is trying to address. By buying up the dubious debt from these banks and by injecting money into the system, it removes the uncertainty and banks start lending money out to everyone again… we hope.

So that is what happened and what the bail-out is all about, but what happens next? Um… I have to say I don’t know. This really could go either way. The one extreme is that there are no more bank failures, the economies start picking up again and in two years time everyone wonders what the fuss is all about. The middle path is that there might be a few more smaller bank failures, but most of the financial institutions hold together. America goes through about 10 years of recession or very low growth, but eventually recovers, hopefully a little wiser. The worst case scenario is that another major financial institution fails, resulting in a domino failure of the entire financial system. America goes into a depression which could last as long as 20 years, dragging the rest of the world with it. The most probable scenario is the middle one, but let’s have a look at the worst case scenario.

The danger is very real. The crisis and the buy-outs have resulted in there being fewer banks, and banks like Bank of America and Citigroup are getting larger. This is called concentration risk. Now if one of the mega-banks fail, the effect will be disastrous. Fewer players, with more of the market… very risky. America is almost certainly heading into a recession, which means that there will be more defaults, foreclosures and bad debts. This is not over yet and only time will tell what the future bank failures are going to be.

But on the positive side it helps to compare the current situation with the Great Depression. There are some very key differences. Firstly a lot of protections were put in place after the Great Depression – for example unemployment insurance and federal insurance of bank deposits ($250 000 of each savings account in a bank is guaranteed in the case of a bank failure). Both of these would have a major mitigating role if things do go pear shaped. Secondly after the First World War, countries cut foreign trade and turned inward. The first great globalisation of the Victoria age was brought to an end and there was little integration – countries suffered alone. And thirdly, the America economy in the 1920s/30s was a lot less sophisticated and diversified. The service sector was very small, the industrial sector was new and the financial sector was very basic. The Great Depression was very strongly tied into the agricultural sector as a result. It was farms that were being foreclosed in those days and in many ways it was the flow of agricultural goods rather than credit that came to a grinding halt because of that crisis. A lot of lessons were learnt from then and have been learnt since.

This crisis isn’t new. Japan and Sweden have been through something very similar, they survived. In fact Sweden got out of their crisis very well. The scale of it is the problem this time. And there were warning signs too, Enron being the biggest. A company built on complex financial deals, that when unravelled had no substance – sound familiar?

So what happens now? Well for us on the street, we wait and hope… and get money ready for the biggest opportunity of our lifetime. Now is one of the best times to buy shares. Trust me it will be difficult if you do, expect not to make any money for at least a year, but your future gains will be far more. Just one warning, only invest money that you do not need – buying at the bottom is great, but predicting which is the real bottom is as difficult as predicting the top of a bubble. You do not want to invest all your life-savings at the bottom, only to have the bottom fall out from under you.

If you do not have any extra cash, and most people out there are suffering badly at the moment, then you must just tighten your belt, learn about financial discipline and support each other. It will get better, and when it does, remember what you learn in this time.

But in summary, things are bad, corrective measures have been put in place, adjustments are happening, things are going to get worse before they get better, but I don’t believe that everything is going to collapse.

In June I started what was supposed to be a series about different types of government, unfortunately I got distracted and so part 2 is only coming to you now. However the follow-on has now become incredibly relevant. South Africa is seeing some very interesting democracy in action (for a quick comment on that, don’t stress, democracy is all about changing leaders, don’t get too attached. The easier one president leaves, the easier it is for the next one to leave) And I hope you have been watching the US elections, because it has been fascinating. I recommend you go back and reread my democracy blog (the first in this series), America is a text-book example of what happens when democracy decays, when people no longer care. Chose a backwater woman with no experience and your rating goes up (that is the nicest way I will ever describe Mooselini); think too much and talk to deeply and you get accused of elitist, intellectualism and lose rating points. And so the comment I ended that blog with “If you don’t care then maybe democracy isn’t for you”, becomes the question “So what if democracy isn’t for you?”

