Henry and Mrs T have just arrived in Vienna. Clean, broad street, prosperous and with pleasant people. Our (young female) taxi driver was unhappy at massive numbers of immigrants who receive large welfare payments and do not work. From last October faces are not allowed to be covered in public but no-one knows what to do to those who fail to comply.

Big Meeting

In my opinion in his post Kim press conference President Trump finally looked presidential. However, as Greg Sheridan has noted, duing and after his meetings with President Kim he effectively ‘threw his regional allies under the bus’. Only time will tell if Trump was conned by Kim, as previous American Presidents were, but subsequent material released in North Korea seem to promise official desire for economic prosperity.

Australian wage restraint

Jamie Smith in Sydney says ‘Australia is no lucky country for workers as pay stagnates’, and that ‘Central bank unnerved by weak wages growth as gig economy expands’.

His article starts: ‘Australia has created 1m jobs over five years and its economy is growing at a healthy 3.1 per cent a year, but for workers the “lucky country” has lost some of its shine. Wages growth is stuck near record lows and household debt is among the highest in the developed world’.

Here is a reason: ‘In Australia there is a sharpening focus on the changing structure of employment, particularly casualisation of the workforce. It has the third-largest share of part-time workers among the 34 OECD member countries, behind the Netherlands and Switzerland. Some economists warn this factor is undermining the bargaining power of workers’.

Henry’s own contribution to this debates digs into people’s psychology rather than facts, though the facts have of course created the psychological flavour. Over a year ago Henry wrote as follows: ‘As a minister in the Whitlam government said: 'One man's wage increase is another man's job', or words to that effect. The Hawke government accepted that logic and unions agreed. Jobs grew more quickly when the Howard government's labor market reforms were introduced but the Rudd-Gillard-Rudd governments knew better and reversed these reforms. Yet real people ('the punters' in political argot) are capable of understanding the messages of market experience and many have settled for low wage increases rather than risk becoming unemployed.’

Read on here, and wonder why the mighty RBA cannot see the key point, great caution by real workers who know just how fragile is the Australian labor market. Low wages growth is a global matter and in my view the ‘punters’ would rather have jobs than wage increases. Of course, how could men on large salaries, mighty pensions and safe jobs imagine the psychology of ordinary workers?

There is an equally important fact, due to the central bank and Treasury, who collude on national forecasts, have over-estimated wages for nearly a decade now. Over predicting wages means overestimating tax receipts and underestimating budget deficits. Meaning fiscal policy has been too easy, meaning Australia’s government debt is now over half a trillion dollars, and still rising.

Take care, gentle readers. RBA Chief has an important point to add to this argument, again quoted by Mr Smyth: ‘… the Reserve Bank of Australia … has warned that weak household income growth and high debt posed a risk to the economy. “The crisis is really in wage growth,” Philip Lowe, the RBA governor, cautioned last year as he implored workers to demand higher wages to stimulate the economy.’ Again I must disagree. The crisis is due to excess borrowing by households and will create a doozy of a recession before long.

Kulture

Do not miss Fiona Prior’s review of Gurrumul’s movie, and do see the movie itself.

The sporting like

Caaarlton! Absolutely flogged by Freo, despite much hope for a gutsy effort at least. One of Henry’s son’s described their effort as ‘a disgrace’ and forces us to ask ‘what is the f**k is wrong?’

One the other hand, the Aussie futball team in Kazan showed great bravery and diligence in holding France to a 2-1 goal win. We await games against Denmark and Peru and must have a chance to progress.

Image of the week - Economists in confusion

Gurrumul

Directed by Paul Damien Williams

I found myself crying during this documentary about the life of indigenous musician Geoffrey Gurrumul Yunupingu. Paul Damien Williams' biopic presents Gurrumul, a man blind from birth, as a human being uncomprehending and/or completely disinterested in external status symbols, who possesses an angelic voice capable of touching hearts and conjuring the eternal beauty of his songlines.

First, I must describe Gurrumul physically although it is possibly incorrect to do so for his dark. glowing skin, voluminous jaw and cheek line and the white pupils of his eyes are transfixing in their sculptural and ancestral qualities.

Early in this documentary, when that wave of critical attention Garrumul is receiving begins to turn into something far greater, an ABC journalist asks Gurrumul questions about his blindness, his music, his heritage. Gurrumul does not answer and you suddenly realise this gifted performer is cripplingly shy. His close friend Michael Hohnen answers for him and at the end of the interview Gurrumul looks up and smiles with childlike innocence on realisation that he is no longer the centre of attention.

Later in the film you see him perform with Sting, who has requested a duet with the rising star Gurrumul on live European TV. Gurrumul doesn’t know who Sting is nor anything about the song Sting wishes to partner in. In rehearsal, Gurrumul sits on stage quietly with Sting, head down and strumming the selected music (Gurrumul can play anything on hearing it once or twice) but he does not speak nor respond to encouragement to sing. Back in the dressing room, family members Skype him from the remote Elcho Island community in far North East Arnhem Land and translate the words of ‘I’ll be Watching You’ so that he can relate the song to his family and his life. After a moment Gurrumal smiles, sings and hums along. For the live show soon after he is perfect; taking part in a breath-taking performance where his spontaneous enhancements to Sting’s original work completely upstage the rock star.

Gurrumul's so unusual lack of concern with fame and fortune is reinforced most pointedly in the documentary when Gurrumul fails to show for an American tour for which most musicians would sell their souls. It eventuates that Gurrumul is still on Elcho Island with family; for him, appearing on the Letterman Show and other ‘you have made it on the world stage’ platforms just can’t compete with this little community full of loved ones.

It is hard to watch this documentary without noting the depth of friendships that surrounded Gurrumul. I specifically point-out the love of Michael Hohnen and Mark T Grose, for to these two ‘white fellas’ who were founders of Skinnyfish Music, the friendship and happiness of Gurrumul was far more important than the money they stood to make from the abandoned tour. As fate would have it, the Rolling Stone covers, international adulation and worshipful fans occurred, regardless of Gurrumul having little desire for them.

The documentary ‘Gurrumul’ brings out the beauty of an individual of unusual purity and extraordinary talent, and also captures the genuine love that those who knew him held for him. Both the story and the voice of this beautiful soul will bring tears to your eyes.

Gurrumul passed away in 2017.

Catch ‘Gurrumul’ at selected cinemas soon.

Snow White

Angelin Preljocaj’s sultry 'Snow White' certainly hearkens back to the darker nature of the tale by Brothers Grimm, while costumes by legendary designer Jean Paul Gaultier provide the sophisticated allure of a fetishised fairy tale. Just add the music of Gustav Mahler and set design by Thierry Leproust and you can’t but drown in the beauty of it all.

A poetic beginning sees a distraught King (Sergi Amoros Aparicio) take his newborn baby daughter from the body of his wife, who has died in child birth. We are quickly conveyed through the stages of Snow White’s life by adorable young dancers Adriana Chatenay, Jasmine Provence Orsini-Mustafa and Scarlett Weaver, until our young herione blossoms into puberty and suddenly ‒ unbeknownst to herself ‒ becomes the nemesis of the Wicked Queen (Cecilia Torres Morillo and Anna Tatarova).

Into the woods the Queen’s henchman take Snow White (Verity Jacobsen and Mires Delogu) but find they cannot take the young girl’s life and instead kill a young deer and take its heart back to the Queen.

Colour and light are used to perfection in this performance; the glistening black surfaces of the queen’s thigh high boots and the flimsy, opaque white of Snow White’s gown reinforce the young girl’s vulnerability. The scarlet kerchief thrown to Snow White by her young Prince, the glistening, crimson heart of the slaughtered deer and, of course, the blood red apple which was to end Snow White’s young life associate sex, life and death in a very Freudian manner. Carl Jung would also have given a big nod of approval to this retelling of the almost archetypal fairy tale.

Special touches including the naughty pussycats running amok across audience seats and those delightful young ‘Snow Whites’ already mentioned make this production magic.

You all know the story but you will never have seen it clad in Gaultier and captured in the reflection of a giant, golden mirror. More Met Ball than story-book.

Ballet Preljocaj was performed at Sydney Opera House

And back to Henry ...

Tomorrow President Trump meets President Kim in Singapore. Mr Trump says he will know within one minute if President Kim is ok so if the meeting goes on that presumably will be good news. Mr Trump has dismissed the myth of the wily oriental so that already is progress.

Politics and economics are of course intertwined. Mr Kim presumably wants a deal that makes his people more prosperous. Mr Trump wants to look like the man who got the wily oriental to a satisfactory agreement to give up his missiles and nuclear warheads. Hard sledding, as each President will want to look good.

President Trump faces many hard issues. The one I believe is his hardest is partly because he lacks knowledge about economics. America’s large trade deficit is mainly because its spending is larger than its income. President Trump is increasing American spending and this is making its trade deficit worse. China's and Germany‘s trade surpluses are due to controlled national spending. This is economics 101 but barely mentioned by journos – eg weekend FT ended a long article with one sentence that hinted at this truth.

Where are Mr Trump’s economic advisors? Are they all too scared to tell him one of the great truths of economics? Does no G7 leader have the guts to tell him he’s barking up the wrong tree? Said leaders seem to think Trump is just barking mad.

There is another iron law of economics that needs exposure. It is the design flaw in the currency issue in the Eurozone. A fixed exchange for the Northern Zone and Southern Zone nations is a recipe for Northern prosperity and Southern economic misery. Check out the rates of unemployment, gentle readers. Maybe pointing this out would help President Trump begin to think about America’s trade deficit.

Ho, ho, it is on with the show. Assembled leaders seem to lack basic knowledge of economics. In Warsaw Henry and Mrs T were refused entry to the ‘Royal Palace’ – an oddity in a Republic – because the EU presidents were supposedly meeting to discuss who knows what. Will Brexit be abandoned? Or will Northern Island rejoin the Republic of Ireland? All because of a silly border issue. Or were the said Presidents discussing the design flaw in their own baby monster? Or whether Germany is crushing Southern Eurozone by having a cheap Euro relative to their national productivity while Southern Euro is groaning under the weight of a heavy Euro relative to their productivity.

Incidentally, reconciling the two issues discussed here – relative spending and relative productivity - requires a pass in Economics 201. Sadly, no one with such a qualification seems around to advise the global presidents with one exception. I bet President Xi has mastered basic economics.

Kulture

Fiona Prior is swept away by the fetishised beauty of Angelin Preljocaj’s ‘Snow White’. More here.

Henry’s message from Warsaw, or was it Prague, may be worth a glance.

Sporting news

Caaarlton! Had a by which was a great relief. Coach Bolton must be frustrated that his team can blow open Richmond in the foirst 15 minutes of the season and run the Swans close until ¾ time but have registered only one win so far this year.

Anyway, that remains to be explained. Now we are hyped up for the world cup of soccer, or ‘futball’ as they call it here. Australia has little hope of progressing to the second round but we know will give it a glorious go.

Image of the week.

When travelling viewing art, especially paintings, is high on our list of things to do. Imagine the excitement when Henry's editor ,Pete Jonson, found an exhibition of a fellow modernist, name of Jiri Sliva. Jiri is like Pete an economist by training and has a wonderful sense of humour. Here is a link to his work.

The brochure that one is handed when paying to see his show explains. ‘Jiri Sliva was born in Pilsin in 1947 and has lived in Prague since 1966. After graduating from the Prague University of Economics, he was employed for eight years in the Prague Institute of Philosophy and Sociology’.

Jiri’s work rate is prodigious and is summarised on the web site already referred to. On the brochure, someone named Josef Kroutvor says: ‘Sliva seeks out banal moments, lifting them to a level of extreme incongruity. It could be said that Sliva takes things literally in order to demonstrate their relativity or nonsensenicality. An inner instability is probably an essential prerequisite for Sliva’s entire repertoire of ideas, puns, minor incongruities, and strange phenomena’.

One’s immediate attention is taken with Juri’s interest in Kafka. His exhibition is called

My Cup of Kafka and features a figure, presumably Mr Kafka dressed as a respectable gentleman standing up is a red coffee cup filled with coffee. An image called ‘Tango Kafkaesco’ shows Mr K dancing with a large cockroach. Another shows him riding a large cockroach. A third shows the large cockroach dreaming of Kafka.

It must be said that Freud gets space, as does Einstein. One of my favouites is called ‘Kosher blues’ and shows four Jewish gentlemen plaving the blues . One has a drum kit, one a violin, a third with a full beard an oboe and the second bearded gent (Dylan's grandfather?) a primitive guitar. All have neat clothes representing men not from the present except perhaps in some imaginary ghetto.

Prague is a lovely older city, mercifully not badly damaged except for the death of most of its Jewish citizens during WW2. There is a Jewish Museum that will fill you with dark thoughts about Germans in the 1940s. The many old buildings, including a stunning cathedral or two, show the age of the Czech nation and the Hapsburg Empire.

We also came on an exhibition of Dali’s prints, presumably collected by a person or art galley over many years. Also an exhibition by Alfons Mucka, ‘Master of Art Nouveau’. Clearly modern Prague is a hive of cultural enterprise and will repay a longer visit than Henry and Mrs Thornton could afford.

Donald Trump and Kim Kardashian – the photo opportunity

There has been much ‘to do’ about Childish Gambino’s video ‘This is America’ (2018). It is racist, cynical, nasty, narcissistic, violent and frightening. No, this isn’t a criticism but rather a description. ‘This is America’ is a cultural artefact that has been made by a knowing creative with the intent of revealing/presenting a truth. If interested, please see more here. It is very much as described and you will be saddened.

image: For the Love of God (2007), by Damien Hirst. Courtesy of the artist.

With similar intent is Damien Hirst’s ‘For the Love of God’ (2007), a diamond-encrusted skull that I felt nailed a certain, frightening value system way beyond the illicit diamond trade. Social statements made by artists are as old as opinion. Almost a century ago the Dada Movement was building artworks on the belief that the art deserved by a world that had permitted the horrors of World War One was, well, latrine-worthy.

image: The Fountain (1917), by Marcel Duchamp

Why that little prelude? Truly disturbing this week and not an artistic statement about a dystopian, cartoon world is a photograph taken off Kim Kardashian and Donald Trump at the White House. Mr Trump is a man who has ridden celebrity to the nth degree and whose name has become ubiquitous; first through the erection of a tower and then as presenter on a Reality TV show where he episodically fires contestants. Kim Kardashian is a fellow reality show star whose name may be even more well-known than Trump’s own.

The White House should house the most influential human beings on the planet and the convergence there of Kim Kardashian and Donald Trump was inevitable and/or horrifying depending on your view-point.

Populism, polls, ratings, and rants, I can’t help noting that those who find Post-modernism, Semiotics and Post-structuralism inappropriate critical additions to our school curriculum should please take a reality check and come on down to the art room.

Opinion polls said it would be a close run thing, but in the event it has been a clear win for ‘Yes’ to the proposition that Section 8 of the Irish Constitution that prohibits the ‘no questions asked’ abortion up to 12 weeks of pregnancy. Women voted 70 % ‘yes’ and men slightly less. Young people overall higher 'yes' than the average but only people over 65 said ‘No’. (These figures come from exit polls but the actual count will be available shortly.)

‘Ireland throws of the shackles’ said one newspaper; ‘Ireland joins the modern world’ said another. The general result seems to be well supported and the government is resolved to fixing the constitution by year’s end.

A more interesting issue concerns Brexit’s implications for the ‘Two Ireland’ situation. The peace agreement after the Irish ‘troubles’ allows Northern Ireland to leave Britain and join a united Ireland if the people of northern Ireland vote to do so. Perhaps the joining of the modern world will spark interest in this further reform. If Britain joins Brexit – a policy some people are beginning to doubt – the border in Ireland will be a difficultly and may make people very irritated. Watch this space.

Australian newspapers seem to be detecting a sea change in Australian politics. Messrs Turnbull and Morrison seem far more confident. Bill Shortcake (as Henry calls him) is facing a big problem if, as some commentators believe, a majority of Labor pollies plan to bring the refugees from Manus and Naru to Australia, presumably to free them into our nation. In my view this would immediately reopen the people smuggling trade and then what happens? And the latest news says a poll shows a strong majority of Aussies want company tax cut as planned by the government, or in some cases sooner.

Henry’s Irish trip has reached Sligo, with help from the Garda to find our accommodation for tonight. The recent experience has been less confusing as we overcome jetlag and become more used to Irish ways. People seem generally pleasant and tourism is running strongly as the weather is warm and sunny.

As soon as possible Henry will write another installment in the ongoing saga.

Kulture

Fiona Prior visits Sydney's Vivid 2018. More here.

Sporting life.

We returned to our room in time to see Real Madrid score its third goal egainst Liverpool in what seems like the World Cup of Futball. Liverpool’s (German) goal keeper was blamed for weak attempts to block two of the Real Madrid goals, and he seems destined for the chopping block.

To Henry’s untutored mind however, at 2-1 down Liverpool looked a far weaker team, perhaps partly because their best player, Mo Salah, was substituted off early in the game after a bad injury.

After Caaaarlton!’s pathetic performance last weekend against Melbourne, Henry was almost too pissed off to look at the latest results. But Caaarlton!’s narrow win over Hawthorn was a very pleasant and welcome occurrence. It may even by worth watching the replay. (correction, narrow loss to Geelong - I must have dreamt Hawthorn result.)

Image of the week.

Each year Sydney designs a stunning light show that is a family favourite.

From 25 May to 16 June 2018, enjoy the dazzle!

image: Lighting of the Sails: Metamathamagical by lighting designer Jonathan Zawada, courtesy of www.vividsydney.com

For the 10th Anniversary of Vivid Sydney, celebrated Australian artist Jonathan Zawada has created a site-specific artwork that transforms the Sydney Opera House sails into a series of kinetic digital sculptural forms that continuously morph on a psychadelic loop. Inspired by the Australian environment, his forms are dazzling.

image: 1000 Cranes by artist collective Ambient & Co, courtesy of www.vividsydney.com

"1000 Cranes is inspired by an ancient Japanese legend: if a group of 1000 origami cranes (known in Japanese as senbazuru) are hung in one’s home it will act as a powerful and benevolent charm and bring good luck.

The 'senbazuru legend' found new and poignant relevance in Japan through the actions of a young girl tragically affected by the atomic bombing of Hiroshima in 1945. Sadako Sasaki was exposed to dangerous levels of radiation from the bombing and by age 12 had developed leukaemia. After months in hospital, Sadako-san was inspired to begin the intricate process of folding 1000 origami cranes. She became too weak to finish the project but after her death, her classmates completed the senbazuru in her honour. Influenced by her story the practice of senbazuru grew in popularity throughout Japan.

(*The senbazuru legend is possibly one of the most beautiful and evolving legends) in our world.)

image: EORA Dark Emu, projection courtesy of Bangarra Dance Theatre and www.vividsydney.com

Another beautiful legend 'Dar Emu', refers to the Spirit Emu, who “left the earth after its creation to reside as a dark shape in the Milky Way.

The projection EORA Dark Emu is created by Stephen Page and Jacob Nash of the Bangarra Dance Theatre, the work features Bangarra’s dancers, painted with light, showing the unbreakable connection between earth and sky.

image: Giant puppet at Barangaroo created by Erth Visual & Physical Inc., Jacob Nash and Mandylights Australia, courtesy of www.vividsydney.com

The giant puppet Marri Dyin promenades along Wulugul Walk, Barangaroo during The Liminal Hour, performing fire and rain rituals. She is unmissable.

