-----
In the US the Biden calm rolls on as Trump is acquitted by Senate due some very cowardly Republican Senators. Fortunately it seems his support is gradually dropping so we can hope for better times ahead with only a zillion other issues to address.
In the UK I heard my brother had his first vaccine dose a few days ago. The UK economy shrank by almost 10% last year so they need to get something right!
In OZ Parliament is back and so we will see all sorts of stuff happen. By the end of next week we may actually see some vaccines being given! Frankly it can’t happen soon enough!
And in late-breaking news OZ news (and other stuff) is off Facebook. A big battle may be brewing!
-----
Major Issues.
-----
Universities need to ‘talk the language of the Coalition’
Robert Bolton Education editor
Feb 8, 2021 – 12.01am
Universities are “Olympic gold-medal complainants” who can’t speak the language of the Coalition government and have used up the “tranche of goodwill” the Coalition gave them last year with a $1 billion in extra research money, says former Australian Catholic University vice-chancellor Greg Craven.
Professor Craven, who left ACU in January after 13 years in the top job, says he has no plans to seek another vice-chancellorship.
He told The Australian Financial Review that the pandemic, which has smashed international revenue, would lead to new business models for universities, new levels of regulation and a new type of vice-chancellor who was more familiar with the thinking of government.
“Most people in universities tend to be on the left in politics,” he said. “It makes it especially difficult to talk to a Coalition government unless they have had experience in government.
-----
Universities at risk after failure to control costs
Robert Bolton Education editor
Feb 8, 2021 – 12.01am
The failure of universities to keep costs under control and to build adequate financial reserves has left them exposed to default and the biggest threat they face is not the collapsing international market owing to COVID-19, but the vast number of new universities in China, says a new report.
Writing in the Accounting, Auditing and Accountability Journal, professors Tom Smith and James Guthrie, from Macquarie University, say overseas revenue increased by 230 per cent between 2008 and 2019. Domestic student revenue grew by a much smaller 64 per cent.
But universities allowed costs to blow out, especially academic salaries which went up by 223 per cent over the same period. Non-academic salaries went up by 242 per cent and “general expenses” increased by 263 per cent.
“This is unfortunate because the dramatic increase in general expenses and non-academic salaries has undoubtedly contributed to a broad failure to put money aside for lean times,” said Professor Smith.
-----
https://www.afr.com/world/asia/what-do-we-do-when-beijing-turns-up-heat-on-taiwan-20210207-p570co
What do we do when Beijing turns up heat on Taiwan?
China will use grey area tactics of bullying rather than bullets against its rival in Taipei. Those may be difficult to counter.
Linda Jakobson Contributor
Feb 9, 2021 – 12.00am
We should be preparing for a catastrophic war across the Taiwan Strait, if recent public commentary is any indication.
However, the common assumption that informs these analyses – that Beijing would attack Taiwan – is outdated. A military invasion of Taiwan by the People’s Republic of China (PRC) cannot be ruled out, but is improbable.
President Xi Jinping is much more likely to rely on a protracted and intensive campaign, using ‘all means short of war’, to force Taiwan’s leadership to negotiate and thereby achieve Beijing’s long-cherished goal of unification.
Australia should prepare for a scenario in which Beijing adopts an aggressive mix of new technologies and conventional methods to apply pressure on Taiwan.
-----
https://www.afr.com/work-and-careers/workplace/academics-unite-against-ir-bill-20210208-p570g0
Academics unite against IR bill
David Marin-Guzman Workplace correspondent
Feb 9, 2021 – 12.00am
Labour law experts have warned that the government’s industrial relations reforms threaten to tear a hole in the safety net, increase casualisation and worsen wage growth at a time when pay rises are necessary for the economic recovery.
Twenty-three senior academics led by University of Adelaide professor Andrew Stewart joined to warn the proposed reforms on casual employment would increase disputes and red tape for employers, and declared their strong opposition to allowing enterprise agreements to temporarily leave workers worse off than the award minimum.
The criticism, which will form part of a submission to a Senate inquiry, adds to the high-profile opposition to the reforms, with Fair Work Commission president Iain Ross also panning a proposed 21-day deadline to approve agreements as risking “unintended” consequences.
Employers have argued that if the bill is not passed it will reduce business confidence in hiring and drag out the economic recovery.
But Professor Stewart said that while the academics supported some parts of the bill, such as higher fines for underpayments, its changes on enterprise agreements and awards provided a mechanism to cut wages.
-----
How often have tax cuts for the rich trickled down? Never.
A new study published by the London School of Economics shows such moves increase the wealth of the top 1 per cent but don’t create growth or jobs.
Michael Hiltzik
Feb 9, 2021 – 6.36am
We can probably stipulate that almost no one really believes that tax cuts for the rich are good for the economy.
The claim has become so closely identified with Republican ideologues and their patrons – that is, the rich themselves – that it no longer has much purchase in public debate.
It’s still GOP orthodoxy, however, so a new study published by the London School of Economics debunking it with hard data is useful.
Its authors, David Hope of the LSE and Julian Limberg of King’s College London, examined tax cuts enacted by 18 developed countries, including the United States, over the 50-year span from 1965 to 2015.
Their conclusion was that tax cuts for the rich succeeded in increasing the wealth of the top 1 per cent and achieved absolutely nothing in terms of spurring growth or reducing unemployment.
-----
Unis face coercion, intimidation from ‘foreign states’
Feb 9, 2021 – 12.01am
Australian universities, researchers and their families are under threat from foreign states looking to exploit the sector’s open and collaborative nature, according to the Australian Security Intelligence Organisation and Australian Federal Police.
With foreign governments seeking to get inside knowledge of Australian research and technology, the intelligence agency declared the higher education and research sector to be one of the “at risk” parts of the community.
ASIO said, in a submission to a joint parliamentary committee probing the risks for the sector, that while open, collaborative structures have been the foundation of the country’s scientific and technological accomplishments, they leave Australian research institutions open to exploitation by international partners with different political, cultural and moral values.
ASIO provided four examples of incidents it is aware of, without naming institutions or individuals.
-----
https://www.smh.com.au/national/morrison-needs-to-step-up-in-the-pacific-20210208-p570lz.html
Morrison needs to step up in the Pacific
Peter Hartcher
Political and international editor
February 9, 2021 — 12.04am
In the last few years, the leaders of the Pacific islands came up with the idea of calling their region Blue Pacific. The point? To emphasise that they have joint custody of “the world’s biggest oceanic continent”.
In the last few days, Blue Pacific has collapsed in a Pacific blue. The overarching organisation for the 18 nations, the Pacific Islands Forum, has splintered in acrimony. One member has quit and others are considering following.
In the middle of a pandemic, with the Pacific islands’ economies in distress, oceans rising and China probing for political opportunity, it’s the worst possible moment for the forum to go into “existential crisis” as the Australian National University’s Stephen Howes calls it.
Australia is one of the 18 members. It’s also the dominant resident power in the region. Together the forum nations control an expanse of ocean that – including members’ exclusive economic zones – covers 10 per cent of the Earth’s total ocean area.
-----
China gets its chance as Pacific Island Forum fractures amid Micronesian exits
Australian diplomacy in the Pacific has suffered a blow with the decision by the region’s five Micronesian states to exit the Pacific Island Forum, handing China a fresh opportunity to exploit regional instability.
Nauru, the Federated States of Micronesia, the Marshall Islands and Kiribati announced on Tuesday they would join Palau in withdrawing from the PIF, after the bloc was passed over for leadership of the forum.
