May 12 2022 Edition
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Sadly the horror of the war and Ukraine just rolls on and the US has started a new and bitter debate on the status and legality of abortion. To me the Republicans are serial abusers of women whose attitudes and women are in about the 16th century.
In Europe and
the UK the war is dominating with the UK having some interesting local
elections last week. Interesting the UK has promised to defend Sweden and Finland against Russia.
In OZ we just
suffer the election campaign and all the associated nonsense.Debates are now over and all we have to do is vote!!!
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Major Issues.
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Reserve Bank must be made accountable for inflation mistakes
Resetting the official target is beside the point when the major issue for the central bank review should be making its policy processes more transparent.
Peter Tulip
May 1, 2022 – 1.26pm
Both major political parties support an external review of the Reserve Bank of Australia (RBA) after the election. What should that review examine?
Media reports have focused on the RBA’s inflation target of 2 to 3 per cent. Some commentators argue for a higher target, some for a lower. Others propose replacing this target with a different variable, such as nominal GDP.
These questions are worth considering, but they are not the main issues facing the RBA.
For most of the past decade, the RBA has been unwilling or unable to attain its targets. Underlying inflation fell below 2 per cent for over five years – and would have done so for longer if not for the pandemic.
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https://www.afr.com/politics/federal/no-excuses-mcgowan-slams-coalition-over-palmer-20220501-p5ahi8
‘No excuses’: McGowan slams Coalition over Palmer
Andrew Tillett Political correspondent
May 1, 2022 – 3.46pm
West Australian Premier Mark McGowan says the Liberal Party’s willingness to preference Clive Palmer’s United Australia Party shows the Coalition “hasn’t learnt its lesson” about the dangers of dealing with the mining magnate, and is an insult to every Australian.
Mr McGowan also tried to use his state’s budget surplus – tipped to hit $8 billion and fuelled by a booming resources sector – as evidence that Labor was the party of superior economic management.
WA Premier Mark McGowan helps launch the federal election campaign.
“The evidence is in, and it’s beyond reasonable doubt, the Liberals and Nationals can’t manage money,” Mr McGowan said.
“Our success in Western Australia comes from strong Labor economic and financial management. Our careful and cautious approach to the pandemic.”
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https://www.afr.com/policy/economy/no-prime-minister-higher-inflation-was-home-grown-20220428-p5agv4
No, prime minister, higher inflation was home-grown
Government forecasts are overly optimistic. The CPI peaking at about 6 per cent until mid-2023 is the legacy of the fiscal overcompensation for COVID-19.
Chris Murphy
May 1, 2022 – 2.09pm
Detailed economic modelling that I have been undertaking over the past year foreshadowed an inflation outbreak, and predicts that the outbreak will get worse before it gets better.
While labour supply disruptions from COVID-19 and the war in Ukraine have played a role, in Australia and the United States some of the inflation is home-grown from the overreaction of national fiscal policy to the COVID-19 recession.
Underlying inflation is not yet as high as the headline consumer price index increase of 5.1 per cent in the year to the March quarter suggests. Stripping out regulated prices and the volatile items of fruit and vegetables and automotive fuel, the underlying CPI rose by 4.2 per cent.
The latest version of my paper on fiscal policy and COVID-19 was published at the Australian National University before the recent federal budget. It confirms the prediction made last October, in an early ANU seminar version of the paper, that underlying CPI inflation will eventually reach a peak of about 6 per cent.
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Liberal campaign stumbles on ‘toxic’ personalities
Updated May 1, 2022 – 5.01pm, first published at 4.24pm
Treasurer Josh Frydenberg rejected claims Scott Morrison is “toxic” in inner-city electorates, such as his Melbourne seat of Kooyong, and said pundits shouldn’t write off the Prime Minister’s chances at the May 21 election.
But behind the scenes, local campaigners conceded the Prime Minister was weighing down the party’s chances.
Mr Morrison was absent from the Treasurer’s high-profile campaign launch on Sunday, and it notably took 40 minutes, until the last sentences of Mr Frydenberg’s speech, before the Prime Minister got a mention.
Campaigning in the western Sydney seat of Parramatta at the same time, Mr Morrison dodged multiple questions about whether he would visit seats targeted by independents backed by the Climate 200 movement.
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https://www.afr.com/politics/federal/are-we-going-to-risk-three-more-wasted-years-20220501-p5ahla
Are we going to risk three more wasted years?
This is an edited extract of the Labor Leader’s speech at his official campaign launch on May 1 in Perth.
Anthony Albanese Labor Leader
May 1, 2022 – 4.41pm
The COVID pandemic has shown us the strength of our community. But it also revealed the vulnerabilities of our economy. The big question for Australia is – are we going to learn the lessons from this?
Are we going to stride forward – or instead are we going to slide back? Are we going to risk three more wasted years?
Scott Morrison says you don’t have to like him, but it’s better the devil you know. Well here’s what Australians do know:
They know he failed on bush fires, and they know he then failed on floods. They know he didn’t order enough vaccines and then didn’t order enough rapid antigen tests. They know it’s harder to see a doctor. It’s harder to buy a home, and the cost of everything is going up but their wages aren’t. They know aged care is in crisis – that’s the devil you know.
These problems didn’t happen overnight. This government has had a decade in office.
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At the halfway mark, it’s advantage Labor, especially in WA
The standout feature of Labor’s launch was the host city being Perth, which has never been the location of a campaign launch by a major party. And it was as interesting for who was there as for who was not.
Phillip Coorey Political editor
May 1, 2022 – 6.09pm
Three weeks ago, Anthony Albanese didn’t know the Reserve Bank’s official cash rate.
On Sunday, as he marked the halfway mark of the election campaign with Labor’s campaign launch, Albanese was more than aware of the number as he tilled the soil in anticipation of the RBA lifting the rate as early as Tuesday.
If the bank moves on Tuesday, it will, for several days, if not more, become the most talked about number on the election campaign, other than the polls.
Houses are not unaffordable in Australia because of interest rates, quite the opposite, but the increases ahead will not do much to help, and will play into the broader cost of living theme now dominating the election campaign.
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‘No one left behind’: Albanese’s plan for a ‘better Australia’
Phillip Coorey Political editor
May 1, 2022 – 5.23pm
Low-cost housing, cheaper medicines, sovereign manufacturing and a better paid and stronger care sector are at the core of Anthony Albanese’s official pitch to become just the fourth Labor leader in 70 years to take his party from opposition to government.
In the first-ever campaign launch by a major party in Perth, Mr Albanese promised to unite the country after the ravages of COVID-19, restore integrity in government and to look after the young, the sick and the elderly.
“No one held back, no one left behind,” he said under the banner of “A Better Future”.
The launch, held on Sunday at the halfway mark of the election campaign, was pointedly in the Western Australian capital, which for more than a decade has been a Coalition stronghold.
But WA has turned on the Morrison government, principally after it joined Clive Palmer in a High Court case during the early stages of the pandemic to try to force Labor Premier Mark McGowan to open his borders.
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Australians losing national identity and connection to community: survey
6:22PM May 1, 2022
Australians’ sense of national identity and connection to their local community has steadily declined over the past six years.
And there is a growing willingness to engage in activism, a new survey reveals, which may affect voting intentions at the coming federal election.
The drop in identification with Australia since 2017 was a significant factor in an overall decline in people’s sense of belonging and wellbeing, the latest Inclusive Australia Social Inclusion Index finds.
The last year, in particular, saw significant falls in the strength of identification with Australia among religious minorities, Aboriginal and Torres Strait Islander peoples, and LGBTQI+ people, the report, based on combined surveys of more than 11,000 people, shows.
“Identification with Australia and local community (are) important parts of promoting a socially inclusive society where people care about and feel a sense of connection with others,” Inclusive Australia chief executive Andrea Pearman said. “We are also seeing a trend towards
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Why the RBA should lift interest rate to 0.5pc this week
This is a critical week for the future of the economy. What matters more than the amount of increase is how the message is sent and explained.
Warwick McKibbin Contributor
May 2, 2022 – 1.22pm
With the inflation rate in Australia now at 5.1 per cent (or 3.7 per cent in terms of the trimmed mean inflation), the Reserve Bank of Australia faces the same dilemma as almost all central banks around the world. Should the policy interest rate be increased? How much should interest rates go up between now and when inflation is expected to stabilise within the band of 2 per cent to 3 per cent?
This band is set out in the Statement on the Conduct of Monetary Policy as the key aspect of implementing the mandate of the RBA. With inflation outside the band, action is needed unless it is clear that the event is only temporary.
An even more critical question is whether the goal of the Reserve Bank to target inflation within the band of 2 to 3 per cent over the cycle is even the appropriate monetary framework in 2022.
For some time, economists have argued that inflation targeting is past its use-by date. The economy is experiencing dramatic supply shocks such as the COVID-19 pandemic, the Russia-
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Island well known to Australia offers one counter to China’s Solomon Islands move
Political and international editor
May 3, 2022 — 5.00am
Beijing may have established the political foundation for a military base in Solomon Islands, but Australia has options for responding. Other than fuming and threatening.
Australian politicians like to call the South Pacific region “Australia’s backyard”. So what do you do if the tendril of a poisonous vine grows over your back fence and threatens to overrun your backyard?