.

image of harbour forecourt courtesy of www.vividsydney.com

So many beautiful, thought-provoking and fun exhibits and immersive environments at this year's Vivid festival.

Don't miss out.

until 16 June

Ireland is a truly beautiful country that is currently divided into two pieces, Northern Ireland which is part of the United Kingdom and Southern Ireland which is called Eire, currently a committed member of the European family. How all this works out is one of the many questions surrounding Brexit and no-one will value any speculations of this writer.

It is our first visit and we have hired a car and in over 2 weeks are circumnavigating the Irish landmass, mostly in the countryside but visiting both Belfast and Dublin.

We flew into Dublin from Helsinki on Finnair, a coshare flight with Japan Airlines. This was the third flight in 26 hours or so, after Melbourne to Narita and Narita to Helsinki via JAL. We met two dear friends who had flown from London, secured our luggage and hired a car. Then drove, heavily jet-lagged, to a small place called Evergreen B&B not too far from Dublin airport. Evergreen is in a beautiful garden and scored 8/10 for accommodation, comfort of its bedrooms and heroic breakfasts. The owners, Jimmy and Mary, were cheerful and welcoming. They scored only 4/10 on the agreed Faulty Towers score sheet, where a high score is not one to strive to achieve.

We were advised of a gold club with ‘bar food’ available until 9.30 PM. Setting a trend soon to be established in Wicklow, we overshot the golf club but eventually found it in time to order bar food and a bottle of wine. Three of the party ordered Sea Bass. When the plates arrived the fish were clearly salmon. Rather than making a fuss we tried it and it has to be said it was tasty salmon. While paying for dinner Henry asked the bar attendant why we were served salmon rather than Sea Bass. ‘We ran out of Sea Bass’ the youth explained. Henry’s comment, ‘Perhaps you could have told us and allowed us to decide what else we would like to eat’ seemed surprising to the lad and there was no point in trying to teach him how to handle customers.

The next morning we headed for Wicklow on the South East coast. A great feature of our drive was a big house called Power’s Court with its beautiful garden. The books had emphasised that Irish drivers are dangerous and we drove very carefully, always stopping in a layby when a car or truck driven wildly loomed on the narrow roads. Mostly we travelled through high altitude spectacular but barren country on the ‘Military Road’, built during the times of trouble so the British soldiers could seek out and ki ll or capture Irish ‘terrorists’.

The highlight was the large lake in a deep valley owned by the Guinness family, leading to jokes about making Guinness by the lakeful.

Then we stopped at a Glenderlouch, which is an impressive monastic ruin. This is mostly without roofs, and hard rain and strong winds blowing emphasised for the large number of visitors the difficulties of life as a Monk.

Wicklow was our destination and due to extreme scarcity of accommodation in Wicklow we were booked in different places. Trouble was, it turned out that the addresses were sketchy in the extreme. One place was South of Wicklow, the other North, though we did not know this before setting out to find both places and deposit people and luggage appropriately.

The plan was to find Henry and Mrs T’s abode, believed to be South of Wicklow on Dunbar Road, and called ‘Dunbar Lodge’. But there was no number and Dunbar road is very long. Soon found ourselves far beyond any plausible location of a B&B in Wicklow. We drove back, but still saw no sign of a ‘Dunbar Lodge’. Finally we asked a young man coming out of a pub, who confirmed we had been hunting in the right side of the town but needed to look for a house whose roof ‘sloped down to the ground’ just past a large sign involving AAA.

Again we headed South and again overshot. This time we turned into an old person’s home to ask for advice. The desk person was well practiced: ‘I get about three questions a week about your Dunbar Lodge. Please tell them to put up a sign’. The kind manager of old persons then gave us detailed instructions about how to find the place, which was hidden away down a narrow lane with a tiny hand-written name high on a nearby fence. After another overshoot to the centre of Wicklow, further discussions with kind people, we were there, and in the hands of a young back packer from Brazil. She was apologetic about the difficulty of finding the place, which through no fault of hers was simply awful. We already had paid and knew there was no other accommodation available, so advice to self was to cop it sweet, and in future recall that in matters commercial price is usually an indicator of value.

Naturally being modern oldsters we logged an apparent address of the second B&B into the Sat Nav function on one of our phones. The supposed address was three Gaelic words that I cannot recall. But the device seemed determined to take us well away from Wicklow. We drove around with Henry (the nominated driver) supporting the sweet lady on the Sat Nav device.

Suspicion about Sat Nav instructions is a great destroyer of a driver’s confidence, and the people in the back seat required frequent stops to ask people in central Wicklow how to find the B&B called ‘Three Gaelic words’. On our third run North, after several stops to ask people where the relevant B &B was, we found it.

The nice lady running the place guessed immediately which Henry’s B&B was. ‘Didn’t you read the reviews?’ she asked. ‘Afraid not’ Henry replied, ‘it was cheap and Mrs T thought she had found a bargain’. Then came Henry’s question about the Sat Nav fiasco. ‘That’s simple’, the nice lady responded. ‘You have to log in ‘Three Gaelic words, Wicklow, County Wicklow’. If you omit ‘County Wicklow’ the device will take you to another ‘Three Gaelic words’ in a place called Bray.

A day later we travelled further South along the coast, and then turned inland to Clonmell. There we had hired rooms in a nice hotel called Fennessy’s, run for the past 22 years by Mr and Mrs Fennessy. Their hotel had tiny but adequate rooms to foster unavoidable intimacy but large and delicious breakfasts. We stayed for two nights and in the day between we travelled to the Rock of Cashell. This was an ancient but ruined monastery that sits on a high outcrop of rock and was at one time turned into a castle. Thin but persistent rain and strong winds again reminded us of the tough lives of Monks over the past one thousand years.

We lunched at a bakery in Cashell and found another interesting example of behaviour of Irish retail food providers. Two of our party ordered cottage pie but only one was delivered to our table. After several minutes waiting for the second cottage pie three of us provided with food started to eat before the food became cold and one of our party went to ask about his meal. ‘We ran out of cottage pie’ was the explanation. ‘Would you like something else?’ Our friend eventually obtained a tasty chicken pie, but again the lack of natural response to deficiency in the kitchen was a marked but interesting aspect of life in Ireland. I am inclined to stitch these episodes with the extreme difficulty in finding accommodation booked weeks or even months earlier to ask whether or not jokes about Irish behaviour are not so unfair as one assumes from a distant county like Australia.

Kulture

Fiona Prior views 'The Children'. More here.

Sporting life

Being is the Republic of Ireland, today I must focus on Gaelic football, courtesy of the Irish Independent, whose edition today rather reminds one of the Herald Sun – front half crime, rear all the sport that’s suitable to report.

The front of the Independent concerned crime, with the latest murder of a young women put in context by reprise of similar murders over the years. Difference here was the suspect has been shot dead by the plod (Gaelic: ‘gardai’) although the victim’s body has not been found yet.

The sporting section started with an unusual heading ‘Ryan issues silent cry for help as Tipp gamble pays to pay off’. The opening paragraph explains this flourish. ‘The team Michael Ryan picked for Tipperary’s game against Limerick seemed not so much a selection as a cry for help.

‘A new goalkeeper, a new full-back, an entirely new midfield pairing made up of two championship newcomers, five players starting a first championship match, no Brendan Maher, no Michael Breen, no Seamus Callinan’.

A bit later the verdict: ‘As failed gambles go it was up there with the time God decided to play the Devil at poker for the soul of a Spanish railwayman’.

The final score, incidentally, was Limerick 1-23 to Tipperary 2-14, by no means a complete flogging. The real embarrassment came in the last half when Tipperary introduced its old stars from the bench, but was unable to resist Limerick’s ‘late flurry’.

Go to Limerick, Caaarlton, some fine players there, probably still inexpensive.

Image of the week - Rock of Cashel, Reconstruction

The Children by Lucy Kirkwood

Director: Sarah Goodes

‘The Children’ is a flip on the usual ‘baby boomers have screwed this world and are leaving us to clean up’ adage. In fact, this theatre piece is a brave, compelling and sad story of a group of people like any other group of aging Anglos. The characters of ‘The Children’ (a stellar cast comprising Pamela Rabe as ‘Hazel, Sarah Peirse as ‘Rose’ and William Zappa as ‘Robin’) have worked hard and played hard, have made good and bad choices, have said and done things they should and should not have said and done ‒ and they are trying to live the best life they can, considering the circumstances.

Only the circumstances in Kirkwood’s ‘The Children’ begin in a home just outside the exclusion zone of an area where there has been a natural disaster that has caused a meltdown in the nuclear reactor.

In waltzes an aging women (Rose), returning after 35 years and somewhat surprising the inhabitants of the house (Hazel and Robin). Hazel appears to be a yoga practising conservationist and Robin a subsistence-style farmer but we later discover they are all scientists who worked at the nuclear plant before its meltdown.

Initially you think this play is about past affairs and relationships, intrigues and remorse set is a more problematic context than most that take on this theme. In a way it is, but more uniquely it is about a group of older people who slowly and painfully decide to return to a mess that they had initially decided was too hard to confront, and by doing so relieve the young scientists who are presently working frantically to restore some security before the leaking plant can create further damage.

Loosely based on the group of Japanese elders (Skilled Veterans Corp) who volunteered to assist in the crisis at the crippled Fukushima Daiichi nuclear plant, ‘The Children’ will leave you with an aching heart and many thoughts.

A surprising piece of theatre that you find you have become immersed in without noticing.

A Sydney Theatre Company and Melbourne Theatre Company production THE CHILDREN By Lucy Kirkwood

Budget week was more than usually combative. Scott Morrison outlined a plan for spending cap of 23.9 % of GDP, income tax cuts for all in the next decade (abolishing most of the dreaded ‘bracket creep’) and with a wafer thin budget surplus a year later than recently forecast.

All this is thanks to stronger commodity prices and stronger economic (especially jobs) growth, thus stronger tax receipts. This is the first acknowledgment of what Henry has predicted to be two years of economic sunshine. The catch is that with the coalition’s decade long reduction of company tax still on the plan the government has far less (hypothetical) cash to splash than the socialist opposition.

In his reply Bill ‘Rolled gold certain’ Shorten offered almost twice the initial tranche of tax cuts for battlers and various other gifts for his presumed voters. The rest of the government’s tax cuts, planned by Morrison for wealthier Australians, will not be supported by Labor as by offering lower % increases in post tax incomes than for battlers, but larger dollars, it is allegedly unfair. Like the proposed cuts to company tax this was presented as ‘more lolly for Turnbull’s mates in the big end of town'.

Labor is making a bold old fashioned play that Karl Marx or Jeremy Corben would be proud of. Henry thinks the government should put the company tax on hold because giving large tax cuts to banks being increasingly revealed as crooked and uncaring about customer welfare is simply untenable. Then they could stick to their guns on income tax reform, leaving their push for a more encouraged middle income group to be promoted hot and strong, and even brought forward.

Do not be confused, gentle readers, Bill Shorten will lie, confuse and misrepresent to achieve office, and will inflict further financial and motivational damage on Australia's most productive people if he is elected.

Kulture

Fiona Prior covers the Archibald Prize results with her usual elegance and dash. Read on here.

Sporting life

Henry eyes were damp as Caaaarlton! beat the traditional rivals Essendon by 13 points in a hard fought match that will greatly improve team morale, fire up the youngsters and give everyone at Princes Park a great boost of confidence. Any further wins this season will be very welcome, but if the scalp of old rivals Collingwood is taken in round 14 on June 21 will be wild jubilation in Henry’s visit to Rome. (Last year saw wins over both Essendon and Collingwood, sufficient to calm the keenest supporters in this time of slow but steady rebuilding.)

Adelaide vrs Port was one for the ages and there were several other excellent games. Plus a proposal to break the competition into two halves and send the Gold Coast Suns to Tasmania. I’d also suggest that a Northern Australia team that could make the game truly national and allow us to see the enormous talent of Aboriginal players in greater numbers.

Image of the week

2'018 Archibald Prize

The Archibald Prize is one of the nation’s most popular and oldest art awards but most people don’t take it too seriously as an art event.

It is more like a yearly prestige event – a who’s who on our country’s radar. It is usually accompanied by a little outrage, a lot of gossip and on occasion tears and laughter.

This year is different. Usually the Archibald is as much about those who have agreed to sit for the artist as it is the artist themselves. This year it is much more about the artist. So many self-portraits! As one headline of a mainstream media outlet put it, this year’s Archibald is the year of the selfie.

So have our creatives given up on our politicians, scientists, cultural, sports and media figures or have they, like so many other in our culture, just succumb to the narcissistic nature our times?

Image: 'Self-portrait, after George Lambert' by 2018 Archibald prize winner Yvette Coppersmith. Courtesy of the artist and AGNSW.

Find the full ‘who’s who in the 2018 Archibald zoo’ here.

This year the Wynne and Sulman finalists ran rings around their portraiture peers.

Full view of Wynne finalists here.

2018 Wynne Prize winner Yukultji Napangati's untitled landscape is exquisite in its textural and spatial storytelling detail. The depiction is associated with Yunala, a rock hole and soakage water site among sandhills west of Kiwirrkura and an ancestral group of women who camped at this site. Interestingly, all the entries of the Wynne captured the transcendent quality of our outback regardless of technical approach.

Image: 'Untitled ' by 2018 Wynne prize winner Yukultji Napangati. Courtesy of the artist and AGNSW. (*Note: enlarge the image to more fully appreciate the subtle complexity of this painting)

Image: 'West of Wilcannia II' by John R Walker. Courtesy of the artist and AGNSW

John R Walker's 'West of Wilcannia II' – a Wynne finalist – is one of the many landscape finalists in this year's Wynne to capture the glorious timelessness of Australian terrain.

And the modern primitivism of Sulman finalist Jason Phu's 'On the bbq were a thousand thousand generic meat sausages that the hand of Guan Yin, the Goddess of Mercy, calmly turned. She was unperturbed by the vicious spitting oil. Shaking her warm empty can she yelled out 'can someone get me a beer?' made me take a second look and half smile, half wince.

Image: 'On the bbq were a thousand thousand generic meat sausages that the hand of Guan Yin, the Goddess of Mercy, calmly turned. She was unperturbed by the vicious spitting oil. Shaking her warm empty can she yelled out 'can someone get me a beer?' by Jason Phu. Courtesy of the artist and AGNSW.

Many of the Sulman finalists included a little provocation in their offerings which made them a lively collection. Full view of Sulman finalists here.

In summation, Mother Nature was the subject of all the best portraits but wasn’t a contender for the Archibald; the Wynne exhibited the greatest artistry; and the Sulman possessed a few well received heartbeats.

Art Gallery of New South Wales

Until 9 September

This is one of the boldest and most controversial budgets Henry can recall after almost 50 years of watching on budget night.

The Australian summarises as follows:

* The Treasurer pledged $140bn in personal income tax relief over the decade in a plan to bring an end to bracket creep and deliver a top tax rate of 32.5 per cent for middle- class Australia.

* Adam Creighton dissects what you will be left with after the Treasurer unveiled the biggest income tax cut since John Howard was PM and he also examines how booming revenues and a fresh push to get spending under control have lopped $126 bn off the future debt burden .

* Peta Credlin suspects an early election is in the offing, while Paul Kelly writes that this budget is an appeal to stick with a long-run Coalition plan: a return to surplus combined with personal income tax reform.

* Dennis Shanahan, meantime, believes the danger for Scott Morrison will be that the taxpayers will consider his tax cuts too complex, too small and too far away.

* The economy is firing on all cylinders, with business and government investment, household spending and exports rising, writes David Uren.

Labor says it will only agree to phase one of the tax reform plan, a sandwich and malted milk tax cut. Bill Shorten suggests that the coalition should negotiate over this matter. 'Its all or nothing' says the PM.

Sydney Theatre Company and UBS present

The Resistible Rise of Arturo Ui

Written by Bertolt Brecht

Director Kip Williams

“Arturo Ui is a small-time gangster with a lust for power. In a city shaken by economic crisis and undermined by corruption, Ui keeps rising and rising until he reaches the very top. When he gets there, he won’t be breaking the law, he’ll be making it.

The Resistible Rise of Arturo Ui partially presents in an almost graphic novel framework. Clever work with digital media using screens of text as ‘context locators’ and clever cinematography (by Justine Kerrigan) continually allows the audience close-ups of the cast members while the more traditional stage craft takes place.

Arturo (Hugo Weaving) is a small time crook with big-time dreams; rat-cunning rather than intelligent. Arturo’s grubby and transactional streetwise politics takes him from brute to revered politician in about the same time it took for a strange man with a funny little mustache to become the Fuhrer (Brecht wrote The Resistible Rise of Arturo Ui in 1941 as a cultural sign-post of Hitler’s opportunistic use of economic hardship ... as well as his use of greed, corruption, the take-over of labour unions, the institution of violence, blackmail, imprisonment, and other coercive methods to maintain his power, once gained.)

Hugo Weaving is fabulous as Arturo, depicting Arturo taking acting lessons to learn the language, garb and oratory proficiency of a great man, and we follow Arturo and his lackeys transforming from evil and violent gutter criminals to evil and violent white collar criminals, albeit with improved diction, an appreciation of art, better real estate and flash clothes.

Tom Wright’s tweaking of lines to make the work more directly relevant to Sydney-siders has worked well. We can almost see the landmark trajectory of this small time crook from running a protection racket over market-stall owners, to influencing board meeting outcomes, to essentially standing over a nation.

Brechtian fun and games.

A cautionary tale that unfortunately has not dated.

Its only two sleeps until the 2018 budget. If the Treasurer's cheerful mien and snappy chat are any guide, he must have some serious good news to share. All those jobs, albeit mostly in government employment with zero productivity, must be helping. Plus recovery of commodity prices for reasons even long time commodity experts seem unable to explain. Households seem to be saving more, reducing their gearing as global interest rates begin to rise. Despite being partly mysterious the better news validates Henry's claim that there will be a couple of years of economic sunshine, leaving time partially to fix household and government debt.

With a slight improvement in the polls for the coalition there is even a (still thin) chance of winning another term of office. Peter van Onselen in the Weekend Oz outlines a fiendish plan. A mid-term half-Senate election this year to 'clear out the cross benches', followed by an election for the Reps late in 2019.

I'd add a modest suggestion. Bring Tony Abbott into the cabinet with responsibility for, say, Aboriginal Affairs, plus an unstated mandate to destroy Bill Shorten. His pitch would be simple. 'Bill is an old fashioned socialist. He will raise taxes on the middle class and the wealthy. He will restore the traditional wrecking ball of the unions. He will greatly expand spending on welfare bludgers, the disabled and incompetent school teachers. Taxes will blow out and the debt reduction plan of the Turnbull government will be reversed. Bill will embed low growth for decades. All Australians who want their children and grandchildren to prosper should vote (thinking 'though it hurts to say this') for the Turnbull government.'

With Tabs in the team, there would be a serious chance of the coalition holding power. If the cabinet had the sense to roll back Kelly O'Dwyer's mad plan to tax superannuation - (excuse 'because growth of tax revenue is growing so much faster than predicted') - Liberals would flock back to the party with donations again flowing. I must assert just how much anger and angst there is in Victoria about Kelly's lunatic decision.

Kulture

Fiona Prior catches Hugo Weaving in The Resistible Rise of Arturo Ui. More here.

Sporting life.

