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If you want to keep a blog that makes the arguments every day against the ravages of capitalism going and keeps alive the flame of democracy and community, make a donation to help cover my costs. And of course keep reading the blog. To donate click here. Keep socialist blog En Passant going. More... (4)

Sprouting sh*t for almost nothing
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My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. http://sharonfirebrace.files.wordpress.com/2014/02/18-2-14-john-passant-aust-national-university-g20-meeting-age-of-enttilement-engineers-attack-of-austerity-hardship-on-civilians.mp3 (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. http://sharonfirebrace.com/2014/02/11/john-passant-aust-national-university-canberra-2/ (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. http://sharonfirebrace.files.wordpress.com/2014/02/4-2-14-john-passant-aust-national-university-canberra-end-of-the-age-of-entitlement-for-the-needy-but-pandering-to-the-lusts-of-the-greedy.mp3 (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole
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Sick kids and paying upfront

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Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. http://sharonfirebrace.com/2013/12/03/john-passant-australian-national-university-8/ (0)

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From Goldman Sachs to the Melbourne Storm, the game remains the same

A few bad apples explains it all.  That must be it.

Wall Street is innocent. The fraud claims against Goldman Sachs, the collapse of Lehman Brothers, the AIG rescue, the trillion dollar bail outs must all be the result of a few bad apples.

For Goldman Sachs it was paradise.  They sold collaterised debt obligations to clients and then then used credit default swaps to short sell the CDOs and profit from it. The victims range from AIG to Greece.

But at least there are a few good apples. Like the 25 top US  hedge fund managers who received on average $1 billion each for their ‘expertise’ last year. Men who add no value to society get billions.

We in Australia have a our bad apples too. 

Like ABC Learning. James Hardie. Opes Prime. Storm Financial. HIH. AWB bribing Saddam Hussein. Stern Hu from Rio Tinto pleading guilty to accepting bribes. BHP being investigated for bribery in Cambodia. Those jailed for international tax evasion(with possibly more to come). 40 percent of big business paying no tax.

And now we have the Melbourne Storm. For non-Australian readers the Storm is a rugby league team in Melbourne, the city which is the heart and soul of Australian Rules – a fast flowing game not unlike Gaelic football but more exciting. 

Rupert Murdoch (the head of news Limited) owns and controls this outcrop of rugby league in Melbourne.

The team has won 3 premierships since its induced birth in 1998, 2 of them in the last 3 years of the National Rugby League competition.

That competition has a salary cap. You guessed it.  A few bad apples at the Storm rorted the system to build the best team. They overspent on the salary cap.  They kept two sets of books to disguise their actions.

So while all the other 15 teams were apparently operating within the rules the Chief Executive Officer of the Melbourne Storm (a bad apple) arranged third party payments outside the rules to keep the Storm’s best players.

In a regulated market like rugby league, this is evidently unfair competition.

Sixteen teams, a regulated market, a salary cap to spread the talent around… You join the dots.  One bad apple emerges.

Or maybe more. The former CEO of Melbourne Storm wants an independent enquiry into the salary cap and compliance with it. ‘They’re all doing it’ was his justification for organising the Storm’s massive salary breaches.

The whole lot of them are a thieves’ kitchen, united against competing professional sports and divided in competition between themselves – not just to win the competition but to win more dollars to continue doing so. 

The 16 NRL clubs are a snap shot of capitalism today and what is wrong with it. 

To ensure the survival of the game, they have sold its working class soul to the highest bidder. They suppress the returns to the players, those who produce the wealth. In fact the players are the architects of the re-distribution of some of the surplus productive workers create to the likes of Rupert Murdoch’s News Limited.

Governance is big on the agenda of capitalist regulators at the moment, like ASIC and the ATO. CEOs are easy fall guys for an enterprise’s problems. But the Board is ultimately responsible. The Storm Board is controlled by News Ltd.

Insider trading is also on the radar  of regulators.  In a stock exchange setting this means that people with inside knowledge buy or sell shares depending on that knowledge.

Allegations are surfacing that someone with inside knowledge of the investigation into the Storm’s breach of the salary cap may have backed them to win the wooden spoon.

As a penalty for breaching the salary country, the National Rugby League stripped the Storm of all their points won so far this year and decreed they will not win any points for the rest of the year, as well as stripping them of their 2007 and 2009 premierships.  They will win the wooden spoon. Someone stood to profit from this action and acted accordingly.

Fraud, deceit, two sets of books, insider trading, cut throat competition, regulated markets, lack of ethics and governance, winning at all costs. Aren’t these what our society is built on?

It’s not a few bad apples. The whole system is rotten.