But let’s not get write off democracy just yet, because there are so many options and flavours to try. Firstly, who gets to vote? There is a compulsory democracy (like Australia) where every person is required by law to vote. No voter apathy – you will vote. How about only allowing people that have undergone a voter election course the right to vote? Or a year’s course in politics? How about only allowing university graduates to vote? How about only landowners (has been done in the past), or people with a certain amount of wealth? Surely the educated and the wealthy would be the most responsible people to allow the right to vote? But the rich and the educated will always be able to look after themselves, the poor should be the ones choosing who would be the best person to help them out of poverty – a plebocracy? The possibilities are endless – each segment of society having very different goals and priorities, which are often in conflict with those of other segments. The decision on who gets to vote is very strongly linked to what you believe a government should be doing…

Also what you vote for and how you vote has some interesting possibilities. One idea I really like is, instead of voting for a single choice, you vote for 2 or 3 – first preference, second preference, etc. What this means is that moderate parties have a very decent chance. You are might be a firm supporter of one major party, but you are also concerned about environmental issues and so put your second preference as the Green party. Environmental issues now gain a lot more prominence, reflecting the general concern that most people might have for the environment. Or a moderate party might win the election in a very polarised country with two opposite, competing parties. The voters are not willing to vote for the opposing party as their second preference, but are quite happy with the compromise moderate party. This form of voting is especially effective in the parliamentary/representative form of government (people get seats/representation depending on how many votes they get). On the negative side this system might be very difficult to administer, requires a wide variety of political parties, and has the potential of being too moderate and boring. But on the positive, it can create a large political space allowing more players and more people to have their say, as well as bringing issues that would otherwise be ignored to the fore.

One variation on what you vote for is that you can either vote for a party or you vote for a person. It is difficult to find a pure form of either of these, because a leader that has the final say is important, and also it is impossible to either run an election campaign or run a government in a large country all by yourself. But as an example, Britain tends more towards the party democracy system, whereas America tends more towards the executive (individual) system. In a party democracy, the party chooses its leader and can swap leaders as and when it wishes. This is a very robust system because it is effectively a democracy within a democracy. The public chooses a group of people who they think best represent their issues. This group of people, who are theoretically well educated in politics and the issues in their country (since they chose to enter politics) then choose from themselves the person they believe is best suited to lead them. What is the problem with this form – well pick 5 verbs to describe British politics and I bet one of them will be “boring”. Party democracies are slow moving and can take a while to radically shift policy – sometimes a good thing, sometimes a bad thing. The other thing that can happen has just happened in South Africa – someone can become leader of a country without having to convince the majority of the people that they are the right person… all they need to do is convince the majority of the ruling party that they are the right person. Smaller target group, easier to influence.

An executive democracy on the other hand is where the public directly choose the one individual who they wish to lead them. Executive democracies are fast moving and decisive and can undergo rapid changes. The personality and beliefs of the chosen leader will define the government’s policy. Highly advantageous, but put some idiot with a middle name starting with W in charge and it can also be highly disastrous. This form of democracy is the most susceptible to democratic decay, since personality can play a far stronger role than policies. Note that parties are far better at developing policy than individuals. John McCain has taken full advantage of America’s leaning towards this system, he has run his campaign not as the next leader of the Republican party who have been responsible for Iraq and the bad economy, but as a ‘fresh’, ‘new’ leader who has nothing to do with George W Bush’s policies. If the public saw the last 8 years as Republican policy, McCain wouldn’t stand a chance, but he has convinced them that it is Bush’s policies.

But why just vote for a person or a party? Why not also vote for the issues? I would like [Obama/McCain] to be the leader, but I want him to follow a [pro-choice/pro-life] policy, to [withdraw from Iraq/stay in Iraq] and to [prioritise healthcare/education/industry]. Mix and match. Sadly it would be difficult to administer and to hold the leader to account for implementing what people voted for. Also people can make stupid decisions – give them a choice of [raise taxes/lower taxes] and they will pick [lower taxes] every time. Not always the right decision.

Other things to mess around with are when you vote. Limited term lengths are a popular idea at the moment, most neoliberals will tell you that anyone who stays in power for longer than 8 years will definitely become corrupt and will cling to power. I would like to point out though that Franklin D Roosevelt won four terms (12 years) in office in the US (they have since limited it to 2 terms) and Margaret Thatcher was Prime Minister for 11 years. Why should we limit our leaders’ terms? If they are doing a good job, keep them in. With practice they can only get better. Limited terms result in short-sighted policies. But sadly people do tend to get power crazy, take a look at Zimbabwe - leaders that stay in power get too attached to that power, they believe that they know best. Unlimited term lengths requires very, very strong legal, civil and governmental structures that will make sure that the leader will leave when it is time for them to go.

Then how about changing when you have elections. Instead of having regular elections every 4 years, why not have a continuous election? How would that work? Everyone can register whether they are happy or unhappy with the current government. If at any point you decide to change your mind, you go to an election centre (or log onto) and register your new status. A majority of people want a new government, then you have full elections to select that government. Plenty of problems with this idea though…

And there you have some different ideas for democracy, and also one of the key problems too – democracy is very hard to define. What is democracy? If a country only elected a new leader every 20 years , would that country be democratic? Why not? Democracy is government by the people and the people decided that they only want to have elections every 20 years. What if the people decide to have a leader until their death? Everyone votes to have one permanent leader… is that not still democracy then? How about if you have very well run elections every 4 years, but a small group gains control of the media and uses it to brainwash the population into believing that their group is the best to lead the country? Democracy?