Caaarlton! again tried bravely but got flogged by a rampaging Adelaide. Regular readersmay recall Henry's theory that Mick Malthouse was sent to wreck Caaaaarlton! for a generation. Last night, Gibbs, Jacobs and Eddie Betts were helping Adelaide flog us. Richmond have Grigg, Waite at North Melbourne, Tuohy, Troy Menzel and Henderson at Geelong, Kennedy at West coast (a swap for Judd, so this was not , Garlett at Melbourne, Gowers at the Bullies, Bell at Brisbane and 30 others, mostly now superstars.

Imagine the carnage the lost stars would wreck if they played with Kruezer, Cripps, Murphy, Rowe, and a few others from our current fleet of pacy smalls. Can't blame all this on Malthouse. Where was the board when all this talent was thrown away? Sort of like Australia would be under Bill Shorten. What would a Royal Commision reveal?

In an interesting weekend, West Coast beat the so-called 'Power', Cats beat the 'Giants', Bullies beat the Suns, Hawthorn flogged Essendon, who once again collapsed in the third quarter, the Swans were beaten by North Melbourne by 2 points at home, and Richmond seem to be accounting for Freo.

Image of the week - Bill shorten's hero

Still Turning Point: The Catherine McGregor Story

By Priscilla Jackman

Based on interviews with Catherine McGregor

“Gender transition is traumatic and one’s past really does become another, most alien country. I still cannot fully grasp what it will be like to see others experience my joys, sorrows, triumphs and abject failures through a stage show. (Catherine Elizabeth McGregor)

Still Turning Point: The Catherine McGregor Story is the story of a human being born into the wrong body. In the time-frame of this play we watch Malcolm McGregor eventually emerge as Catherine Elizabeth McGregor after a journey of drugs, alcohol, self-abuse, and (almost) suicide.

The psychological dimension of this story is fascinating. Malcolm immersed himself into the most ‘masculine’ of lifestyles, thinking that this would obliterate that female presence in his soul. It didn’t of course, but instead fueled a lifestyle of substance abuse and psychological denial until a pivotal moment came when his only choice was death ... or life as Catherine Elizabeth.

We hear of the torturous moment Malcolm revealed his inner self to his wife, the woman he loved more than any other, and a women he knew that he would lose with this revelation.

We also hear of Catherine's many faux pas. One example is Catherine's ungracious response to the news that former Army Chief General Morrison had won Australian of the Year; another foot-in-mouth put many of the her trans-community against her, when she expressed her belief in having ‘to pass’ ‒ to be seen as a women by strangers ‒ when many of her community who are far more fluid in their sexuality, considered this proclamation ‘unhealthy’.

There are wonderful little moments of joy and humour in Still Turning Point. When airport staff give Catherine a boarding pass printed ’Catherine Elizabeth’ rather than ‘Malcolm’; Catherine’s propensity to take a handful rather than an individual pill or drink, this habit turning her into an emotional mess when (over)taking female hormones and ‒ a sweet insight into the medical profession ‒ when her gallant surgeon offers Catherine his arm on the way to her life-changing surgery.

Voyeuristically, a marvellous insight into the heart and mind of a transitioning human. Statistically, a journey few take and fewer still survive.

Sydney Theatre Company

Until 26 May

Our brave government held off the much mooted Royal Commission for as long as they could. Looks like they were trying to protect their mates in the financial services business, as claimed by Labor. Anyway, once the commission started, with a highly competent Chief commissioner, the dam has burst. Criminal actions as well as merely breaking corporate rules and lying to the regulators. The big banks as well as the once-mighty AMP shown to have cultures that are rotten to their cores.

Here are some explanations and questions.

* AMP's rotten culture is due largely, in my view, to an over-ambitious board driving management to produce profits that exceed those that can be made legally. Greedy board members and greedy staffers have conspired to rip off customers, including dead people. What were the executors of wills doing, one is forced to ask.

* The big banks also succumbed to greed, a modern vice that pervades modern corporate cultures everywhere. Urged on by greedy boards, whose members are paid far more than would be needed to show up. Ditto for senior executives. Encouraging conspiracy to defraud customers.

* Banking strategy that tried, without success, to include 'wealth management' in its corporate structure. 'Wealth' was promoted by inhouse asset management businesses purchased at excessive prices. Poor 'wealth management' of bank customers was compounded by ridiculous promises for management teams that by definition could not all be better than average, and inexpensive index funds were almost never recommended.

* Unqualified 'Financial planners' were paid fortunes to recommend the inhouse managers. Obviously dud Financial planners fired by one institutions were readily re-employed by another and almost none were ever taken to court by relevant regulators.

* Timid or merely lazy financial service regulators. What were they thinking? Almost no legal cases, and clearly any attempt to punish incompetent 'wealth managers' or managers of teams of such people were mostly abandoned.

In short, a massive mess that needs stern repair. This is a long-term problem. Look at the pattern of bank lending, which since the 1980s has exceeded GDP growth by large amounts. Here is a warning from 2007.

Henry's final full-time corporate job was to run a 'wealth management' business for one of the major banks. The main achievement was to introduce a suite of 'best of breed' asset funds, or blends of funds, recommended by the global actuarial company, the USA-based Frank Russel company. This mob not only managed the choice of fund managers, which (of course) did not include the very ordinary inhouse' group, and few if any Australian managers. They also re-trained our financial planners, who adopted the new approach with conviction. Customers loved the new approach and funds under management grew strongly.

I told the board the new vision statement was 'Customers'. Such a slogan was unusual then (20 years ago) but is creeping in now, although mostly, I assert, without conviction. After one board meeting one old fellow came over to make a comment. 'We at the bank know about customers. Our strategy is to get every last drop of blood from every last customer'. I assumed he was being ironic.

Soon an expensive consultant concluded that the wealth management business should be absorbed into the banking structure. I resigned and almost immediately and the Frank Russel collaboration was abandoned. The bank concerned tried many other approaches over the years, but never again found an approach that worked.

The weekend Australian says on the front of its business section 'Banking royal commission. Kenneth Hayne signals end of wealth model'. At last, gentle readers. Praise the Lord and pass the brandy.

Here is a quote: 'Reflecting on the evidence presented over the gruelling two-week stretch of hearings, which included financial advice failures at CBA, Westpac, NAB, ANZ and AMP and advice subsidiaries, Mr Hayne said there were “at least three elements at play” that could explain how the structure of the industry factored into the horror stories heard in the inquiry.

“There are product manufacture, product sale, advice, and the way in which those three elements either fit together or don’t fit together according to both existing firm structures,” Mr Hayne said.

'He said another issue was the effect of internal measures including remuneration, culture, rewarding good conduct, penalising bad conduct, monitoring and detecting departure from what is seen as desirable.

'Last, external measures such as ensuring compliance and enforcing compliance at a company would have to be appraised'.

Now (Mayday) former APRA chief, John Laker, weighs in with his report on the Commonwealth Bank. Press reports use words like 'complacent'. reactive', 'insular': I add 'incompetent', 'greedy' and 'would we be surprised if deeper digging found gross dishonesty'?

Adam Creighton reports: 'Well who would have thought? A massive, taxpayer-guaranteed, ex-government utility with at least 500 executives is complacent, overly complex and bureaucratic, and top managers pay themselves huge “bonuses” with little downside risk.

'These are the shock findings of the 110-page prudential inquiry into the culture and governance of Commonwealth Bank, released yesterday, with the inquiry prompted in September by allegations the bank turned a blind eye to systematic money-laundering through its “smart” ATMs.

'It gets worse. “CBA has not set aside the requisite space, time and permission for quality reflection, introspection and learning,” the report said, suggesting “there is little evidence to suggest that reflection is a skill that is widely valued in practice. In fact, there appears to be a genuine lack of appreciation for its importance”.

'Tell me it isn’t true.

'As writer Tom Dusevic put it yesterday, “more poetry and long walks would fix CBA says APRA”.

Kulture

Fiona Prior watches the loaded transition of Malcolm to Catherine Elizabeth in Sydney Theatre Company’s Still Turning Point: The Catherine McGregor Story. More here.

Sporting life

So sad. Caaarlton! beaten again, to establish a new low point. It is the first time in this once great footy teams life (well over a century) that it has lost the first six games. A young Bullies team looked beatable, and some commentators saw promising signs in both teams.

The only other game I watched saw Swans, without Buddy, battling Geelong. For much of the game Geelong were on top and seemed to be cruising to victory. A late resurgance however saw a stunning win by the Swans.

Exciting 'futball' (soccer) games this weekend plus sad news that Timmie Cahill has played only 63, or is it 65, minutes for his new club. Very hard to fit him into the team for the world cup, but I hope he makes it. The odd 15 minute burst might allow him to win a game or two. He is a magician.

The Israel Falou affair continues to bubble. Fix it, please ARU admin. Do you really want to go without him to play All Blacks, England, even Wales, without him?

Image of the week

Courtesy Clement in The Australian

Apologies dear readers, for late communication. I have been finishing a paper on 'Animal Spirits' for an economist's conference in Vancouver in late June. If there is any demand, I shall post it on the site in due course.

This is the week for our remembrance of the horrible wars our friends (in recent cases), parents and grandparents were involved in. My father was wounded seriously in the bombing of Darwin but fortunately was not required to fight abroad. My number did not come out in the conscription lottery, but several close friends died in Vietnam. My elder son is a Lieutenant in the Australian Army, Reserve Division, and like Sir John Monash and many others in times past would respond if called upon. In both world wars and later, smaller conflicts our soldiers fought magnificently and earned respect of warfighters from nations involved in both sides. Australia's nurses and other support staff also performed brilliantly and mostly the people at home, some unionists and pacifists excepted, buckled down to support the war effort.

All wars are horrible, but most of us have nothing but respect for those people who go to war when their nation calls. Remembrance is mostly about the need to avoid the horrors of war but sadly there are people who we are forced to face in global hotspots, or in the case of home turf, individual terrorists or small groups, who wish to do us harm. Force must be met, firstly by strategies of defence, and if necessary counter force.

I do wish that bone-headed politicians would avoid gratuitiously insulting China, our greatest trading partner. In my view China should be a reliable friend provided we do not poke sticks at her system or people.

Henry's image of the week is a painting illustrating the RBA's admitted major mis-forecasting of wages growth. I commend Governor Dr Lowe for his admissions but wonder why there were at least 7 years of systematic forecasting errors. Simple mis-forecasting is one thing, and perhaps it goes without needing to be said that new procedures have been adopted, and new people have been applied to the task. 'Lest we forget' because major forecasting errors have important consequences and should not be repeated 6 times.

Kulture

Fiona Prior reviews a movie about a party that she thinks would be better as a play. At the Nimrod in Surry Hills, for preference, when Henry was about 25 years old.

Sporting Life

Caaaarlton! fought hard against West Coast on Saturday afternoon and were far from disgraced by their 10 point defeat with four of their best players out through injury. Losing so narrowly, however, was due largely to the Eagles resting several key players in the final term. Still , it was a glimpse of light in what has been a poor start since the glorious 5 goal opening in the first 15 minutes of the opening game against reining Premiers, Richmond.

I watched less sport at the weekend because of that dratted paper, but have the impression there were no great upsets in AFLM.

The struggle between Israel Falou and the Rugby management, and some of Rugby's sponsors, is unfortunate. Freedom of speech must be supported if not always welcomed. Falou's freedom of speech about his God's alleged hatred of gay people was only matching the Qantas CEO's freedom of speech about gay people's right to marry. I'd prefer that neither man spoke out on these subjects while recognising their right to do so.

Image of the week - Lest we forget

Commentary

It has been revealed that RBA forecasts for wages growth for the past 7 years have been (ahem!) consistently far higher than the outcome. In this image I have represented the line of the actual wages growth by the downward fall of the fishing line. Forecasts for each year are shown by the upward attachment for each year, marked by the date, from 2011 to 2017. In the original painting this is clearer, of course, but readers will I hope get the general idea.

Over-predicting wages means over-predicting income tax collections and over-predicting income taxes means over-optimism about the budget deficit - ceterus paribus, of course, the economist's great general caveat. This may not be the whole story. Perhaps other revenues were also over-predicted, and just possibly the 'independent' RBA was leaned on by colleagues in Treasury or even (gasp!) an over-optimistic Treasurer.

One can excuse two or three years of forecasting error. In my day when responsible for such forecasts, such consistent errors would have forced me to find a hole in the ground and shoot myself. Kissinger once said that three errors in a row required some change of approach. This painting is called 'Lest we forget'. This is in the hope that the mighty RBA will never again produce such a consistently biased set of forecasts.

The Party

Written and directed by Sally Potter

There is the distinct feel of times past when we enter the lovely home of Janet (Kristin Scott Thomas) who has just been appointed Minister of Health in a Labour Government. We learn that her husband Bill (Timothy Spall) has forgone his own brilliant career to support her ambitions and the pairs nearest and dearest have been invited to dinner to celebrate.

Bill is already smashed and mysteriously doleful, Janet is receiving congratulations on her mobile, including text messages from what can only be her lover. This ‘Party’ could just as easily be a theatre piece with its cast of seven characters played by the stellar Patricia Clarkson, Bruno Ganz, Emily Mortimer, Cherry Jones, Cillian Murphy and the fore mentioned Kristin Scott Thomas and Timothy Spall; the events all taking place in the home of Janet and Bill. It is, in fact, a comedy of manners; those gathered slowly losing their civilized veneers as alcohol is consumed and secrets are revealed.

Lesbian Jinny (Emily Mortimer) is first to provide a major shock as she reveals she is pregnant with triplets and her older Professor partner (Cherry Jones) can’t hide the fact that she is less than over-joyed by pending motherhood, even if she doesn’t have to carry the ‘football team’. Bill throws a grenade when he reveals a terminal diagnosis and worst still, that he was diagnosed by a Harley Street Specialist. While Janet tries to look less appalled by the fact that he has used a private specialist and more appalled by the fact that he is dying another member of the party ‒ 'Bruno' who is married to the impeccably cynical April (Patricia Clarkson) ‒ starts talking chakras and crystals and only just avoids being murdered by his own wife for his efforts.

Add a few lines of cocaine in the bathroom being snorted by a genetically blessed banker who always ‘wins’ and whose wife has just revealed she is leaving him and this party has definitely begun to pump!

Worth a rainy afternoon in the cinema but I would prefer to see ‘The Party’ on stage.

Ilse of Dogs

Director: Wes Anderson

I must admit I’m not so into animation. I’ll even admit that I preferred Rupert Saunder’s ‘Ghost in a Shell’ (2017) to Masamune Shirow’s original anime. That is sacrilege to many serious movie buffs.

So, ‘Isle of Dogs’ isn’t my favourite Wes Anderson movie but it is still glorious and far superior to the majority of films we are offered.

The time zone is round 2040 and the harsh and corrupt Mayor Kobayashi (voiced by Kunichi Nomura) of Megasaki City has exiled all canine inhabitants to Trash Island, a vast and toxic garbage dump where scraps are limited and ‒ it is rumoured ‒ cannibal dogs resides! Although Chief (Bryan Cranston), tells his pack continually that they are vicious and fearsome alpha dogs, they miss their human masters desperately and their favourite doggy foods. Chief, though a natural leader, is a bit of a freak in their eyes for he is a stray and therefore doesn't understand what it means to love a human master, nor chase sticks or even to have his nose scratched. Sadly, Chief is also a biter.

Back on the mainland the corrupt Kobayashi – member of an ancient cat cult ‒ has even banished his orphaned nephew’s military-trained canine minder, and the little boy’s best friend. Atari (Koyu Rankin), is devastated and bravely hijacks a light plane and flies to the island to rescue his beloved Spots (Liev Schreiber). As the dogs note when debating whether to assist him or eat him, their Masters haven’t come to search for them and really, they don’t have the appetite to eat a little Master even if they are starving, particularly one who has risked his life to come in search of his beloved Spots.

We meet an adorable bunch of pooches along the way, some truly evil politicians and some heroic children and scientists. As always, Anderson reveals many disturbing insights into our own deeply damaged, adult human culture.

Totally charming and as deep as your doggie’s loving eyes, do look out for the delectable Nutmeg (Scarlett Johansson) who has a Farrah Fawcett mane and is rumoured to have … but you’ll have to find out for yourselves.

‘Isle of Dogs’ will follow you home.

President Trump seems to be making progress with his threatened 'Trade War', with China responding by offering concessions, as one might have expected from a 4,000 year civilisation. The President's clinical response to evidence of Syrian government's use of awful chemicals on their own people seems also to have gone off without creating World War III, thank goodness. Giving ground to the students opposing the easy gun ownership seems like a path too hard, but reminds Henry of the beginning of the real freedom for men and women of colour in the USA.

In our local political puddle, nothing seems to have changed. The 30th awful Newspoll for the Turnbull government has come and gone with no explicit challenge for the leadership. Messrs Dutton, Frydenberg and Morrison have each said they'd like to be Prime minister one day, if the job were available. Ms Bishop looks cheery enough that perhaps she knows things the rest of us do not. Mr Abbott was off on his PolyPedal enterprise and is (in Henry's view) planning to return as leader of the opposition after the next election assuming, as we must, that the current government is a dead duck, or at least a crippled chook.

We await the budget, but must remind Scomo that producing a small surplus is the beginning of the Treasurer's task, not success. A substantial surplus is needed. So too are higher rates of interest as when the next global crisis erupts we shall need room to ease macroeconomic policy. Recall the 'Banana Republic' episode. Even though Treasurer Keating followed instructions and turned a budget deficit into a respectable surplus in 1987, three years later a modest US recession triggered a major Australian recession.

Clearly simply fixing the budget is only part of a sound macro policy. In the late 1980s interest rates were not raised sufficiently to head off a damaging boom, and when a new inexperienced team at the RBA finally lifted rates they overdid it, with cash rates at what seems an unthinkable level of 19 %.

The next similar episode is underway now. A US recession is likely within the next two years, and if we are not prepared our recession could be worse than that in 1990-91. Will we call it 'the recession we had to have', gentle readers? Or will it be 'Banana Republic #2'?

EconArt

Big excitement last week as editor's EconArt showing occurred at the Royal Melbourne Yacht Squadron. Good food, good wine and fun speeches, including Pete's explanation of the meaning of the latest painting, called 'Parable for Floating the Aussie Dollar'. This sold within moments of show opening, and later 'Four Famous Economists' and 'Banana Republic'. all three were among the artist's favourites, so financial effects were modified by grief at losing them. An experienced artist present said not to grieve. 'It always feels like losing a close relative', he said. 'But you will get over it.'

Kulture

Fiona Prior is quite besotted by some of the pooches of Wes Anderson’ Ilse of Dogs. More here

Sporting Life

The Commonwealth Games are about to come to a triumphant end. There are many medals for the home team, acts of great sportmanship and record ticket sales. This just about wipes out the recent memory of our incompetent cricketball tamperers.

The AFL season is underway, and Henry's Caaarlton! have played increasingly badly after the first 15 minutes of their first game. Yesterday night's total flogging by North Melbourne (North Melbourne!) was, Henry hopes, a low point from which the trend will be up. Smaller floggings and perhaps a win or two will do for season 2018, but here is a hint for the recruiting team. You now have a competent mosquito fleet, but lack some scary big men. At an absolute minimum we need another serious ruckman, or Kruezer will be burnt out, a serious centre half forward and a really scary centre half back.

