Sunday, 23 October 2016

Whatever you think of The Donald, he's a better choice than Hilary Clinton

The real vote is about who gets to sit in here. (Photo of US Supreme Court by Beatrice Murch via Flickr.)
There can be no doubt that Donald Trump is a fool, that he is lacking in political and policy experience, that he is crude, sexist, morally reprehensible, possibly racist, and may be even insane. But he still is a better choice for US President than Hilary Clinton. Or, if you prefer, he is at least the lesser of two evils.

Donald Trump may not understand the policies he espouses. Indeed he is incapable of articulating a rational policy position on anything. But at least the policies that he represents are the policies of the Republican Party and the policies that continue to represent the interests of the America of the free market, and the America of traditional Christian values. His polices are the policies of the land of the free and of the home of the brave.

The most important thing the next American President will be responsible for is the replacements of up to four Supreme Court judges as they retire or expire. The four judges that will or may need replacement are Antonin Scalia (he passed away in February this year and his seat remains vacant), Anthony Kennedy (b. 1936), Ruth Bader Ginsberg (b. 1933), and Stephen Brayer (b. 1938). Scalia was a conservative who was appointed by Reagan. Although Kennedy was appointed by Reagan he is a libertarian. Ginsberg and Brayer are both liberals (or progressives) appointed by Clinton. The current bench is split evenly between conservatives and liberals, with Kennedy as a wild card. A liberal replacement for would create one of the most liberal-progressive courts in history. If another Justice retires or dies under a President Clinton the bench would be totally dominated by liberals.

Why is this important?

Obamacare v. The Little Sisters of the Poor

Consider that earlier this year an order of Catholic nuns, the Little Sisters of the Poor, found themselves before the Supreme Court for refusing to include contraceptive services in the healthcare plans they were mandated to provide under Obamacare. The Supreme Court found unanimously in favour of the religious order in what was hailed as a victory for religious liberty. The unanimous decision was surprising given the current make up of the court.

However, the decision was not quite in favour of their legal position. The Justices made it clear they were not making a ruling on the merits of the case. Rather, the Supreme Court "vacated" the decisions against the Little Sisters of the Poor that had been made by lower courts. In other words, the cases were sent back for consideration again by the lower courts. The Supreme Court also asked the parties to the dispute to find a solution. So far none has been found. (More can be read about the case on the Catholic News Agency website here.)

That means this case could return to the Supreme Court and the Court could be forced to make a decision on the matter. Imagine the possible outcome if the Supreme Court is dominated by liberals if (or perhaps when) that happens. It is quite possible that a liberal-dominated Supreme Court would order the Little Sisters of the Poor to include contraceptive services in the health insurance plans they provide to their employees.

The Trump Card

In order to placate his Republican detractors, Trump has released the names of 21 candidates he would consider to fill Supreme Court vacancies, starting with Scalia's vacancy. All the names have strong conservative credentials. (This Wall Street Journal article has a list of the latest 10 names, which were put forward by Trump in September.) In particular the Trump candidates are thought to be strong on the issues of states' rights and abortion.

States' rights are important to the base of the Republican Party because they tend to favour decentralisation and smaller government. But states rights became especially important to the Christian base of the Party in 2015 when the Supreme Court ruled in favour of gay marriage in the case of Obergefell v. Hodges. The liberals carried the day with the support of the libertarian Kennedy.

The conservatives on the bench wrote dissenting opinions.

In practice, the ruling overturned plebiscites in several US states that had voted against gay marriage. Justice Scalia put it best in his dissenting opinion when he said the finding effectively robbed the states (and their citizens) of "the freedom to govern themselves".

Both of these issues are important for the Republican base, which is primarily comprised of a strong Christian vote.

From a Christian values perspective, America cannot afford to see the Supreme Court move any further to the left. At stake is freedom of religion and freedom of conscience in America. It is likely that a more liberal, more progressive Supreme Court would push forward the march of marriage equality, against the wishes of the majority of American people - at least in the more conservative states - and impinge upon the religious liberty of the Little Sisters of the Poor and other Christian groups on issues such as contraception and abortion.

Caught between the Devil and the Donald

It would appear Americans are caught between the Devil and the deep blue sea. It is difficult to see how any Christian could vote for Hilary Clinton. She has an unashamed progressive agenda when it comes to gay marriage and abortion. But it is especially hard to see how any Catholic can vote for her after the leak of her campaign director's emails which amounted to an unprecdented attack by any presidential candidate on the beliefs of Catholics and on the Church itself.