You chop it off.
“If there’s a Chinese base in the Solomons, it’s at the very long end of a very long supply line,” points out Professor Peter Dean, director of the Defence and Security Institute at the University of Western Australia. Indeed, it’s a 4000-kilometre journey from China’s nearest point to Solomon Islands.
A little to the north and west of the Solomons is an island whose name is well known in Australia, Papua New Guinea’s Manus Island.
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I was deputy leader of the Liberals. The party I served has lost its way
Former politician
May 4, 2022 — 5.00am
Until 1995 I was a member of the Liberal party, and for 16 years a serving Liberal senator. I was a member of the frontbench for the majority of my years in the parliament and federal deputy leader from 1989 to 1990. The party I joined in 1958 proudly proclaimed that one of the distinctions between it and the Labor Party was that the primary obligation of a member of parliament was to the electorate, and that to cross the floor, unlike the tightly caucused Labor Party, was permitted on conscience issues.
However, the party I served has lost its way. Members are no longer able to successfully execute what the electorate demands and it is now in the sad position of being held hostage by its extremes and those of its Coalition partner.
My concerns today are about Australian democracy. They relate to the lack of accountability in the government; the blatant pork-barrelling; the use of public money for party electoral advantage rather than the public interest; the pursuit of immediate political advantage rather than the long-term interests of the country; the daily focus on politics rather than good government; and the way the government is reactive rather than forward-looking.
This government appears to be dragged kicking and screaming to policy positions that most sensible Australians would support – including on climate change. Does anyone really think the government is as serious about carbon reduction as the community or the business community? Add to this the cruelty shown to people who have established that they are refugees yet are incarcerated and condemned to hopelessness at great public expense.
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The real problem with this election
12:00AM May 4, 2022
In Australia in 2022 politics is following culture. Vent your spleen at Scott Morrison and Anthony Albanese but don’t be fool enough to think that political leaders are not responding to the fracturing of public opinion, the tribalisation of our society and the power of grievance subcultures.
Morrison and Albanese seek 51 per cent support in a democracy where it is no longer possible for a Liberal or Labor leader to make an orthodox appeal reflecting their party’s values and expect to win a voting majority. That age is gone. The cultural glue and class-based economics that held the big parties together with their mass-based appeal is now eroded.
Australia today has serious, though not catastrophic, long-run problems around inflation, productivity, debt, national security, equality and climate change – yet the political system is failing to respond with boldness because it is harder than before to assemble majority support for resolute action. And representative democracy works by majority.
We talk about the good society but we don’t agree anymore on what constitutes the good society or the means to achieve it. The mass loyalties of the industrial age are in collapse – the centres of power and culture defined by class, company, union, profession, religion, patriotism and family.
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Sogavare’s new Chinese enforcers a test for a fragile democracy
An armed Chinese praetorian guard for Solomon Islands’ prime minister could aggravate instability and discontent, not ease it.
Rory Medcalf Geopolitical analyst
May 4, 2022 – 3.48pm
Canberra’s worries about a future Chinese military base in Solomon Islands obscure a more immediate risk in Beijing’s security deal with Australia’s Pacific neighbour.
That’s the very real prospect of China’s paramilitary police becoming the go-to provider of internal security in this fractured democracy.
This could lead to a vicious circle of repression and chaos.
A catalyst for rioting in Honiara has been anger at the government’s new closeness to China, so using Chinese forces to suppress such discontent will ultimately aggravate it.
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https://thenewdaily.com.au/finance/finance-news/2022/05/05/hung-parliament-alan-kohler/
6:00am, May 5, 2022 Updated: 10:21pm, May 4
Alan Kohler: Oh, for the stability of a ‘hung parliament’
It’s pretty amusing that a party that has had three prime ministers and three treasurers in nine years is warning about the chaos and instability of a ‘hung parliament’.
The Liberal MPs in danger of losing their seats to independents, backed by a riotously melancholy chorus at News Corp, are warning of wild consequences if some of the MPs on whom the next PM relies for his numbers are not subject to the discipline of the party whips.
Which is ironic given how much of the past nine years has been characterised by indiscipline and chaos.
Make that two decades. The factions in both parties have been behaving like unruly independents for 15 to 20 years, sacking leaders willy-nilly and controlling government policy.
Labor’s factional instability seems to have been largely policy-free, just warring tribes, fighting for the hell of it, because that’s what they do, but in the Coalition it has been all about policy, specifically one: Climate change.
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Morrison’s election pitch is short on substance, contradictory and confusing
Award-winning political commentator and author
May 5, 2022 — 5.00am
Unless Scott Morrison comes up with a compelling new policy or gambit in the next few days, he could go down in history as the Liberal leader who won an election he should have lost, then lost the one he should have won in a canter.
So far, Morrison’s arguments for re-election have been short on substance, contradictory, confusing, or jarring. Distilled, Morrison’s early campaign pitch offered voters more of the same, appealing to them to stick with him because he was better at managing the economy and national security.
Then as inflation hit a 20-year high, triggering the first interest rate rise in a decade, his message veered from warning voters it was too risky to change because everything was turning to custard to arguing everything was going as planned, and if it wasn’t, the Reserve Bank had carefully pointed out none of it was his fault.
Each formulation is delivered with such conviction – which remains his great strength – that it is easy to forget what happened yesterday or the day before, although if you believe the polls it is catching up with him.
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https://www.afr.com/wealth/personal-finance/house-prices-to-correct-up-to-25pc-20220505-p5ait4
House prices to fall up to 25pc
If the RBA relies on its worthless forecasts, prepare for a truly massive draw-down in house prices.
Christopher Joye Columnist
May 6, 2022 – 9.29am
Since late last year, we’ve had several contrarian views. First, US markets needed to price in the Federal Reserve lifting its cash rate to 2.5-3 per cent. At the time, markets were pricing in a tiny 1.5 per cent terminal Fed cash rate. They’ve now lifted that to around 2.9 per cent.
A second forecast was that the US 10-year government bond yield needed to rise above 3.2 per cent. Markets strongly disagreed, pricing in just a 1.3 per cent yield. Yet four months later, the US 10-year yield is above 3 per cent.
A third expectation was that US equities would mean-revert back to normal cyclically-adjusted, price/earnings multiples. This required a 30-60 per cent drawdown in US stocks. Since that time, the S&P 500 has fallen about 14 per cent while the Nasdaq is off 24 per cent. We estimate that the S&P 500 has another 20-35 per cent to go. The Nasdaq should fall much further.
A fourth view was that while Aussie house prices would continue climbing for a while, they would have to correct 15-25 per cent after the first 100 basis points of cash rate hikes, which we thought would start in mid-2022. The Reserve Bank of Australia obliged this week with its first 25-basis-point increase. It was a classically jejune Martin Place: doing the one thing nobody on the planet expected just to prove everyone wrong.
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How Morrison turns the blue heartland teal
Political and international editor
May 7, 2022 — 5.00am
When other independent candidates for federal parliament started to colour their campaigns teal, some of Zali Steggall’s supporters got very protective. They urged her to intervene. It was her colour, after all.
Teal was the colour of Steggall’s 2019 campaign when she defeated Tony Abbott with a mammoth primary vote swing of 13 per cent, and 18 per cent after preferences.
It was a signal achievement not only because she’d humbled a former prime minister. She’d taken the bluest of blue-ribbon Liberal territory. The Liberal Party and its conservative predecessors had held the area around Sydney’s northern beaches seat of Warringah for as long as the federal parliament had existed.
Why teal? The colour symbolises Steggall’s political pigmentation, she says – it’s a mix of blue and green. Blue represents traditional conservative values and green the environment.
But Steggall wasn’t proprietorial. She was happy for the new wave of blue-green candidates to adopt her colour. And, critically, she was more than happy to offer them the lessons she’d learned in how to construct a campaign.
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On Scott Morrison’s watch, Australia has lost standing on the world stage
Columnist
May 7, 2022 — 5.00am
Australia confronts a paradox of affluence and influence. It continues to count itself, with justified pride, as one of the world’s truly resilient economies. On present trends, we are likely to leapfrog both Russia and Brazil by the end of this year to become the 11th largest economy in the world – a position we have not held before in the globalised age.
Yet we are shrinking on the international stage.
Scott Morrison confirmed as much this week when he added the name of Solomon Islands Prime Minister Manasseh Sogavare to the list of leaders who won’t talk to him. The Australian prime minister said he was acting on advice “from our security intelligence agencies”.
The concern, as Anthony Galloway reported on Friday, was that Morrison risked further inflaming an already tense relationship by having another phone conversation with Sogavare. The Solomon Islands leader had made up his mind to sign a security deal with Beijing, and there was no point trying to talk him around.
That makes three allies and frenemies who Morrison can’t call at the moment. French president Emmanuel Macron has avoided contact with the prime minister since their spectacular public slanging match last November over the AUKUS submarine deal, while Morrison last spoke to Chinese President Xi Jinping in person in June 2019.