The fracturing of the PIF, which will be limited to Melanesian and Polynesian states once the Micronesian withdrawal is formalised, will constrain Australia and New Zealand’s ability to work with the region as a whole on key economic, security and environmental challenges.
In a communique, the Melanesian states expressed their “great disappointment” in the process to select the PIF’s new secretary-general, after the election of former Cook Islands prime minister Henry Puna to the post last week.
-----
Canberra’s latest innovation: politics without policy
Ross Gittins
Economics Editor
February 10, 2021 — 12.05am
The most remarkable development since we returned to work this month is Scott Morrison’s barefaced announcement that the government has enough on its plate rolling out the virus vaccine and getting unemployment down, and so there’ll be no attempts to deal with any of our many other problems before the election late this year or early next.
There could be no franker admission that we live in an era of leaders who lack the ambition and courage to lead. Only on those problems so acute the mob is baying for the government to “Do Something!” will something be done – or grand announcements made that give the appearance it’s being done.
It’s Prime Minister as odd-job person. You don’t look for ways to secure our future, you sit there waiting for pressing matters to turn up: a light bulb that must be changed, a dripping tap that needs a new washer. Acute problems, yes; chronic problems, through to the keeper.
It’s the confirmation of what all but the rusted-on voter has long suspected: that our politicians are motivated far more by the desire to attain and retain office than by any great desire to make the world a better place for us to live and bring up our kids.
-----
https://www.afr.com/policy/economy/the-opiate-of-low-interest-rates-20210209-p570zo
Cheap money addiction will be hard to shake
What could be wrong with cheap money? A great deal when central banks do not know when to stop.
Satyajit Das Contributor
Feb 10, 2021 – 3.04pm
Central banks globally aren’t thinking about thinking of normalising interest rates. With the price of money near its zero bound, authorities are increasing its supply through multiple rounds of quantitative easing.
Cutting interest rates is now standard operating procedure for financial collapse, economic crises, pandemics and, one suspects, even for an alien invasion. While undoubtedly useful, excessive reliance on this policy lever is dangerous. Central banks should heed Winston Churchill’s admonition to occasionally look at the results no matter how beautiful the strategy.
First, the effect on real economic activity may be limited and uncertain. Low rates do not necessarily increase the supply of credit because of banks’ risk aversion and unwillingness or inability to pass on rate cuts fully. Business and individual demand for credit is based on needs and borrowing capacity. In the absence of income certainty, investment and consumption decisions are not driven solely by the cost of debt.
Low rates and the resultant reduced cost of capital encourages substitution of labour with automated production techniques. There may also be a shift from bonds into equities in search of income. Investors force companies to increase dividends and undertake share buybacks. To meet these pressures, companies must boost cash flow and earnings by shedding workers and reducing investment. The process increases share prices and shareholder returns but is bad for the overall economy. Given that 60 per cent to 70 per cent of activity in developed economies is driven by consumption, reduced employment and wages is unhelpful.
-----
Australia doesn’t have to ‘choose’ China over the US: Martin Parkinson
By Anthony Galloway
February 10, 2021 — 6.40pm
Australia’s former top public servant, Martin Parkinson, says the Morrison government has poorly managed its communication of policies that have upset China, warning it has further inflamed tensions with the nation’s biggest trading partner.
The former head of Treasury and the Department of Prime Minister and Cabinet said Australia should not simplify the debate about the geo-strategic situation in the region, saying it was not a “choice” between the United States and China.
Speaking at the Association of Superannuation Funds of Australia annual conference on Wednesday, Mr Parkinson said to simplify the debate on China as a choice was “actually really dangerous”.
“It implies we end up with two blocs and if we end up with two blocs we are heading toward a Cold War-type environment,” he said.
“The question is not whether we choose, it’s how we balance. And I think for Australia, we need to get a lot more sophisticated.”
-----
China’s coal war with Australia fuels shortage at home
· The Wall Street Journal
China’s ban on Australian coal imports is intensifying a crisis in its coal market, which is battling surging prices, supply shortages, conflicting policy goals and a cold winter.
Locked in a diplomatic brawl over Canberra’s call for an independent global inquiry into the origins of COVID-19, Beijing imposed an informal ban around September that forced boatloads of Australian coal to languish at sea. China’s central government made the embargo official at a mid-December meeting with major Chinese electricity producers, who are big buyers of thermal coal.
The ban complicated a supply crunch that the meeting was convened to solve, government and state media reports show. China was short of thermal coal and officials urged the companies to import more--from anywhere except Australia, China’s biggest supplier. To comply, buyers in China have had to pay steep premiums for imports from farther afield, on top of prices that have risen 84 per cent since mid-year.
“Coal buyers are on tenterhooks watching the import market,” the China Coal Transportation and Distribution Association, which represents importers, said in a statement. “It’s been hard to replenish low coal inventory and shortages, while demand is unabated.”
-----
Sharemarket investing is back with a bang
A sharp slide in the number of Australians active in the sharemarket has been reversed thanks to a legion of new investors rushing in for bargains during the depths of the crisis last March.
These new investors are younger, more likely to be using an app as opposed to full service brokers and they favour exchange-traded funds over individual shares.
Commonwealth Bank’s results on Wednesday carried the latest numbers for CommSec, the online broker.
In the most recent half year, CommSec managed a stunning 100 per cent rise in trading volumes compared to a year earlier.
-----
Air force could reject extra Joint Strike Fighters
Andrew Tillett Political correspondent
Feb 12, 2021 – 10.36am
Australia may curtail acquiring extra Joint Strike Fighters beyond the 72 it has committed to, the head of the Air Force says, amid fresh reports of production problems plaguing the aircraft.
Days after Prime Minister Scott Morrison posed for photographs inside the cockpit of one of the jets, RAAF chief Mel Hupfeld said “changing strategic circumstances” and rapid advances in technology might make additional JSFs unnecessary.
Defence has the option of buying up to 100 Lockheed Martin’s Joint Strike Fighters, and has accepted 30 already. The cost of acquiring 72 aircraft has been budgeted at $17 billion.
While Australia’s early participation in the multinational project has helped local defence companies secure $2.7 billion in contracts to supply parts for planes, globally the program has been hit be delays and cost blowouts because of problems with the aircraft and its systems.
-----
We’re entering the next resources supercycle: JPMorgan
Luke Housego Reporter
Feb 12, 2021 – 4.23pm
The world is likely to have entered its fifth “commodity supercycle” since the start of the 20th century, according to high-profile US JPMorgan strategist Marko Kolanovic, with economic conditions and policy expected to drive a sustained upswing for natural resources.
While reporting season has already began to reveal a surge in earnings among miners in iron ore and gold from commodity market tailwinds, results from BHP, Rio Tinto and Fortescue Metals Group due next week will underline Australia’s exposure to the resources demand from the crisis policy settings introduced last year.
But beyond the immediate lift from initial economic stimulus, Mr Kolanovic argues the global economy may be headed for an extended period of high commodity prices.
“We believe that the last supercycle peaked in 2008 (after 12 years of expansion), bottomed in 2020 (after a 12-year contraction) and that we likely entered an upswing phase of a new commodity supercycle,” he argues in new research.
-----
Feel an election coming on, or is that just the spin making you dizzy?
Columnist and communications adviser
February 13, 2021 — 12.00am
We are not in an election campaign, but we are totally in an election campaign. The date hasn’t been set yet, but narrative hangs heavy in the air.