Rest of the AFLM are sorting themselves out with Richmond, West Coast, Port Adelaide, Sydney Swans and GWS all with bigger, stronger and more skillful players than the very nice lads at Caaarlton!

Image of the week - 'Parable of Floating the Aussie Dollar'.

The Other Side of Hope

Director: Aki Kaurismäki

Your attention span needs to be able to hang in there for longer than the perfunctory four minutes between sensational film moments in the case of Kaurismäki’s ‘The Other Side of Hope’. Think about eight minutes between heart beats followed by Kaurismäki’s signature dead-pan delivery of emotionally loaded dialogue. These insights are into one of our most compelling human dramas ‒ the international refugee crisis.

‘The Other Side of Hope’ follows the young Syrian Khaled (Sherwan Haji), fleeing Aleppo after his home has been demolished and his family killed “by the Syrian Government, the Russians, Hezbollah, Iran, ISIS, the rebels, the Americans, who knows …” (to paraphrase). At the same time we are also following Wikstrom (Sakari Kuosmanen), a middle-age man caught in a miserable hole that involves both his job and his marriage. In fact, the only real malevolent force in the time-frame of this movie ‒ the brutality of the physical threat of the Syria situation left behind by Khaled ‒ is that of a neo-Nazi gang who wants to kick in the head of the defenceless ‘camel boy’.

‘The Other Side of Hope’ is full incidents and accidents. It deftly showcases the kindness of strangers prevailing and overwhelming the inefficiency of well-meaning but inadequate bureaucracies to provide glimmers of hope in what would otherwise appear to be insurmountable sadness.

A beautiful film, ‘The Other Side of Hope’ will be enjoyed by grown-ups who love the medium of movies and who believe in the power of humanity.

A new poll has provided Malcolm Turnbull a sliver of hope. The big one, no 30, is out tomorrow but the general view seems to be that there is no alternative leader worth trying. But if things stay dismal for the coalition either someone will challenge or Malcolm will go to the Governor General so he can be fired by the public rather than his own party. And who knows, North Korea may land a missile near Darwin and produce a landslide vote for Malcolm and his team.

The BBQ stopper in leafy Kew concerns the great danger of Bill Shorten's attempted, so far looking like a winning strategy, swing to the left. 'They'll soak the rich, and decimate the middle classes', is the cry. The concern is the prospect of taxes on carefully acquired wealth, but the coalition's raid on 'excess' superannuation balances showed that nowadays 'anything goes'.

When I can reestablish my link to Quadrant Online I shall provide a report on Wolfgang Kasper's article about 'The Merits and Perils of Western Civilisation'. Wolfgang's conclusion is: 'Australian culture, as it evolves, is better placed than any other to draw inspiration from the two greatest, deepest civilisational traditions mankind has created - the Christian Occident and the Confucian Orient'. Henry would add: 'Provided we solve our economic problems, clearly indicated by government and household overspending, and the troubles that will occur from excess debt as global interest rates return to normality'.

Advice from great men of history

David Hume, a great philosopher and friend of Adam Smith, wrote that the practice of amassing public debt "appears ruinous, beyond all controversy" that it will lead to "poverty, impotence, and subjection to foreign powers" and that ultimately "either the nation must destroy public credit, or public credit will destroy the nation".

Adam Smith, known as the father of economics, wrote that "the progress of the enormous public debts which at present oppress, and in the long-run probably ruin, all the great nations of Europe, has been pretty uniform".

* Dennis Rasmussen, The Infidel and the Professor, Princeton University Press, 2017. (Pp 169, 170)

Kulture

Fiona Prior enjoys the tragicomedy ‘The Other Side of Hope’ by Finnish director Aki Kaurismäki. More here.

Sporting life

The Commonwealth Games are well underway and for a change the Aussies are doing well, currently leading the medal table for England, the old enemy. Swimmers and cyclists are leading the charge, with men also starring unlike the results of recent games.

AFLM is going badly for Henry's Caaaarlton!, now down 3 zip and looking like a team struggling to make things happen. As in game one against Richmond the Blues opened the game against Collingwood with a frenzied blitzkrieg of three goals, and then let the old enemy score ten in response. Nunawading firsts in Henry's day would have known how to stop such an avalanche, by starting a fight. Or by sending a forward or two down back to confuse and harass the opposition forwards.

Saw the final quarter of Hawthorn vrs Geelong, narrowly won by the Hawks. GWS, the Sydney Swans, West Coast and the two sides from Adelaide are all doing well. As an old bloke said at a recent social event, 'the AFL really screwed the Melbourne teams'. 'Amen to that' confirmed Henry.

The shambles that is Australian cricket has calmed down with the three bad boys copping their excessive (in my view) penalties. The obvious contrition and tearful apologies are generally regarded as having softened the public's opinion of the heinousness (is that a word?) of the crimes, and there is to be further investigation of the Kulture from the top down. 'Win at all costs' seems to be the mantra but the investigators will find it impossible to define the red line that cannot be crossed.

Image of the week - confusing politics

The Melbourne Age reports: 'The Defence Department is reviewing business dealings between one of its senior scientists and the Chinese government’s missile development agency amid ongoing concerns about Beijing’s effort to recruit western scientists and officials.

'In a separate development, Fairfax Media can also reveal that Australia's peak scientific research agency, the CSIRO, spent tens of millions of dollars upgrading its cyber-security and information systems after a data breach linked to an employee who was a Chinese national. The man disappeared after the apparent breach in November 2013.

'The Defence Department senior scientist, who has a security clearance that gives him access to classified information, was in early 2016 appointed director of a small NSW firm which specialises in non-military uses of big data analytics'.

Another fine article comes from the latest Economist, titled 'America’s trade strategy has many risks and few upsides'

'It is undermining the rules-based trade order and could start a series of tit-for-tat moves'.

The concluding paragraphs are as follows: 'China’s desire to be seen to adhere to the rule book could weaken, however. Cui Tiankai, its ambassador to America, responded to Mr Trump’s announcement by saying that “if people want to play tough, we will play tough with them and see who will last longer.” At risk would be agricultural exporters and American companies operating in China. Mr Lighthizer told a congressional committee on March 21st that he would defend farmers’ interests should they be hit, adding to the impression that Mr Trump would not shy away from a trade war.

'Another risk stems from Mr Trump’s obsession with the bilateral trade deficit. No deal can guarantee to bring it down. Whatever the two sides agree to, the fact is that trade is devilishly difficult to manage. Factors beyond China’s control could easily overwhelm the impact of any deal on the bilateral trade deficit. Mr Trump’s cuts to income and corporate taxes mean that America’s economy is about to receive a large stimulus. All else equal, this will suck in imported goods.

'American and Chinese trade negotiators thus have their work cut out. Any deal they reach must allow both sides to claim victory. And since it will be judged a success or failure according to outcomes that have little to do with their agreement, it is bound to be a fragile one'.

The Death of Stalin

Director: Armando Iannucci

Based on the graphic novel by Fabien Nury (creator) and Thierry Robin (illustrator)

Imagine Stanley Kubrick making a movie about the death of Stalin rather than the Cold War (‘Dr Strangelove or: How I learned to Stop Worrying and Love the Bomb’ 1964) then turn up the violence dial till it will go no further. ‘Death of Stalin’ is definitely located at the black hole end of black comedy.

What is most blood-chilling about ‘The Death of Stalin’ is that not for one minute are we allowed to forget the bloody sadism of the reign of this despicable character even though the laughs are flowing freely because of the hilarious dialogue and characterisations.

The film starts with a stunning orchestra recital and then swiftly moves to a ‘jolly chaps’ scene of Stalin and his inner circle. They are (over) eating, (over) drinking, (and way over) talking about the many tortures, deaths and rapes they have been responsible for in a business-as-usual manner. When the night’s hit-list is eventually brought out and the names of those who are to be killed and tortured is fine-tuned, Stalin notes that a particular couple are to be shot, ‘her first, with him watching’ and another victim’s body is to be taken and left in the pulpit of his church. When the band of merry psychopaths finally disperse ‒ after watching a cowboy movie with their leader ‒ it is also divulged that one of this intimate party (Vyacheslav Molotov played by Michael Palin) is also on tonight’s list.

Delicious about ‘The Death of Stalin’ is that director Armando Iannucci has allowed this group of stellar American and English actors to ham-up their own accents for the film. Ultimately, you have a group of Russian men speaking like English and American goons; hugging, kissing and toasting each other while they wise-crack and position themselves like paranoid gangsters.

Fear oozes in this depiction of powerful men in Russian history, all recognising that the death of Stalin could be both opportune or life-threatening, depending on how they manage themselves and their alliances from this point. A friend from Columbia once told me that her country was so violent because the criminals not only carried guns but were also high on cocaine. I wondered if this period of Russian history is so bloody because the players were smashed on vodka as they made their political decisions. A slippery morality, psychosis and a pre-disposition towards violence are well recorded by-products of substance abuse.

Malenkov (an absurdly pompous Jeffrey Tambor) immediately assumes charge, his hair becoming progressively darker and figure progressively slimmer – he takes to wearing a corset – as Stalin’s funeral approaches. Nikita Khruschev (Steve Buscemi) is quick to start schmoozing and dealing, while Lavrenti Beria (Simon Russell Beale) is depicted as the most conniving of all. First on the scene after Stalin’s cerebral hemorrage, Beria collects every incriminating file he can on the other members of this tight inner circle. The film palpitates with political ambition and fear.

My favourite/unfavoutite character in ‘The Death of Stalin’ is Georgy Zhukov (Jason Isaacs). Zhukov looks like a militarised Baron Von Trapp; so handsome and debonair right down to the scar on his face, until he opens his mouth and sounds like a character from ‘Minder’.

This film takes the liberty of imploding a slab of history into the night of Stalin’s death and the period until his funeral. It depicts Zhokov and his military supporting Khruschev and out-positioning Beria. Khruschev gets rid of Beria quickly after and we know that it is only time before the clueless Malenkov meets a similarly violent end.

Think of a group of bureaucratic serial killers who find themselves leaderless and who scramble for the top job. Now add hilarious dialogue.

Horrifying history.

Impeccable set design.

‘The Death of Stalin’ has been banned in Russia.

This is not a film for children.

Massive market volatility surely marks a turning point in market sentiment. It is worth listing the facts which make investors nervous. The main fact is that markets have been strong for a long time and have reached a point where some downturn was required. 'It's time' if you like.

Other factors in no carefully thought about order include:

* President Trump's continual flow of tweets and changes of staff show a man with an hairtrigger approach to life and policy, a bit demented indeed.

* President Trump's tariff increases may, as optimists suggest, just be his clever negotiating for better deals for US trade, or it may signal the start of trade warfare that will make the world a less prosperous place.

* The punch up over Russia's poisoning of a major former spy and his daughter in London shows the fragility of world peace. Add in North Korea's nuclear posturing, China's South China Sea takeover and Russia's threats on nuclear missiles armed with nuclear bombs and there are plenty of reasons why a nuclear war could break out, almost by accident.

* Will China's boom, already slowed, hit a speed bump due to its heavy (largely onshore) credit burden? Will the USA economy's apparent speed up also slow as its enormous (largely offshore) credit burden finally implodes?

* Global monetary policy is being gradually tightened. Rising cash rates in the USA and some selldown of bonds purchased as part of 'Quantitative easing' adopted during the global crisis is being unravelled. Both cash interest rates near zero and powerful 'quantitative easing' boosted US bond and equity markets. Now similar actions in reverse will raise interest rates generally and exercise a steady deflationary effect on global equity markets.

Hard to see recovery of equity markets any time soon. Henry knows one savvy bloke who recommends putting all one's investments into cash, and spreading cash balances across banks so as to be within the $250 K limit per holder during the GFC, when at the worst of the scary 'Great Recession' was running. 'This time Recession will be worse, much worse' says that guru.

Henry's view is there must be a global recession within 2 or 3 years. When the US enters recession, Australia usually follows, as happened during our severe recession of 1990-91. But our current debt overhang will very likely make the next recession far worse. It would be wise to sell assets and repay debt, gentle readers.

Kulture

Fiona Prior sees the black, black comedy ‘The Death of Stalin’. More here.

Sporting life.

Footy on Good Friday and many shops open, what is the world coming to? Adelaide beat Richmond, North Melbourne flogged St Kilda and no-one was struck down by a bolt from the blue.

Today Caaarlton! plays the Suns in Queensland and the coach has called for a more 'balanced' style of play. Less all out attack and a bit more stern defence. Then next week we face another old enemy, Collingwood.

Former Captain Smith has apologised and shed more tears about his foolish behaviour in South Efrica. This has already led to some strong support, especially when the list of trivial penalties for former players caught tampering with the ball. Fair go, ICC and Australian counterpart. It's ok to show we are tougher on our players than other nations, but surely not so much tougher than has produced one year (or in one case 9 month) suspension from all 'First Class' cricket.

Hopefully, the hard man Warner will win a legal appeal and those long serving clowns that run Australian cricket will get the push themselves. If it was good enough for coach 'Boof' to quit, surely some long serving administrators should pay a price too.

Update: Caaaarlton! has faced the Suns and got soundly trounced. Collingwood next Friday night provides an opportunity to show Richmond was no fluke, but being 3 zip down would suggest business as usual for an undermanned Caaarlton!. Henry watched final quarter of Hawthorn-Geelong game which showed what is needed to be an elite team. Scary really.

Mr Warner has spoken and managed a tear or two. But he refused to answer any hard question and is expect to appeal the harshness of his sentence. And even if Smith and Bancroft do not appeal, relief for them will surely follow a reduced sentence for Mr Warner.

Image of the week - Four Famous Economists

Finally someone in public life has stated an important truth. On Insiders today, Gerard Henderson said, as an apparent side issue, something like: 'The only way wages can go up is for productivity to increase'. Barry the boss failed to pick up the point but it is one that needs to be publicised widely and understood by the voters. Of course, Treasurer Scomo will not make the point because the Turnbull government is making no real attempt to introduce policies that will raise national productivity. This attitude is best described as 'unfathomable stupidity'.

'What happens when a Shorten government introduces wage increases unbacked by productivity increases? Jobs growth will slow, gentle readers, and, if unbacked wage increases are large enough, job numbers will fall. Such a response was proven by the Whitlam government and endorsed by Prime Minister Hawke in briefing the 'Sherpas' preparing the modelling for the National Economic Summit and endorsed by the ACTU Sherpas. And the ACTU accepted a cut to real wages by not demanding compensation for cuts in real wages resulting from the fall in the Aussie dollar during the 'Banana Republic' episode.

Australia is at risk of Banana Republic # 2. Lots of factors are similar. Here is Henry's attempt to point out the possible scenario facing Australia and Australians.

In 1986 Australia's international debt was growing far too quickly for comfort. After prodding by the RBA's Head of Research, and a fiery interchange in the presence of top teams from Treasury and the Reserve Bank, Treasurer Paul Keating resolved to follow relevant recommendations. These were to convert the budget deficit to a surplus, convince the ACTU to cop a cut in real wages due to a falling exchange rate and to allow the Reserve Bank to raise interest rates.

These policies were all implemented and (after a substantial fall in the value of the floating dollar) the economy moved to a better configuration. Soon however, as the dollar began to recover, the RBA top leadership resolved that this was equivalent to a tightening of monetary policy. While the board was advised of the need to tighten monetary policy by raising cash interest rates, and seemed to agree with this advice, the opposite happened month after month.

The economy began to overheat and, perhaps by coincidence, a new management was installed at the RBA. In quick time cash interest rates were raised dramatically almost to 20 %, creating the worst recession since the Great Depression of the 1930s. This recession was not as dramatic as depicted in the painting (see Image below), but the next Great Recession might well be. Again government debt is growing rapidly and interest rates are very low and supposedly to remain that way even as USA rates rise. Additional factors are that household debt is unsustainably high, real wages and productivity growth are zero or very low and the global boom (also built on borrowing) is likely to end soon.

Sporting life

The unfathomable stupidity of the Australian cricket team has appropriately been labelled as 'worse than the underarm bowling incident'. Worse because it was decided at a partial team meeting over lunch, whereas the underarm bowling was an act of passion. Worse because the youngest member of the team was fingered to do the deed. Worse because it was a furtive act that was just as certain as an over of underarm bowling to be seen on television.

Send the Mont Albert Fourths to play the Fourth test, or at least pick an entirely fresh team lead by Aaron Finch, current best performing Aussie opening batsman. And all the other good performers in Sheffield Shield, with a sprinkling of Victorian players who get no joy from the NSW-biassed selectors. Why are we surprised that descendents of the NSW Rum corps are cheats?

Good news. The AFLW final was a beauty with the doggies winning despite their leader being unable to play due to an unfair tribunal decision designed, it is said, to impose a softer set of rules on the wimmin. It was alleged on ABC TV this morning that the mighty AFL are going to impose a softer set of rules on the poor, weak wimmin players. What rubbish, gentle readers. Let the Hunger Games begin!

More good news. Caaaarlton! jumped out of the starting gate to blitz premiers Richmond with 5 goals in the first few minutes. Faster than last year, stronger - think Cripps as the most obvious - and above all confident with the new attacking flair that has been created by coach Bolton in his third year rebuild. Finally toward the end of the third quarter gas was being lost, and severe injuries saw one player off for the game and only ruckman Mathew Kruezer hobbling about on the forward line. The Premiers went on to a win they will be relieved to have got.

Image of the week - Banana Republic, as it might have been, or could be.

A new genre in the ever-changing world of art.

Parable for Floating the Aussie Dollar

At the time of floating of the Australian dollar it was (in my view) seriously overdue. This parable shows Prime minister Bob Hawke going over the fence - actually an image of Australia's rabbit proof fence - with ease, accompanied by his chief adviser, Professor Ross Garnaut. The RBA chief, RA (Bob) Johnston went over, also on a willing steed and accompanied by two of his main advisors, John Phillips and the artist.

Treasury, represented by the black horse, for some reason was reluctant, meaning that the Treasurer, the nicely besuited Paul Keating sailed over the fence unhorsed. Later exchange of articles in Quadrant revealed that Treasury's boss, the legendary John Stone, agreed the dollar should be floated but the time was not right and a more gradual process would have been safer.

Political and Economic leaders

Good Morning America

Donald Trump became President of the USA on Friday 20 January, 2017.There were many questions. Which promises will he keep, which will be delayed or ditched? Economists are expecting new spending by government - the Great Fence, replacing some of America's aging infrastructure and perhaps increased military spending. Will foreign policy follow the Donald's pre-election promises? Make friends with Russia, confront China in the South China Sea (and perhaps by putting tariffs on Chinese imports) and withdrawing from NATO. Making allies commit more to the new American military regime?

Whatever happens there will be change, or at least firm questioning of many past verities. If spending by government is increased, and/or taxes reduced, this may turn a modest recovery into an inflationary boom, and rising debt levels, and wouldn't that be fun? Or not if the US Fed raised interest rates faster than now expected.

Headwinds (G7 + China)

'In recent years, further downward pressure on the growth rate has emerged from the four headwinds that are slowly strangling the American growth engine. Rising inequality has diverted a substantial share of income growth to the top 1 percent, leaving a smaller share of income growth to the bottom 99 percent. Educational attainment is no longer increasing as rapidly as it did during most of the twentieth century, which reduces productivity growth. Hours worked per person are decreasing with the retirement of the baby-boom generation. A rising share of the population in retirement , a shrinking share of working age, and longer life expectancy are coming together to place the Federal debt/GDP ratio after the year 2020 on an unsustainable trajectory. These four headwinds are sufficiently strong to leave virtually no room for growth over the next 25 years in median disposable real income per person'.