A vote for Clinton would be tantamount to a vote for America's continued slide into the cultural and moral abyss. Clinton would likely seek to appoint Supreme Court justices who will ensure the slide on the slippery slope speeds up.

At least the appointments Trump is considering for the Supreme Court bench would slow that slide.

That is the stark choice Americans are facing. Let's hope they can put all the other stuff - all the stuff that stinks about Trump - to one side and consider what this presidential election is really about. Walking into a polling booth on election day in America will be like peering into the abyss - or at least it should be before our American cousins cast their votes.

God help America.

Saturday, 22 October 2016

It's only illegal if you get caught in China doesn't quite work

No gambling allowed here (Photo of Great Hall of the People, Beijing, China, by the author)
The “everyone does it” claim by foreign companies operating in China is a poor excuse for flaunting the country’s laws and regulations. That's what I said in an opinion article that was published in  The Australian Financial Review on 18 October.The article draws on my 13-years experience in China, working with foreign companies who all too often found themselves on the wrong side of China's lawsor regulations, especially those governing the import of food and medicines into the country.

The article, which follows the arrest of 18 gambling industry executives in China, looks at the risks of over-enthusiastic marketing by Australian (and other foreign) companies that often contravene China’s laws and regulations. In the article Alistair suggests that companies involved in the gambling sector should have “read the tea leaves” and curbed their marketing efforts in China.

The article includes the following among the matters companies in the gambling industry should have been sensitive to:
  1. That casinos and gambling, along with marketing of casinos and gambling, are illegal under Chinese law – indeed, some 40 executives of South Korean casinos were arrested in China last year for breaching these laws, and Las Vegas casino operators have pared back their marketing efforts in China in response to the laws;
  2. The Chinese Government’s current crackdown on corruption is targeting many of the high roller clients of casinos given gambling’s links to money laundering – anyone marketing to this group would also likely find themselves a target of the Chinese authorities; and,
  3. Rising tensions between China and Australia over China’s construction of islands and military bases in the South China Sea would meant that China was looking to fire a shot across the bow of Australia. Alistair says it is “ironic” that this has happened in the wake of Australia calling on China to abide by the rule of law.
I conclude that the principle of “everyone does it” and the fact that the Chinese Government might turn a blind eye to certain activities of foreign companies only holds true until they start to enforce their laws. In my words: “The arrest of foreign business executives [in the Rio Tinto bribery case] was unprecdented [in China] until it set the precedent.”

The full article can be read here. Please note that a subscription may be required to read this article in The Australian Financial Review.

Saturday, 9 April 2016

A busy start to the year

To be frank, I've been very busy; not even enough time to
catch up with the "House of Cards".
(Photo by Sybil Liberty via Flickr.)
It has been a while since I last posted an article on this blog. There is no excuse except that I have been way too busy with work.

So what's been going on?

Working 9 to 5, and then some

To start with we introduced our Powell Tate brand to the Australian market in February. This was timely in my opinion. Powell Tate is a specialist public affairs agency that is wholly-owned by Weber Shandwick. It has offices around the world, particularly in key government centres like Washington, DC, Brussels and Beijing (I used to run the Powell Tate office in Beijing). In my opinion we needed the brand to be introduced into Australia because of the nature and sophistication of the work carried out by the Corporate and Public Affairs Practice of Weber Shandwick Australia. Bringing the Powell Tate brand into the market has provided us the opportunity to put forward our point of differentiation more clearly in the market. Weber Shandwick Australia's Sydney Corporate and Public Affairs Practice moved holus-bolus to form Powell Tate. We share our offices with the Weber Shandwick team and continue to work with them on client projects where our specialisation services are required. If you want to find out more about Powell Tate Australia you can visit our website.

Apart from this development I have been busy working with a client on a product liability issue for the past month and a half. And we've had a few other crises popping up here and there for clients.

But time to muse ...

Between all of that I have managed to find some time to pen a few articles for some of our daily newspapers and our blog, and to contribute to a report on China's ambitions to achieve Market Economic Status (MES) in the World Trade Organisation (WTO). Here are links to those various musings, in reverse order:

Towards China Market Economy Status: A Powell Tate Report - This year will see the world's three largest economies - the EU, the US, and China - become increasingly involved in a complex trade tussle with considerable political and economic ramifications for themselves and the rest of the world. Powell Tate's offices in Beijing, Brussels, Washington and Sydney have produced this report that assesses the issues and what's at stake.