I think it all comes down to what you want from your government… which will hopefully be the next topic.

Going to delve into some post-Fordist Marxism here. Been thinking more about good people and how they fit into the workplace, and came up with an interesting perspective. One way of looking at the world is as a series of class struggles – Mr Marx was a big fan of this idea. The timeless struggle between the haves and the have-nots, the ruling and the servants, those in power and those without power. But it is a struggle that has had some major victories – the people freed themselves from monarchy with democracy, the slaves were emancipated, women got the vote, blacks got equal rights. These victories have not ended discrimination or hierarchy, far from it. One of the biggest divides is still the rich and the poor, the haves and the have-nots. But it has introduced a new dynamic. Your potential is no longer restricted by arbitrary divisions, it (theoretically and only in some countries) is now possible to obtain any level of power or success no matter if you are black, white, male, female, rich or poor. It can just be a lot more difficult for some people. This has effectively eliminated any group dynamic from the struggle – the only commonality between people is their level in the society and that can change. No longer will there be slave revolts, women’s suffrage movements, black civil rights movement or anti-apartheid struggles – it is now a personal and individual struggle.

Now some people interpret this as meaning that it is each man (or person) for themselves, screw everyone else just look out for number one. These are the empire builders, that carve out their little kingdoms and surround themselves with yes-men; people who do not consider or value other people’s opinions; people who measure themselves entirely by their own success; they will bite, claw and backstab their way to the top and then cling onto power by any means necessary, not caring how they use that power, only that they have that power. This interpretation is that since everyone is now equal in the struggle, the struggle is against each other. But this is wrong, this is not how it should be interpreted. The struggle is with each other. The battle is not to see who gets to the top, but to see that everyone can reach their own top. We are all in this together, we are not in this by ourselves.

So what does the second interpretation mean in practice. If you have power, if you are at the top, it is your duty to help those below you to reach their potential. Helping them does not weaken your hold on power, it strengthens it through the support of those you help. Power is not meant to be held, it is meant to be given. If you lift those below you, you with be lifted with them; if you push those below you down, you will never get any higher and chances are that eventually everything will collapse under you. Just remember you are not creating yes-men, you are helping them reach their own potential.

If you don’t have power, your duty is to help those around you. Power can be created by groups – combining the tiny little bit of power each person has into a cohesive group can create large amounts of power. Help those around you, support them and pool your efforts, you will accomplish far more. Be strong against the empire builders, do not allow them to grind you down, use the power of the group to resist them. But do not resist everyone above you, support the good people, both those above you and amongst you. Every bit of support you give a good person will provide a tenfold benefit to everyone they go onto support. Also be wary that you aren’t building your own empire, you should be pursuing group goals and not just your own goals (if your own goals are the same as the group that is great).

But just remember what I said at the beginning, it is still a personal and an individual struggle. Do not get caught up in group-think, you are your own person, you have been emancipated, you have been given freedom and choice and opportunity, do not allow others to take that from you. Remember this and be strong when you are faced by an empire builder, remember this is still a struggle, don’t take it laying down, don’t become one of their yes-men. And when you have power, don’t let others force you to use that power badly. How you use that power is your choice and your responsibility.

Welcome to the new revolution – we’re fighting this one one person at a time!

It has been a while since I have written something arrogant and pretentious… ok it has been a while since I wrote anything… but just lately I have been having a lot of exposure to conflict between people and I started wondering what makes a good person, a nice person. Since I strive every day to be a good, nice person, what are the principles that I try and live up to when dealing with other people? So here is what I came up with – Pete’s guide to being a nice person:

• Other people always have something to teach you, learn from them
• Do not ever assume that you are better than someone – everyone will be better than you at at least one thing.
• Give others the benefit of the doubt. Don’t assume that any action is deliberate, malicious or intended negatively. This is not to say you should be naive, be wary of others’ intentions, but rather allow them to prove their good intentions before condemning them.
• Trust people for their intentions, not for their actions. Trusting someone because you believe their intentions are good (or bad) is far better than trusting someone to do or not to do something.
• Do not expect anyone to do something that you would not be willing to do yourself
• Do not judge anyone for doing something that you have done yourself
• Be patient when explaining things to other people, their inability to understand does not mean that they are stupid. In fact if you are unable to explain something to a ‘stupid’ person, you yourself do not understand what you are trying to explain.
• If someone disagrees with you, it does not mean that they know less than you, it may be that they know more than you, or have interpreted things differently.
• Be open about your opinions and beliefs, allow them to be scrutinized and challenged by others
• Listen to other people’s opinions and beliefs, respect and try to understand why they hold those beliefs
• Always consider how you can make other people’s lives easier with the things that you do
• Be patient, tolerant and open with even the most frustrating of people
• Help others without any expectations of recognition or reward
• If someone helps you without expecting recognition and reward, repay the kindness a thousand fold
• Do everything you can to help other good people succeed
• Always admit when you are wrong
• Be gracious and allow others to admit when they are wrong
• Learn from your mistakes and help others to understand their mistakes
• Other people’s interests are equally important as your own interests
• Tough love - always aim for the long term happiness of others and not their current happiness. This can be the hardest because it can mean hurting someone now, if you know it will make them happy later. Tough love can only be applied if you follow every other point listed above – especially be wary that you are not assuming that you know more or are better than the other person.

Well there we go, a short list of slightly different ways to be a good person

Be good everyone!

The unweekly email is back! Getting an email every week from me was clearly unsustainable and was ruining the name ‘unweekly’ Want to write a bit about governments in the next few mails. Going to start with some thoughts about the worst form of government… except for all the others (thanks Mr Churchill).
Let’s begin with an ideal utopia. Imagine a country where everyone is very well educated, politically savvy, aware of everything going on in their country and are concerned citizens. They decide that the best form of government for them would be a democracy – they would elect from amongst themselves the best leaders to run their country. Since everyone is so switched on politically, this is quite an easy task and they do indeed elect a superb leader who does all the right things, promotes the greater good and makes the country a great place. Now this person is doing such a great job running the country that everyone else stops worrying about politics and events in their country – they know that they are in good hands and that their leader will always do the right thing. Then it comes time to elect a new leader. Unfortunately the people are slightly less switched on this time – so both the people doing the electing and the choice of candidates is not as good as the first time. No one really minds, the new leader does a pretty good job anyway, the country continues to grow and the people forget even more politics. A couple of cycles later and no one is really interested in politics, nor events in their country, nor the concerns of the people, nor issues the country faces – there is a government that takes care of all that for them. Unfortunately the people chosen to lead have been getting progressively worse. The voters don’t really care or know about the broader issues and bigger picture, and only really care about their own little world and its problems. They have consequently started voting for the candidate that offers quick short-terms gains and quick fixes to their problems. Since the candidates are chosen from the general population and the general population is less politically savvy, the candidates know very little about politics, government, what the true problems the country faces and how to deal with them. The candidate that will win is now the smoothest talker, not the best leader, the one who makes the boldest promises even though they are impossible to keep. The original people in this utopia would have been able to see right through such candidates, but now the people are enamoured by them.
And so you have the natural decay of democracy.
And this is the reason why democracy is such a difficult form of government to form and maintain. Firstly, to form a democracy the people need to be politically savvy enough to understand it, to want it and to have people amongst them who are good leaders. George Dubyah’s idea that you can somehow impose democracy on a country is doomed to failure. If the people don’t buy into it, it will collapse all too soon, especially if they feel that they are not truly able to choose their leaders and if they do not understand what their leader’s role should be. Secondly, maintaining a democracy requires that its people do try to remain politically savvy. This unfortunately takes energy and commitment. People have to keep up to date with current affairs, understand not just what their needs are, but what their fellow countrymen’s needs are, and to be able to understand enough about politics and leadership to be able to judge their leaders. The stronger and greater the number of people that do this, the stronger and greater the democracy. Democracy is a fantastic form of government because it makes its leadership accountable and provides an opportunity for the best leaders to come to the fore. But in order to work it needs its citizens to care and to take an interest. Democracy is government by the people, and so the government is only as intelligent as its people, as wise as its people and as caring as its people.
How about you? Do you know the issues that your country faces? Do you know what your government is doing? Do you care about the problems and needs of your fellow countrymen? Do you take an interest? Do you stand up for the issues that are important? Or do you just complain about how bad the government is and how it never does anything for you? Do you not vote because you believe there is no point? Do you just let the government get on with governing whilst you try and live your little life?  If you don’t care then maybe democracy isn’t for you.