Robert J. Gordon, The Rise and Fall of American Growth, 2016, which should be read by every serious economist in the world. And in Australia, especially Treasury and Reserve Bank economists, and perhaps Treasurer Scottie.

Arguably, the arrival of President Trump, the lead penguin in the image above - check the largest animal's hairpiece - with erratic foreign policy, a tendency to trade protectionism and adding to uncertainty about the global attempt to slow global warming - will make things worse. The next two penguins are Mrs May from the UK and Angel Merkel from Germany. The rest of the G7 nations - Canada, France, Italy and Japan - are represented by resting or dead penguins and the compassionate (or merely hungry) upright one at the back represents China.

If American growth languishes, can global growth prosper? Australian inequality is not so bad as America's, and our demography may not be so inhibiting. Yet we share America's federal debt and deficit problem, and household debt is far worse. The US Fed is raising cash rates and Australian rates must eventually follow. When this happens our East Coast housing bubble will end - indeed this may be underway in any case - and many overcommitted households will be in dire trouble.

Spend less and save more, if you can.

America's central bank.

Janet and the mob

Janet Yellen, Chair of the Federal Reserve Board (Central Bank) of the United States, is the world's most powerful woman, close to the top of the gender-free overall list. Her task is to return global monetary policy to normal, meaning returning US cash interest rates to normal, ie approximately normal real growth plus target inflation. (WARNING: that is a controversial idea.)

Hers is a tough gig, and the global market volatility after her first tiny move toward higher interest rate shows just how hard her job is. This perhaps explains her slightly puzzled expression and the question mark of her crook. The sheep, representing the burghers of Wall Street, are generally unheeding, just (as usual) prepared for the best.

Sadly, Ms Yellen is to be replaced by President Trumps choice in February of 2018. He will be lucky to achieve what the lady sheep herder did.

Bene's Great Moderation

Ben (Bene to friends) Bernanke, was Janet Yellen's immediate predecessor. He pronounced that the 1990s was the time of 'The great moderation'. Economy running like a Swiss clock, inflation under control share prices (represented by the upward slope of the first mountain) rising strongly and smoothly. Bene’s study of history should have told him that the great share boom of the 1990s would be followed by a great bust. This was the Global Financial Crisis, represented by the storm clouds. Many sheep enticed onto the mountain died.

By ignoring imprudent asset inflation - in America both share prices and house prices - comment from on high about 'the great moderation' fooled many people into riding unsustainable booms, until the inevitable crashes.

The Bubble Meister

Alan Greenspan, Bene's predecessor, famously said it was impossible to tell if a healthy boom in asset prices was a dangerous bubble. He opined, wrongly in my view, that it was better to let the boom go on and if it was a bubble clean up after it burst. Lots of damage was done with this approach, including Main street anger when Wall street was bailed out. Of course, the Wall Streeters, represented here by the sheep, paid a price. Not a big enough price, as in the painting, when sheep and the grass died, and the bailouts created what economists call 'moral hazard'. (This is when naughty or merely profligate sheep get rebooted to try again to become rich.)

Mr Greenspan was also famous for telling a congressman that if he thought he understood something Mr Greenspan had said 'I must have misspoken'. As well as a Bubble Meister, Mr Greenspan was the last of the 'Alchemist' central bankers. Now, as Lord King, previously governor of the Bank of England, points out in a recent book, central bankers are required to be transparent and excellent communicators.'

Paul Volcker Smashes Inflation

In the 1960s, US President Lyndon Johnson prosecuted a war against communism in Vietnam and a war on poverty in the USA. Gradually this excessive striving created inflation, until by the late 1960s inflation was becoming a global issue. Then the 1970s saw two rounds of oil inflation fostered by opportunistic oil producers that greatly exacerbated the problem of global inflation

The painting shows the history of American inflation from 1960 to its peak in 1980, when many people were deeply concerned at what looked like global inflation out of control. The appointment of Paul Volcker as head of the US Fed was a turning point. Mr Volcker bravely announced new operating procedures for monetary policy and greatly lifted cash interest rates. Tight money indeed caused recession (in fact two in quick succession, represented by the vertical lines) but also smashed inflation, as the painting shows.

Unemployment peaked at around 10 % but fell quickly after the end of the second recession.

The ghostly figures include the shade of Mr Volcker, reviewing his work. Inflation was caused by economic policy and made worse by opportunistic behaviour by oil producers. It was ended by Paul Volcker’s bold action. Macroeconomics as currently practiced is in trouble. But the image here, inspired by Paul Romer’s Figure 1, illustrates a story that shows great clarity in cause and effect. The subject is only in trouble because practitioners fail to take the data seriously.

Brexit

The first big political economy shock in 2016 was the decision by the non-elite British voters to opt in a referendum to depart from the European Economic Community. The 'leave' case was lead by Boris Johnson who is shown here sending his best wishes to the continental members of the EEC as a friendly farewell.

The second big shock was Mr Trump's surprise victory over Mrs Clinton in the American presidential election. We shall deal with this shortly.

Banana Republic - as it could have been

And may still be

In 1986 Australia's international debt was growing far too quickly for comfort. After prodding by the Artist, and a fiery interchange in the presence of top teams from Treasury and the Reserve Bank, Treasurer Paul Keating resolved to follow official (RBA) recommendations. These were to convert the budget deficit to a surplus, convince the ACTU to cop a cut in real wages due to a falling exchange rate and to approve the Reserve Bank to raise interest rates.

These policies were all implemented and (after a substantial fall in the value of the floating dollar) the economy moved to a better configuration. Soon however, as the dollar began to recover, the RBA top leadership resolved that this was equivalent to a tightening of monetary policy. While the board was advised of the need to tighten monetary policy by raising cash interest rates, and seemed to agree with this advice, the opposite happened month after month.

The economy began to overheat and by (possible) coincidence a new management was installed at the RBA. In quick time cash interest rates were raised dramatically almost to 20 %, creating the worst recession since the Great Depression of the 1930s. This recession was not as dramatic as depicted in the painting, but the next Great Recession might well be. Again government debt is growing rapidly and interest rates are very low. Additional factors are that household debt is unsustainably high, wages and productivity growth is very low and the global boom (also built on borrowing) is likely to end soon.

Economists in Action

The Invisible Hand

The father of economics is widely known as Adam Smith, visible here as a putti. (Another father in my view is David Hume, a Scottish philosopher who greatly influenced his good friend Adam Smith.)

One of Adam Smith's great notions is that the economy is governed by an 'Invisible Hand'. It is difficult to represent an invisible hand in oil paint, so I have resorted to my daughter's glitter. The hand is almost invisible from 20 paces and only becomes visible as one approaches the painting. Anyway, this is my first attempt, in which The Hand is directing some people up the hill, representing rich rewards, and the majority to the poor, swampy lowlands.

The burning bush introduced itself for technical reasons, but I think provides a nice biblical touch to the scene.

Economists in Uncharted Waters

The crisis of 2007-08 emphasised differences among economists. This image represents the world's economists as religious fanatics on a desert island with a half-sunken row-boat and with their larger sail-boat drifted away as no one secured it properly. The large shark cruising by illustrates risks of the location, but the greater risk is because violence has succeeded the usually more polite modes of discord among the high priests of global economics.

A decade after the Global Financial Crisis (GFC) the world's more acclaimed economists have still not reached agreement on what needs to be done differently to prevent a recurrence. Good thinkers believe the next crisis may be far worse. This in my view is almost certain unless major nations have restored fiscal and

monetary policy to something like 'normality'. This is important so there is 'dry powder' that makes it possible to repeat the expansion of these policies to boost economic activity.

Animal Spirits

'Animal Spirits' is a phrase used by economists to describe the optimism or pessimism of 'economic agents' (ie 'people'). This is a concept used by the best theoretical economists such as Keynes, Minsky, Akerlof and Shiller but since it is arguably imprecise and (most economists believe) unable to be quantified or included in formal models this presents a barrier. This barrier means the concept is largely ignored in formal models. This means the models or theories are lacking what at times of boom or bust is perhaps the most important influence.

In June of 2016 I presented a paper at a conference in Rome (jointly with Clifford Wymer) in which we provide a measure of Animal Spirits based on a long period of reading, reflection and debate followed by empirical testing of the relevant ideas. Preliminary measures of its impact in determining movements in share prices and decisions about output and investment have been tested in simple models and now are being incorporated in a model of the UK economy from 1855 to 2014, with assistance from the Bank of England.

Here is a link to the paper. (NB, quite technical but ignore the mathematics.)

The painting represents optimistic and pessimistic sheep. Those ascending the share price mountain - climbing from left to right - are optimistic while those being crushed by falling share prices are pessimistic - walking right to left at the bottom of the mountain. Two have succumbed to the Black Dog of Despair and one is dangling with a rope around his neck. One enterprising sheep seems at the far left to have discovered a way to get on the upward part of the mountain.

Self portrait with theorems

This image was devised as I struggled to invent a narrative of how expansionary monetary policy influences asset prices. The short red bar shows expansion of the money supply (horizontal axis), which simultaneously reduces interest rates (vertical axis). In the middle distance is the goods market, which in current conditions is not much influenced by monetary policy. Thus the effect of monetary expansion is largely on asset prices, represented in the blue structure on the (imagined) vertical axis The blue supply curve for assets is steep as asset creation is slow, so asset prices rise rapidly when asset demand is pushed up by expansion of the money supply.

The artist is also the author of learned articles on this exposition, a tiny figure as he contemplates the theorems of economics, 'gathering seashells by the shores' of his subject.

Famous Equation Modified

So called 'monetarists' such as Milton Friedman use this equation as the basis of explanation of how money (M) influences prices (P). V is 'velocity of circulation' about which not much can be said except that its fluctuations modify the beauty of the link between M and P. The other variable is product (y). It is agreed that when M expands, y is initially boosted, so clearly Mv does not always equal Py. This opens the subject for attempts to articulate the links in some detail, which has been a large part of my professional life as an economist.

Julia in Wonderland

No understanding of economic policy is complete without some ideas about fiscal policy, symbolised here by the scary floating bright red bars stretching as far as the eye can see. (With a magnifying glass you will spot the last of the Howard-Costello surpluses, represented by blue bars,)

A similar picture applies to most nations

The great economist John Maynard Keynes saw bright red budget deficit bars part of the solution to economic depression. But his followers overdid his ideas until budget deficits created massive debts that ruined national economies. In this painting the three figures are Julia (with the red hair), Kevin (with the top hat) and Wayne - the one with the furry ears.

Will Australia, and other western nations, ever tame the dragon of debt, or will failure to do so creates the next Great Depression?

Floating Aussie dollar

In 1983 the Hawke government floated the Aussie dollar. This was the most important policy adjustment since the steady reduction of tariffs started by Prime minister Whitlam. This meant giving Aussie monetary policy the chance to work effectively to fulfill its main objective to improve economic stability by keeping domestic inflation low and moderately stable by adjusting cash rates of interest.

At the time it was not realized that such a policy would allow asset inflation to soar and the currency to be too strong. A revised prudential authority (APRA) began to restrain house prices in 2017 but the exchange rates remains uncomfortably high, having made the Aussie economy uncompetitive for some of the time since the float, at great cost to manufacturing industry. My proposed policy is to provide a tax on capital inflow, a suggestion that makes the nellies in government highly nervous.

The floating dollar is placed in a portrait of Lake Pedder, itself a highly controversial landscape.

Four Economists

This is an image of the artist's four favourite economists. Milton Friedman, Geoffrey Blainey, John Maynard Keynes and Hymen Minsky.

Milton Friedman taught him monetary economics (by his books and articles, we met only once, in Paris). Friedman's book with Anna J Swartz, A Monetary History of The United States, is a masterpiece. Geoffrey Blainey is a brilliant historian whose books almost always have an economic flavour. His The Great SeeSaw and The Causes of War successfully address major economic themes ignored by just about everyone else. His analysis in the SeeSaw book was important input to the artist's formal economic research on the subject of 'Animal Spirits'

.

John Maynard Keynes's The General Theory of Employment, Interest and Money is another masterpiece, and his The Economic Consequences of the Peace rang a bell that European politicians ignored at great cost in the 1920s and 1930s. Hyman Minsky's views on causes of major economic fluctuations contain brilliant insights not yet absorbed by the economics profession.

For this image I have focussed on the images of these brilliant men, all of whom I feel I know well from their writing, and in Blainey's case from a lifelong friendship. The setting is an imaginary meeting , imaginary as differing ages and formal fields of interest meant that any actual meeting was impossible. The composition is the style of the Dutch masters.

Central banking idyll

This image features one of the world's most distinguished (now retired) central bankers - Australia's Glenn Stevens. Glenn is shortly to retire but is shown throwing money into the air, an alternative to Milton Friedman's helicopter. The money is being followed by asset prices, symbolised by a house image and a share price image. The dark blue ball at upper left indicates a remote blue moon, representative of an unresponsive 'real economy' of factories, milk bars and so on.

The conditions under which monetary expansion stimulate asset prices rather than ordinary economic activity (y in the Famous Equation image above) or ordinary goods and services inflation (P ditto) are uncertain and will win someone a Nobel Prize in economics.

Lest We Forget

It has been revealed that RBA forecasts for wages growth for the past 7 years have been (ahem!) consistently far higher than the outcome. In this image I have represented the line of the actual wages growth by the downward fall of the fishing line. Forecasts for each year are shown by the upward attachment for each year, marked by the date, from 2011 to 2017. In the original painting this is clearer, of course, but readers will I hope get the general idea.

Over-predicting wages means over-predicting income tax collections and over-predicting income taxes means over-optimism about the budget deficit - ceterus paribus, of course, the economist's great general caveat. This may not be the whole story. Perhaps other revenues were also over-predicted, and just possibly the 'independent' RBA was leaned on by colleagues in Treasury or even (gasp!) an over-optimistic Treasurer.

One can excuse two or three years of forecasting error. In my day when responsible for such forecasts, such consistent errors would have forced me to find a hole in the ground and shoot myself. Kissinger once said that three errors in a row required some change of approach. This painting is called 'Lest we forget'. This is in the hope that the mighty RBA will never again produce such a consistently biased set of forecasts.

Technical notes

Exhibition scheduled for 10 April. Contact artist here if you would like an invitation.

All paintings are oil on canvas and painted with Rembrandt paints. Each canvas is either 3 foot by 3 foot or 1 metre by one metre. (Supplier went metric.) or in the case of the Parable of the Floating of the $A 36 X 48".

All paintings are, or soon will be, framed in identical blond-wood.

Within 12 months I should have 20 of these paintings. Galleries who might be interested can contact me on 0403 048 105.

A fine example of writing has hit my inbox. Called 'Globalisation Some thoughts on the open v closed divide'. Written by The Economist's Bagehot, it deserves wide circulation and deep discussion.

This column provides several enticing paragraphs and a link to the full article.

' ONE of the most popular interpretations of modern politics is that it is increasingly defined by the difference between open and closed rather than left and right. Openness means support for both economic openness (immigration and free trade) and cultural openness (gays and other minorities). Closedness means hostility to these things'.

'... things are not always as they seem. People who boast about openness can often indulge in all sorts of closed practices. And people who pledge eternal allegiance to free trade can find their attitudes changing as the logic of globalisation extends from goods to services. I suspect that middle-class support for open economies will change radically in the future as middle-class people find themselves challenged by two forces—clever machines that reduce the supply of cerebral jobs, and clever people from the emerging world who compete for their jobs. ... Middle-class protectionism will be the wave of the future'.

And in conclusion: ' My final reason for criticising the open-closed division is that there is a much better way to understand modern politics: that is through the prism of meritocracy, in particular the divide between those who pass exams and those who do not. Passing exams gives you an opportunity to enter a world that is protected from the downside of globalisation. You can get a job with a superstar company that has constructed moats and drawbridges to protect itself from global competition. You can get a position with a middle-class guild that has constructed a wall of licenses. You can get a berth in the upper-end of the state bureaucracy or a tenured job in a university.

'Exam passers combine a common ability to manage the downside of globalisation with a common outlook—narcissistic cosmopolitanism—that they pick up at university and that binds them to other members of their tribe. Failing exams casts you down into an unpredictable world where you are much more exposed to global trends such as the shift of manufacturing jobs to cheaper parts of the world. Exam failers are also bound together by a common outlook on the world: anger at the self-satisfied elites who claim to be cosmopolitan as long as their job is protected, and a growing willingness to bring the whole system crashing down'.

Labour wins Batman and gains a new member who looks like the real deal. South Australia gains a new Liberal government, after 16 years in the wilderness, and should benefit from new ideas and less complacent leaders. The rule in Australia is the Federal government is mostly run by the party that is opposite to most of the State goverments which is another bad omen for Mr Trumbull and his merry men and occasional women.

The Coalition deserves time in the wilderness. They wax indignent about Mr Shorten's attempt to grab people's return of corporate tax already paid - theft, as ScoMo rightly calls it - but it was the Coalition that decided on a tax grab from old people who have accumulated superannuation balances exceeding $1.6 million. Bad luck that we have planned to live on our savings. No mention of grandfathering, the accepted way of changing rules that impinge on people's long term planning. My point is that Kelly O'Dwyer's super grab opened the door for Labor to do as it wishes.

Labor's plan to make Negative gearing less of a rort was scorned by ScoMo. The reason may well be because so many members of Australia's political class, especially the Libs, are up to their ears in negative gearing schemes. A highly experienced accountant told me at a small private function that the rules mean someone cannot offset more than the income in a 'negative gearing' scheme. But this is routinely ignored by the ATO, and indeed that is why the common name is 'Negative' gearing. So with ten properties, a negative gearing member can accumulative excess losses that mean he or she will pay no or little tax on his or her parliamentary salary.

Please tell me this is not true Kelly, or ScoMo or even the Head of Treasury.

The Banking Royal Commission has already uncovered examples of greed, dishonesty and a cavalier attitude to the law. Go for it, I say. This must and will be sorted.

Kulture

Fiona Prior is back and today reviews Black Panther. 'Black Panther is as much about the politics of our world as it is about the fantasy worlds of Marvel'.

The Sporting Life

AFLW is reaching its final, and Henry hopes eventually the season is extended and includes a proper finals series. When Henry was a lad one went to AFL games and could watch some of the seconds game. Why not an AFLW game, with the same entrance fee, to provide more fun and better value? Sadly, we'd have to pay more as greed permeates the AFL about as much as the banking industry.

One/one in the cricket tests in South Africa. Only four sleeps til the AFLM competition proper begins. Caaarlton! starts the season against the reining premiers and will do well to avoid a flogging.

Image of the week - Parable of the float of the Aussie dollar.

Black Panther

Written and directed by Ryan Coogler

Black Panther hints at the politics of our world through the fantasy worlds of Marvel.

Imagine a physical showdown between a young Martin Luther King and Malcolm X. King finally gets the advantage and asks Malcolm X to surrender so his life can be spared. Malcolm X prefers to die, likening his death to that of a slave who jumps off a cargo ship rather than face a life of serfdom.

I’ll work backwards from this point on the latest Marvel Studio’s offering Black Panther. The Luther King character is T’Challa, played by Chadwick Boseman. T’Challa has recently become ruler/’Black Panther’ of the high tech African Kingdom of Wakenda, a top-secret futuristic Xanadu–style nation run from an energy source that plummeted to earth as a comet many, many centuries ago.