Seven downsides to Australia’s dangerous property obsession
Home ownership creates unbalanced growth and deceptive prosperity while contributing to structural problems
Sat 7 May 2022 06.00 AESTLast modified on Sat 7 May 2022 08.21 AEST
Property is Australia’s default religion. As of early 2022, the total value of residential real estate was about $9.8trn, two-thirds of total household wealth of $14.7tn. This affluence is increasingly problematic.
In Australia housing is no longer simply shelter but an investment and store of savings. Like a magic pudding, home equity (current value less any mortgage) is expected to fund consumption, provide for retirement and be passed on to your progeny.
Property’s attractiveness is understandable. It provides secure shelter, converts rent to a form of savings, and rising values have historically protected purchasing power. It creates well-paid, difficult-to-offshore, local construction jobs. Policymakers can influence activity through zoning laws, land releases, home ownership incentives, interest rates and loan availability. It is popular with voters.
But the resulting over-investment creates several problems.
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Delayed gay marriage debate ‘could split’ Anglican Church
10:00PM May 6, 2022
A long-delayed showdown over same-sex marriage threatens to “further diminish” Australia’s second-largest church and destroy its national unity, Anglican Primate Geoff Smith warns.
The day of reckoning will come next week when bishops, priests and church elders meet at the first Anglican General Synod held in five years to thrash out a response to gay marriage.
The conference was cancelled in 2020 and last year because of the pandemic.
Conservatives backed by the wealth and numbers of the powerful Sydney Diocese will put up motions in the new form of a synod “statement” to forbid same-sex marriage blessing ceremonies and enforce chastity rules for priests. Some say they will quit the church if these fail.
But church progressives insist the statements would be ignored if carried by the Anglicans’ answer to parliament, causing a “quasi-split”.
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COVID 19 Information
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How are doctors unravelling the mystery of long COVID?
They call them long-haulers – people still suffering symptoms long after a bout of COVID. But what is the condition, exactly? Doctors expect the answer will change our understanding of immunity forever.
May 1, 2022
Six months after physiotherapist Scott Willis became one of Australia’s first COVID-19 patients, something strange happened in a swimming pool. One moment he was doing laps, the next he could barely move his arms and legs. “I just ran out of steam. I can pinpoint it to the second,” Willis says. “If I didn’t have the rope to grab on to, if I’d been out in the ocean, what would have happened?”
That bone-deep exhaustion, which can hit suddenly or linger all day, is the most common sign of what has become known as long COVID, in which illness strikes again or drags on months after a COVID-19 infection. But about 200 other symptoms have been linked to it too – sometimes entirely new ones such as confusion and hallucinations, heart palpitations, seizures and sexual dysfunction. So-called long-haulers have likened the condition to “a living death”. Many are too tired to work – or get out of bed.
Millions of people have been affected by long COVID – even many of the clinicians treating it, such as Willis. And that list is only expected to grow. Some researchers expect long COVID cases in Australia to hit 10,000 by the end of the year. Yet, more than two years into the pandemic (and at least 18 months into the condition for Willis), long COVID remains something of a medical mystery.
Is it a new phenomenon or a syndrome like chronic fatigue on a bigger scale? Are some people more at risk of developing the condition than others? What might be going on in the body? And what treatments are being tried?
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6:00am, May 2, 2022 Updated: 8:28pm, May 1
Michael Pascoe: COVID quietly jumps to become our second-biggest killer
COVID is on course to become our second-biggest killer, writes Michael Pascoe. Photo: TND
A third of the way into our year of letting it rip, COVID has jumped to become our second-biggest killer.
And, no, it’s not killing people “just like the flu used to”. COVID is killing at more than three times the rate of flu and pneumonia combined.
And it’s killing people at a younger age than those who typically die from flu or pneumonia.
No, the plague hasn’t faded away.
It’s continued to spread and have its way with people, from the asymptomatic to the fatal.
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https://thenewdaily.com.au/life/wellbeing/2022/05/06/covid-deaths-2022/?breaking_live_scroll=1
10:00pm, May 6, 2022 Updated: 11:23pm, May 6
COVID’s death toll has soared since the election was called, but nobody is talking about it
Australians seem to think COVID-19 is all wrapped up as an issue. It's not. Photo: Getty
10:00pm, May 6
It’s just shy of a month since Scott Morrison announced the election.
Since then, as of Friday, 907 people have died from COVID-19, way more than 10 per cent of all deaths since the pandemic began. That’s a lot of heartache.
You could fill a couple of Boeing 747s with that many people. Politicians would be lining up to join a national prayer meeting if those planes went down in quick succession.
But the high COVID death rate, and the very high case numbers, are not getting a mention, particularly in the election coverage.
In the week leading up to Mr Morrison’s announcement there was an average of 54,337 new cases reported each day.
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Covid’s true death toll close to 15m, says WHO
By Rhys Blakely
The Times
6:22PM May 6, 2022
Governments around the world have massively under-reported the number of deaths caused by the Covid-19 pandemic, an analysis suggests, with nearly 15 million people estimated to have died.
A report published on Friday AEST by the World Health Organisation gave a jarring new perspective of the toll taken by two years of disease and disruption.
The report calculates that between January 2020 and the end of last year, about 14.9 million more people died than would have been expected in a world without the coronavirus. Governments officially reported about 5.4 million Covid-19 deaths during the same period.
WHO director-general Tedros Adhanom Ghebreyesus called the numbers “sobering”, and said they pointed “to the need for all countries to invest in more resilient health systems that can sustain essential services during crises”.
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Climate Change.
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https://www.smh.com.au/national/climate-change-is-making-our-homes-unensurable-20220502-p5ahoe.html
Climate change is making our homes uninsurable
Climate Councillor
May 3, 2022 — 6.00am
Australia is fast becoming an “uninsurable nation”, according to new modelling released by the Climate Council. One in 25 Australian properties will be effectively uninsurable in just eight years, with figures as high as nine out of 10 in the worst affected suburbs.
Skyrocketing costs or flat-out insurance ineligibility are becoming more widespread as climate change hits home.
The Victorian electorate of Nicholls, which covers Campaspe, Greater Shepparton, Moira, and parts of Strathbogie and Mitchell, took the unenviable title of the most at-risk electorate in Australia.
Here, communities are faced with potentially one in four properties being uninsurable by 2030. Then you have some suburbs, such as Shepparton, which are facing a staggering 90 per cent uninsurability rate in the next eight years, with riverine flooding posing the biggest risk.
The electorate of Richmond in NSW, taking in Ballina, Byron Bay, Lennox Head and Murwillumbah, is the second most at-risk electorate, with one in five properties set to be effectively uninsurable by the end of the decade.
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Volkswagen sells out of electric cars until 2023
Louis Ashworth
May 5, 2022 – 10.39am
London | Volkswagen buyers face waiting until 2023 to get behind the wheel of a new electric car after the German company “basically sold out” of rechargeable vehicles in Europe and the US.
The admission by the German carmaker comes as supply chains and lockdowns in China hamper production, leaving factories without key parts.
Chairman Herbert Diess said Volkswagen (VW) had a backlog of 300,000 orders in western Europe. “We are basically sold out on electric vehicles in Europe and in the United States, and in China, it’s really picking up.”
The group, which owns the Porsche, Škoda and Audi brands, sold 99,000 electric vehicles worldwide in the first three months of the year, less than a third of market leader Tesla’s deliveries. Just 28,800 of those sales were in China – a crucial target market.
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Why nobody really wants to talk about climate change
The policy vacuum has opened the door to a new field of political actors who smell an opportunity to upend the political order. If even some of the hype is right, election night on May 21 will be dramatic.
Jacob Greber Senior correspondent
May 4, 2022 – 9.19pm
Elections are when reality collides with political belief, delusion and spin. Nowhere is this more true than Australia’s grindingly-slow climate policy debate, where the political vacuum is being filled by capital and markets.
By offering modest, small-target strategies, both Labor and the Coalition are creating the perfect conditions for private actors to intervene and disrupt. And while that will drive change, the question is whether it will be in the nation’s best interests.
Nowhere are the consequences of absent leadership more consequential than Australia’s energy industry. For more than a decade, it has cried out for a long-term integrated climate and energy policy framework to help manage the transition and gradual phase-out of coal power.
Labor and the Coalition have committed to Australia reaching net zero emissions by 2050. But the lack of detail about the measures to be used to get there leaves the nation at risk of a messier transition. That will drive prices higher than they should be and embed economy-endangering supply security issues.
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Boiled alive: how India’s record heatwaves test the limits of survival
By Ruth Pollard and David Fickling
Updated May 4, 2022 — 3.03pmfirst published at 10.57am
New Delhi: The city feels like it is on fire. The heat comes off the road in blistering waves, and the water that flows from the cold tap is too hot to touch. Daytime temperatures have hit 44 degrees and often do not fall below 30 at night. A giant landfill on the outskirts of the capital spontaneously combusted a week ago, and the 17-storey-high dump that contains millions of tons of garbage continues to smoulder, worsening the city’s already dangerously polluted air.
Daily power outages driven by a surge in demand for electricity have resulted in blackouts as long as eight hours in some parts of India, while coal stocks — the fuel that accounts for 70 per cent of the country’s electricity generation — are running low, prompting warnings of a fresh power crisis. The northern wheat crop is scorched. It was the hottest March in 122 years. Spring just didn’t happen, and those extreme temperatures continued into April and May (though they are predicted to ease this week). Still, it’s not until June that the monsoon is expected to arrive and provide any kind of relief.