Anthony Albanese has a hat, an Akubra, which is a sure sign. He is Touring Queensland, another dead give-away. Albanese is not confining himself to one hat – he has to wear many hats to appeal to a diverse electorate. He’s getting his hard hat on, too, so he has the country and the workers of the city covered.
Speaking of which, Labor has a new slogan to frame its industrial relations pitch to workers – “On your side”. It means something, which makes it a good slogan. Even the Prime Minster clearly agrees. He’s been using “We’re on your side” since 2017, when he was Treasurer. He used it again after the partyroom spill that made him PM. And, in case you were wondering how awesome he thinks Albanese’s slogan is, Morrison bunged a quote – “We are on your side” – on the Liberal Party homepage before the last election.
-----
The question Ed Husic wants answered: Why can’t Australia make electric cars?
February 14, 2021 — 12.00am
Labor’s innovation spokesman Ed Husic has been asking himself the same question for five years, since he first visited Tesla’s California factory in 2016: why can’t Australia build an electric car?
Mr Husic, who was elevated to the role of shadow industry and innovation minister last month, says he doesn’t have a plan - yet - for how to make it happen.
But in the two weeks since he took over his dream portfolio the western Sydney MP has visited tech start-ups and medical companies and held round tables in Melbourne, Canberra and Brisbane. He’s even been to a western Sydney exporter of high-end pet food which gets shipped to Japan.
He’s determined to kickstart a conversation about reviving car-making in Australia, even though major manufacturers quit Australia in the last decade despite $30 billion in government subsidies between 1997 and 2012.
-----Coronavirus And Impacts.
-----
Amended Oxford-AstraZeneca COVID-19 vaccine may be needed for South African variant
Updated February 8, 2021 — 7.32amfirst published at 4.02am
London: Early data from a new small-scale Oxford-AstraZeneca vaccine study suggests the jab offers only “minimal protection” against the so-called South African coronavirus variant.
South Africa said it will suspend use of the AstraZeneca shot after data showed it gave minimal protection against the country’s dominant coronavirus variant.
The study from South Africa’s University of the Witwatersrand and Oxford University showed the vaccine had significantly reduced efficacy against the South African variant.
Health officials in Britain are trying to contain the spread of the variant amid concerns that it is more contagious or resistant to existing vaccines. More than 100 cases of the South African variant have been found in the UK.
Oxford researchers expect to have a modified jab to cope with the variant later in the year, the vaccine’s lead researcher said on Sunday.
“We have a version with the South African spike sequence in the works,” Sarah Gilbert, lead researcher for the Oxford team, told the BBC on Sunday.
-----
AstraZeneca Covid-19 vaccine weaker against South Africa strain
· Dow Jones
South Africa will halt a planned rollout of AstraZeneca PLC’s Covid-19 vaccine after a small clinical trial found that it doesn’t appear to protect recipients against mild and moderate illness from a fast-spreading new strain of the coronavirus first detected in the country.
The trial, which enrolled around 2,000 volunteers with a median age of 31, was too small and its participants too young to draw broad conclusions on the vaccine’s overall efficacy in protecting against the disease caused by the coronavirus, especially when it comes to hospitalisations or death. However, its findings contribute to concerns that a mutating virus is rendering existing Covid-19 vaccines less effective and that shots will need to be updated to protect against new virus strains.
Of the 39 volunteers in the AstraZeneca trial that were found to be infected with the new South African variant, 19 had received the vaccine, while 20 had received a placebo, said Shabir Madhi, the trial’s principal investigator and dean of the medical school at the University of the Witwatersrand in Johannesburg. Those numbers would imply an efficacy rate of around 10% at protecting against mild and moderate Covid-19 from the new variant, said Dr. Madhi, although he added that the data were too limited to be statistically significant.
After the results were announced, South Africa’s health minister, Zweli Mkhize, said the country would temporarily halt a planned rollout of the vaccine until there was more information on the vaccine’s efficacy. The country had planned to administer a first shipment of one million doses of the vaccine to health-care workers later this month.
Johnson & Johnson and Novavax Inc., whose vaccines have yet to be authorised in any country, have also found that their shots were less effective in recent human clinical trials in South Africa, compared with trials in the US or the UK. But their vaccines were still found to be 50% or more effective at preventing mild or moderate cases of Covid-19 and even more potent at shielding recipients from severe illness and hospitalisation from the new strain.
-----
https://www.afr.com/world/asia/virus-did-not-leak-from-wuhan-lab-who-20210210-p57137
Virus did not leak from Wuhan lab: WHO
Michael Smith China correspondent
Feb 10, 2021 – 9.15am
The World Health Organisation has concluded a month-long investigation into the origins of coronavirus, which has killed more than 2 million people, without finding any firm evidence to determine how the first humans became infected.
A team of Chinese and international scientists, including one Australian, this week concluded a 28-day investigation in Wuhan which was the central Chinese city where the first outbreaks of COVID-19 became public more than a year ago.
The WHO team dismissed a theory that coronavirus leaked from a laboratory in central China and said it was “most likely” to have been transmitted through an intermediate animal host.
The World Health Organisation's fact-finding mission into the origins of COVID has ruled out the possibility the virus was leaked from a Chinese lab.
-----
CBA’s hit from pandemic far less painful than feared
Stephen Bartholomeusz
Senior business columnist
February 10, 2021 — 12.19pm
The Commonwealth Bank December half result provides another insight into the impact of the pandemic on the banks and the economy. It could have been a lot worse.
While CBA and its peers took their biggest hits last year, when they set aside massive provisions for likely loan losses, the December half was the period when the rolling and protracted lockdowns and the severe restrictions on travel had their most significant impacts.
In the circumstances, the 11 per cent fall in cash earnings to $3.9 billion – a decline somewhat magnified by general provisioning against the risk of future loan losses – isn’t what one might have expected from the country’s biggest bank during the most difficult period for the economy in the post-war period.
Certainly, last March, as the extent of the threat was recognised, the banks and governments feared something far more destructive.
-----
WHO releases report on COVID-19 origin after independent investigation in Wuhan
By Eryk Bagshaw
February 9, 2021 — 10.01pm
A month-long investigation into the origins of COVID-19 has dismissed suggestions that it could have been introduced to humans through a laboratory leak, finding it was most likely to have been transmitted through an intermediate animal host and may have been spread through frozen food.
The World Health Organisation and Chinese investigators on Tuesday announced several key findings including that the virus was likely to have been active outside the Wuhan market for weeks before cases were first detected. The team raised the possibility that the virus could have been present in other regions or countries before the first cases were reported in Wuhan.
But the zoonotic origin of the virus remains a mystery, with investigators finding no clear link to bats, pangolins or other wild animals, while calling for more samples to be taken from felines and other species.
China team lead Dr Liang Wannian, a senior official at the National Health Commission, said mortality rates in Wuhan show there was not likely to be a large spread of the disease or unidentified respiratory pneumonia between October and December 2019.
-----
https://www.afr.com/world/asia/who-s-wuhan-mission-impossible-aids-china-blame-game-20210210-p5718f
WHO’s Wuhan mission impossible aids China blame game
The WHO’s mission to uncover the truth about the origins of the coronavirus in China was always going to be politically fraught.
Michael Smith China correspondent
Feb 10, 2021 – 7.42pm
It was the World Health Organisation’s “mission impossible”.