The Melbourne Storm is a mirror into the soul of capitalism.

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Comments

Pingback from Tweets that mention En Passant » From Goldman Sachs to the Melbourne Storm, the game remains the same — Topsy.com
Time April 27, 2010 at 1:19 am

[…] This post was mentioned on Twitter by John Passant. John Passant said: En Passant » From Goldman Sachs to the Melbourne Storm, the game remains the same http://enpassant.com.au/?p=7075 […]

Comment from Marco
Time April 27, 2010 at 12:53 pm

Quite interesting views, John.

But I think CEOs have more responsibility. This reminds me of your last article on the USSR. In a way, executives are appear to be our own version of the Soviet bureaucracy .

At one hand, CEOs are workers: they don’t own the means of production; they only own their own work force.

But in practice, they control the means of production; in many cases, they have a greater control over the means of production than the very capitalists that theoretically own them.

Corporations have grown too big and too complex to be controlled by any individual capitalist or even by a family. I suspect, during Marx and Engels times, capitalist enterprises were predominantly smaller (with a few exceptions, to be sure).

It was about Marx’s times that the corporation started to take off. Mostly in the US, and a little bit in the UK. And, I wonder, perhaps the change from individually-owned enterprise to a gigantic share-enterprise, often with monopolic power, has had effects on the behaviour of the whole system?

Comment from David E
Time April 27, 2010 at 2:39 pm

There’s some truth to that, although i would wonder how much it has really changed. Even if you have a different demographic make-up with the power, e.g. a board vs. an individual CEO, the systematic effects probably still lead them to similar behaviour. They still have to make a profit, and that goal still competes with ideals like returning value produced to the workers, pursuing environmental sustainability, or trading ethically – even if the goal exists in a different set of brains.

I work at a business that is ostensibly a co-op; in practice, the co-ops board is dominated by ex-employees who refuse to cede control to current employees. They don’t receive any profit from the store and for a long time, the place has actually run as if it was a co-op, with no inteference from above. But then the landlords (who try to make their money out of the building we rent) started to put pressure on, the board started making changes and we are beginning to turn into a much more profit-oriented non-profit.

My point being, even through this somewhat convoluted arrangement, the ultimate goal (in this case, of the landlords) of making money filters through to shape the nature of the business at the other end of it.

Comment from Pharmacy technician book
Time April 27, 2010 at 2:47 pm

Terrific work! This is the type of information that should be shared around the web. Shame on the search engines for not positioning this post higher!

Comment from Marco
Time April 27, 2010 at 5:05 pm

@David,

I don’t think CEOs manage their corporations with the benefit of anyone, other than themselves, in mind.

A CEO, for instance, could be faced with a situation where the future corporate survivability could be put at risk, but with increased profits (i.e. managers’ compensation) now. But this does not necessarilly suit the corporations’ shareholders.

That seems to be the case with Lehman’s “Dick” Fuld: he and his gang, it seems, could risk being sued by Lehman’s shareholders, over the Repo 105 affair.

In the end, I believe the raise of management could intensify the instabilities inherent in capitalism.

Comment from Beau
Time April 27, 2010 at 6:12 pm

Another example of over regulation.

Comment from Marco
Time April 27, 2010 at 7:12 pm

John and all,

This is the most scandalous thing I’ve read in my whole bloody life and fits perfectly well with the topic of your post:

“Goldman fraud charges: emails and internal reports revealed”. The Telegraph (UK), 26/04/10.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7634658/Goldman-fraud-charges-emails-and-internal-reports-revealed.html

I nearly fell off my chair reading Fabrice Teurre’s email to Marine. I don’t know if to laugh or to have a stroke.

Comment from Marco
Time April 27, 2010 at 8:38 pm

Some more details on the information above:

I’ve read the whole material. That related to Tourre, in my opinion, puts him not only in a very bad light, but makes him sound ridiculous.

While that related to the rest of the management is not negative.

It appears, following The Telegraph, that the material was released by Goldman Sachs itself…

I wonder if they are trying to set a fall boy…

Comment from Arjay
Time April 28, 2010 at 8:58 pm

The free market was not allowed to operate.It was competition for the masses and economic socialism for the large corporates.Capitalise the profits based on no productivity and socialise the losses via more taxation and loss of jobs for the masses.

The GFC has just begun and unless we get away from the mentality of “too big to fail” ,it will be worse than the Great Depression of the 1930’s.

Your wealth is always in your people.Kill the incentive for people to invent and achieve, then you destroy your economy.

Both the Corporatists and the Communists have yet to realise this reality.In my view, they are one in the same.Psychopathic power freaks.