I have to start this post by apologising to my loyal readers – I have been conducting a social experiment with you without your knowledge. And I am very disappointed, you all failed the experiment.
My last two emails have been about HIV and AIDS and I have received not a single comment from anyone about them. In contrast my “Run for the hills the country is falling apart” post is one of the most popular and has a stack of comments. Talk about crime and everyone has something to say – people share their experiences, talk about what happened to their friend, or complain about how the government isn’t doing enough. Talk about HIV and everyone shuts up.
Let’s have a look at the numbers. The murder rate in South Africa is approximately 10 000 people a year, so 10 000 people a year are killed by crime (crime stats report). The estimated number of deaths from AIDS related illnesses varies between 150 000 to 350 000 people a year. The consensus appears to be around 300 000 people a year at the moment. This is 30 times the number of people killed by crime! This is roughly the same number of contact crimes a year in South Africa (including rape, assault, attempted murder and robbery). So you are as likely to die from HIV as you are of experiencing crime directly.
Think about this. If someone says that they have been a victim of crime, what would your response be? Some sympathy, support, a bit of solidarity, a sharing of experiences? If someone starts discussing crime, you would probably have something to say. Every one of you living in South Africa has done something to protect yourself against crime. You have security at your house and don’t trust strangers. You go on crime-prevention courses and teach your children how to avoid crime. Yes?
Ok, now think about this. If someone was to tell you that they have just found out that they are HIV positive, what would your response be? And be honest with yourself here. Tell them they were stupid and reckless? Tell them they have no morals? Blame them for sleeping around? Alienate them, stigmatise them, cut them out of your life? Think about how society would probably respond to that person. But is discovering that you are HIV positive any less traumatic than being a victim of contact crime? Do you discuss HIV with your friends? And ask yourself what you have done to protect yourself against HIV. Do you have safe sex? Do you have sex with strangers? Have you been on an HIV awareness course? Have you taught your children about sex and HIV?
To have a deeper look at the numbers, I am using a slightly older report from 2002 – the Nelson Mandela/HSRC Study on HIV/AIDS – but it is a good one and a good place to start. They estimated that 15.6% of South Africans were infected with HIV in 2002 – this means at least 1 in 7 people are infected. It is almost a certainty that you have met a person who is HIV-positive and it is quite likely that you know someone personally who is HIV-positive. “Rubbish,” you say, “I don’t know any poor, black people!” Firstly most of you who are reading this are in the 25 to 34 years age category – the prevalence amongst this age group is the highest, 28.4% for 25-29 years and 24.1% for 30-34 years. So in fact if you are in this age group, 1 in 4 of your peers is HIV-positive. Are you still sure you don’t know anyone who is HIV-positive? So you are white and don’t have any black friends – yes, your odds are a little lower. The prevalence amongst whites is estimated at 6.2% versus 18.4% for Africans. But 6.2% is still 1 in 16, do you have more than 16 friends? And unfortunately I can’t work out what the prevalence amongst whites in the 25 to 34 years age group is, but doing a bit of extrapolation I would guess it is about 10%. 10%?! Those are very good odds that someone you know is HIV-positive. Slept with more than 10 girls? Did you use a condom every time? And don’t forget, this report is 5 years old and HIV has continued to spread.

So I challenge all of you to start talking about HIV as much as you talk about crime. And if you find out someone is HIV-positive, how about giving them some sympathy, support, a bit of solidarity and sharing some of your experiences.