Conducting a truly independent investigation on the soil of a one-party state determined to deflect the blame for a global pandemic that has killed more than 2 million people was always going to be fraught with complexity.
The fact it happened at all is a reflection of the huge international pressure on China to allow the team of WHO scientists, including one Australian, to spend 28 days in Wuhan investigating the most politically sensitive issue in the world right now.
The investigation culminated in a lengthy press conference on Tuesday night when the team of international and Chinese experts concluded what most of the world’s scientists knew already: the “most likely” cause of infection was from an animal to a human.
It also ruled out the theory spruiked, often hysterically, by the Trump administration that the virus leaked from a laboratory in Wuhan. No surprise there.
-----
It will be six years before the world is vaccinated against COVID-19: experts
By Rachel Clun
February 10, 2021 — 5.28pm
It will take six years to vaccinate enough of the world’s population to reduce the threat of COVID-19, but public health experts say vaccines are no silver bullet and hygiene measures and masks will be part of life for years to come.
Infectious diseases expert Associate Professor Sanjaya Senanayake said the SARS-Cov-2 virus could eventually become another seasonal cold or flu-like virus, but there were some major obstacles to that, including the global vaccine rollout.
“Only about 70 nations have started to vaccinate their populations, and at the current rate of vaccination, it is estimated we won’t reach global coverage of 75 per cent with vaccines for about six years - not one or two years, but six years,” he said.
“In addition, Oxfam has said that by the end of this year, there will be 70 poorer nations where only one in 10 people have been vaccinated.”
Experts speaking at the National Press Club yesterday have ruled out unrestricted international travel for some time - revealing it's unlikely the world will achieve "global herd immunity" from COVID until at least 2027.
-----
Researchers identify conditions that most raise risk of COVID death
By Stuart Layt
February 10, 2021 — 11.00pm
Australian researchers have found chronic kidney disease, cancer, diabetes, and hypertension are the four main conditions contributing to death from COVID-19.
It’s hoped the findings can be used to develop better strategies for managing patients, especially in parts of the world that are still recording a high number of cases.
The Griffith University study pulled in data from around the world looking at 375,859 patients from 14 countries.
Co-lead author Dr Adam Taylor said they were able to use the data to ascertain the four conditions that carry the most risk of death from COVID-19.
-----
Hybrid mutant coronavirus strain labelled ‘of concern’ in Britain
Two mutant coronavirus strains have merged, spiking a testing surge across Britain, as health authorities label the new variant “of concern”.
The mutation is a combination of the South African variant, which has been identified as potentially resistant to vaccines, and the UK variant, which is up to 70 per cent more infectious.
The New and Emerging Respiratory Virus Threats Advisory Group in England have categorised the new mutation first identified in Bristol as a variant “of concern”.
There have been 14 cases in Bristol, four in Manchester, and three cases elsewhere in the UK, forcing major cities to set up more community testing centres in a bid to get the variant under control.
-----
The eight lessons to learn from the year of the plague
The first is that countries that lock down for longer to stamp the virus out have avoided a damaging open-shut cycle.
Jim O'Neill Columnist
Feb 11, 2021 – 12.48pm
It is probably premature to offer an assessment of the COVID-19 pandemic’s possible consequences, not least because there may well be many more twists and turns to come. And once we defeat the coronavirus, some of the pandemic-induced changes to our lives might turn out to have been temporary. But with these caveats in mind, it is possible to begin drawing some conclusions.
First, it seems reasonably clear that once a new, highly infectious and dangerous virus appears, it pays to act aggressively to stamp it out as soon as possible, rather than wait and hope that we learn more. More than a year after the initial COVID-19 outbreak in China, many of the mostly Asia-Pacific countries that took the most aggressive steps to tackle the coronavirus seem to be in a much stronger position than the West.
Recently, for example, Western Australia reacted to a single COVID-19 case by locking down Perth for five days. In Britain, by contrast, the clamour to reopen resurfaces as soon as there is evidence that current hospital admissions and reported deaths have passed a peak, even though the daily rate of new infections is well above 15,000.
Ending lockdown is obviously desirable, but as Britain has learned, any easing of restrictions will be temporary unless the number of active cases declines dramatically.
-----
Amazon coronavirus variant ‘three times more contagious’: minister
By Maria Carolina Marcello
February 12, 2021 — 6.55pm
Brasilia: A coronavirus variant identified in the Brazilian Amazon may be three times more contagious but early analysis suggests vaccines are still effective against it, the country’s health minister said, without providing evidence for the claims.
Under pressure as the variant hammers the state’s capital city Manaus with a devastating second wave of infections, Health Minister Eduardo Pazuello sought to reassure Congress members that the surge of recent months was unexpected but coming under control.
He also told a Senate hearing that Brazil would vaccinate half its eligible population by June and the rest by the end of the year — an ambitious target as the country has barely guaranteed doses for half its population of more than 213 million.
-----
The endemic endgame is nigh
The persistence of acute infections and chronic, debilitating ‘long Covid’ means that the next stage of the pandemic sounds grim. Expecting vaccines to see off this virus is mistaken.
By the Economist
February 12, 2021
Even miracles have their limits. Vaccines against the coronavirus have arrived sooner and worked better than many people dared hope. Without them, the pandemic threatened to take more than 150 million lives. Yet, while the world rolls up a sleeve, it has become clear that expecting vaccines to see off COVID-19 is mistaken. Instead the disease will circulate for years, and seems likely to become endemic. When COVID-19 first struck, governments were caught by surprise. Now they need to think ahead.
To call vaccination a miracle is no exaggeration. A little more than a year after the virus was first recognised, medics have already administered 148 million doses. In Israel, the world’s champion inoculator, hospital admissions among those aged below 60, who have not received a jab, are higher than ever. By contrast, among the largely inoculated over-60s they are already nearly 40 per cent below their mid-January peak and they will fall further.
Although vaccines fail to prevent all mild and asymptomatic cases of COVID-19, they mostly seem to spare patients from death and the severest infections that require hospital admission, which is what really matters. Early evidence suggests that some vaccines stop the virus spreading, too. This would greatly slow the pandemic and thus make it easier to alleviate lockdowns without causing a surge of cases that overwhelms intensive-care units. Those findings, and many more, will harden up over the next few months as more data emerges.
-----
UK strain: use of incorrect figures is more infectious
Let’s get some numbers straight. The UK strain is not 70 per cent more infectious, as we were originally told. It’s not even 50 per cent more infectious, the latest widely quoted figure.
According to the most authoritative source of data on the detailed epidemiology of transmission risk, the UK government executive agency Public Health England, a person who is infected with the UK strain of coronavirus will pass the virus on to 14.7 per cent of their close contacts.
Say somebody infected with the UK strain had 10 close contacts. On Public Health England’s numbers, eight of those contacts would not be infected.
To be
clear, the UK strain is more infectious. Somebody infected with the original
Wuhan strain is likely to pass the virus to 11 per cent of their close contacts,
according to Public Health England. That means the UK strain is roughly 34 per
cent more infectious than the original strain.
-----
UK variant may be 70pc more deadly, scientists say
Benjamin Mueller and Carl Zimmer
Feb 14, 2021 – 8.43am
London | British government scientists are increasingly finding the coronavirus variant first detected in Britain to be deadlier than the original virus, a devastating trend that highlights the serious risks of this new phase of the pandemic.
The scientists said last month that there was a “realistic possibility” that the variant was more lethal. Now, they say in a new document that it is “likely” that the variant is connected to an increased risk of hospitalisation and death.