What’s most alarming about this heatwave is that it’s not so much a one-time ordeal as a taste of things to come as the effects of global warming push India and its neighbours to levels where the climate is a core threat to human health.
The most worrying weather measurement is not the heat typically reported in forecasts but the wet-bulb temperature, which combines heat and humidity to indicate how much evaporation can be absorbed into the air. At wet-bulb temperatures above 35 degrees Celsius, we become unable to reduce our temperature via sweating and will suffer potentially fatal heatstroke after only a few hours, even with shade and water. Similar effects can result for those working outdoors when wet bulb temperatures exceed 32 degrees, and measures as low as 28 degrees caused tens of thousands of deaths in the European and Russian heatwaves of 2003 and 2010.
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How hot will the world get under political parties’ climate plans?
By Mike Foley
May 6, 2022 — 6.00am
Climate change is once again a hot topic in the federal election, but unlike 2019 when the Coalition waged a scare campaign on the cost of Labor’s more ambitious emissions reduction goals, this time around parties are vying for bragging rights over who has committed to the most meaningful action.
As witnessed in the recent east coast floods, Australia is in the firing line of increasing natural disasters in a warming world. Climate scientists say limiting warming to 1.5 degrees can help avoid the worst damages of climate change.
The world has warmed about 1 degree since around 1900, but it’s been worse in Australia, where the average temperature has climbed 1.4 degrees, on average, with nine out of the 10 warmest years on record occurring since 2005.
Global warming under parties’ climate policies
What would happen if the rest of the world adopted these goals?
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Royal Commissions And The Like.
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How the care economy turned into a market meltdown
Health, aged care and disability care add up to some of the fastest growing parts of the economy. But they exist in a limbo of failing private contracting that has to be fixed.
Laura Tingle Columnist
May 6, 2022 – 4.37pm
One of the truly perplexing things about this election campaign is that, of all the things that we are talking about, or shouting about, few relate to the issues that have most reflected our suddenly intimate relationship with government amid a global pandemic: issues like the state of the health and hospital system; the aged care system; or the disability support system.
These were all found to be wanting during the pandemic. Two royal commissions are either completed or under way. There has been at least one state-based inquiry into what went wrong with the quarantine system.
Yet no one really seems to know what is going on in any of these sectors on a day to day basis, or about how to fix them.
There are the obvious blame games about politicians’ decisions during the pandemic. But how much discussion has there been about what the pandemic has revealed about the gaps in the way any of our human services are delivered?
None.
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National Budget Issues.
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https://thenewdaily.com.au/finance/finance-news/2022/05/02/reserve-bank-careful-alan-kohler/
6:00am, May 2, 2022 Updated: 4:03pm, May 1
Alan Kohler: Dear Philip Lowe, please be careful
Tomorrow’s interest rate decision by the Reserve Bank is the weightiest in a generation, and not only because it would be the first hike in a decade and Australians are burdened with debt.
The Reserve Bank is also technically insolvent – quite broke, in fact.
Thanks to its pandemic rescue efforts, known as quantitative easing, the RBA owns $560 billion worth of government bonds, federal and state, and they have lost close to $50 billion in value this year.
That’s more than three times the RBA’s puny capital of $15.5 billion.
The government’s bank has never had to face insolvency before, but it’s never owned this many assets. If it had to value them to the market, the capital would be gone and receivers would be changing the locks, but it doesn’t have to do that, so it’s fine. Phew.
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Our inflation problem isn’t a big one - unless we panic and overreact
Economics Editor
May 2, 2022 — 7.10am
I can’t remember a time when the arguments of all those bank and business economists claiming “the inflation genie is well and truly out of the bottle” and demanding the Reserve Bank raise interest rates immediately and repeatedly have been so unconvincing.
At base, their problem is their unstated assumption that the era of globalisation means all the advanced economies have identical problems for the same reasons and at the same time.
If America has runaway inflation because successive presidents have applied budgetary stimulus worth a massive 25 per cent of gross domestic product at the same time as millions of workers have withdrawn from the workforce, Britain’s withdrawal from the European Union is causing havoc, and Europe’s problem is particularly acute because of its dependence on Russian oil and gas, we must be the same.
Business economists have put most of their energy into convincing themselves our problem is the same as everyone else’s, rather than thinking hard about how our circumstances differ from theirs and how that should affect the way we respond.
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https://www.rba.gov.au/media-releases/2022/mr-22-12.html
Media Release Statement by Philip Lowe, Governor: Monetary Policy Decision
Number 2022-12
Date 3 May 2022
At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 35 basis points. It also increased the interest rate on Exchange Settlement balances from zero per cent to 25 basis points.
The Board judged that now was the right time to begin withdrawing some of the extraordinary monetary support that was put in place to help the Australian economy during the pandemic. The economy has proven to be resilient and inflation has picked up more quickly, and to a higher level, than was expected. There is also evidence that wages growth is picking up. Given this, and the very low level of interest rates, it is appropriate to start the process of normalising monetary conditions.
The resilience of the Australian economy is particularly evident in the labour market, with the unemployment rate declining over recent months to 4 per cent and labour force participation increasing to a record high. Both job vacancies and job ads are also at high levels. The central forecast is for the unemployment rate to decline to around 3½ per cent by early 2023 and remain around this level thereafter. This would be the lowest rate of unemployment in almost 50 years.
The outlook for economic growth in Australia also remains positive, although there are ongoing uncertainties about the global economy arising from: the ongoing disruptions from COVID-19, especially in China; the war in Ukraine; and declining consumer purchasing power from higher inflation. The central forecast is for Australian GDP to grow by 4¼ per cent over 2022 and 2 per cent over 2023. Household and business balance sheets are generally in good shape, an upswing in business investment is underway and there is a large pipeline of construction work to be completed. Macroeconomic policy settings remain supportive of growth and national income is being boosted by higher commodity prices.
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RBA predicts real wage cuts until 2023, despite accelerating pay growth
May 6, 2022
Workers will suffer real wage cuts until the global inflationary pulse from the Ukraine war and Covid supply chain issues ease through 2023, despite accelerating pay growth, the Reserve Bank says.
This morning’s RBA’s quarterly Statement on Monetary Policy included the radical upgrade to the bank’s inflation forecasts which underpinned Tuesday’s rate hike to 0.35 per cent – the first since November 2010.
The SOMP confirmed that the RBA’s board “is committed to doing what is necessary to ensure that inflation in Australia returns to target over time”, and that “this will require a further lift in interest rates over the period ahead”.
“The Board will continue to closely monitor the incoming information and evolving balance of risks as it assesses the timing and extent of future interest rate increases.”
“A strong expansion in the Australian economy is under way and inflation will increase further,” the statement read. “The unemployment rate is forecast to decline to around 3.5 per cent in early 2023 – the lowest level since 1974 – and remain around this level thereafter.”
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Health Issues.
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Inquiry condemns ‘culture of fear’ in NSW hospitals, calls for funding review
May 5, 2022 — 10.58am
An inquiry into NSW regional hospitals has found doctors and nurses are operating in “culture of fear” where they are frightened to speak up about critical staff shortages and inadequate resources, leading to significantly poorer health outcomes for patients including premature deaths.
The report recommended that the NSW Government urgently engage with the Australian Government at a ministerial level to establish a plan to improve doctor workforce issues and called for a review of the current funding model for regional local health districts.
The inquiry’s lengthy final report was released on Thursday, making 22 findings and 44 recommendations for improvement.
The inquiry, launched in the wake of a Herald investigation into the state of regional hospitals, found “there is a culture of fear operating within NSW Health in relation to employees speaking out and raising concerns and issues about patient safety, staff welfare and inadequate resources.”
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International Issues.
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‘Shoot and scoot’: Western artillery surging into Ukraine ‘will reshape war with Russia’
By Dan Lamothe
May 1, 2022 — 4.27pm
Washington/Kyiv: The Western artillery flooding into Ukraine will alter the war with Russia, setting off a bloody battle of wits backed by long-range weapons and forcing both sides to grow more nimble if they hope to avoid significant fatalities as fighting intensifies in the east, US officials and military analysts predict.
The expanded artillery battle follows Russia’s failed effort to rapidly seize Ukraine’s major populations centres, including the capital city, Kyiv, and comes as the government of President Volodymyr Zelensky and his Western benefactors brace for what is expected to be a grinding campaign in the Donbas region. The conflict there is expected to showcase the long-range cannons that are a centrepiece of Russia’s arsenal, weaponry already used to devastating effect in places like Mariupol, a southern port city that’s been pulverised by unrelenting bombardment.
Defence Secretary Lloyd Austin, speaking alongside his Canadian counterpart at the Pentagon on Thursday, said long-range fires will prove “decisive” in the next phase of the war. The Biden administration, which along with Canada is training small numbers of Ukrainian troops how to operate the dozens of 155 millimetre howitzers that both countries have pledge to provide, is expected to approve the transfer of even more artillery to Ukraine in coming days, Austin said.