So continuing from the last email about HIV forcing us to confront the truth that sex happens, I want to have a rant about how many of our HIV prevention campaigns seem to ignore this truth.
HIV prevention is usually summarised by the mnemonic ABC – Abstinence, Be faithful, use a Condom. Driven largely by a conservative population and Mr. Bush, a large amount of emphasis and more importantly money has been put into abstinence campaigns. Being faithful gets a bit of attention, and unfortunately condom use is an avoided topic because that would involve admitting that sex happens. The abstinence campaigns are basically a desperate attempt to roll back the clock to the good old days when sex didn’t happen, when sex was dirty and only performed by evil, immoral people. Want to avoid HIV, avoid sex. What a fantastic idea, now you don’t have to talk about sex with anyone, you can just talk about why they shouldn’t have sex and how not to have sex. You children are safe once again now that you have enrolled them in a virginity-testing club (for those of you who think I am joking about this, there are such things as virginity clubs and the even claim to be able to test whether a guy is a virgin… crazy, crazy people!). Imagine the spread of HIV being halted in its tracks by everyone promising not to have sex! What a marvellous scheme.
The problem is that this thinking has infiltrated the thinking of most HIV prevention programmes, partly because of old habits and old thinking and also partly because of the Greeks and their stupid alphabet. The order of the letters makes us think of the ideas in that order. Firstly you should Abstain, if you aren’t abstaining then you should Be faithful, and lastly if you aren’t abstaining or being faithful then you should use a Condom. But this is basically saying that sex only sometimes happens and then only as a last resort – wrong! Sex happens, that should be your starting point! Let’s look at the reality of each of the steps of prevention in their current order.
Firstly abstinence. Abstinence is promoted as being almost 100% effective at preventing HIV infection (infection through blood being the main remaining threat which is very minimal). But how effective is abstinence? Abstinence unfortunately has a more than 99% failure rate. Almost everyone has sex at least once in their lifetime. Even a few of the people who have taken the most sacred of vows not to have sex have broken those vows… sometimes in dodgy, scandalous ways. So sooner or later abstinence will fail.
So you fall to being faithful to protect you. Well considering that there is a TV show dedicated entirely to catching people being unfaithful, just how reliable is being faithful? Sure you are being completely faithful, but do you really trust your partner. And both of you might even be completely faithful in your relationship, but have both of you checked your HIV status recently? Maybe one of you was infected in a previous relationship without knowing it. And then there is the disturbing belief amongst some people that having sex with more than one partner does not constitute being ‘unfaithful’, they believe that as long as you love one person and spend the most time with them, then you are being faithful. Those other sexual liaisons ‘mean nothing’. So how effective is being faithful? 60% effective maybe?
So if you aren’t one to be faithful, then you are going to of course wear a condom… aren’t you? If you think you can cheat on your partner and get away with it, you are probably going to also think that you can not use a condom and get away with that too. And for all the faithful, good people out there, you don’t have to ever worry yourself about condoms because you won’t ever get to this point.
You see the problem here? The whole thing is completely backwards. It is being approached backwards and is being taught backwards. This is how it should go:
Use a condom. Sex happens, it will happen at some point in your life. It might not have happened yet, but it will happen. When it does, are you prepared to use a condom? Know how to use a condom, carry a condom with you, so that when it happens you are ready and prepared. This is the starting point, this is what we should be emphasising and teaching. A properly used condom is 99% effective at preventing HIV transmission and even better, also at preventing other STDs and pregnancy. Sex happens, so be prepared for when it does, be educated and informed about it, do it responsibly and safely.
So a condom will protect you 99% of the time, but if you want more protection then you should also be faithful to your partner. If you are faithful to one partner AND use a condom then you are more than 99% protected. Have a healthy and open relationship, not only will you cut your chances of getting STDs, but you will also have a happier relationship and better sex too.
But if you want to be completely safe, then abstain from sex until you are ready. Get to know your partner better, build a healthy relationship, get married first if you prefer, then you can have sex knowing that you can trust your partner. But even if you are abstaining, never forget C – know how to use a condom, carry a condom, because sex will happen and you should not allow it to catch you unprepared.

There is another disturbing trend amongst HIV prevention campaigns – the stigmatisation of sex as being something bad. This is a combination of multiple factors – old-fashioned thinking, conservative and denialist thinking, ‘HIV is bad therefore sex is bad’ thinking, etc. Some campaigns therefore appear to send the message that people only have sex to get food or money or because another person is using them. Sex is portrayed as something that bad people try and coerce out of good people. You know what – here is a little secret that will shock and amaze you, and I could be stoned to death for revealing it. Sex is good. Sex is fun. People enjoy having sex. People have sex because they like it. Sex happens!