The British government did not publicly announce the updated findings, which are based on roughly twice as many studies as their earlier assessment and include more deaths from cases of COVID-19 caused by the new variant, known as B.1.1.7.
It posted the document on a government website Friday and said that it had been considered at a meeting of government advisers the day before.
-----
Climate Change.
-----
https://www.afr.com/policy/energy-and-climate/morrison-scores-a-climate-own-goal-20210207-p5707z
Morrison scores a climate own goal
Ruling out a carbon price denies the Coalition the most effective way of getting the technology solution that it wants.
Tony Wood Contributor
Feb 8, 2021 – 3.23pm
In his recent address to the National Press Club, the Prime Minister announced his goal “to reach net zero emissions as soon as possible, and preferably by 2050″. The statement took the government a small step further on its journey towards a credible climate change policy.
Yet, in the same speech, the Prime Minister imposed a significant constraint on his government’s future policy options. “If you don’t get there (to net zero) by technology, there’s only one other way that’s achieved and that is a tax. I will not tax our way to 2050.”
Any form of carbon price or emissions reduction liability on polluters also seems to have been ruled out.
“Technology not taxes” is a catchy slogan. Like many such slogans it sounds like a valid ambition. But this one is based on a false trade-off.
In the quest for lowest cost emissions reductions, technology and carbon prices or taxes are not mutually exclusive.
-----
Global climate action will reshape Australia’s trade
As countries cut emissions and demand for our key fossil fuel exports, we must make adroit shift and seize the big industrial opportunities of a post-carbon era.
Toby Phillips Contributor
Feb 9, 2021 – 12.41pm
Last week at the National Press Club, the Prime Minister said Australia would “reach net zero emissions as soon as possible, and preferably by 2050”. Those final words are key, and represent a shifting tone more in line with our global partners. Just two weeks ago, US President Biden signed an executive order aiming for net-zero by mid-century. Before Christmas, it was Hong Kong. A couple of months before that, Japan and China.
They say a week is a long time in politics, but where will we be in a decade? What about three decades? National discussions about climate change rightly focus on the choices of Australian governments, businesses, and people. But just as important are the global forces shaping Australia’s place in the world.
Global climate action is reshaping Australia’s trade outlook.
The numbers are stark. Looking at Australia’s top 20 trade partners, over 80 per cent of our exports are to countries that have pledged net-zero emissions by the middle of the century (China, South Korea, the UK, the EU, and several more). And Australia’s export mix is highly concentrated in carbon-intensive commodities: 70 per cent of what we sell to those countries is fossil fuels, minerals or metals.
-----
Confected Nationals climate debate ramps up pressure on McCormack
By David Crowe
February 9, 2021 — 7.30pm
There are two ways to make sense of the revolt among some of the Nationals over Scott Morrison’s declaration his government will “preferably” commit to net-zero greenhouse gas emissions by 2050.
The first is mundane. Nationals MPs such as Barnaby Joyce and Matt Canavan will always oppose action on climate change because they doubt the science and question the need to act.
The second is also routine, but more manipulative. Joyce and Canavan, and their small group of followers, want to throw Nationals leader Michael McCormack off balance.
The revolt would not be worth the name without the personal grudges and leadership spills that have plagued the Nationals for about five years.
One essential point is that nobody has set out a new demand. In arguing against farmers being slugged with a costly carbon target, Joyce and Canavan are spurning something the Prime Minister rejected only last week.
-----
Royal Commissions And The Like.
-----
https://www.afr.com/wealth/personal-finance/what-aged-care-could-look-like-20210209-p570zh
What aged care could look like
Private operators and member-led mutual organisations are leading the way in delivering better quality care.
Bina Brown Contributor
Feb 11, 2021 – 12.00am
Canberra’s first independent dementia home is just months away from opening but owner Rodney Jilek is already thinking about replicating the idea elsewhere.
The not-for-profit cottage-style residential aged care option will accommodate up to six “guests” at a time. There will be a house manager, two carers and a registered nurse. It will operate alongside a day therapy centre for people living with dementia.
Jilek, an aged care consultant with 30 years’ experience in the sector, is privately funding the project through his own business (along with a fundraising drive through his registered charity Community Home Australia), which he hopes will become a blueprint for the delivery of dementia care.
Household model
While it will have unique characteristics, including a high use of technology and a focus on normalising residential care with outings and connections to the broader community, it is a household model successfully used in disability care and one repeatedly referred to in submissions to the Royal Commission into Aged Care Quality and Safety, which is due to hand its final report to the government on February 26.
-----
National Budget Issues.
-----
https://www.afr.com/policy/tax-and-super/time-s-up-for-taxation-system-20210204-p56zoo
Time’s up for taxation system
Australia’s top tax architect says reform of distorting taxes such as stamp duty stands head and shoulders above just about everything else to drive the COVID-19 economic recovery.
Ken Henry Contributor
Feb 7, 2021 – 1.04pm
When my colleagues and I sat down in 2008 to begin our comprehensive review of Australia’s tax and transfer systems, we started with a quick scan of the landscape to identify those things doing most damage, and therefore most deserving of our attention.
Stamp duties on property conveyance stood out. These antiquated taxes were levied by our various colonial governments long before Federation. They were used because of administrative simplicity, in times in which it was difficult for revenue authorities to do anything more sensible.
In our consultation paper released in December 2008, we observed that stamp duties are highly inefficient. They discourage transactions, which are the means by which resources are allocated to their highest-value use. Several studies had confirmed that stamp duties have high economic costs relative to other taxes.
We noted that stamp duties may encourage people to continue to live in one house when they would prefer to live in another, and that stamp duties may be responsible for over-investment in large dwellings, by encouraging people to renovate and discouraging downsizing.
-----
Australians tap super for $500m outlay on IVF, weight-loss surgery and dentistry
By Jennifer Duke
February 8, 2021 — 5.38am
Almost 34,000 Australians withdrew more than half a billion dollars from their retirement accounts last year for medical treatments such as IVF, weight-loss surgery and dentistry, amid concerns from the superannuation industry about a surge in applicants taking money out early.
Australian Taxation Office figures show 59,900 applications to access super were made on compassionate grounds in 2019-20, a 10 per cent annual increase. About 33,700 of these were approved in full or in part worth $513.5 million. In the year before, 53,700 applications were made, 31,100 were approved and $456.5 million worth of funds were released. In 2014-15, $184 million was released to 14,000 people.
Applicants are able to ask the ATO to let them use money from their retirement to pay for various treatments, palliative care, home renovations for the disabled, funeral costs or to avoid foreclosure on their home under a scheme allowing superannuation to be accessed for compassionate reasons. This is separate to the COVID-19 superannuation scheme, which allowed struggling workers to withdraw up to $20,000 from their accounts during the pandemic, and is separate to financial hardship access managed by the funds themselves.
-----
Look closely and the RBA’s upbeat forecasts for the economy aren’t that wonderful
Economics Editor
February 8, 2021 — 5.00am
Although everyone knows it’s impossible to know what the future holds, everyone – from prime ministers to punters – asks economists to forecast what will happen to the economy. The economists always oblige. The latest set of official forecasts for our economy were laid before us by the Reserve Bank on Friday. You beaut. Now all is known.
Though economists have an appalling forecasting record, we are undeterred in asking for more, and the economists are undeterred in providing them.