Poor T’Challa. Although he has triumphed in the arm-to-arm combat with his war-promoting adversary you know that his victory comes with the bitter acknowledgment that much of what his vanquished cousin said was correct; the flourishing Wakanda and its riches should be used for social revolution rather than remain hidden in the jungle. Wakenda’s centuries old isolationist policy is about to be over. Black Panther is a player.

Black Panther with its glorious and exotic kingdom creation and stunning cast is a little too didactic for adults (it is based on a comic book after all) but perfect for children. There is clearly defined good and bad. There is a moral dilemma of some complexity but not too complex to make the choice of violence a solution and it sets the scene for future screen time with this latest Marvel hero.

Interesting note: The first 'Black Panther' comic hero and the Black Panther activist movement were both created in 1966.

'I'm giving Australia a break from our new tariff policy because it's such a great little country, a loyal ally to the USA and a nation that buys aeroplanes and other stuff from us far larger in value than we buy from them', asserted President Trump, or words to that effect.

'Rocket Man' has apparently agreed to meet the Donald to discuss 'denuclearisation' of the Korean Peninsular. The President's remaining senior colleagues are doubtless concerned that the North Korean boss will run rings around their deal-meister. Still, it looks like the trade sanctions may be biting, and I'd not be surprised if the Eurozone nations are about to face some painful truths about the cost of NATO when called upon to up their cash contribution or face new trade barriers.

Meanwhile, the thirtieth Newspoll will be with us soon, and is widely expected to remain at a level that justifies at least a challenge to the leader. Trouble is, there is no-one obviously qualified to be a new leader, and Tony Abbott is ruled out to avoid Labor's Rudd'n'Gillard'n'Rudd madness. So we battle on with current management, seemingly impervious to the good news on jobs and general unhappiness with the current management.

Trouble is, Mr Turnbull, the public recognise that you know little about economics and lack decisive courage in improving third rate economic policies. Here are the things you should have a clear policy on:

* Fiscal policy needs to have a viable plan for a return to substantial budget surplus. This is so fiscal policy can help cushion the downturn when the next global crisis hits, and in the meantime allow higher spending on defence, health and education.

* Monetary policy similarly needs to be returned to some semblance of normality so it can be eased to help soften the blow from the next global crisis. (The primary focus on goods and services inflation needs to be rethought to facilitate a return to sustainable interest rates.)

* Immigration policy needs to be reformed, with about half the current level overall and better targeted to include a language test and 'commitment to our way of life' test. Apart from far happier people in our big coastal cities with less traffic chaos, fewer home invasions and other soft improvements to the way of life, this will help reduce budget deficits as many unsuitable immigrants require welfare. (Bravo John Stone and Judith Sloan for saying this in recent weeks.)

* Productivity policies need to be focussed on to allow Australia's incomes, including real wages, to rise without creating goods and services inflation or slowing jobs growth. This will also improve the budget balance and give Australia the opportunity to become a genuine global economic leader. (Please note with 80% of record jobs growth in government, it is no wonder that productivity is low. And where are wages growth highest - you got it, in the government sector, where productivity is near zero.)

Such policies need to await a reforming government, like the Hawke/Keating government and the Howard/Costello government. Sadly, no-one of the stature of key members of these governments seems to be on the horizon, so we shall stumble on with unhelpful economic policies and unhappy voters not knowing who to vote for.

Kulture

A window into international view of Australian kulture is provided by an Indian Institute. (Something very different.)

The Sporting Life

South Efrica's test team has struggled its way to a modest lead in the second test. Clear mutual lack of respect bedevils the contest and relatively weak umpiring is not helping.

AFLW is a revelation, with the most amazing increase in skill levels after one and three quarter seasons of playing at a high level. Did Henry ever tell you about the Supercoach who decades ago revealed that he was coaching a women who was in his view capable of playing with the men at the highest level? In Henry's family, the daughter was the best footballer although not allowed to show up the boys once she was 10 or eleven years old.

Soon it will be AFLM time, and we are happy to have secured tickets to the opening game. This features Caaaarlton! vrs Richmond, and one expects the reining premiers to win easily. Sadly Caaaarlton!'s AFLW team is not doing so well, so it is implausible to shout 'give the gurls a go!".

Image of the week - courtesy The Economist

Top Girls

Written by Caryl Churchill

Directed by Imara Savage

Looking at statement theatre works retrospectively can be both interesting and sad. Tops Girls by Caryl Churchill was written and first presented in 1982 The recurring theme in the first scene of this bold and ‒ in its era ‒ innovative eighties theatre piece is that all the strong and disparate women gathered round a celebratory dining table tragically judge their lives by the rules of the men of their eras.

Whether it is the adventurous concubine Lady Nijo (Michelle Lim Davidson), the recently promoted eighties business woman Marlene (Helen Thomson), the completely obedient Lady Griselda (Paula Arundell) or, one would think, the ultimate glass-ceiling smashing Pope Joan (Heater Mitchell) ... to name just a handful of the fabulous historic and fictional characters in Top Girls, they are all slightly disappointed and/or ashamed of their lives.

Why? Well, the over-riding theme is that (almost) all of Top Girl’s characters have had their children taken or have had to give them up to reach their career and lifestyle heights and even then be uncertain of their gains. Griselda may have been taken from a slum and made an aristocrat but she still believes that she must obey her husband unequivocally, even when he cruelly steals her children as a means to test her loyalty. Lady Nijo gave up a number of children at birth without question but is only really disturbed by having had to give up the male child and, back to the eighties, the wife of Marlene’s defeated professional competitor truly believes Marlene should step down because hubby will be humiliated to report to a woman!

Pope Joan feels disappointed even on a theological level. In addition to losing a child under grizzly circumstances, Joan believes that though accepted as Pope here on earth, God knows her secret and this is why ‘He’ does not deign speak to her!

In Top Girls, clever use of sets (by David Fleischer) as much as dialogue conveys the political dilemmas that are constantly faced by our Top Girls. When we meet Marlene in a sleekly professional context as the newly promoted manager of a recruitment agency we are troubled that she advises her female clients to not reveal their age or their plans to have children. Marlene has smashed a glass ceiling recently, yet we sadly realise she already intends to play the same old game.

Another set transports us in the claustrophobic kitchen of Marlene’s sister Joyce (Kate Box), the sister who didn’t escape their small country town upbringing. It is in the kitchen that the revelation occurs of Marlene’s teenage pregnancy. Marlene's 'niece' Angie (Contessa Treffone) is the child she gave away to pursue a better life.

So much has changed even since the 80’s – look at the fabulous New Zealand Prime Minister Jacinda Adern normalising pregnancy in the top job – yet this is still the exception and not the rule.

Churchill does a great job suggesting the lives of all these women; the losses and the gains that occur when important life choices are made. It is an interesting work to consider in the twenty first century where men, women, young, old and automation are all competing for those jobs.

Drama Theatre, Sydney Opera House

until 24 March

President Xi becoming President for life is a scary idea, given China's last President for life, Mao the Mighty. Several major discussions in the Oz provide interesting content. Greg Sheridan provides a wonderful overview, a snippet toward the end touching on Australia's lack of flexibility and slowness to address very important matters: 'while the West is suffering a widespread crisis of governance, Beijing is fast and agile. As Peter Jennings drolly observed, in the time Australia took to write a defence white paper, Beijing militarised the South China Sea.'

Russia's President for life, Mr Putin, is another very effective strongman. He has announced a new missile system, nuclear powered missiles with nuclear warheads, missiles that he claims the USA will not be able to shoot down. He'll be passing then on to North Korea next.

Donald Trump, a would be President for life is trying to start a tariff war. One sincerely hopes someone will persuade him this makes no sense. Old steel mills in the US rust belt will not open again and any reduction of trade will make Americans and the world poorer.

And atrocities too numerous to count and too complex to understand continue to create industrial strength misery everywhere.

Politics is at a low ebb in Australia, and we plead for leaders of major parties that work together to achieve vital reforms. Like getting 'the punters' to agree on a program of economic reform to balance the budget over 'business fluctuations' (wrongly called the 'business cycle', since economies go up and down but not in any cyclical way yet devised by mathematics.) And to introduce a steady series of productivity enhancing reforms so real wages as well as other incomes can rise. And finding the way to spend enough on defence to be able to seriously damage national capitals of powerful nations who wish to subjugate Australia. (Anyone for persuading the USA to sell us a couple of elderly but still potent nuclear submarines and train several crews?)

Perhaps we need a President for life if we are going to prosper and remain independent. One with a good nose for economic policy. A John Stone or a John Elliot. Certainly someone called John, or perhaps Peta.

Dr Ken Henry, Chair of the mighty bank called NAB, regrets his masterful decade old program of tax reform has not been introduced. This was the man who helped entrench Australia's excessive consumerism by persuading Prime minister Rudd to throw money at consumers during the global crisis of 2007-08. And introduced ludicrous programs of school 'improvements' and attempted to save the global climate by stuffing stuff into home roof spaces. No wonder we ignore this bloke's advice.

Our biggest national economic problem is the budget which will on current plans never produce more than a tiny surplus. Australia needs tax reform (a 15 % GST with no exceptions) or (preferably) scaling back/postponing current excessive spending programs.

The budget issue will never be solved until the leaders of both sides of politics are women or men of generous natures with serious visions of what Australia needs to become a highly productive nation with concern for the welfare of its children and grandchildren. Such women or men could surely work out a joint program, taking turns to prepare a list of priority items. Costs and incomes from the list would be added up, with subtractions for savings, until the agreed list was estimated to produce a sustainable budget surplus.

Kulture

Fiona Prior visits Sydney Theatre Company’s Top Girls. More here.

The Sporting Life

The first test match in South Efrica seems headed for a mighty Australian victory. Stark and Lyon dealt with the Efrican batters, and our batters cobbled together enough reasonable to good scores to leave the home team with a massive 400 + runs to make in their second innings on a poor pitch in fading light. Very glad Bancroft made a fifty in the second innings, but what about proven centurion Aaron Finch? 'No dammit', says the all wise selector, 'he comes from Victoria.'

Next excitement is the start of the footy season and the Commonwealth Games in Brisbane.

Henry was mighty pleased to see a young Caaaarlton! side beat St Kilda, providing signs of new talent that should grow into a great team in several year's time. Still, all the other teams seem younger and faster as well, so too much should not be expected.

Selectors for the Commonwealth Games seem to have gone for youth in the swimming and athletic teams and so some happy surprises seem likely. Plus the Campbell Sisters and Karl Chalmers to name just three proven winners.

Henry's youngest says Australia could have a gold medal winner in the new Olympic sport of skateboarding. If it happens, remember you heard it here first.

Image of the week - with thanks to Eric Lobbecke

The magical Lady and the Unicorn is presently on show at the Art Gallery of New South Wales. Be sure to book online as there is an appointment system and you need to allocate your time appropriately. This is a cautionary tip as I didn’t! Please see an excerpt below from my original essay on this famous lady and other famous Parisian dames.

image: Sight, c1500 (detail), from the series The lady and the Unicorn, Musée de Cluny – Musée national du Moyen Âge, Paris

“And now my favourite Parisian lady, housed in the Musée National du Moyen Age – The Lady and the Unicorn tapestry series. I’m sure you will be very familiar with her image. This medieval damsel is housed in a merged site of beautiful old Gallo-Roman baths (1-3rd C) and the former residence of the abbots of Cluny (15th C).

To make my visit an even more poetic experience a Museum Garden opened in 2000 symbolically bringing the two periods together. Micro gardens with the ambience of a medieval monastery have such names as ‘The Medicinal Simples’, ‘The Thousand Flower Carpet’ and ‘The Forest of the Unicorn’.

Our unicorn lady herself could easily be muse to an Umberto Eco or Dan Brown novel – the six tapestries that combine to create the entire series depict the lady in a pictorial, tapestry representation of each of the senses … and the final tapestry, which has inspired scholarly debate for centuries, seems to depict the damsel relinquishing an ornate necklace worn in a previous tapestry scene. Is the series representative of courtly or spiritual love? Apparently, in the medieval period, being one did not exclude the other.

The ‘mysterious’ tapestry, the one which inspires discussion and debate, depicts the lady in a pavilion removing her exquisite necklace. The tapestry bears the words ‘A mon seul desir’ (to my sole desire). It adds a theological and philosophical dimension, and according to Jean Gerson, Chancellor of the University of Paris round 1420, it depicts ‘another sense’ that of ‘heart’ or ‘understanding’. Whether it be heart or comprehension, courtly love or Christian ideals − or a 1000 flower potpourri of all, as is most likely − there seems to be agreement that the importance of the gesture is in its act of free will, of mastery over the senses and thoughtful use of them.

image: Mon Seul Desir, c1500 (detail), from the series The lady and the Unicorn, Musée de Cluny – Musée national du Moyen Âge, Paris

Sydney-siders are privileged to have this bewitching lady presently visiting AGNSW.

Art Gallery of New South Wales

10 Feb – 24 Jun 2018

An improving economy in the early months of 2018 has been overshadowed by Barnaby's Mistress'n'baby affair. As someone said, 'The ram got out of the home paddock'. Prime minister Turnbull's savage denunciation, we judge during a boiling temper fit, was utterly unnecessary. Why not say something like: 'I regret that my dear colleague, Barnaby Joyce, has got himself into a personal muddle and I wish him well as he sorts his life out.'

Then he could have announced his ober dicta on sex in the office. Instead he looked and acted like an old fashioned Puritan, missing only the tall hat, as he ordered the modern equivalent of a flogging, effectively a death sentence for Barnaby's political career, at least for now. The PM's new rule makes him a laughing stock. As Mrs T said: 'Modern people greatly value the workplace as somewhere to get to know people. With long hours and demanding jobs it is one of the few places to find a suitable spouse."

The PM's total inability to answer a question about how long he has known about Barnaby's new partner was acutely embarrassing. Did he know before Barnaby's by-election? He said then that Barnaby was his hero. Did he advise Barnaby to move his new partner out of his office? The pettifogging answers to the questions about the move of Ms Vicki. from office to office, into that of a man 'Then not a minister', and Barnaby's acceptance of free accommodation, added a grubby overlay to what was otherwise a strictly personal matter.

Then there was a report from the wild west of an allegation against the ram for sexual misconduct. Barnaby probably smiled at the lady, doffing his hat in a (to her) suggestive way.

Where to from here? Soon 30 Newspolls will have been delivered and the PM already looks like a political dill, flapping around in shallow electoral water and now clearly marked as a man who has absolutely no political judgment. One hopes the Nats do not elect as leader a person of low intellect, lousy ability in front of a camera and no political judgment. If they fail to find the perfect leader Barnaby will be back within 6 months or there will be yet another Deputy Prime minister.

Anyway you think about it this is a rotten situation for good government and increases the risk of Bill Shorten becoming the next Prime minister. Still, Bill is also a bit of a dill, although with a fair bit of low cunning. But Mr Shorten's return to old leftie politics will provide opportunity for the coalition. Australians do not wish to return to industrial conflict, or wage increases the nation cannot afford and even more foolish government expenditure than now in the pipeline.

Henry's absence

I must apologise for Henry's absence last weekend. Saturday was day 2 of a Telstra blackout that lasted until 9 am Friday when finally a competent technician was sent to install a modern modem. This 6-day clusterf**k was the third in month and we came very close to switching internet suppliers.

The trouble is that no person one speaks to another person before 5 minutes at best, sometimes 30 minutes. Speaking to a Telstra robot, and then a human who obviously fails to know all the tricks, or to care too much, is deeply frustrating. Henry went to a Telstra shop and learned about 'Hot spot tethering'. The competent technician said 'The help desk people are meant to tell you of that option when you call to report an outage, but be careful, it is pretty costly'.

One is forced to conclude, as the old time Treasury men used say, that what this country needs is a good recession. After the next bit of economic sunshine fades, that is probably what we get, so do cut back spending and repay debt is you can.

Kulture

Fiona Prior (re)visits the mysterious and magical Lady and the Unicorn. More here.

Do not miss Henry's editor's latest painting - of his four favourite economists.

The Sporting Life

Australia's much maligned T20 team, lead by Dave Warner, went from 7th to nearly no 1 while flogging England and NZ.

Now the test team is about to face the South Efricans, with a bowling attack about as scary as our top three and a spinner almost as good as GOAT.

Caaaaarlton! gurls got beaten by the Bullies in a most disappointing effort last night. The Bullies featured a former ice skater who kicked 4 goals in the second quarter and an unbelievable 7 over all, and was definitely the difference between the teams.

Soon it will be the AFLM season and we can be disappointed by Caaaarlton!'s blokes.

Image of the week.

Joan

Milk Productions

Written and directed by Lucy J Skilbeck

Performed by Lucy Jane Parkinson

I haven’t thought much about Joan of Arc since religion and history classes at my Catholic primary school!

In this Milk Production, we first meet the young tomboy Joan (played by Lucy Jane Parkinson) as our heroine waits for a visitation by Saint Catherine ‒ ‘she of the Catherine Wheel’ the rambunctious Joan is quick to inform us. My deep-past memory grinds into activity, as I think about the myriad martyr stories I was also told back at that primary school. Admittedly, apart from some gratuitously macabre deaths I can’t remember much about the Catherines, Marias and all, whereas the story of Joan of Arc is one I have not forgotten.

Parkinson plays Joan as a sturdy young heroine who reacts as anyone would, if visited by a long dead saint. Her disbelief and questioning is a huge part of why this stage production is so touching. Joan struggles with fear for both sanity and identity; unsure if she is blessed or cursed. She suggests that there has been some mistake, that she is just a peasant girl, that she is not worthy of such a task … in fact, any excuse she can think of.

As important to the story-line as the historic detail in this production about the life of Joan of Arc is thatJoan is a girl in drag. Parkinson can jump from vulnerable young girl watching her mother raped and trampled by English soldiers to one of her playful (and impressive) x-dressing personas: first as Joan's solid, loving dad; then as the effete and narcissist Dauphin, Charles VII; and finally as the pompous, pro-English Pierre Cauchon, who trials Joan for heresy. (It should be mentioned at this point that Lucy Jane Parkinson is an internationally acclaimed and award winning Drag King.)

Only once before have I seen such convincing gender transition on stage. It was at a fund-raiser at the Slide Lounge on Oxford Street almost 10-years ago when I watched Trevor Ashley transform from a big bloke sitting at a dressing table wearing a hairnet to emerge a diva capable of belting out 'Respect 'with enough soul to rival the original Aretha (this year Trevor Ashley is playing at Sydney Opera House – you’ve come a long way Trevor!)

Apart from Ashley, Parkinson is the only drag performer I have witnessed capable of such complete transformation. From a simple, theatre-in-the-round stage configuration, Parkinson uses her charismatic warmth, talent and story-telling ability to conjure the boy/girl Joan and take us on a journey full of humour, bravery and insight.

I, Tonya

Directed by Craig Gillespie

I seem to be watching really black comedy lately or pseudo biopics of people and their movie-worthy 15 to 524,160 minutes of fame. I, Tonya is both. It encapsulates the worst clichéd characteristics of that demographic Hillary Clinton unwisely labelled ‘the deplorables’ and is based around the brutal kneecapping of young skater, Nancy Kerrigan in 1994. Tonya Harding was the figure-skater accused of motivating the attack. The extent of her involvement is still shrouded in mystery.