Complete change of topic for this week - I am going to tackle one of the most significant causes of social change in the modern age. Something that has made us confront our morals, our beliefs and to acknowledge things that were once easy to deny – the Human Immunodeficiency Virus.
HIV has had a major impact on our society and has forced us to acknowledge a basic truth – sex happens. Sex has always happened, but we have not always acknowledged that it happens. It is dirty, messy and immoral, even thinking about it will send you straight to hell. Sex should only happen between a married man and woman, and then only to create babies. You must not talk about sex – ever. If you are very daring and liberal, you can provide sex education to your children, but you must only tell them which bits go where and how babies are born. Sex is a chore that you may one day have to perform, but it is generally best if you don’t ever acknowledge its existence. The hippies in the 60s showed that sex can happen between unmarried couples and that it can be fun, but they were a drug-crazed fringe group and were easily dismissed by mainstream society.
Then along came HIV… The first thing it did was to make us acknowledge that sex also happens between two men. The first major group to become infected were gay men. In the past, if you were gay you could hide your secret, deny your homosexuality and no one need ever know. Suddenly gay men were getting sick and a clear link was drawn by society – if you get sick, you are gay. Their cover was blown and the gay community suddenly found itself under the somewhat hostile public spotlight. But under the twin threats of a mysterious disease and a scornful public, the gay community banded together and found new strength – the gay pride movement made huge strides. Famous people started dying and the public started to realise that many of their heroes and idols were gay. The pinnacle event for me was the death of Freddy Mercury – a worldwide icon, who was openly gay (at least in his later career) and who disclosed that he was HIV positive just before his death from AIDS. HIV could no longer be ignored, could no longer be seen as God’s wrath on the immoral underworld of the sodomites – it was killing our heroes. To confront and prevent HIV we also had to confront the truth that sex happens between two men.
But HIV was not just a gay disease and it was already infecting heterosexuals. People who weren’t gay also started dying. HIV wasn’t just magically transmitted between people just because they were gay – it was transmitted because they were having sex. To talk about HIV, we had to talk about sex. Sex could no longer be ignored or denied – sex happens and it was killing people. We had to start talking to people about how they have sex, how to have safe sex and how to protect yourself – otherwise more people would die. We became aware and were forced to admit that everyone was potentially having sex – our children were having sex, unmarried couples were having sex and sometimes our spouses were having sex without us. It was no longer just about HIV, it became about sex. Issues that were denied and had been buried, now had to be faced. Teenage sex, extramarital sex, casual sex, sex workers, sugar daddy sex, gay sex, sex with multiple partners, sex, sex, sex.
Confronted with our own sexuality in such a dramatic fashion, we have been forced to rethink the morality of sex. Sex can no longer be seen as only happening between married couples and immoral everywhere else. Morality became irrelevant, it was now about how to protect yourself. Having unprotected sex, having multiple sexual partners, having extramarital sex, etc, became risky behaviour. And now a new morality is being defined around this risky behaviour. In the old days it was a simple command – “thou shalt not have any sex” – which led to the obvious question “but why?” It was a groundless morality that ignored the reality and denied a basic natural act. The new morality is far more realistic and practical – “Thou shalt not cheat on your girlfriend”, “Why?”, “Because it will put both of you at risk of contracting HIV”. Sex happens, so learn how to have responsible sex. No longer is sex education just about which bits go where, sex education is about life skills – how to negotiate, how to stand by your beliefs, how to communicate, how to say no, how to have a healthy relationship, how to use a condom, how to look after your health when sexually active, etc.
And HIV has forced us to confront bigger issues around sex too, the power politics of sex and the socioeconomic reasons for sex. How risky sexual behaviour is related to poverty and education; the sexual behaviour of migrant labourers and truck drivers; how much choice a woman has on whether a condom is used and the power play at work. And HIV is also no longer just about sex, it is also about poverty. The highest HIV prevalence is in some of the world’s poorest regions. HIV can now be treated and should not result in the person dying, but the drugs are expensive and they are not reaching the poor who need them. And it is the poor with less power and education and fewer options that are not able to make the choice to have safe sex and are therefore most at risk of contracting HIV.
And HIV is also about stigma and judgement and denial and our own mortality. The spread of HIV could be completely stopped in its tracks if everyone went for testing, knew their status and was open about their status. But will this ever happen? How can we ask people to reveal their status when it could result in them being cast of from society, to be rejected by their friends and family as unclean and dangerous? When there is still so much fear and misunderstanding of HIV in the world? Why would someone go for an HIV test when many people still believe HIV is a death sentence? Who wants to know they might die? Why would someone go for a test when they believe it is only gay people, the poor or the immoral that get HIV?
We have a long way to go, lessons are still being learnt, stigmas are still being challenged, but we ignore those lessons and perpetuate those stigmas at our own peril.

As I reached for happiness
I touched only pain
As I dream of greater things
I experience only rejection
I cry in sadness
I cry in joy
I cry in frustration
I cry in compassion
I laugh at my tears
I laugh at my stupidity
I laugh in happiness
I laugh in understanding
I mourn the deceased
I celebrate new life
As I despair for lost opportunities
I hope for new beginnings
I am in that mad place between agony and ecstasy

Was all ready to write this email, when I thought I should have a quick look at the numbers. I’m glad I did because I was just about to perpetuate the popular view. A handy tip – always check the numbers and beware of ass-umptions. Just because everyone says one thing and just because it makes sense, does not mean that it is correct.

So this week I’m going to have a look at what has been going on in America. I think the decade of 1999 to 2008 is going be one of the most popular case studies in future economic papers. An interesting time and a complicated time.