The US and Canadian howitzers bound for Ukraine are towed on trailers, while those pledged by France - systems known as self-propelled CAESAR howitzers - fire the same, 155 millimetre explosive rounds, but from the back of a truck chassis.
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Does high inflation matter? That depends on who you ask
By The Economist
5:46PM April 25, 2022
It started in America, but the surge in inflation has spread to the rest of the rich world.
Consumer prices across the OECD club of mostly rich countries are rising by 7.7 per cent, year on year, the fastest pace of increase in at least three decades. In the Netherlands, inflation is nearing 10 per cent, even higher than in America, while in Estonia it is over 15 per cent.
How forcefully should central banks respond to the inflationary surge? The answer depends on how much damage inflation is causing. And that depends on whom you ask.
Inflation is regarded as costly because it erodes people’s savings and distorts price signals. And there are unquestionably instances when it has brought an economy to its knees. During Weimar Germany’s period of hyperinflation in the 1920s people’s savings evaporated, eliminating the middle class and paving the way for the rise of fascism. Inflation also spiralled out of control in Zimbabwe under Robert Mugabe. As price signals broke down, millions went without food.
In more moderate inflationary episodes, such as the current one, the evidence for economic carnage is weaker. One worry is that increases in prices outpace rises in wages, causing real incomes to decline. This has almost certainly been happening across rich countries in recent months. American real hourly earnings fell by nearly 3 per cent in the year to March.
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https://www.afr.com/world/asia/singapore-pm-warns-of-global-recession-20220501-p5ahm0
Singapore PM warns of global recession
Michelle Jamrisko, Philip J. Heijmans and Abhishek Vishnoi
May 1, 2022 – 6.48pm
Singapore | Singapore must prepare for more economic challenges as inflation will remain high and central banks are tightening policies, Prime Minister Lee Hsien Loong said, warning that the world may face a recession within the next two years.
Russia’s war on Ukraine has clouded the outlook for Singapore’s post-COVID-19 recovery on which the nation was “cautiously optimistic” at the start of this year, the premier said in a May Day address.
“Singaporeans are already feeling the impact of the war on the cost of living”, with the island facing an $S8 billion ($8.2 billion) hit a year from higher energy prices, he said.
Mr Lee joins a growing list of global policymakers, market participants, economists and companies warning of recession risks against the backdrop of Russia’s invasion of Ukraine and COVID-19 shutdowns in China.
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https://www.afr.com/world/asia/explainer-does-china-plan-to-invade-taiwan-20220324-p5a7kn
Explainer: Does China plan to invade Taiwan?
Although a Chinese invasion is not imminent or even inevitable, the outcome of the Ukraine conflict will influence Xi’s next move.
Michael Smith North Asia correspondent
May 2, 2022 – 8.00am
Russia’s invasion of Ukraine has put the spotlight on another potential territorial conflict much closer to Australian soil.
China’s long-held claim over Taiwan remains unresolved, but Xi Jinping’s tacit support for Vladimir Putin’s campaign in Europe has raised fears he may also be willing to start a war to reunify the self-governed island state of 23 million people with the Communist mainland.
Although a Chinese invasion is not imminent or even inevitable, the outcome of the Ukraine conflict will influence Xi’s next move. China’s strongman leader is watching the events in Europe closely to determine whether the United States has the appetite or the ability to stop him from taking control of Taiwan by force. If war breaks out in the Taiwan Strait, Australia would probably be drawn into any conflict with disastrous results.
Does China want to invade Taiwan? And if so, when?
The Chinese Communist Party does not want to take Taiwan by force, but neither is it willing to back down from its historical claims over the island.
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China’s Pacific foothold exposes ‘new cold war’ hyperbole
Having preened on the global stage for standing up to the China threat, the Morrison government has now been shown to have little influence in the region most crucial to our security.
James Curran Historian
May 2, 2022 – 5.00am
Amidst the tumult arising from the Solomon Islands-China security agreement, two clear points emerge.
The first is the inherent right of any country to make sovereign decisions in its own interest. Although acknowledged in the White House summary of the visit to Honiara by President Joe Biden’s Asia supremo, Kurt Campbell, one has to strain to hear Scott Morrison or his ministers enunciate this principle, one so relevant to all Pacific nations.
The second is that China has pulled off a most striking diplomatic development. It has established the legal right to send police and troops to protect its own citizens, as it sees them, regardless of how many generations they are divorced from residence in China.
The prospect of a Chinese military foothold of this kind is profoundly disturbing, touching on fears that have animated policymakers since colonial times: a foreign power occupying a strategic launch pad in the Pacific.
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https://www.theatlantic.com/magazine/archive/2022/05/social-media-democracy-trust-babel/629369/
Why the Past 10 Years of American Life Have Been Uniquely Stupid
It’s not just a phase.
April 11, 2022
What would it have been like to live in Babel in the days after its destruction? In the Book of Genesis, we are told that the descendants of Noah built a great city in the land of Shinar. They built a tower “with its top in the heavens” to “make a name” for themselves. God was offended by the hubris of humanity and said:
Look, they are one people, and they have all one language; and this is only the beginning of what they will do; nothing that they propose to do will now be impossible for them. Come, let us go down, and confuse their language there, so that they will not understand one another’s speech.
The text does not say that God destroyed the tower, but in many popular renderings of the story he does, so let’s hold that dramatic image in our minds: people wandering amid the ruins, unable to communicate, condemned to mutual incomprehension.
The story of Babel is the best metaphor I have found for what happened to America in the 2010s, and for the fractured country we now inhabit. Something went terribly wrong, very suddenly. We are disoriented, unable to speak the same language or recognize the same truth. We are cut off from one another and from the past.
It’s been clear for quite a while now that red America and blue America are becoming like two different countries claiming the same territory, with two different versions of the Constitution, economics, and American history. But Babel is not a story about tribalism; it’s a story about the fragmentation of everything. It’s about the shattering of all that had seemed solid, the scattering of people who had been a community. It’s a metaphor for what is happening not only between red and blue, but within the left and within the right, as well as within universities, companies, professional associations, museums, and even families.
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https://www.afr.com/policy/economy/brace-for-the-global-recession-trifecta-20220501-p5ahiz
Brace for the global recession trifecta
Gloomy forecasts for the US, Europe and China tend to underestimate how downturns in one region may compound the difficulties of others.
Kenneth Rogoff Columnist
May 2, 2022 – 4.12pm
Is the global economy flying into a perfect storm, with Europe, China and the United States all entering downturns at the same time later this year?
The risks of a global recession trifecta are rising by the day.
A recession in Europe is almost inevitable if the war in Ukraine escalates, and Germany, which has been fiercely resisting calls to pull the plug on Russian oil and gas, finally relents.
China is finding it increasingly difficult to sustain positive growth in the face of draconian COVID-19 lockdowns, which have already brought Shanghai to a screeching halt and now threaten Beijing. In fact, the Chinese economy may already be in recession. And with US consumer prices currently increasing at their fastest rate in 40 years, prospects for a soft landing for prices without a big hit to growth look increasingly remote.
Private and official economic forecasts have recently started to highlight growing regional risks, but perhaps understate the extent to which they multiply each other. Widespread lockdowns in China, for example, will wreak havoc with global supply chains in the short run, raising inflation in the US and lowering demand in Europe. Normally, these problems might be attenuated by lower commodity prices. But with no clear end in sight in Ukraine, global food and energy prices are likely to remain high in any scenario.
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Investors face volatility as demand stalls amid supply disruptions
Policymakers will need a rare mix of skill, luck and time to soft-land both an economy and markets conditioned by once-unthinkable levels of policy stimulus.
Mohamed El-Erian Contributor
Updated May 2, 2022 – 3.56pm, first published at 3.40pm
For years, financial markets benefited enormously from the generosity of monetary policy in a world economy deemed by central banks, and the US Federal Reserve in particular, to lack sufficient aggregate demand.
To the detriment of markets, this has been changing rapidly as central banks belatedly recognise that today’s problem is not one of weak demand but, rather, insufficient supply.
Looking forward, an even more complicated possibility is taking shape: that of stalling demand in the midst of persistent supply disruptions.
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Finland and Sweden will apply to NATO within days
By Bruno Waterfield
The Times
May 3, 2022
Finland will announce a bid for membership of NATO on May 12 in a move to be mirrored by Sweden within days.
The Finnish and Swedish prime ministers, Sanna Marin and Magdalena Andersson, will on Tuesday discuss a “joint leap” with Olaf Scholz, the German chancellor, at his official retreat, Schloss Meseberg, north of Berlin.
In Finland, the Iltalehti newspaper reported that the country, which borders Russia, will formally apply to NATO with a statement next week from Sauli Niinisto, the Finnish president.
His declaration of support will begin a parliamentary process expected to lead to an application to join at a summit of NATO leaders in June. Stockholm is expected to follow suit after talks between the Finnish and Swedish foreign ministers, Pekka Haavisto and Ann Linde. “It is Finland’s wish that Finland and Sweden can adhere to the same timetable in respect of applying for membership to NATO,” Haavisto said after the meeting in Helsinki.
Niinisto is due to make a two-day visit to Sweden ending on May 18, when both countries will agree future Finnish-Swedish security co-operation in terms of joining NATO.