Four rules for crisis management success that PR managers don't get but should - working on some recent client crises I have become frustrated by many of their in-house and consumer marketing PR advisers. They have failed to understand that the dynamic of communications needs to change in a crisis, which has caused innumerable problems for the companies and lawyers involved. In this piece I try to set out four rules for PR managers to follow in order to be helpful in a crisis situation.

A 12-step program for Op-Ed success - I am often amazed by clients who think it is either very easy to have an opinion article published in a major newspaper or magazine, or by those who think it is so hard to do so it is not even worth trying. In this piece I have laid out 12 rules for success in getting opinion pieces published in major newspapers and magazines.

Former ministers find themselves with a lot of time on their hands - This piece was published during the Rolex-gate affair that received considerable media coverage in February. It was meant as a humorous take on the affair within the context of Chinese culture and superstition. A version of it was later published by the Australian Financial Review as Four Rolexes puts you on a death watch in China.

Earlier that month I had an opinion article published in the national daily broadsheet, The Australian, about former Human Services Minister Stuart Robert's ill-advised "personal" trip to Beijing to support a close friend and Liberal Party donor's business interests with China. That article was published as Stuart Roberts (sic.) in China: guilty of cultural naivety or foolishness.

With February and March so busy, I'm hoping for a quieter April.

Saturday, 12 December 2015

On foreign investment in Australian agriculture

In November the Federal Government blocked bids by two separate Chinese interests for the troubled Kidman & Co properties. This led many to speculate that the Government was opposed to foreign investment in agriculture. Some even suspected it was xenophobic and particularly opposed to Chinese investment.

The Australian agriculture sector is in need of foreign
investment to modernise and capture the opportunities in the
Asian region; but politics is standing in the way. Would-be
foreign investors need to do more to successfully close their
bids. (Photo by Blue Mountains Local Studies via Flickr.)
I wrote an article at the time saying that the real issue was sensitivities around investment in the agribusiness sector. I pointed to the fact that the minor Party of the Federal Coalition Government, the Nationals, continue to hold sway despite the recent change of Liberal leaders (and Prime Minister) from Tony Abbott to Malcolm Turnbull.

However I argued that would-be foreign investors, including Chinese investors, looking to buy into Australia's agribusiness sector should not lose heart. Rather, I said, they should learn lessons from this (and the earlier failed Archer Daniels Midland's bid for GrainCorp), and plan future takeover bids better.

In particular, I said, would-be foreign investors needed to increase their lobbying efforts. Foreign investors can't be satisfied with assurances from the Prime Minister or the Treasurer, or from the Foreign Investment Review Board, that their bids meet all the relevant criteria. In today's political fulcrum a deal can be undone even if all the boxes are ticked. I argued that would-be foreign investors needed to also lobby the Nationals and launch public affairs campaigns to win the support of local communities around targeted businesses, and to win broader public support.

The articles were published as "Game on for foreign investors in Australian agriculture: blocked Kidman deal points to way forward, not road's end" in The Abacus, the Australia China Business Council's blog, and on the Public Affairs Asia Blog.

Saturday, 17 October 2015

Three steps to media interview success

Alistair Nicholas being interviewed by media
at a recent conference on doing business in China.
A piece I wrote on media interview success has been published on the Weber Shandwick Australia website and can be read here.

The three steps I recommend potential interviewees take are to

  1. Know their messages;
  2. Anticipate difficult questions; and, 
  3. Practice responding to questions, particularly the difficult ones before the interview.
The full article can be read here.

Saturday, 12 September 2015

Eulogy for My Father: Delivered 29 August 2015

Noel Anthony Nicholas, 5 September 1921 - 22 August 2015
You’d be glad to know Mum asked me to keep this short. I guess she didn’t want people leaving early because they got bored with me rambling on. And my sisters asked me not to make anyone cry. I’ll do my best on both counts.

I have to admit it was challenging to keep this short. How do you sum up in just 10 minutes a life of 93 years, lived as it was across three continents? There are so many wonderful stories from Dad’s life that you want to tell them all. But they will have to wait for another time, perhaps later today at the Workers Club where Dad enjoyed a glass of wine every Sunday after mass.