Psychologists tell us people to suffer from “the illusion of control” – the tendency to overestimate their ability to control events. Once we know what’s going to happen, we can duck and weave accordingly.
Maybe economists keep producing their forecasts merely to be obliging, but I suspect they suffer their own illusion: that having a dodgy forecast is better than not having any.
Particularly at times when we’re trying to recover from a recession – recessions the economists rarely if ever saw coming – Reserve Bank governors produce optimistic forecasts, or try to sound upbeat about a not-so-wonderful forecast, for the justifiable reason that what actually happens can, to some extent, be influenced by what enough people expect to happen. People tend to act on their expectations, as part of their illusion of control.
-----
Covid-19 recovery stimulus: Who gets a shot in the arm?
Paul Bloxham
Australian economic policymakers faced significant challenges in 2020, but this year looks likely to be even tougher.
In many ways, their economic policy choices last year were more obvious, less subtle and less politically challenging than the ones that will be faced in 2021. This year, the trade-offs for policymakers will be more complex.
Last year, in the face of the largest peacetime negative economic shock since the Great Depression, all of the arms of economic policy were moving in the same direction.
Fiscal support totalled a massive 15 per cent of GDP and the Reserve Bank cut its cash rate to near zero and took a range of unconventional policy actions, including a large-scale bond-buying program. There were also key forbearance measures, such as safe harbour arrangements for corporate insolvencies and repayment holidays for mortgages.
-----
‘Tax retirees’ super to pay for aged care’: ACOSS
By Jennifer Duke
February 9, 2021 — 5.00am
Retirees could face a 15 per cent tax on superannuation earnings to help fund aged-care services under a federal budget proposal from the Australian Council of Social Service, while the long-term unemployed would be put into training or subsidised work experience.
The social services lobby group is recommending a staggered reintroduction of the superannuation tax over the next three years to bring $2.5 billion worth of revenue into federal government coffers in 2022-2023. This money would be used to fund affordable aged-care services.
Also on the list of proposals is a $370-a-fortnight increase in the base rate of JobSeeker, retaining wage subsidy scheme JobKeeper for affected industries, and government-subsidised work experience and training for those out of work for a long period.
The future of the nation’s superannuation system has become a hot-button issue ahead of the federal budget amid debate about the currently legislated rise of the super guarantee from 9.5 per cent to 12 per cent. There is a growing push from a group of Coalition backbenchers to stop the increase and instead allow first-home buyers to dip into their retirement savings. The federal government is also facing pressure to improve the social safety net after the Reserve Bank governor Philip Lowe last week said the dole should be increased on the basis of “fairness”.
-----
NAB business survey points to ‘ongoing recovery’
Businesses began the new year in an upbeat mood, with corporate confidence climbing in January despite a Christmas period marred by COVID-19 outbreaks, which triggered temporary lockdowns in Sydney and Brisbane and state border closures.
NAB’s business survey for January showed operating conditions retreated from December’s multi-year highs but remained above average and at a level suggesting an expansion in overall corporate activity, the bank’s chief economist, Alan Oster, said.
“The survey continues to point to an ongoing recovery,” Mr Oster said.
NAB’s business confidence index lifted by five points to an above average 10 points, while conditions retreated from 16 points to seven points. A reading above zero indicates more positive than negative responses, and both confidence and conditions have surpassed pre-COVID levels.
The lift in confidence was led by personal and recreational services, which are playing catch-up to other industries such as retail as restrictions progressively ease.
-----
The weak US dollar is at a crossroads: Will it fall even further?
Stephen Bartholomeusz
Senior business columnist
February 11, 2021 — 11.55am
The US dollar is signalling a global recovery but, perversely, is also sending very mixed messages about the prospects for the world’s largest economy itself.
After reaching a three-year high against America’s major trading partners last March, just before markets recognised the severity of the threat of the coronavirus pandemic, the greenback has slumped 12 per cent against the basket of currencies of its major trading partners, depreciating about 13 per cent against the euro and a whopping 27 per cent against the Australian dollar.
For a moment at the start of this month, as the likelihood of Joe Biden’s $US1.9 trillion COVID relief package strengthened, the downward trajectory in the US dollar’s value was halted, only to resume in response to weaker-than-expected economic data.
The explosion in US debt and budget and trade deficits, and the prospect of President Joe Biden’s stimulus package has vastly increased the supply of US dollars.
Short positions against the dollar are at their highest level for nearly a decade (which, with iron ore prices and interest rate differentials is among the key influences on the Australian dollar), and influential economists like Yale’s Stephen Roach are predicting another massive plunge in the greenback’s value.
-----
https://www.afr.com/policy/economy/critics-line-up-as-lowe-loosens-rba-purse-strings-20210210-p5718t
Critics line up as Lowe loosens RBA purse strings
John Kehoe Senior writer
Feb 11, 2021 – 3.32pm
Reserve Bank of Australia governor Philip Lowe has become a surprise lightning rod for criticism as he has overseen the loosest monetary policy in history.
The great experiment of near-zero interest rates and the RBA buying government bonds (in effect printing money) is sharply dividing economic opinion.
Several academic economists, including former RBA officials, complain that Lowe is doing too little to achieve the RBA’s employment and inflation goals.
Former prime minister Paul Keating has been similarly critical of the alleged inertia of the “high priests” at the RBA.
Academics appeared offended by Lowe’s suggestion last Friday that business people on the RBA board are “better at grappling with decision-making under uncertainty” than economists.
-----
Economic recovery ‘locked in’ but could come with $44b interest headache
By Shane Wright
February 12, 2021 — 12.01am
Australia’s recovery from the worst recession since the 1930s is “locked in” but the Morrison government fears the battle to defeat the coronavirus pandemic could leave future taxpayers with an extra $44 billion in interest payments on ballooning debt.
As Labor warns of a political war with the government over the post-pandemic recovery, and signs people reliant on the JobKeeper program are increasingly worried about losing their jobs, the nation’s top Treasury bureaucrat has predicted the economy will strengthen on the back of consumers over the next two years.
Treasury secretary Steven Kennedy said Australia’s control of the pandemic and the amount of federal and state government money pumped into the economy meant the country was well on its way out of recession.
“We’re quietly confident now that the recovery is locked in,” he told the Senate’s COVID-19 committee on Thursday.
-----
Why we’re stuck with low interest rates for a long time
Ross Gittins
Economics Editor
February 12, 2021 — 11.34am
When it comes to interest rates, we’re living in the strangest of times, with rates lower than ever.
Savers are getting next to no reward for lending their money. Does this make sense? Not really. But we’re moving through uncharted waters and aren’t sure how we’ll get out of them, nor what happens next.
When Reserve Bank governor Dr Philip Lowe appeared before Parliament’s economics committee last Friday, he was asked whether we get the interest rates the world forces on us, or whether our authorities are free to set the rates they want.
Lowe’s answer was “we have the freedom, but we don’t”. Huh? “It’s complicated,” he explained.
-----
Demise of JobKeeper to put 100k jobs at risk, says Treasury
9:15PM February 11, 2021
Close to 100,000 recipients of the JobKeeper program who are working zero or very few hours are most at risk of losing their jobs when the scheme expires at the end of March, Treasury secretary Steven Kennedy says.
As economists debate the potential impact from the end of the wage subsidy scheme and coronavirus JobSeeker supplement, Dr Kennedy told a parliamentary committee that he was “quietly confident the recovery is locked in” — provided the virus remained under control. He echoed comments from Reserve Bank governor Philip Lowe last week that the improvement in the unemployment rate may briefly pause come the end of JobKeeper. He said the job losses in the immediate aftermath would be “roughly matched” by employment growth associated with a labour market recovery he argued had been surprisingly strong coming out of the recession.