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The repeal of the right to an abortion would be Trump’s real legacy
Updated May 3, 2022 — 6.10pmfirst published at 5.06pm
Washington: If the US Supreme Court’s draft decision on Roe v Wade holds true, then the battleground for this year’s midterm elections has been well and truly set.
Make no mistake: today’s leaked draft decision has the potential to completely reshape the social and political landscape in America.
For almost 50 years, Roe v Wade has guaranteed that women have a federal constitutional right to abortion in the US.
But the draft ruling written by Justice Samuel Alito and leaked to Politico is an unflinching rebuke of that guarantee.
Not only does it argue that the law was “egregiously wrong” from the start, it also hands the authority over women’s reproductive rights to the states.
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China’s deal with the Solomons is an act of colonisation
Military leader and strategist
May 3, 2022 — 11.45am
Since Federation, Australian national security policy has recognised the importance of ensuring no external, hostile power could dominate the South Pacific.
Even American General Dwight Eisenhower, working as a planner in the Pentagon in 1942, listed the security of the route to Australia as an important part of US strategy. This was highlighted by the sacrifices of the US military at Guadalcanal and the seas around the Solomon Islands in the Second World War. During the Cold War, Australia worked to limit Soviet expansion into the region.
For many, these are seen as historical but not contemporary concerns. But like Paul Dibb, Peter Hartcher and other analysts have described since the announcement of the secret China-Solomons compact, there are compelling reasons why denying the South Pacific to powers hostile to Australia must remain a central element of our national security policy.
The Solomon Islands, as a 2016 Sydney Morning Herald story highlights, sits astride very important shipping lanes from the Australian east coast. Australia derives massive incomes from exports such as coal and natural gas, among other commodities, which are shipped from our east coast ports to points further north. The ability to monitor and potentially interdict this shipping by naval and airborne assets out of the Solomon Islands would pose a significant threat to our security and prosperity.
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What is Roe v Wade, and what happens if it is overturned?
The famous US court decision is on the cusp of being overturned – what are the consequences?
May 3, 2022
In 1973 the pivotal United States Supreme Court decision Roe v Wade legalised abortion across the country and became a touchstone for 50 years of conflict between the pro-life and pro-choice movements.
A leaked draft of a new Supreme Court ruling shows Roe v Wade is on the cusp of being overturned, intensifying furious debate in the US and potentially imperilling a right that millions American women have had for decades.
But how did this decades-old ruling come to hold such significance in the global discourse about women’s rights, and what could overturning it mean?
What was the decision in Roe v Wade?
In 1970, Norma McCorvey was a Texas mother of two children who became pregnant with a third. She wanted an abortion but the state’s laws denied access to the procedure unless the mother’s life was in danger, so McCorvey launched a legal challenge. She was given the pseudonym “Jane Roe” to protect her identity but later went public. Henry Wade, the opposing Texas attorney-general, also gave his name to the case.
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Vulnerable Transnistrians sit on shaky ground
By Louise Callaghan
The Times
5:26PM May 3, 2022
In the square by the People’s Cultural House, two teenagers share a cigarette under a statue of Lenin. Children perform a traditional Russian dance nearby. Two women in headscarves serve beans and greying chicken beneath a hammer-and-sickle flag in a Soviet-style cafe.
Time seems to have stood still in Transnistria since 1990, when the tiny breakaway region declared independence from Moldova during the death throes of the USSR.
Appearances are deceptive, though. In the past few days this internationally unrecognised pro-Russian territory of 400,000 people in southeastern Europe has become a focus of urgent global scrutiny amid fears that the Kremlin is about to use it to expand its war beyond Ukraine.
The alarm was sounded when a senior Russian commander said that Moscow’s “special operation” aimed to create a land bridge from Donbas to Transnistria, which would strangle the economic lifeblood of Ukraine, cutting it off from the sea, and pull Moldova into the conflict. On cue, Russian state media began publishing articles claiming Russian-speakers in Moldova were being repressed – a claim the Kremlin used to justify its invasion of Ukraine.
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Artillery key to Ukraine’s success as West rolls out the big guns
By The Economist
6:12PM May 3, 2022
Other flashier devices get more attention. The tank-busting Javelin is the star of various memes. The Turkish TB2 drone has its own catchy song. But no weapon has been more important in the war in Ukraine than artillery – and it is likely to become even more significant still in the coming weeks.
An adviser to General Valery Zaluzhnyi, Ukraine’s top commander, recently explained how his forces halted the Russian advance on Kyiv.
“Anti-tank missiles slowed the Russians down,” he said, “but what killed them was our artillery. That was what broke their units.”
In the current fighting in southern and eastern Ukraine, where the two sides are more entrenched, artillery is even more pivotal. And the more sophisticated versions Western countries have started to give Ukraine could make all the difference.
The basic idea behind artillery is simple enough. The rifles carried by soldiers and the guns mounted on tanks employ what is known as direct fire: they hit things they can see.
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How the Ukraine war changed history
William A Galston
8:07PM May 4, 2022
We do not know how the war in Ukraine will end, but it is already evident that it represents a turning point in contemporary history. To begin with, the war has ended the debate about the purpose of the North Atlantic Treaty Organisation and the possibility of its expansion. Strategists who feared that extending its protective umbrella to Central Europe and the Baltics would provoke Russia acknowledge that the invasion makes further expansion inevitable. Finland and Sweden, which previously shied away from a formal relationship with the alliance, appear on the verge of applying for membership. Emmanuel Macron, recently re-elected as France’s president, is unlikely to renew his oft-repeated charge that NATO is “brain dead”.
Instead, NATO will emerge from the war in Ukraine as a more united and effective defensive force. As members transfer their stocks of Soviet-era weapons to Volodymyr Zelensky’s government, the US and others will replace those stocks with modern weapons that can operate in tandem across the alliance. Second, the war has transformed Germany. Europe’s economic powerhouse has abandoned a foreign and defence policy shaped by memories of World War II and has pledged to rebuild its military and expand its military spending to at least 2 per cent of gross domestic product. Step by step, it has relaxed prior limits on arms transfers to countries actively engaged in military conflicts and recently agreed to send heavy weapons to Ukraine.
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Putin is failing in Ukraine but succeeding at oppressing Russia
The war is bringing habits from Stalin’s day back to Moscow
A MAYBACH GLIDES out of a driveway gate in Prechistenka, a rich neighbourhood in Moscow. Young women from the suburbs pose for selfies next to a luxury apartment block. The Michelin-starred restaurants, though less full than last year, still enjoy a brisk trade. At first glance, Moscow’s wealth and hedonism seem almost unchanged despite Russia’s war against Ukraine, and the sanctions and isolation that have come with it. But it is not quite business as usual in Russia’s capital, however. The streets are quiet and the mood is subdued.
Russians do not talk openly about the invasion of Ukraine, now entering its third month, but they are navigating a new reality of fear and anxiety. The Kremlin has not made much headway in its assault on Ukraine. But in its simultaneous imposition of near-totalitarian control in Russia, it has been far more successful. It has been vigorously suppressing dissent and demoralising opponents, turning a relatively open country into a complete dictatorship. It is the Kremlin’s biggest achievement in the conflict, says Gregory Asmolov, an expert on Russian information warfare: “You couldn’t even imagine this straightjacketed political reality a few months ago.”
State propaganda cites official polls that claim 81% of Russians are behind the war. The reality is more complicated. At a minimum, the polls reflect a mixture of propaganda and fear. A group of independent sociologists suggests that as much as 90% of the population refuses to participate in political polling. Another 5-8% of respondents hang up during the conversation with pollsters, while a further 21% admitted to being scared to take part in surveys. Most of those were between 18 and 29 years old.
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Why Vanguard’s Jack Bogle was a punk
A new book shows just how radical Bogle was – and that his true legacy is the company’s mutual ownership, not its beloved index funds.
Eric Balchunas
Updated May 5, 2022 – 10.15am, first published at 8.00am
For the past decade, while cryptocurrencies, Federal Reserve policy, meme stocks and Elon Musk have captured all the headlines, investors have been quietly funnelling a billion dollars a day into the greatest money-transfer machine in the history of capitalism: Vanguard.
Yet, the company shouldn’t even exist. An asset manager owned by its investors? That invests in passive indexes? That charges only microscopic fees? That’s made millions of Americans fabulously wealthy and bankrolled countless retirements without succumbing to Wall Street?
The money manager now has more than $US8 trillion ($11 trillion) in assets – second only to BlackRock, which it could surpass in a few years – as well as the three biggest funds in the world and another three in the top 10. Vanguard’s influence extends well beyond the numbers on any scoreboard. The entire investing universe now bends towards the company’s headquarters in sleepy Malvern, Pennsylvania.
The reason for Vanguard’s quiet dominance is both its unusual ownership structure and the unusual structure of its founder, John “Jack” Bogle, who died in 2019 at age 89. As an exchange-traded funds analyst for Bloomberg Intelligence, I spoke with Bogle many times, including in an interview six months before his death, with Joel Weber, the editor of Bloomberg Businessweek, for our Trillions podcast. My study of Bogle and Vanguard culminates with my coming book, The Bogle Effect.