Talking with my sisters these past few weeks – probably talking a lot more in these past few weeks than we had done with each other in the past 50 years – we found ourselves marvelling at what Dad had taught us during our lives, by the way he lived his life. He taught us how to live – and these past few weeks how to die - with joy, charity, grace and dignity. There were many other virtues that Dad lived everyday, but these stood out, particularly during these past few weeks. We hope we can live up to the example he set.

If you knew Dad you knew he was a great athlete in his time – he dominated in boxing, field hockey, and athletics. Indeed, he held South India’s Bantam and Featherweight boxing titles simultaneously – no mean feat because it required the ability to quickly gain and lose weight between bouts. He was as dedicated and persevering in his professional life later. By the time he had retired nearly 30 years ago, Dad was one of the leading ceramic engineers in the country and he had contributed to the design of the tiles that would roof Parliament House in Canberra. But his true achievements – the achievements that spoke to his character - went beyond those of the sports field and of his professional life.

Sitting with him the past few weeks in Nepean Hospital and then Springwood Hospital we had the opportunity to see how loved he is in this community and other communities around the Penrith Valley and the Blue Mountains. There was no end to the stream of people who dropped by to sit and talk with him. Some were old friends that hadn’t seen him in 15 or 20 years but who remembered him and came as soon as they heard he was sick. Many of you gave generously of your time to be with Dad and Mum or to prepare meals for our families. And you all offered your prayers for him and for us. To all of you we are eternally grateful for your generosity and kindness. Words cannot express our depth of gratitude. I’m sure you are in his prayers now as you are in all of ours.

It struck me during these recent weeks in hospital that the measure of a man’s life is not the titles – boxing or otherwise – that he has accumulated; but the quantity and quality of his friendships. Dad had friends of all ages and backgrounds who would do anything for him as he would for them. Sitting in the hospital we heard stories of those friendships; at the centre of all of those friendships was Dad’s and his friends’ shared faith in God. All of you here today in this church – the church that he loved so much - are testimony to those deep friendships and that shared faith.
If God was the cement of Dad’s friendships, the water in the mix was that Dad always put others first. Dad managed to always find the good people of faith in our local area and he would soon be helping them with some project or other. And they always reciprocated. People came to help concrete the patio or the driveway. Or just to sit around our kitchen table and talk about anything and everything because Dad and Mum were always so welcoming. Dad always gave generously of his time - to train school athletics teams; to help at school and church working bees; to deliver food and clothing as a member of the St Vincent de Paul Society; and, later in life, as an acolyte of the Church in this parish. We were joking with him in the hospital just a few days ago that when he “retired” as an acolyte at 93 he must have been the oldest acolyte in the world. (Fr Zsvonamir: We need to check on that and get it into the Guinness Book of Records.)

Fr Paul: you put it best when you wrote in a birthday card on the occasion of Dad’s 90th birthday that Dad was “always undaunted by the challenges of life” with his “’can do’ approach to life and … faithful dedication to God and family.”

One particular story of Dad’s selflessness and concern for others comes to mind. About 10 years ago when the bushfires came through here Dad and Keiron had been up on roofs clearing gutters and fighting fires that started. The thing is, Dad was in his 80’s at the time. I was on the phone from China expressing my alarm at his recklessness. I had said something like “what’s in your mind Dad? Getting up on a roof in a bush fire at your age?” He replied without any hint of irony “Someone has to look out for the old people in town.” “Who’s older than you?” I asked. He just laughed and said: “Well someone had to do it”. The truth is Dad always looked out for the vulnerable and he always put others first.

That attitude was there to the end. You could see it when he was lying on his sick bed in hospital. For example, when the nurses were taking a little while to help bring him some pain medication or help him with some other task because they were with another patient. He would say: “Of course; there are so many people here worse off than me.” I don’t know that anyone was physically worse off than him at that stage. But, nonetheless, Dad put their needs ahead of his.

Apart from the number of people coming to see Dad, the nurses were probably surprised by the laughter, including Dad laughing heartily, even up to the last few days. But we, including Dad, were celebrating a life lived to the full, a life of true happiness surrounded by faith, love and loved ones. At times I suspect Dad was trying to support us with his cheerfulness and sense of humour when he saw our spirits flagging. Even at what we might have considered his darkest hour he put us ahead of himself.