“I don’t expect it (the end of JobKeeper) to disturb the trajectory of the unemployment rate coming down,” he said, as he foreshadowed material upgrades to Treasury’s jobs outlook in the May budget.
Speaking in the same committee room on Thursday, ATO second commissioner Jeremy Hirschhorn confirmed that about $83bn had been paid out in wage subsidies to February 1.
-----
Extra spending will weigh on budget for years
By Shane Wright
February 13, 2021 — 5.00am
The Morrison government will be spending tens of billions of dollars more than it had planned years after the end of the coronavirus recession, despite its promises to limit expenditure to protect the nation’s finances.
A breakdown of expected budget spending between this year’s mid-year budget update and the 2019-20 update, compiled by the independent Parliamentary Budget Office, shows total expenditure settling at much higher levels than had been anticipated.
This week, Treasury secretary Steven Kennedy said the economic recovery from the recession was “locked in” even as government support measures are coming to an end.
Despite the reduction in support, total payments, including for programs such as the JobKeeper wage subsidy and expenditure on aged care and health, are forecast to be $295 billion higher over the five years to 2023-24 than had been predicted in the 2019-20 mid-year budget update.
-----
Health Issues.
-----
No entries this week.
-----
International Issues.
-----
https://www.afr.com/markets/equity-markets/the-biggest-lesson-of-gamestop-20210208-p570fl
The biggest lesson of GameStop
An economy in which individual fortunes are so closely tied to the health of the stock market rather than income growth is fragile. Speculation, no matter how widely shared, isn’t democracy.
Rana Foroohar Contributor
Feb 8, 2021 – 10.07am
Much has been written about whether the GameStop trading fiasco is the result of illegal flash mobs or righteous retail investors storming a rigged financial system. Robinhood’s decision to block its retail customers from purchasing the stock while hedge funds continued trading elsewhere has turned the event into a David and Goliath story.
But that story is predicated on a false idea, which is that markets that have been “democratised” and that people trading on their phones somehow represent a more inclusive capitalism.
They do not. Markets and democracy are not the same thing, although most politicians — Democrats and Republicans — have acted since the 1980s as if they were. That period was marked by market deregulation, greater central bank intervention to smooth out the business cycle via monetary policy following the end of the Bretton Woods exchange rate system, and the rise of shareholder capitalism.
This combined to begin moving the American economy from one in which prosperity was based on secure employment and income growth, to one in which companies and many consumers focused increasingly on ever-rising asset prices as the most important measure of economic health.
-----
Response to Myanmar coup calls for difficult balancing act
A heavy-handed approach to sanctions may have the unintended effect of driving a member of the ASEAN family into the arms of a resource-hungry China.
Alexander Downer Columnist
Feb 7, 2021 – 4.36pm
One of my observations about the media is that its enthusiasm for or dislike of people is often a far cry from what those people are really like.
The media lionised Megawati Sukarnoputri when she was, in effect, the opposition leader to Suharto. But as president of Indonesia she was pretty ordinary. The media mocked George W. Bush as somebody who was inarticulate and unintelligent. In reality he was charming, sharp and amusing, whatever you might think of his policies.
There are are two people who the media proclaimed as great heroes, both of whom I had the pleasure of meeting. One was Nelson Mandela of South Africa. He was indeed a great and conciliatory figure, but he was tough-minded and could be quite aggressive in pushing his point of view. He was one of the most impressive people I have ever met. He was a hero to me.
The other, Aung San Suu Kyi, in common with Mandela, was and is a champion of democracy. I met her many years ago in her villa in Yangon. She certainly looks demure and speaks flawless English with an English accent. But I was quite struck by how aggressive she was.
-----
Could Biden’s rescue package lead the US down a dangerous road?
Stephen Bartholomeusz
Senior business columnist
February 8, 2021 — 12.46pm
Former US Treasury Secretary Lawrence Summers has provoked a fierce debate in the US by essentially asking whether, with Joe Biden’s proposed $US1.9 trillion ($2.5 trillion) new COVID relief package, there can be too much of a good thing.
In a column published in the Washington Post last Friday, Summers, Treasury Secretary during the Obama administration, warned of the risk that macroeconomic stimulus on a scale closer to War War II levels than normal recession levels would set of inflationary pressures of a kind not seen in a generation, with consequences for the dollar and financial stability.
His commentary triggered a fierce response from the Biden administration. Its senior economic adviser, Jared Bernstein, called them “flat-out wrong” and argued that the risks of doing too little far outweighed the risks of “going big.”
Summers responded to that criticism and a wider debate his opinions had triggered with another column on Sunday in which he said the issue policymakers had to address was quantitative – whether the $US1.9 trillion ($2.5 trillion) plan, when combined with an earlier $US900 billion package – was too large for an economy with extraordinarily loose financial conditions, reasonably rapid growth forecast, unmet public spending needs and a big overhang of private savings.
-----
https://www.washingtonpost.com/opinions/2021/02/04/larry-summers-biden-covid-stimulus/
Opinion: The Biden stimulus is admirably ambitious. But it brings some big risks, too.
Contributing columnist
Feb. 5, 2021 at 5:06 a.m. GMT+11
President Biden’s $1.9 trillion covid-19 relief plan, added to the stimulus measure Congress passed in December with the incoming administration’s strong support, would represent the boldest act of macroeconomic stabilization policy in U.S. history. Its ambition, its rejection of austerity orthodoxy and its commitment to reducing economic inequality are all admirable. It is imperative that safety-net measures for those suffering and investments in vaccination and testing be undertaken rapidly after the indefensible delays of the last months of the Trump administration.
Yet bold measures need to be accompanied by careful consideration of risks and how they can be mitigated. While the arguments for providing relief to those hurt by the economic fallout of the pandemic, investing in controlling the virus and supporting consumer demand are compelling, much of the policy discussion has not fully reckoned with the magnitude of what is being debated.
I agree with the general consensus of progressive economists that it would have been much better if the Obama administration had been able to legislate a much larger fiscal stimulus in early 2009, in response to the Great Recession. Yet a comparison of the 2009 stimulus and what is now being proposed is instructive. In 2009, the gap between actual and estimated potential output was about $80 billion a month and increasing. The 2009 stimulus measures provided an incremental $30 billion to $40 billion a month during 2009 — an amount equal to about half the output shortfall.
-----
George Shultz, Secretary of State under Ronald Reagan, dies at 100
· Dow Jones
George Shultz, a pillar of the Republican foreign-policy establishment whose diplomacy helped seal the end of the Cold War, has died, according to a family statement. He was 100 years old.
Mr Shultz held four different cabinet posts in the Nixon and Reagan administrations and served for six years as President Ronald Reagan’s secretary of state, one of the longest such tenures since World War II. He remained an active voice on national security, economic and environmental issues after leaving government, sometimes taking positions challenging the Trump administration.
A man of strong convictions who nevertheless rarely lost control of his emotions, Mr Shultz played a pivotal role in encouraging Mr Reagan to pursue a dialogue with the Soviet Union’s leaders despite strong opposition from the Pentagon and, at times, the president’s own national-security adviser.
“I always thought of Shultz as a stabiliser,” said John Lewis Gaddis, a Yale University professor and Cold War historian. “If you think of great ships going across the ocean, the captain sets the course, but somebody has to keep it on course.”