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Federal Reserve lifts rates half a point, says ‘soft landing’ likely
Matthew Cranston United States correspondent
May 5, 2022 – 4.06am
Washington | The Federal Reserve raised interest rates by 0.5 of a percentage point – the biggest rise in 22 years – and cut bond purchases as it attempts to tackle soaring inflation and maintain chances of a soft landing for the economy.
The US central bank’s policy-making Federal Open Market Committee on Wednesday (Thursday AEST) voted unanimously to increase the Fed funds rate to a range of 0.75 per cent to 1 per cent. The move follows a quarter-point increase in March that ended two years of near-zero rates.
Fed chairman Jerome Powell, in his first in-person press conference in more than two years, said the 40-year-high in inflation was “much too high”. He said further 50 basis point rate rises “should be on the table” at future meetings, especially as Russia’s invasion of Ukraine added pressure on inflation.
However, in a slightly more dovish tone, Mr Powell ruled out a rate rise of 0.75 of a percentage point at future meetings. He said that was “not something the committee is considering” and suggested that high wage growth might level out as labour demand and supply came back into balance.
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Ukraine using US intel to kill Russian generals: report
By Jon Gambrell and Cara Anna
Updated May 5, 2022 — 11.13amfirst published at 5.14am
Key points
· The US has provided intelligence that has helped Ukrainian forces kill many of the Russian generals who have died in the Ukraine war, the New York Times reported.
· Russia bombarded railroad stations and other supply-line targets across the country.
· Analysts are speculating Russian President Vladimir Putin could mobilise reservists on May 9, expanding Russia’s war effort.
· The EU’s top official called on the 27-nation bloc on Wednesday to ban Russian oil imports, a crucial source of revenue.
· Heavy fighting also raged at the Azovstal steel mill in Mariupol, the last stronghold of Ukrainian resistance in that city.
Washington: The United States has provided intelligence that has helped Ukrainian forces kill many of the Russian generals who have died in the Ukraine war, the New York Times reported, citing senior US officials.
Washington has provided to Ukraine details on Russia’s expected troop movements and the location and other details about Russia’s mobile military headquarters, and Ukraine has combined that help with its own intelligence to conduct artillery strikes and other attacks that have killed Russian officers, the newspaper said.
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Solomon Islands at risk of invasion, says PM Manasseh Sogavare
May 5, 2022
Solomon Islands Prime Minister Manasseh Sogavare says his country has been threatened “with invasion” by opponents of its security agreement with China as he chillingly declared Russia was not the aggressor in the Cuban missile crisis.
In an extraordinary address to parliament in defence of the controversial security agreement, Mr Sogavare said his country had been treated by critics of the pact like “kindergarten students walking around with Colt .45s in our hands”.
He pushed back, without naming the US or Australia, at both nations’ warnings that a Chinese military presence in Solomon Islands would not be tolerated.
“We deplore the continual demonstration of lack of trust by the concerned parties, and tacit warning of military intervention in Solomon Islands if their national interest is undermined in Solomon Islands,” Mr Sogavare said.
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How does Australia deal with a deranged rogue like Manasseh Sogavare?
May 5, 2022
How does Australia deal with a rogue like Solomon Islands Prime Minister Manasseh Sogavare?
Whichever party wins this election now faces a mammoth challenge to restore any workable relationship with this increasingly erratic leader.
Sogavare’s rant to his parliament this week, a thinly disguised attack on Australia and the US, could be fairly described as deranged.
The four-time prime minister railed at opponents and threats, real and imagined, in a manner which suggests he has abandoned his claims of impartiality when choosing between rival suitors China and Australia/US.
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https://www.afr.com/policy/economy/the-fed-doesn-t-deserve-all-the-inflation-blame-20220505-p5aiqr
The Fed doesn’t deserve all the inflation blame
Central banks around the world have had to navigate extraordinary political pressure in recent years amid an uncertain inflation outlook.
Kenneth Rogoff Columnist
May 5, 2022 – 10.42am
A growing crescendo of commentary places the blame for the current surge in US inflation squarely on the Federal Reserve. But much of the criticism is stupefyingly naive about the political pressures the Fed and other central banks around the world have had to navigate in recent years.
In the US, pressures on the Fed reached a peak when the Democrats, eager to put progressive ideas into practice, took control of the White House and Congress in January 2021. Yes, the Fed has significant independence in many dimensions, but it does not enjoy nearly the same institutional independence as, say, the European Central Bank.
Instead, the Fed is a creature of Congress that can, in theory, be radically transformed at short notice. Importantly, the term of the Fed’s chairman always expires one year into a new president’s term, and President Joe Biden’s administration could make several other Fed appointments as well.
Although the idea of “Fed packing” (adding new positions to tilt the central bank’s voting majority) never gained traction, Fed officials surely noticed the Biden administration’s discussion of whether to counter the US Supreme Court’s conservative majority by increasing the number of justices.
Given Biden’s attempt to administer massive fiscal stimulus, how realistic was it to think that the Fed could have started increasing interest rates in the first half of 2021 as inflation started to rise?
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https://www.economist.com/finance-and-economics/2022/05/07/russias-economy-is-back-on-its-feet
Finance & economics | ‘Tis but a flesh wound
Russia’s economy is back on its feet
A recession looms, but perhaps not a big one
May 7th 2022
IN EARLY APRIL we pointed to preliminary evidence that the Russian economy was defying predictions of collapse, even as Western countries introduced unprecedented sanctions. Recent data further support this view. Helped along by capital controls and high interest rates, the rouble is now as valuable as it was before Russia’s invasion of Ukraine in late February (see top chart). Russia appears to be keeping up with payments of its foreign-currency bonds.
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The real economy is surprisingly resilient too. True, Russian consumer prices have risen by more than 10% since the beginning of the year, as the rouble’s initial depreciation made imports more expensive and many Western companies pulled out, reducing supply. The number of firms late on their wage payments seems to be growing.
But “real-time” measures of Russian economic activity are largely holding up. Total electricity consumption has fallen only a smidge. After a lull in March, Russians seem to be spending fairly freely on cafés, bars and restaurants, according to a spending tracker run by Sberbank, Russia’s largest bank. On April 29th the central bank lowered its key interest rate from 17% to 14%, a sign that a financial panic which began in February has eased slightly. The Russian economy is undoubtedly shrinking (see bottom chart), but some economists’ predictions of a GDP decline of up to 15% this year are starting to look pessimistic.
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The 1990s promised a new era of peace but it was an illusion
After the Berlin Wall fell in 1989, Europe was lulled into a false belief that the horrors of the 20th century were exhausted.
Helen Thompson
May 6, 2022 – 5.00am
The feeling that history might have ended belonged to the summer of 1990. With shards of the wall that once divided Europe lying scattered around Berlin, it was easy to believe that the horrors of the 20th century were exhausted, largely without more blood having to be shed.
A continent chastened by the catastrophes of competing millenarian nightmares and abandoned empires could, it seemed, start to enjoy itself. If the impression of a new dawn of peace was punctured by Iraq’s invasion of Kuwait in August that year, the first Gulf War was still cast as a “good” war to uphold international law.
That summer’s hopefulness was always a chimera. Few gave any thought as to how an independent Ukraine containing Sevastopol – a Russian Black Sea naval port since the days of Catherine the Great – could defend itself against a humiliated Russia without the new, pacific-minded Germany acting as a military protector.
The Gulf War, too, was not a moral crusade but an oil war fought, as president George HW Bush admitted, because “we cannot permit a resource so vital to be dominated by one so ruthless”. Even in its own terms, victory proved incoherent. Far from establishing the geopolitical conditions for successfully projecting power in a region on which it had an acute resource dependency, the US established a post-war sanctions regime against Saddam Hussein that constrained the supply of oil from Iraq.
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What overturning Roe v Wade means for the world
Seeking protection for abortion rights through courts has become a riskier strategy than building the kind of mass movement that can power legislative victories.
Amanda Taub
May 5, 2022 – 2.27pm
The draft US Supreme Court opinion overturning Roe v Wade that leaked this week is not yet final. But when the dust settles, American women may conclude that they had lost the right to abortion the same way that an Ernest Hemingway character said he had gone bankrupt: gradually, and then suddenly.
If anything like the leaked draft becomes law, it will be the result not just of decades of campaigning, litigating and nominating of conservative judges by anti-abortion groups and their Republican allies but also of a single decision that reverses the establishment of a constitutional right that had inspired abortion rights campaigners around the world.
So, the opinion also raises a question relevant to activists everywhere: Is seeking protection for abortion rights through courts, rather than building the kind of mass movement that can power legislative victories, a riskier strategy than it once seemed?
Roe’s surprising politics
It is hard to imagine now, but at the time Roe v Wade was decided, in 1973, abortion was not a major issue for the American right or even for evangelical Christians.
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The Fed and RBA have finally hit ‘lift-off’ but may have waited too long
Senior business columnist
May 5, 2022 — 11.58am
The US Federal Reserve has finally, and belatedly, accepted what most in and around financial markets recognised quite some time ago: US inflation is raging out of control and far more decisive efforts to stamp it out are required.