Dad’s life was about absolute trust in God. He never doubted that God would provide and therefore he never concerned himself with material things. In fact, Dad lived a life of complete detachment from material things. To him possessions were shackles that could keep you from God and Heaven. And so, Dad’s most cherished possessions were in essence spiritual - the crucifix he carried when he, as a Eucharistic Minister, took communion to the sick; his rosary beads which were in his pocket every day; and a well-worn prayer book given to him by an American priest who was visiting India in 1951 – Dad used that prayer book three times a day every day as far back as I can remember.

Let me tell you an anecdote that sums up both Dad’s absolute trust in God and Dad’s wonderful sense of humour.  In 2005 Mum and Dad were preparing to come and visit my family in China. Mum was worried about Dad getting ill and was trying to get some travel insurance. But she couldn’t find a travel insurance company prepared to insure an 83 year-old man about to venture to China – not cheaply anyway. Dad’s response was “I don’t need their insurance; I’m insured by God.” And so they visited us in China, literally on a wing and an insurance premium paid for by prayer.

I’d like to tell you something about Dad’s dedication to Our Lady. When we were growing up, Dad would go to mass every Saturday as well as Sundays. Saturday was for Our Lady. And, on the first Saturday of every month he would make a pilgrimage to St Mary’s Cathedral in the city. From where we lived in Mt Druitt the journey used to take an hour-and-a-half each way. But he did it every month. And, of course, Dad prayed the rosary every day – those beads weren’t in his pocket for show, you know.

Dad’s dedication to the Mother of God was sublime – and so it came as no surprise to us that he passed away peacefully last Saturday, the 22nd of August - the Feast of the Queenship of the Blessed Virgin Mary.

If you knew Dad you knew he was never short of a prayer or a novena if you had some difficulty. He would often give good counsel, but more importantly he would follow up by saying he would start a novena to Our Lady or to the Sacred Heart of Jesus. He would then say “leave it all in the hands of God.”

In all of this, in all of his life lived to the full, it shouldn’t be forgotten that Mum was with Dad every step of the way for more than 56 years. Theirs was a partnership to be envied, a partnership that bore out St Paul’s quote about a husband and wife becoming one flesh. In the spiritual sense of that reference Mum and Dad were as one; together shunning material possessions; together you were dedicated to your children and our education; together you were firm in the Faith and committed to works of charity; together you were both always graceful, dignified, and cheerful. Mum; your dedication to Dad and the vigil you kept these past few months is testament to the team you both were. Dad would tell you that Our Lady will continue watching over you because she knows the faith you shared together.

There were two phrases of Dad’s that summed him up (not surprisingly, they are also Mum’s favourite phrases). Whenever you asked Dad how he was he would reply “I’m well, by the grace of God”. Even to the very end he would say that. Dad’s life was a tribute to the grace of God. A life lived across three continents always surrounded by good friends and love – true gifts from God.

His second phrase was to always say farewell by saying “God bless you.” He meant it every time he said it. Every nurse in the hospital who helped him in the smallest way these past few weeks was thanked and given that blessing. They were all touched by it, by Dad’s authenticity, and by his faith – some of them remarked upon it to me. He was truly blessed by God and we were all blessed to have had him in our lives.

We will miss you Dad. But we know you are in a good place. And we know that from up there you will still be thinking of us, praying for all of us. Please do so; we need your prayers so we can all be a little more like you.

By the grace of God we will see you again in His Kingdom. That’s a prayer for us, not you, Dad; for you have fought the good fight to the end, you have finished the race. His light undoubtedly shines upon you.

Vale, Dad. God bless you.

Sunday, 14 June 2015

Big ass comments and Sydney housing prices breaking the Internet: time for a balanced perspective

Photo from Starcasm,
adapted for purposes of satire,
(in case of any doubt). 
Treasurer Joe Hockey's recent comments about how to get a house in high priced property markets like Sydney and Melbourne were definitely ill-advised. Actually his statement in response to a question at a media conference was just plain dumb. But there was an element of truth in what Joe had to say and people need to get what's happening in the Australian housing market in perspective. It's the economy, stupid.

Big asses do break the Internet

Hockey was stating the obvious when he said the best way to become a home owner in Australia's booming property market was a to get a good job, that pays good money, and is secure so you can get a bank loan. That was the advice my father gave me 25 odd years ago when I wanted to buy a property. It's the advice I'm giving my children now. It is no doubt the advice parents all over Australia are giving their kids. So why the hullabaloo that the Treasurer offered the same advice?