On a larger canvas, I, Tonya illustrates the voyeuristic focus of the press that only moved its cameras from the train wreck of Tonya’s life and career when another notorious ‘incident’ – the O.J. Simson case – usurped the international scrutiny of Harding. Black celebrity as murderer was more compelling than white trash violence, it seems.

Tonya (played by Australia’s Margot Robbie) came from a dirt poor and violent background. Her father had left her in the care of her brutal mother (played deadpan awful by Allison Janney). Tonya met Jeff Gillooly (Sebastian Stan) at 15, they dated regularly and he regularly beat her up. Despite this Tonya married him, the film implying that the marriage was more to escape her mother than for love of the violent and stupid boy.

Unfortunately, on top of these misfortunes, Tonya was not going to achieve the accolades to which she aspired. The US Figure Skating Association took its image very seriously and Tonya’s rough and uneducated background was not an image they would support. Though at one point the greatest female ice-skater in the world, Tonya was constantly judged down on her presentation, and – to make matters worse – she was audacious enough to call the judges out on this injustice. Were Tonya born a couple of decades later she would probably have her own reality television program, a 'Honey Boo on skates' or some such thing.

Look out for husband’s best friend – Tonya’s body guard – the obese Shawn Eckhardt (played by Paul Walter Hauser). Not just an idiot but also completely mad, Eckhardt to this day insists he is an international underworld spy. Eckhardt was critical in escalating an ill-advised attempt to psychologically put Nancy Kerrigan off her game to the knee smashing incident that ended Tonya Harding's career forever.

Thought provoking and hilarious, the tragedy of I, Tonya’s portrayal of inter-generational ignorance and poverty will stay with you.

Volatility has returned to global equity markets. Finally some big falls mixed with partial recoveries, typical of markets in transition. So far at least this is nothing to worry about and, as RBA Chief Dr Phillip Lowe said, there is no need to change the outlook for general economic progress, which is predicting a year or two of economic sunshine. But global interest rates are rising and rising rates usually end equity booms. In modern days, no country like Australia can for long stand apart from powerful global trends.

Here is the problem. Should there be further market correction to a point where economic sunshine would be affected adversely, or other news bad for economic sunshine, governments do not have the ammunition to prop up economies. Interest rates are still very low and fiscal deficits are very large, producing more or less steady increases in piles of official debt. In countries like Australia, household debt is still rising from horrendous and utterly unsustainable levels. Housing prices are so far stabilising or falling gently, but it is early days.

My advice to the punters is to start tightening belts and pay off household debt as quickly as you can. National Treasurers do not give this advice. Rather it is 'all is well, keep spending'. This is complete bull s**t but false economic advice like this is one of the flaws in modern capitalism.

Economic sunshine as predicted by Dr Lowe may last for a year or two, or the dark clouds may roll in sooner than that. Use your time to repay debt and produce a more sustainable lifestyle punters.

Kulture

Fiona Prior sees Australia’s Margot Robbie in the thought provoking and hilarious tragedy I, Tonya. More here.

The sporting life.

Caaaarlton! has won its first two games in the AFLW competition. A serious knee injury to a star player and captain will slow the team down, despite in the game against GWS signs of new skills, like passing the ball across the ground to players who have somehow got free from opponents. Melbourne look the most sklilful team but the overnight game between Freo and Collingwood at the new stadium in Perth delivered a record crowd of almost 42 K fans and showed a very skilled Freo team that may provide competition.

The big excitement is the Winter Olympics. The surprise if this event is the gracious greeting on the team from North Korea, combining its forces with the capitalist running dogs from South Korea and walking under a single flag, albeit one carried by two people looking as if they were struggling for possession. Rocket Man's sister has been greeted graciously by the South Korean President, while the North American Veep looked doggedly at the field of play.

Much excitement as snow boarders hurled themselves down impossible looking slopes performing great flights with various exciting contortions as they left the various 'jumps'. Henry is waiting most eagerly for the Lurge.

Our cricketers beat the pestiferous Poms in the tests, got flogged in the ODI competition and are again winning in the T20. Obviously one or other team is not delivering maximum AMPS from time to time.

Image of the week - Clear Air Disrupted.

Molly’s Game

Directed by Aaron Sorkin

Based on the book Molly's Game: The True Story of the 26-Year-Old Woman Behind the Most Exclusive, High-Stakes Underground Poker Game in the World by Molly Bloom

Gambling is such a loaded topic.

According to headlines, real estate guru John McGrath is carrying $16.2 million in gambling debt. That implies the downfall of the once great Australian businessman due to an out-of-control gambling addiction. Sad.

Meanwhile, Australia has banned gambling advertising from Live Sports broadcasting before 8:30 pm every night while Tasmania’s state government is significantly reducing the number of one-arm-bandits on its shores. (Perversely, the latter’s most marvelous cultural attraction MONA, was built on the wealth of MONA's high profile gambler owner David Walsh).

Like the next chapter in a soap opera, Australians await a new roll-out of headlines and gossip columns about the rise and fall and rise and fall of Australian Jamie Packer’s life and gambling industry ambitions. Included is high risk schmoozing by JP's staff that has led to their incarceration in Chinese prisons; celebrity promoters straight from Hollywood’s A-list doing remarkably little for exorbitant fees; and a very inappropriate girlfriend who left him while still sporting a huge rock on her engagement finger. More silly than sad.

With all these elements in mind – not exactly a neutral canvas – I caught Aaron Sorkin’s Molly’s Game at the movies.

Molly’s Game is based on the true story of a high-achieving small town American lass who, through accident, loses her opportunity to ski in the Olympics and redirects her competitive streak into high-stakes gambling games in North America (Molly doesn’t play, she hosts). Molly Bloom (played by the charismatic Jessica Chastain) quickly becomes the hostess with the mostess, attracting the world's biggest punters to her tables.

Molly’s game became increasingly popular as a seat at her table did not just open up a world for high-roller gaming but also created an exclusive network where business deals and tips could be transacted and exchanged as casually as cards were dealt and over-sized egos made feel like James Bond.

The sweetener that put Molly’s poker matches ahead of the competitions was the possibility of playing with the most influential men in the world – initially movie stars, who in turn attracted the moguls, politicians, and then the highest of high-wealth Wall Street billionaires.

Unfortunately for Molly, her success in exclusive, underground gambling ultimately led to the Italian mafia wanting to manage her 'debtors'; the Russian mafia money-laundering at her table (Molly's drug intake began to impair her usually scrupulous vetting processes) and eventually the scrutiny of the FBI.

This true story, and now book and film has it all; celebrity players, mafia, drugs, scary gun scenes, FBI informers and an interestingly moralising ending.

Satisfying entertainment based on nine years of a young woman's life more exciting than most fiction scripts.

In every asset boom most people expect it to go on forever because 'this time it's different'. In every occasion of asset boom like we have been enjoying, correction is inevitable and mostly painful. Yet not all the signals are consistent.

US stocks run on, and US economy seems firmly in recovery mode. Some of the world's prime investors are fearful of a big equity shakeout and losses in bond portfolio as the decades long bond rally ends. To Henry, today's graph showing US credit to GDP ratio from 1870 show a basis of this. It is a point made by some of the world's best journalists, including Martin Wolf, in his recent book, The Shifts and the Shocks. (At the Book Grocer in Melbourne, this nice hardback is available for $10, a real bargain.

Here is a quote from Wolf's final chapter, called 'Fire next time'.

'The kernel of the story ... is one of the interaction between global macroeconomic forces and an increasingly fragile, liberalized financial system. ... The idea that, in such a world, the central bank can target prices of goods and services while assuming that credit and the financial sector, which both creates and deals in debt, will be stable, is hopelessly naive. ...'.

The emerging 'Marcoprudential control' mechanism is peeping over the horizon, and is intended to cope with excess credit growth and asset inflation, if necessarily helped by tightening monetary policy. In Australia, APRA is credited with curbing growth of house prices what property owners and developers pray will be a soft landing. My guess is that more action will be needed and that a hard landing is likely.

In the global picture, only time will tell, but Henry shares Martin Wolf's judgment that the actions designed to ameliorate the damage in the crisis of 2007-08 - fiscal expansion, bail outs of financial institutions, super easy monetary policy, including 'quantitative easing - will make the next crisis worse, and harder to ameliorate.

In any case, if fiscal and monetary policies are not returned to some sustainable 'neutral' situation before the next crisis, governments, central banks and prudential regulators will lack necessary firepower.

The meaning of Australia Day

Lots of great Australia day commentary today. Paul Kelly's comment that Australia must face two truths about 26 January is highly relevant

.

'There are two truths about January 26, 1788. It was the threshold moment for one of the most audacious experiments of the Age of Enlightenment seeding a British settlement and society on the continent most distant from Britain under the practical yet visionary leadership of Arthur Phillip, in many ways the true founder of Australia who, against almost every prospect, had the insight to believe this convict colony at the ends of the earth would one day be “the most valuable acquisition Great Britain ever made”.

On the other hand: 'The associated truth is that the oldest civilisation on earth, isolated for thousands of years from the rest of the globe and hence extremely vulnerable, was unable to defend itself and suffered dispossession of its lands, ravage from disease, loss of life in conflict and loss of its way of life.

'Despite the initial good intentions towards the Aborigines displayed by Phillip, the great moral failure in Australian polity was the belief there was no place, no dignity and, indeed, no life for the original Australians.'

The Sporting Life.

Roger Federer sent 'Comet Kahoutec' (the brilliant Korean youngster who made the semi-final of the Australian Open against all expectation) from the court suffering blisters. Hyeon Chung will be back no doubt, and I suspect he will later wish he'd fought it out.

The pestiferous Poms at 5 for 8, has it ever been better than this? Last week I wondered why Aaron Finch was not opening for Australia in test cricket but there has been no explanation. Today I am forced to ask if Glenn Maxwell will get a go in the Australian team at any type of international cricket. 'He needs to train smarter' asserted The Boss, Steve Smith. Wish he'd take the trouble to be more specific, as his statement sounds like advice from a spirit in a seance, spelt out on the ouja board.

Well done to the bowlers. And imaging if Stark had been there to mop up the tail. All out for fourteen? What fun.

Anyway, just a couple of finals to follow in the tennis and normal sleep patterns can be renewed. And then the AFLW begins and then AFLM (practice matches).

Image of the week - Courtesy John Mauldin, read on here.

The Shape of Water

Director: Guillermo del Toro

If you found del Toro’s Pan’s Labyrinth a nightmare parading as a fairy-tale you will be happy to find The Shape of Water is much more of the the princess, prince, wicked monster love story that you expect when a story begins ‘Once upon a time…

Set in Cold War America, The Shape of Water is an enchanted tale of a mute cleaner Elisa (Sally Hawkins) working in a high security Government laboratory who falls in love with a top secret 'asset’. The asset is an amphibian Amazonian monster god who looks very similar to the creature from the black lagoon.

Thousands of allusions to water coalesce in this film. It drips from taps, it pours from the sky, it spills from buckets and over-sized fish tanks; it trickles in silver lines down our heroine’s cheeks. The cinematography and set design of The Shape of Water is exquisite, as it is in all del Toro’s film marvels. Surreal, a little bit gothic, a little bit noir, and with an attention to detail that makes you think that del Toro and his art director are definitely on the spectrum (who else would paint a giant replica of Hokusai's The Great Wave off Kanagawa on a wall than swab green blue paint over the image so that on a subliminal level the audience is completely immersed in their watery theme).

As in the best Beauty and the Beast tale or Princess and a Frog(man) parable, it takes the love of a pure-hearted princess to save our monster god from the grips of…. well, an even worse monster. The actual scary entity in this movie is the darkly handsome and sadistic government security officer Richard Strickland (Michael Shannon) who may look like Prince Charming but who is more evil than your average story book bad guy. Strickland believes that the only good Amazonian monster god is a dead Amazonian monster god and is hell-bent on dissecting our Princely amphibian to study his double lung and so, somehow, out do the Russians in the space race. (Excuse me? This one left me a little baffled too).

Green muscle cars, flouro-lime cream pies, ‘happy’ families who look like retro advertisements for a nuclear family on happy pills and a world where the disabled, homosexual, African American and women seem to not count one iota. We enjoy this journey to its happy ending because our band of outsiders save the Amazonian monster god by outsmarting the true monsters!

With his Princess safely in his arms, Amphibian Man waves a fond farewell to this motley crew before diving into the canal to a happy ever after.

Warning! A young friend suggested that were the Amazonian monster god’s genitals visible, this movie would have another rating entirely.

Back to Henry.

Golly gosh another year has gone by. Instead of matters for Aussie looking up they are decidedly looking worse by the day. The global sentiment concerning Australia is reflected in the ASX 200 where key companies have mostly treaded water for recent months with anaemic rises at best with few stars. Mum and dad investors need to understand that the direction of the ASX is determined by fund managers in Edinburgh, London, Oslo, Boston, New York and Hong Kong just to mention a spattering of financial centres. The other day the Raff was asked why such a poor performance by the ASX versus many of its peers. The answer to this question is pretty simple. Global investors do not have to invest in Australia.Many if not most off-shore fund managers allocate investmentfunds according to MSCI indexes and their performances against the same or similar. The picture shown below partially explains why the Dow Jones keeps making new highs and why the ASX 200 by comparison struggles. Note that Australia is not identified in the picture – precisely it’s too small and so who cares? Well it seems nobody does right now.

FIGURE 1: MSCI World Index

However it is true to say that some Aussie stocks are well placed on MSCI sector indexes like banks and resource companies. But overall, as already alluded to, Aussie is a non-event.

Imagine that you are a leading fund manager in Boston or London. Are you going to buy exposure to a country considering the following, just to mention the tip of an iceberg of negative situations?

The country is deficient in power supply – blackouts expected in summer when all the air conditioners get turned on (in QLD temperature limits are suggested but how are households going to be monitored?) – How stupid is that?South Australia is spending truckloads of dosh on batteries that will need replacing every seven years.– let’s buckle to the minority no matter the cost.The barrel has been scraped forour elected leaders in the major political parties.The Liberals show as hopeless and with the Labor a shoe in at the next election, offshore investors no doubt see disaster lying ahead for Australia (look what happened to the NZ dollar when a socialist got a reign on power).Billions of dollars are being spent on the NBN when 5G wireless is probably a hundred times better. But no – let’s waste billions of dollars and protect outdated technology by refusing to grant sufficient band width for 5G wireless to compete with the NBN.Worse still are mutterings to place a levy (tax) on 5G and perhaps on other communications to fund a blowout in the NBN.Manufacturing as most people think of manufacturing is going the way of the dinosaur and government does not seem to give a dam.Oh –but we are going to build a few submarines at great cost instead of buying off-the-shelf from the USA. Sure jobs are being created but perhaps savings should have been used for more patrol boats also being built in South Australia.An intellectual desert talking recently on the ABC said no worries – ten percent of the workforce is engaged in manufacturing. Well how so? Simply change the definition of manufacturing to include drawing of plans and electronic design etc. It’s just too bad that the hundreds of workers that have lost jobs in or connected to car manufacture are not skilled in paper work etc. Now wonder Australia is up s…t creek.It is becoming increasingly difficult to identify where strong economic growth is going to come from to reduce the real level of unemployment remembering the official figures are a nonsense based on a dumb telephone survey (for a some weeks the Raff had to participate in one such survey – what a lot of bollocks).

As many would say it is what it is. The Raff reckons that at the next Federal election the protest vote against Liberal and Labour will be significant with legions turning to minor parties. It seems likely that never again will Liberal or Labor win power in their own right – crikey what a mess the country has become. The Raff’s remembers the golden years of the 1960s though to the mid-1970 – yep the Raff’s generation saw the best of times.

World Trade

Some of Henry’s readers might remember that yonks ago The Raff wrote a note on the correlation between total World Trade (imports + exports) versus a commodity price index. What the picture presented at the time was up to 2002 the two series were visually well correlated. In 2002 China’s economy took off like a Saturn 5 Rocket and likewise so did World Trade. This is entirely as should be expected except that commodity prices lagged by 12-18 months and then shot up likewise.

It’s now nearly 40 years since The Raff has kept tabs on economic cycles and in that time he has seen a bewildering number of charts showing this and that correlations more numerous than ants in the pantry. But when it comes to commodities as a basket, there is nothing better than trends in World Trade, as the best indicator topredict the direction of basket commodity prices– this is simply because in the main, they are demand driven. Surprise, surprise: perhaps on of Henry’s readers might let The Raff know when if ever a broker type analyst has compared trade with prices. In all the years as a mining portfolio manager no such work was evidenced.

In July 2017 the World Trade Organisation started publishing a new WORLD TRADE OUTLOOK INDICATOR or WTI. The next two pictures show the WTI for July 2017 and the WTI for November 2017 including an outlook for 4Q 2017.

FIGURE 2: WTI – July 2017

FIGURE 3: - November 2017.

Ok, so the outlook for trade was slowing in 4Q 2017. In past booms World Trade has recorded y/y growth of +10%, reversing in downturns by the same or worse. For a host of reasons World Trade will not see the sorts of growth phases between 2002 and 2009. The interesting metric is the 3.2% increase from the figure published in July versus November. It’s probably just a coincident but 6-7% increase in WTI would match closely China’s reported GDP increase of 6.9% for CY 2017.

Assuming copper as a bellwether indicator of industrial health and strength of the USD, it’s worth noting that price is falling back and LME inventory increasing a tad.

FIGURE 4: LME 1-Year Copper Price.

FIGURE 5: LME 1-Year Inventory.

The mega miners like BHP and RIO have performed pretty well of late. Should World Trade continue to advance then leading resource stocks should continue to outperform the likes of the banks. The Raff will endeavour to keep Henry’s readers abreast of any changes in trade. The Raff admits to being somewhat tardy of late with contributions to Henry because he has accepted a wonderful opportunity to complete a PhD at UNSW over the next three and a half years. Since 1969 the sapphire deposits in Central Queensland, some 250km west of Rockhampton, continue to be of great interest – a thesis looking at the origins of the occurrences of these coloured gems is underway.

The Raff trusts that all of Henry’s readers have a healthy and successful 2018.

Finally, instead of the usual 'she'll be right, cobbers', someone who should know warns that Australian house and land business might be catastrophic. The Oz reports: 'An Australian property developer who turned his back on the local market because he saw it as too risky says an inevitable softening of residential prices, particularly on the eastern seaboard, will lead to a “spectacular disaster” for those with exposure to development land'.

Read on here.

And if it goes beyond 'development land' many mortgage holders will be in great trouble. There will be bargains for cashed up home buyers, bad loans for banks and a certain loss for the Turnbull government. In Henry's humble opinion, that is the future 80 % certain for the Australian economy.

Two of the old team of (non Russian) KGB have interesting articles in the Oz today. Alan Kohler warns that President Trump's 'tax reform' package will be a disaster'. The Aussie dollar has been rising an broke through the level of $0.80. Was this due to a stumble by the Fed's wordsmiths, Kohler asks, no is the answer.

The smarties in America know that the tax cuts, while good for share prices, will be a disaster for the US budget. When the long boom in bond rates end the US dollar could fall dramatically. There will be two problems for Australia.

Kohler again: 'the problem of competing against lower US company tax rates with a big budget deficit as the starting point, and the problem of a lower US dollar driving our exchange rate higher. 'MacroPrudential policy seems to have ended the boom in house prices and the burning question is whether we shall experience the soft lending hoped for by many Aussies or the hard lending feared by the smarties.