After its half-hearted 25 basis point increase to the federal funds rate in March – after two years where the rate was effectively zero – the Fed has announced its first 50 basis point rise in 22 years in response to an inflation rate of 8.5 per cent, the highest in 40 years.
It’s also announced plans to start shrinking its near-$US9 trillion ($12.4 trillion) balance sheet, a balance sheet swollen by the near-$US5 trillion purchases of bonds and mortgage securities it has made since the onset of the pandemic.
For the next three months it will allow $US47.5 billion a month of those securities to run off as they mature without reinvesting the proceeds. From September the rate of “quantitative tightening” will increase to $US95 billion a month, withdrawing liquidity from the US – and global – financial system.
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Facebook caught ‘extorting’ Aussie government to soften laws
May 6, 2022 – 11.21am
Facebook deliberately caused chaos for essential services in Australia - including fire services during bushfire season and suicide hotlines during the pandemic - to strong-arm the Morrison government into coming to a favourable deal over the media bargaining code, a US whistleblower has revealed.
A report in the Wall Street Journal overnight features internal Facebook documents showing how a ban of thousands of non-news Australian Facebook pages in February 2021 was deliberate even though Facebook publicly claimed it was an unfortunate error. Internally, the move was praised as “genius” and led Mark Zuckerberg to say the negotiations achieved “the best possible outcome in Australia.”
Mark Zuckerberg praised his team for getting Josh Frydenberg to agree to the “best possible outcome in Australia” for Facebook. Alex Ellinghausen/AP
In light of the new revelations, former Australian Competition and Consumer Commission boss Rod Sims said the decision not to “designate” Facebook under the media bargaining laws should be revisited by Treasurer Josh Frydenberg.
The revelations will embarrass the government, which has taken credit for reining in the power of big tech platforms, with Facebook and Google both since signing deals with some publishers - including The Australian Financial Review’s publisher Nine Entertainment - for the provision of news content.
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Could Honiara be a case of Havana 1962 revisited?
12:00AM May 6, 2022
The brilliant film director Stanley Kubrick captured on celluloid the absurdities of the first Cold War. Dr Strangelove or: How I Learned to Stop Worrying and Love the Bomb is a wickedly funny cinematic account of how easily the world might have slipped into a nuclear confrontation between the US and the Soviet Union in the early 1960s.
The mentally unstable strategic air commander, General Jack D. Ripper (the magnificent Sterling Hayden), unilaterally sends his wing of B52s off to bomb the Soviet Union.
Having done this, Ripper dispatches a message to US president Merkin Muffley (the unforgettable Peter Sellers), in which he boasts, “My boys will give you the best kind of start, 1400 megatons worth … God willing, we will prevail, in peace and freedom from fear, and in true health, through the purity and essence of our natural fluids.”
In the war room in Washington DC, Muffley replies to the effect that Ripper is obviously a psychotic, to which General Buck Turgidson (the inestimable George C. Scott) interjects that he would like to wait until all the evidence is in.
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https://www.afr.com/world/north-america/us-economy-adds-428-000-jobs-in-april-20220507-p5ajbx
US economy adds 428,000 jobs in April
Reade Pickert
May 7, 2022 – 5.04am
Washington | US hiring advanced at a robust pace in April, yet a smaller labour force may increase pressure on employers to boost wages even more to bring workers back.
That dynamic will likely complicate the Federal Reserve’s fight to tame decades-high inflation, as central bankers work to bring labour demand in line with supply.
Nonfarm payrolls rose 428,000 last month in a broad-based advance, matching the gain in March, a Labor Department report showed on Friday (Saturday AEST). The unemployment rate held at 3.6 per cent and average hourly earnings rose, albeit at a more moderate pace from a month earlier.
The median estimate in a Bloomberg survey of economists called for a 380,000 advance in payrolls and for the unemployment rate to fall to 3.5 per cent.
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https://www.afr.com/markets/equity-markets/inflation-anxiety-triggers-market-chaos-20220506-p5aj1s
Inflation anxiety triggers market chaos
Alex Gluyas Markets reporter
Updated May 6, 2022 – 4.28pm, first published at 12.17pm
Global shares suffered a brutal sell-off as investors began to doubt whether leading central banks such as the US Federal Reserve and the Reserve Bank of Australia can succeed in taming inflation by raising interest rates, without causing recession.
The S&P/ASX 200 Index fell 2.2 per cent on Friday, the biggest drop since Russia invaded Ukraine in February, and Macquarie Group shares dropped 7.8 per cent as the investment bank cast a “cautious” outlook. Hong Kong’s Hang Seng was on track for a loss of 3.5 per cent and China’s CSI 300 2.5 per cent.
The challenge was underscored by an ominous forecast from the Bank of England that surging energy prices will lift UK inflation to more than 10 per cent in the fourth-quarter of this year. The Reserve Bank of Australia on Friday formalised its latest inflation upgrade, predicting annual CPI growth of 6 per cent, up from 3.25 per cent, by December.
The RBA will do “what is necessary to ensure that inflation in Australia returns to target over time”, the central bank’s monetary policy statement said on Friday. “This will require a further lift in interest rates over the period ahead.”
Financial market futures indicate Australia’s cash rate will rise to 3 per cent by the end of December, and to 3.6 per cent by June 2023.
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Sinn Fein calls for united Ireland debate after historic election win
Amanda Ferguson
May 8, 2022 – 7.34am
Belfast | Sinn Fein, the former political wing of the Irish Republican Army (IRA), hailed its first victory in a Northern Ireland Assembly election as a “defining moment” for the British-controlled region and called for a debate on a united Ireland.
Sinn Fein was ahead of the pro-British Democratic Unionist Party (DUP) by 27 to 24 seats with two left to declare, making it the first Irish nationalist party to become the largest in the devolved assembly.
“Today represents a very significant moment of change. It’s a defining moment in our politics and for our people,” said the head of Sinn Fein in Northern Ireland, Michelle O’Neill, whose party secured 29 per cent of first-preference votes to the DUP’s 21.3 per cent.
She said there should now be an “honest debate” around the party’s goal of unifying the territory with the Republic of Ireland.
The victory will not change the region’s status, as the referendum required to leave the United Kingdom is at the discretion of the British government and likely years away.
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Britain’s local elections point to hung parliament with Labour PM
Hans van Leeuwen Europe correspondent
May 7, 2022 – 3.44am
London | Labour leader Keir Starmer would likely become prime minister in an unstable hung parliament, if Britain’s confusing array of local and regional election results were replicated at a national poll next year or in 2024.
According to the BBC’s go-to psephologist John Curtice, a politics professor at Strathclyde University, the results across 200 council elections suggest a national Labour vote share of 35 per cent, with Prime Minister Boris Johnson’s Conservatives on 30 per cent.
The Liberal Democrats, a centrist party whose fortunes plummeted after an ill-fated coalition with the Tories under David Cameron from 2010 to 2015, took what would amount to a 19 per cent share.
The council elections, which took place on Thursday and were being counted into the weekend, are a low-turnout, locally driven affair, making them an unreliable guide to a national election.
But they are always viewed as a test that the political leaders must pass - and never more so than this year, with both Mr Johnson and now Mr Starmer reeling from damaging allegations that they flouted the rules against social gatherings during lockdown.
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Xi Jinping steps up China’s political divorce from the West
China’s leader has dug in over his COVID-zero policy and his loyalty to Vladimir Putin – and his reasoning does not bode well for the West.
Richard McGregor Columnist
May 6, 2022 – 12.21pm
In Australia, it’s election season. In China, it’s selection season.
Scott Morrison submitting himself to voters is a very different proposition to Xi Jinping seeking a new mandate from the “selectorate” of the ruling communist party, as he will formally do later this year.
But both campaigns, albeit in very different ways, put candidates through a searing test – or as one US political consultant described them, an “MRI for the soul”.
Whoever you are, whatever you stand for, your personality and beliefs will eventually be on display for all to see, in China, as in democracies.
Many of Xi’s local adversaries have no need to see a computer-generated readout of his political personality. They know it all too well, having been cast aside, fairly or unfairly, for corruption, or over policy differences, since he came to power in later 2012.
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Armed and ready, Ukraine goes on offensive in northeast against Russia
By Marc Santora, Cora Engelbrecht and Michael Levenson
May 7, 2022 — 11.42am
Krakow: Ukrainian troops, emboldened by sophisticated weapons and long-range artillery supplied by the West, went on the offensive against Russian forces in the northeast, seeking to drive them back from two key cities as the war plunged more deeply into a grinding, town-for-town battle.
After weeks of intense fighting along a 300-mile-long (480 km) front, neither side has been able to achieve a major breakthrough, with one army taking a few villages one day, only to lose just as many in the following days.
In its latest effort to reclaim territory, the Ukrainian military said that “fierce battles” were being waged as it fought to retake Russia-controlled areas around Kharkiv in the northeast and Izyum in the east.
The stepped-up combat on Friday came as the White House announced Friday that President Joe Biden would meet virtually Sunday with President Volodymyr Zelensky of Ukraine and the leaders of the Group of Seven major industrial nations: Britain, Canada, France, Germany, Italy, Japan and the United States.
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I look forward to comments on all this!
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David.
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