News&Views No 5, Feb 19-26, ‘Fixing economies’.
Updated: Feb 28, 2022
First, a snippet from the Economist. Feb 12th, P32, ‘The president’s shortcomings are hardly news. Robert Gates famous claim that Mr Bidon had been wrong on ”nearly every major foreign policy and national-security issue” over the past four decades was so crushing because it rang true.’
Then there is Boris Johnson in the UK, Mr Putin in Russia and President Xi in China, not to mention Prime minister Scottie in Australia. The countries of the world have massive debt, near zero interest rates, near zero productivity and a general propensity for large countries to bully small countries.
The other question the Economist asked is ‘What would happen if the markets crashed?’ Doesn’t bear thinking about, but as in the past it is surely time for a crash of the major markets. We must prepare for this inevitable experience.
In Australia, Paul Kelly points out that ‘Scott Morrison’s decision to attack Labor on national security issues is a high-risk strategy that could easily backfire on both sides.’
Greg Sheridan points out that: ‘Putin’s Ukraine gamble raises the danger for Taiwan’.
Dennis Shanahan says that: ‘The first two parliamentary weeks of the year were coloured by scandalous triviality and brutal negativity while being devoid of budget or economic debate’.
Other great scribes struggle to provide any solid proposals to fix the Australian economy. There only three serious policies that need be declared, and implemented. Serious productivity policies, finding plausible ways to cut national debt and raising cash interest rates until relevant rates are safely above zero, surely NOT negative.
The AFR editorial writes of ‘signs of failure in Australia’s market of political ideas’. Yes indeed, However, while the AFR knows the political processes are out of whack, it fails to say what policies are needed: I repeat, productivity up, debt down and interest rate up. If anyone thinks this policy program is simplistic, I am prepared to bet the Australian economy will simply muddle along with current policies of both the Coalition and Labor.
The Oz, 21 Feb, Greg Sheridan, P1 & P2. 'Australia's defence weaknesses.'
This is a powerful example of what is needed if Australia is to be ready to become ready to defend itself from a serious military attack.
I shall merely list Mr Sheridan's list of items, apart from his general comments.
'Authoritarian dictators are on the march, militarily and politically , and the scandelous truth is that, for all the billions of dollars we have committed to defence, we have done almost nothing to increase our ability to defend ourselves, much less to strike an enemy or keep one at bay'.
Here is the list:
* We aim for 100 fast jets. So far 80 in place and we lack the pilots to fly them all.
* Repeated notice we are to build our own missile capacity but no actual build.
* We need serious weapons on the rather ponderous new ships - let's arm them.
* Buy several squadrons of fast jets.
* Buy big numbers of missiles; the current number is 200,000, a joke really.
* Get large numbers of armed drones optimised for maritine conflict.
* Build more warships we actually know how to build
* Build more Collins class submarines, thought about but again not started.
An agenda like this would be a good start, not an easy job with the economic agenda outlined above, but vital. And another bit of Mr Sheridan's wisdom: 'If you keep abusing Beijing needlessly, you will certainly provoke it into gestures like we've just had in the Arafura Sea. That does not maximise Australian security'.
AFR, 21 Feb, P28, Karen Maley, 'Can the Fed avoid global recession.'
'Probably not' is the answer. After all, '11 of the 12 past Fed policy tightenings have been followed by a recession'.
Prepare for making it 12 out of thirteen, gentle readers.
The Oz, Feb 22, P 11, Tony Abbott, ‘A moment in which our world could all change’.
‘Few things have been more telling than the reaction of key countries to the Russian army poised on Ukraine’s borders’. …
‘A fortnight ago the Russian dictator and his Chinese counterpart Xijinping, issued a declaration on international relations entering a new era. We know the type of new era they have in mind from their preposterous claim that Russia and China enjoy “longstanding traditions of democracy”.’
‘Meanwhile, comrades Putin and Xi watch the scuttle from Kabul, …
‘They see America in retreat and in no other country or collection of countries and with strength and goodwill sufficient to be the guardian of peace with freedom. For all of us individuals and for each of our countries, the challenge is to prove them wrong’.
Wow! A powerful account that may stir some people, but will there be enough of the relevant, highly placed, people?
Immediately below Tony Abbott’s work is Adam Crighton. He discusses ‘giant experiment leaves Anglosphere wallowing in debt’. Well worth a read.
Two especially interesting articles in the AFR. P 39, Steven Hamilton, from George Washington University in Washington.
‘Across all levels of government, Australia collects a greater share of revenue from personal revenue that all 37 other Organisation for Economic Cooperation and Development countries, bar Denmark.’
And the concluding comments: ‘If being a liberal means anything, Treasurer Josh Frydenberg should deliver [reform] next month – either as a springboard for his own tax reform agenda, or one hell of a welcome gift for his successor’. AMEN.
The second article that caught my mind. On p.26 is a lovely short piece about ‘Inflation experience crucial’ by one Richard Henderson.
‘We have no historical data to help project what might be coming’, Mr Nuzum said. Since the financial crisis more that a decade ago, a broader uptake of technology and an aging population have depressed wage growth, helping to keep inflation low.
It seems to me that, even in Australia, inflation will surprise and make the RBA scramble, probably too little, too late. (This is a traditional mistake of the mighty RBA, I am sad to say.)
Apart from adding Russia to the list of modern day outposts of tyranny - along with Belarus, Cuba, Iran, Myanmar, North Korea, Saudi Arabia, Syria, Zimbabwe and so many more - Fiona Prior investigates the disappearance of that famous 'who dunnit' writer Agatha Christie, inspired by last week's review of 'Death on the Nile'. More here.