The world is waking up that recession is on the way. Ever since the Global crisis economists have been baffled by low inflation and slow GDP growth. To my mind, this combination is due to the big scare of the global crisis, fears of workers worried about losing their jobs and the inability of leaders to convince people that recovery is on the way.' Low Animal spirits for workers' is a relevant phrase.
Major countries are in the 'what should we do?' phase. Australia looks as if the PM has decided fiscal stimulus beats budget surplus and the Treasurer has been persuaded (or ordered) to prepare a stimulus package. The Prime Minister has said the plan will be "targeted," "measured" and "scalable" to prepare Australia's economy against the virus that has shaken global financial markets and practically shut down China's economy.
No-one can be sure just how bad the coronavirus will be and the government is on the horns of a dilemma. It is determined not to repeat the stupidity of Treasurer Swan who quoted his Treasury Secretary whose mantra was 'Go early, go hard and go households'. However, Treasurer Swan's memorable tag and bold action has been credited with avoiding a recession, although China's boom had a bigger effect in my view.
The dilemma is that if recession occurs despite Treasurer Frydenberg's stimulus package, 'Targeted, measured and scalable', his reputation and Mr Morrison's Prime Ministership will be widely discussed. Please note that China's economy has had a big full stop and will not be helping our economy for some time yet.
The following Tuesday, front page The Oz
Most leaders of developed democratic nations face a similar dilemma. Our government should talk about necessary uncertainty and try to calibrate our stimulus against those of other similar nations. I have believed recession is on the way for some time now and have great sympathy for this government's dilemma.
Big cricket battle between Indian and Aussie cricketers tonight. Sadly I watched the first game in the current series early today as there was no mention that this was not the grand final. Only when the young Indian spin bowler almost got a hat-trick did I figure out that I'd been conned.
In the real final, Australia won at a canter. Mitch Stark must have enjoyed his loved one's great performance, and we all enjoyed the team's wonderful, apparently carefree performance.
The biggest issue for Australian sport is will people be allowed to attend games, or will we all be limited to TV. Still this will all be part of the stimulus package because we'll be able to spend the money we'd normally spend on attending the footy on other treats.