It's probably because he's the Treasurer and because he is very well-heeled. Joe may not have been born with a silver spoon in his mouth, but by the time he was at university his immigrant father had certainly made good - well enough that Joe had been able to attend one of Sydney's most prestigious boys' schools (St Aloysius) and to reside at St John's College when he was studying at the University of Sydney. Joe's claims that he knows the challenges of being a first home buyer, of saving for that first mortgage seem disingenuous given the size of his father's property empire by the time Joe would have had to make a deposit and borrow from the bank.  I don't know whether Joe's father helped him with the deposit for his first home or not; either way it doesn't matter as it just doesn't ring true that Joe did it tough. And that's the reason for the ruckus about his comment. As many media commentators and cartoonists pointed out, the incident was reminiscent of Marie Antoinette suggesting the peasants could eat cake because they couldn't afford bread.

Joe had made another gaffe. Independent senator Nick Xenophon was spot on when he quipped that Kim Kardashian must have been appointed as media adviser to the Treasurer. Joe would have been better advised to point to what's actually happening in the housing market, to what it means for home buyers and investors, and to what it means for the economy.

Let's break it down.

The Chinese are coming, the Chinese are coming ... not

Yesterday I was visiting my parents in the far west of Sydney, near the Blue Mountains, about an hour out of Penrith. It is area I grew up in. It's Battlersville out there. The majority of people are good working class stock. They are tradies and small business owners, employees, small farm owners, and farm workers. Many of them are the salt-of-the-earth-types that built this nation. And they are doing it tough at the moment. My parents were lamenting how hard they thought the future would be for their grandchildren, especially for their grandchildren to buy homes in Sydney. My mother said, "even out here prices are passing the half-a-million dollar mark for a decent house and yard."

I asked her what she thought was pushing the prices so high and what she thought should be done about it. She said it was obviously all the Chinese money coming into the Australian property market and indicated that the government needed to put a stop to the foreign investment because it is squeezing ordinary Australians out of the market. My mother wasn't being racist; my wife is Chinese and my mother loves her dearly. She was blaming all those "rich Chinese" who are "not citizens" coming here and buying up all the property.

However, the fact is the Chinese - and other "rich" foreign investors - are easy scapegoats, and our populist media (e.g., A Current Affair and The Daily Telegraph) enjoy painting them as the problem. But in actual fact these "rich" foreign investors are not buying properties where Australia's true blue battlers are likely to buy a home let alone a first home. Indeed, very few of us are competing for the $39 million Villa del Mare that one Chinese buyer had bought illegally and which he was forced to sell at a cut price to an Australian-Chinese buyer last month. Most Chinese money coming into the market is concentrated on buying properties with harbour views, or in the inner west of Sydney, or on the north shore, with easy access to the city and its top private schools. They are not driving up property prices in Blacktown and Penrith. Chinese buying in those areas are most likely Australian residents or citizens, and are most probably themselves battlers doing it tough as tradies, small business owners and employees. They may look similar but they are not the Middle Kingdom's super rich.

Betting on winners

It is reasonable that the Government fully apply the law to bring to brook individuals like Chinese billionaire Xu Jiayin who purchased the Villa del Mare property without obtaining Foreign Investment Review Board (FIRB) approval. And there is now every indication that the Government is doing that. But there is no need to introduce new laws to stop foreign investment altogether. And there is especially no need for laws that target investors from particular countries or regions.

Indeed, foreign investment - including Chinese investment - pouring into the Australian property market is vindication of the strength and stability of the Australian economy. Investors are moving their money here because they see it as a better bet than their own countries' property markets and a better bet than other countries' property markets.

That's a good thing for us; here's why.

It's the economy, stupid

The Reserve Bank's Governor Glen Stevens calls Sydney's current housing prices "crazy". He may be right. Then again, he may be wrong. The fact of the matter is that price is a function of supply and demand. That's high school economics. If you are of my generation dig out your old copy of Samuelson and check it. If you're of a younger generation, I don't know what they teach in economics these days. Maybe you can find the answer on Wikipedia, the place you researched your last university essay.