Currently in America there is a massive debt crisis, everyone has gone on a massive spending spree lately, racking up huge amounts of debt, buying lots of houses and now no one can afford their credit bills and everyone is defaulting. Right? WRONG! Here is the surprise – I was seriously expecting to see a surge about 5 years ago in consumer spending and debt in America, but it is not there! Consumer debt has been steadily rising, yes it might be getting to be too large a percentage of their income, but the rate of increase has been constant for over a decade. There has been no large jumps in consumer debt. Now I am going to say this in big bold letters – the current crisis in America is not due to a change in consumer behaviour! If anyone tries to accuse the man on the street of being irresponsible and causing the current crisis, they are wrong. The man on the street is doing nothing different.

But now this conclusion leads to a whole host of questions. Clearly Americans are in distress, clearly there is a financial crisis, clearly something has gone seriously wrong in the last few years to cause these problems… I’ve been thinking seriously about all these questions and I am still struggling to work out the answers. I need a few economic doctorates to help me out here, but I’m going to have a go at this anyway.

The best theory I could come up with starts with the basic assumption that the American economy should have been in recession/low growth phase for a longer period than it was – instead of a recession just for 2001, it should have lasted at least till 2004. Instead, from 0.8% real GDP growth in 2001, the GDP growth was already up to 3.9% by 2004. A 3.9% real growth rate is very respectable. But surely growth is good and recession is bad? This is where the American situation just gets a little bit weird and I am sure will get its own economic catch phrase sometime soon. I’m going to put my lot in and call it a period of high-growth recession Everything about the US economy for the 2001 to 2005 period screams major recession, yet the GDP growth rates don’t. Household incomes were constant/falling in that period, total industrial capacity growth was virtually zero, usage of manufacturing capacity was at historic lows, exports were flat, spending on non-residential fixed investments was flat – in short a recession. What was happening in that period that caused this recession? The dot.com boom was over, the US was distracted by wars in Afghanistan and Iraq, cheap Chinese goods were competing all over the world with American goods and the US dollar was far too strong, propped up by both the Chinese and the US policy makers.

So why the high GDP growth rates? If I tell you the GDP growth was led by spending on durable goods, residential structures and federal government spending, you should have a suspicion. Interest rates. The Federal Reserve rate fell rapidly from 2001 to hit a low of only 1% for the year of July 2003 to June 2004 – the prime rate in America for this period was only 4%. So with such low interest rates everyone starts buying residential property – no one buys industrial property or manufacturing capacity, because manufacturing is in a slump and there is already spare capacity. Investors buy residential property instead of business. House prices start rising rapidly and suddenly home owners have access to more credit and can sell their houses and upgrade. Rising house prices also motivate people to renovate and improve their houses (durable goods sales). At the same time, cheap Chinese imports are entering the market and inflation is averaging about 2.5% for the period – people can buy more stuff for the same price. And of course the federal government is very concerned about a recession so they are spending large amounts to prop up the economy.

Remember how at the beginning I said that growth in consumer credit was constant and that there was no major jump in consumer debt? But doesn’t what I just said contradict that? No, you see the growth in consumer credit was constant. With household income levels remaining constant and the economy in principle in recession, people should have stopped borrowing money and consolidated their spending. However no one told them to. Interest rates kept falling, allowing people to continue borrowing money even though their salary was the same, and house prices were soaring, increasing the value of their assets. At the same time low inflation and cheap goods allowed them to continue expanding their lifestyle as they had done during the past decade. Everyone was being told that the economy was growing – why be fiscally prudent during economic growth? So here is the full conclusion in nice bold letters - the current crisis in America is not due to a change in consumer behaviour, it is due to consumers not changing their behaviour! The Americans were deceived by economic slight of hand, their economy was in a severe recession for the period of 2001 to 2005 – they should have been tightening their belts, becoming more efficient, spending less and borrowing less. However, because the Federal Reserve’s mandate includes looking after economic growth and due to pressure from the US government to avoid a recession at all costs, the recession was cunningly hidden by pouring money into the economy. But there was no return in industrial production, since there was spare capacity and the Chinese were being too competitive, so all the extra money started chasing residential property.

Which leads us to the present crisis. The good times are over – rising oil and food prices and a plummeting dollar have pushed up inflation in America. Rising interest rates since 2004 have taken the shine off residential property. Household income and industrial production have only just started increasing above their 2000 levels. At the end of the day, the Americans bought 3 years of growth when they should have been facing a recession – and now they are paying the price.

If there are any qualified economists reading this – I’d love to hear what you think. Let me know if you want to co-write a paper

And just for the record, the statistics I used are mostly from the US Federal Reserve, the US Bureau of Economic Analysis and the US Census Bureau.