Australia currently has no policy to prevent the rise of the Aussie dollar and this is a major weakness in current economic policy, as regular readers of this column (obviously not Treasury or RBA seniors) will be aware. Henry's proposed solution is a tax on capital inflow. A colleage says this would be too risky for a nation so dependent on capital inflow but it would also be very difficult to impose. This colleagues suggests instead we could place a big tax on inflows of money to buy houses, a version of current feeble policy as Henry understands things.

Kohler concludes: ' The last thing the Australian economy needs with a soft housing market is an exchange rate heading back to parity: the Reserve Bank could come under enormous pressure to cut interest rates again in 2018, against its own wishes and everyone’s forecasts'.

Full article here. Note how much higher the Aussie dollar is than 12 months ago.

Amen, Alan. That's why we need a technique to avoid a modern version (post gold stand era) of a nation being crucified on a cross of gold.

The 'G man' in Australia's KGB is Robert Gottliebsen, 'Gotters' to his special pals. He confirms Kohler's view that the long boom in bond prices is over. And this spells trouble for Australia.

' The US bond chartists are saying that not only is the bond boom over but a long-term bond bear market is about to start, particularly if the US 10-year bond yield reaches 3 per cent.

'That would transform the global interest rate outlook and reduce the value of assets that are valued mainly on yield, including shares, long term bonds and property'.

Sounds sensible to me, and we must all agreewe've been warned.

In both USA and Australia jobs growth is the rosiest part of the current situation, at least for people who finally have jobs. Pundits say wages will soon begin to rise. That's on the assumption that the jobs boom is in jobs with reasonable productivity. If this is not the case goods and services inflation will rise and there will be yet another reason to expect cash interest rates to increase.

Kulture

Last week Henry watched the latest Winston Churchill movie, Darkest Hour. Four stars from Rotten Tomatoes a fair assessment for a histrionic performance. Google and you'll see a trailer.

Fiona Prior

Henry's editor has posted a new painting in the EconArt genre. Called The Invisible Hand, it attempts to represent Adam Smith's great concept in oil paint and glitter. Access to all examples of EconArt here.

The sporting life.

Nick Kygrios produced the goods in what Henry expects to be the game of the Australian Open. Playing against his long-time hero, Jo-Wilfried Tsonga seemed to help him curb his behaviour, which is not always of the best standard. Or was it that finally he is grown up. Perhaps we shall learn more this week.

There was a good point from Andre Agassi, which is that Kygrios could gain a lot from a good coach. Henry never played at an Australia Open, (being a failed AFL player and much later a champion boomerang thrower), but wondered why when Tsonga got to the net Kygrios never once tried a lob. Someone else pointed out that Kygrios mostly did not use a two-handed backhand, a standard tool for virtually all very good players.

Congratulations to Steve Smith for being awarded the newspaper's 'Australian of the year'. Perhaps this explains Australia's dismal one day efforts, currently 2 zip. The good news is Aaron Finch's superb job opening the innings. Aren't we looking for a reliable, if possible brilliant, opening batsman for the test team? Will Aaron Finch even get looked at, gentle readers. And if not, why not?

Soon the AFLW season will be with us to provide great viewing. Then we'll see the lads in action. Can't wait, really, but the niggle is how little we've heard about Caaaarlton's recruiting.

Image of the week

Low rates of inflation have perplexed the world’s major central banks over the past two years, but the surprise over the year ahead could be inflation rising much more rapidly than anticipated.

Core inflation rates across the world’s advanced economies dropped to just 1.3 per cent last year, down from 1.5 per cent the year before, despite improving economic growth and falling rates of unemployment.

The “output gap” — the difference between what economies are producing now and their maximum sustainable potential output — is disappearing and, without that idle capacity, inflation should start to rise.

A jump in US consumer prices at the end of last year that was reported on Friday was seen by some economists as the first sign of building pricing pressure that would force the US Federal Reserve to lift rates more rapidly.

“It supports our view that the Fed will ultimately increase interest rates by a more aggressive 100 basis points cumulatively this year,” said the chief US economist at Capital Economics, Paul Ashworth.

Although too much cannot be read into a single month report, the December inflation report, showing prices rose 0.3 per cent, up from 0.1 per cent in November, was seized on because US unemployment is now down to a 17-year low of 4.1 per cent.

The inflation figures were released alongside retail sales showing a sharp lift in December and an upward revision to results for November. The latest labour force reports show US wage growth is rising, and is now up to an annual rate of 2.5 per cent.

With the Trump administration’s generous individual tax cuts kicking in from January 1, an economy already at full employment may start to show signs of overheating.

These concerns were reflected in a speech last week from New York Federal Reserve president William Dudley who warned that the Fed may have to “press harder on the brakes” at some point over the next few years.

The potential for inflation to lift this year is much broader than the US. JPMorgan economists are predicting a 0.5 percentage point lift in advanced nation inflation over this year.

They base this forecast on the increasingly synchronised nature of global growth, the tightness of labour markets and the final fading of the caution that has characterised both household spending and business investment since the global financial crisis.

Although the world economy has now been growing for nine years, 2017-18 is the first time that all major economies have been growing simultaneously. This is starting to boost prices of traded finished goods.

Until recently, low rates of unemployment have coincided with higher measures of underemployment and lower participation in the labour market. However, all measures of spare capacity in the labour market are now approaching the low points of the previous two expansions.

JPMorgan economists say that besides the strong consumer price index reading for December in the US, there are signs of a broader pick-up in inflation across Asia, including Japan, China and Taiwan, while business surveys are also pointing to a shift in the price outlook.

“The ingredients for rising core inflation are now in place and this move will encourage central banks to normalise their stances faster than current market pricing,” they said.

There is no definitive explanation for the weakness of inflation and wages across the advanced world, although most economists have suggested a mixture of globalisation, technology, weaker unionisation and simple slack in labour markets are responsible.

There is an economic debate over whether the increasingly global supply of goods and services means that the pricing power of workers in advanced nations is affected by their competition with workforces in emerging nations. Domestic unemployment rates may not provide a true measure of the supply of labour that business can call upon.

The IMF, in its last review of the economic outlook, said most of the weakness in inflation could be explained by the normal variations in supply and demand — evident in a rising share of the workforce on involuntary part-time contracts — and by the unusually weak productivity of advanced nations since the global financial crisis. They said the empirical evidence showed that a 1 percentage point increase in productivity growth is associated with a 0.7 percentage point lift in wage growth.

The fund’s sister organisation, the World Bank, provided a contrary perspective in its review of the global outlook released last week. It sharply upgraded its estimate of global economic growth — it now expects advanced economies to achieve growth of 2.2 per cent this year, up from a forecast six months ago of 1.8 per cent, while emerging nations will achieve growth of 4.7 per cent.

The World Bank says that poor productivity levels mean that economic growth is now approaching, or surpassing, the maximum sustainable or “potential” growth rate, which is a recipe for inflation.

“With output gaps closing or already closed in many countries, supporting aggregate demand with the use of cyclical policies is becoming less of a priority,” it says.

The World Bank worries that continuing to support economies with very easy monetary policies at a time when spare capacity is disappearing leaves the global economy vulnerable to financial disruption.

“There remain important downside risks. Disorderly financial market movements, such as an abrupt tightening of global financial conditions or a sudden rise in financial market volatility, could trigger financial turbulence and potentially derail the expansion,” it says.

The IMF will release its updated forecasts in a week. Its October update increased estimates for global growth but downgraded estimates for inflation. Both growth and inflation estimates are likely to be upgraded in its next round of forecasts.

Like many others, the IMF has struggled with its inflation forecasts. In its April 2013 economic outlook, it gave the chapter on inflation the heading “The dog that didn’t bark”, reflecting on the reasons why inflation had remained remarkably steady around 2 per cent despite the global financial crisis. The ink was barely dry on that report before inflation rates started to sink.

There have been hints Japan and Europe may withdraw stimulus more quickly as output rises. If inflation shows signs of returning to target zones, the still ultra-easy monetary policies would look completely misplaced.

In excellent comments provided by a reader: God help the Australian economy over reliant on indebted households driven by our immigration fuelled house prices. The need to improve our productivity and international competitiveness is greater than ever.

Published today by The Australian, link here. Posted here with permission of the author.

Aquasonic

Composed and performed by Laila Skovmand with Robert Karlsson, Morten Poulsen, Dea Marie Kjeldsen, Nanna Bech Produced by FuturePerfect Productions, New York Co-produced by Aarhus 2017 European Capital of Culture with support from the Danish Arts Foundation, Aarhus Municipality and DJBFA

You might remember those old movies – set in a circus or maybe a sideshow - starring someone like Charlton Heston who was both ringmaster and father figure to his assorted troupe. Inevitably, along with the bearded lady and the strongman there would be a mermaid in a huge fish tank, her hair billowing like a silken cloud as she glided in a tank that was her pretend side-show home.

Aquasonic has a touch of gothic side-show; a pinch of myth, with its lethally bewitching voices of sea sirens; the dignity of lost Atlantis’ orchestra and a pinch of steam punk experimentation, with its freakish underwater instruments. There is also an overflowing drain and a leaky tap in there somewhere …

My entry – I was a little late – was into a pitch-dark theatre at Carriageworks where back-lighting was illuminating the massive tanks in which each member of the orchestra was enclosed. A lone female voice carried me to an ethereal place and clever lighting had the rubber (I think) shallow pond of a stage floor reflect silvery ripples of water onto surrounding walls and ceiling.

At times the music resembled an eerie gypsy band, at other times it was the aria of an underwater angel, and then you’d hear a punctuation that was more plumbing echo than orchestra or the united intake of breath as the musicians broke water to gasp another lungful of air before continuing to play.

It was the women’s voices that stole my heart and were I an ancient mariner I would certainly have broken through my bondage to join them – and been ripped apart by their razor sharp little teeth, I believe is how the myth goes on.

Aquasonic was a wonderful choice for the Sydney Festival Program.

Loved it!

Until 28 January

And back to Henry.

House prices in Australia have stabilised, on some measures falling, certainly soggy on Australia's East and South-east coasts. Mrs T is watching in Melbourne prices closely and can quote examples of houses that fail to sell at auction, then get listed at still high prices and then are sold one or two hundred $s lower than the listed price. This is a great change from selling at auction $500 K above the listed prices. (Interest here is in the $1 M =/- $200 K range.0

Mrs T says it will be time to buy in six months or so, but recalls when we purchased during the recession the problem was supply, which many sellers going to ground. Now of course a much higher number of people with mortgages are already at a point of 'extreme pain' and will be forced to sell.

The Aussie dollar is again going through a period of strength, mostly due one assumes because commodity prices have been higher than expected. Another reason that we consider a tax on capital inflow. US cash rates of interest are now (due to recent rises) about Aussie levels. With US cash rates currently due to rise further this year, with just one possible rise from Martin Place, the Aussie should be falling and some experts expect a big fall in the mighty Aussie.

Globally, the asset inflation story is still about shares. Despite slowly rising interest rates in the USA, share prices keep on rising. This would very likely to have continued if Janet Yellen had still been US Fed chief, but her replacement, Jerome Powell may have different thoughts. But if he keeps to the Yellen playbook that he supported before being nominated there should be three more 25 basis point increases in US cash rates in 2018 and this should finally be able to at least begin to take some air out of the share market tyres.

Monetary policy cannot serve two (or three) masters. US prudential policy is meant to quall increases in US share prices, but rising cash interest rates will provide supporting policy. In Australia, cash interest rates are focussed on consumer inflation on the grounds that will keep the overall economy in reasonable shape. APRA's prudential policy is supposedly focussed on house prices, and recent APRA efforts have reined in bank lending for housing.

A third issue, an uncomfortably high exchange rate, needs a third policy. In 2013 this was recommended in one of Henry's articles in the OZ, linked here. So far the Aussie dollar has remained uncomfortably high, limiting Australia's international competitiveness, with no policy response except some feeble attempts to limit overseas (Chinese) house buying.

So it is beginning to look like a difficult year. Strong labor markets in both the USA and Australia are confusing officials, politicians and most journos. Strong growth of jobs is a result of unusual wage restraint, with wage restraint due to workers (and households) fears about their lack of market power. This means fear of job losses, with labor markets far more fragile than official estimates of numbers unemployed.

Kulture

Fiona Prior mingles with mermaids at Sydney Festival’s Aquasonic. More here.

The sporting life

The test cricket ended with a 4 zip win over the pestiferous poms. Now there is a slight lull with only the ludicrous 'Big Bash' cricket to disturb us. But the bigtime tennis is about to start and loss of several bigtime players give Roger Federer a chance to add to his room full of trophies. Some hopes for young Aussies who have done well in satellite tournaments.

Soon the AFL will be starting its practice matches and naturally Henry will be rooting for Caaaaarlton! and providing clear-headed, if hopeful, comment.

Henry wishes all readers a happy and profitable new year.

Image of the week - Dream home for a young person

Three Billboards outside Ebbing, Missouri

Director: Martin McDonagh

Ladies and Gentlemen I think we have our Oscar Winner!

It would be a miraculous film to pip Three Billboards outside Ebbing, Missouri for the major gong of the film industry this year.

We all know Frances McDormand (Fargo, Blood Simple, Almost Famous) is one of the greatest actors of our times. Give her a superior script, surround her with actors so on their game that they actually challenge her for most convincing character portrayal, put in place dialogue and events so blackly compelling that the appalling nature of events is only equal to the seams of raw black humour that come at you from nowhere …. and you are approaching the experience of Three Billboards outside Ebbing, Missouri.

McDormand’s character Mildred has lost her teenage daughter in an unspeakable way. Local authorities have not found her murderer and Mildred’s grief, anger and guilt combine to motivate the weirdest of gestures. She has three forgotten billboards plastered with questions and aimed at the county law enforcement authorities regarding why her daughter’s murderer has not been found.

We next meet the well-intentioned and terminally ill sheriff (Woody Harrelson) whose name shines out from these billboards as the one responsible for the lack of progress in the case. From this point you meet a wide array of folks, ranging from the very simple and much younger girlfriend of Mildred’s estranged husband to a redneck police sergeant who can’t quite reconcile the fact that beating black boys in jail is not acceptable behaviour any more, regardless of Southern tradition.

Three Billboards is painful, confusing and heartbreakingly funny. The most brutal of life's realities are handled with great tenderness and wisdom through the film's highly flawed characters and their integrity is strangely rediscovered (unearthed), eventually transcending the mindless and gestalt legacies of bigotry, hatred and brutality that had survived and flourished in this dusty little nowhere place.

Out-of-control but (just) believable behaviour propels us through a film where our two most angry characters find strange redemption when at the point of committing a crime of revenge.

I love the lack of formula in Three Billboards outside Ebbing, Missouri.

I love its strange message of hope.

Go see.

We wish you a happy and interesting 2018, gentle readers. What will happen this year? Will the global economy continue its halting recovery, the US part stimulated by President Trump's tax cuts? Will China's looming debt crisis get worse? Will the UK's Brexit create economic havoc for the brave 'we wish to be masters of our own fate' nation. Is the world economy headed for a swing of the pendulum to a less 'global' approach, with renewed tariffs, other barriers to free trade, more rigorous vetting procedures for issue of visas and many cases of Trump's 'America first' approach.

We did think Trump's announcement on the move of the American Embassy to Israel to be a financial master stroke, assuming America has the courage to actually cut all financial aid to countries who voted against the embassy shift in the United Nations. Think of the fiscal benefits to America, as well as the risks of such 'America First' withdrawal.

Geopolitical risks include nuclear war on the Korean peninsula, further break up of the EEC, collapse of the Chinese financial system, US departing the United Nations, Russia trying again to sort out the Ukraine and further terrorist action now the bad guys have been driven out of the Middle East into naive western nations.

For the Australian economy, New Year's Day brought a bank economist's rather independent views about the outlook for 2018 and 2019, assuming (we think) the absence of major geopolitical disasters. Bill Evans of Westpac has become something of a maverick, far better than the old days of the 1980s when bank economists met at the RBA to agree forecasts for the current and the next year. One old boy revealed at this final appearance his great wisdom. 'I have always sat in the middle of the group, opposite the Chair of the meeting. Since the Chair takes turns for the direction of contribution, I have always quickly calculated the average of those speaking before me. This means I need do no work myself and always look 'reasonable' in the ideas of my colleagues.

Anyway, today I draw attention to a reasonable, fairly independent outlook from Westpac's Chief Economist, Bill Evans. Key points are:

* ' Slow-growth-to-continue-in-2018-and-2019', compared to RBA and Treasury predictions of increasing growth.

* ' Signals from the September quarter national accounts are not encouraging for the official view. There is some evidence that households are reassessing prospects for income growth, particularly with respect to a lift in wages growth.'

* 'Resulting below-trend consumption growth will also discourage any recovery in equipment investment.'

* ' The regulator’s [APRA's] macroprudential policies are restricting interest-only loans and tighter guidelines for all new loans are slowing house price inflation and credit growth. We expect housing credit growth to slow from 6.5 per cent in 2017 to 5 per cent in 2018 and 4.5 per cent in 2019. '

* ' Inflation is expected to remain benign, holding a little below the bottom of the RBA’s 2-3 per cent target band. In this regard we are in agreement with the Reserve Bank ... '

* ' Under these circumstances we cannot fall into line with most other economists who continue to anticipate that the Reserve Bank will begin to raise rates in 2018. Indeed we have been of the view through 2017 that the official cash rate will remain on hold in both 2018 and 2019.'

* ' A heavy toll will be taken on the Australian dollar, with the currency forecast to fall to US70c by the end of 2018.' As US raises cash rates further in 2018 ' 'We expect a move down to US68c in 2019, with downside risks.'

* ' Political uncertainty will remain a feature of the Australian economic picture in 2018 and 2019.'

* ' The two major global risks for 2018 and 2019 centre on the US sharemarket and the Chinese financial system.'

http://www.theaustralian.com.au/business/opinion/slow-growth-to-continue-in-2018-and-2019/news-story/799cba963a73aaa7852705b513740cdc

The Sporting life

The focussed Aussies, lead by Steve Smith with yet another century, David Warner with unusual caution, til he lost it and provided Cap'n Root a fine catch, and newly mature Mitch Marsh, who stayed awake and retained his wicket like a battler from the Mont Albert Fourths, held on for a draw on a completely dead MCG 'drop in' pitch. Surely it is possible to produce a drop in pitch with fire and brimstone, or at least 'fire and fury' on days 1 and 2 while Australia is bowling.

Now we go to Sydney, where there is the prospect of, Ashton Agar, a leggie from Afghanistan, joining Master Lyon, who looks like a leggie when bowling to the English left-hand batters. Personally, I'd promote Shaun Marsh to no 3 batter and return Peter Hanscombe to the side at number 5, but selectors will probably think this is too harsh on Usman Khawaja.

With the tennis yet to begin, Henry has watched some fine work by wimmin cricketors in their version of the Big Bash. Like the AFLW players, the wimmin cricketors go hard at the opposition and show great ability. Like business and government, Aussie sport has opened to allow ladies to participate and they do a great job. Henry is pleased to be retired from being a boardman as his younger mates are universally complaining of less qualified ladies elbowing them aside for board positions.

New Zealand now has a President, PM and High Court Judge who are (gasp!) female. This is your future, fellow blokes, so you must learn to cope.

Image of the week.