Not to put too fine a point on it, Sydney and Melbourne housing prices are as high as they are because of a lack of supply of reasonable housing in those two markets. Quite simply the state governments of New South Wales and Victoria have not released sufficient land for new housing developments to keep pace with population growth. Or perhaps it is because too many development proposals get frustrated by greenies and self-interested community groups. That was certainly the view of property company Stockland's CEO Mark Steinert when he addressed a forum of the Committee for Economic Development of Australia (CEDA) in April. At that meeting Steinert said he didn't see a property bubble in Australia, but was concerned about the pace at which land was being released for development and at which development approvals were proceeding. Those issues mean a shortage of property. Steinert believed it would be five to six years before the market returned to equilibrium. (A report on Steinert's comments can be read here.)

The shortage of property simply means everyone is forced to compete for what little stock there is available in the market. The intense competition is pushing the price up more than anything else.

Importantly the Australian Financial Review's Robert Harley points out that Australian housing prices are not at levels where people cannot afford to buy or at which they just stop buying. Indeed, he says that housing prices as a proportion of household income are still at lower levels than they were at the height of the 1989 and 2004 booms, "or even in the high-interest-rate horrors of the GFC" (GFC refers to the Global Financial Crisis for non-Australian readers).

As "crazy" as housing prices in Sydney and Melbourne might be, people are still buying and they are still borrowing money to buy. They are taking advantage of the lowest interest rates ever. Some are borrowing big. That might be nuts if we are in a bubble, but it's what they are doing.

As an aside, I know some people who ended up losing their houses during the 2004 boom, or when the bubble burst at the end of that boom. They got hit when interest rates went up and they couldn't service their loans. They had over-extended themselves. When you talk to them these days they blame the government and the "greedy banks" that they say took advantage of them. They say the government should have put in more regulations to keep the banks from lending to them when they wouldn't be able to service their debts if interest rates went up. And they say the banks were just gouging the market. I feel for them. These are sad stories. But no one forced them to borrow beyond their means. Sure; they were borrowing within their means when they initially borrowed to buy bigger and better homes. But they should have thought about the fact that the Australian economy was overheated and the Reserve Bank was likely to raise interest rates to try and cool it. That's ultimately what happened and they got burned. That's not the government's fault or the banks' fault. That's stupidity. And, as the saying goes, you can legislate against everything except stupidity.

So, are people being stupid now by borrowing to buy into a bubble?

Glen Stevens seems to think so. It's implicit in his calling the market "crazy". It's only crazy if housing prices are not sustainable. I don't know whether they are sustainable or not. Having just bought a house on Sydney's North Shore, I hope they are sustainable. But there are a whole lot of factors that might play into that equation, so who really knows. Of course, a simple rule to live by - having seen my share of booms and busts - is that whatever goes up must come down.

What the smart money says

And that may not be a bad thing. Here's what smart young people should start doing if you accept that adage. First start saving for a deposit on your first home. But don't buy yet and definitely don't get into debt for a house in this market. Bide your time. Prices will either level off as more supply comes into the market or they will drop substantially if we are in a bubble and it bursts. Either way, it is worth waiting and you can avoid the craziness of the current market.

In the meantime, focus on building your career and getting a better paid job and the security you need to get that first loan. And accept that you may not be able to get your first home in the suburb you want to live in. Start small. When I got that advice and was struggling to get my first housing loan 25 years ago, I bought a small apartment in an outer suburb of Canberra because I couldn't afford a house in one of the city's plush inner suburbs. When my wife and I bought our second home, with a a big yard for our growing family, we settled for one on Sydney's busy Pennant Hills Road because we couldn't afford a house closer to the city or on the North Shore. We started small and worked our way up.

As I am not Joe Hockey and am not, nor never have been, well-heeled, I can give gratuitous advice to GenY-would-be-home-owners: stop complaining, get a job, get a better paying job, save and build security, and accept that your first home will not be your dream home. That's life. As a former Liberal Prime Minister, Malcom Fraser, once said, it wasn't meant to be easy.

Oh, and some advice for Joe Hockey and Barnaby Joyce, the heir apparent to the National Party leadership who has been suggesting people who cannot afford to buy homes in Sydney consider regional Australia: Keep your mouths closed. You are embarrassing conservative politics and yourselves. As Mark Twain once said "It is better to keep your mouth closed and be thought a fool than to open it and remove all doubt."

Kim Kardashian can do without the competition to prove who's the biggest ass.