-----
Game over in GameStop world will be very painful
The central bank free money game is creating a credit pyramid where everyone depends on everybody else. Sound familiar?
Adrian Blundell-Wignall Columnist
Feb 8, 2021 – 2.09pm
Last month we saw the “Gamestonk” – Elon Musk’s one-word tweet that sent GameStop shares off on another tear. Since then it has spread further with the Reddit community and fellow travellers turning to other equities and to silver ETFs.
This is just one symptom of dangerous exuberance. It is what you get when liquidity is free and sensible regulations are held at bay.
The Reddit community has stumbled into a video games room that might as well be be entitled “free money”. Why not take full advantage?
The mechanics of the game are simple enough. Hedge fund short sellers borrow GameStop (or any similar assessed stock) from their prime brokers and then sell it with a view to buying it back later at a lower price. A reasonable arbitrage activity. Their brokers will lend them the stock willingly and allow them to lever it up with a margin loan. After all, interest rates are zero and the financial system is awash with liquidity.
-----
Takeover of Taiwan by China ‘likely’
The Australian defence department has been warned Xi Jinping’s administration is “highly likely” to attempt to take over Taiwan using “all means short of war” as early as 2024.
Linda Jakobson, a specialist on the fraught Taiwan Straits situation, delivered that assessment in a report handed to the Morrison government last May, weeks after the China-Australian relationship plunged to historic lows following Foreign Minister Marise Payne’s call — without forewarning Beijing — for an inquiry into the origins of COVID-19.
A likely trigger would be the election of a more pro-independence candidate in Taiwan’s 2024 election, which will decide President Tsai Ing-wen’s successor.
“If a strongly pro-independence person is elected in 2024 as president of Taiwan it would be a slap in the face for Beijing’s leadership,” Ms Jakobson told The Australian. “I think that’s really crunch time.”
-----
Donald Trump’s legal woe doesn’t end here
· AFP
There is little chance Donald Trump will be convicted by the US Senate of inciting an insurgency but his legal troubles won’t end with the conclusion of his second impeachment trial starting on Wednesday AEDT.
The former president could soon be indicted on criminal charges, not to mention the multiple civil actions that have been filed against him.
The former New York property tycoon, now ensconced in his luxurious Florida residence, is no stranger to the legal system, with his army of lawyers long accustomed to defending him and attacking his opponents during civil hearings.
Now that Mr Trump is again a mere citizen without the protection of presidential immunity, he risks the unprecedented infamy of being indicted.
-----
https://www.afr.com/world/north-america/the-impeachment-trial-no-one-but-trump-wants-20210209-p570vm
The impeachment trial no one but Trump wants
Jacob Greber United States correspondent
Feb 9, 2021 – 2.26pm
Joe Biden doesn’t want it and many of his fellow Democrats aren’t that keen.
Republicans – who are at each other’s throats – most certainly aren’t on board, with the bulk of their senators already declaring the whole thing to be unconstitutional.
Yet the only person who seemingly stands to benefit from this week’s impeachment trial on charges of inciting insurrection ahead of the January 6 Capitol Hill invasion is Donald Trump himself.
Ever since his ignominious social media “deplatforming” over the past four weeks or so, the Trump media juggernaut has ground to a halt.
-----
Lachlan Murdoch vows to stay true to America’s ‘centre-right’ audience
Jacob Greber AFR correspondent
Feb 10, 2021 – 6.27am
Lachlan Murdoch has defended Fox New’s coverage of last year’s US election while vowing to maintain the network’s strong focus on America’s “centre-right” audiences and rejecting any prospect of pursuing upstart pro-Trump challengers like One America News for additional market share.
Describing Fox’s “significant” competitors like CNN and MSNBC as “far left”, Mr Murdoch - chief executive of Fox Corp and Rupert Murdoch’s eldest son - said that a “lot’s been written” about the network and that more would likely come.
“In the journalism business - the journalism trade - what you do is work out what your market is and you produce the best product you can possibly produce for that target market, for your readers or your listeners, or your viewers,” he said on a conference call for investors on Tuesday (Wednesday AEDT).
“The success of Fox News throughout its entire history has been to provide the absolute best news and opinion for a market that we believe is firmly centre right.”
-----
https://www.afr.com/world/asia/why-the-anglosphere-sees-eye-to-eye-on-china-20210209-p570rd
Why the Anglosphere sees eye to eye on China
The idea of an Anglosphere is taking on an unexpected contemporary relevance. The increasingly assertive behaviour of China is bringing together a group of English-speaking countries, all of whom have adopted more confrontational policies towards Beijing.
Gideon Rachman Columnist
Feb 9, 2021 – 1.01pm
As a general rule, it is a good idea to be wary of people who bang on about the “Anglosphere”. In Britain, it is an idea that has a strong whiff of imperial and World War II nostalgia about it. The notion harks back to Winston Churchill, who wrote a four-volume history of the English-speaking peoples.
Now, however, the idea of an Anglosphere is taking on an unexpected contemporary relevance. The trigger is the increasingly assertive behaviour of China, which is bringing together a group of English-speaking countries, all of whom have adopted more confrontational policies towards Beijing.
The Trump administration started a trade war with China and ramped up naval operations in the Pacific. A willingness to confront Beijing is clearly going to persist, in modified form, during Joe Biden’s administration. The new US President has promised “extreme competition” with China. The first phone call between Antony Blinken, US Secretary of State and Yang Jiechi, his Chinese counterpart, was spiky.
-----
George Shultz reminds us the GOP wasn’t always the Trump party
The legendary problem-solver was a throwback to an earlier age when the Republican Party wasn’t all about trouble-making on TV and Twitter.
Max Boot
Feb 9, 2021 – 12.38pm
Most Republicans continue to defend a president whose legacy is more than 460,000 COVID-19 deaths, the storming of the Capitol and the separation of immigrant children from their parents. Thus today’s Republican Party has become known for irrationality, racism and incompetence.
Some argue that it was ever thus – that nothing has really changed since the days of Barry Goldwater. It’s true that the GOP’s current maladies have deep roots. But in the past, far-right extremists did not define the totality of the party.
The death of George Shultz at 100 should remind us of that. He was a throwback to an earlier age when the Republican Party routinely produced competent and moderate administrators. In the quarter-century from 1968 to 1992, the GOP was seen as the “natural” party of governance because the national Democratic Party was said to have gone too far to the left.
-----
Mitt Romney is the model for a new Republican party
If there is a future for US conservatism beyond hot-tempered quackery, Romney points the way. What marks him out as an agent for change is that he does not stop at a moral stand against Trump.
Janan Ganesh Contributor
Feb 11, 2021 – 11.11am
If nothing else, the trial of Donald Trump in the US Senate will afford teachers of game theory a case study for the age. It is in the collective interest of sensible Republicans in that chamber to convict the former president over last month’s Capitol siege. It is in no individual senator’s interest to taste the ensuing wrath of his fans.
Republicans must either co-ordinate to pool their risk — they can’t all be hounded — or let Trump off. He can book his acquittal party now.
The likeliest volunteer for the torment of going against Trump is Utah senator Mitt Romney. No one who sought converts to Mormonism in 1960s France is unacquainted with thankless work. The most prominent latter-day saint in the US remains a glutton for it.
Last February, Romney alone among Republican senators voted to remove Trump over his dealings with Ukraine. Of late, he has stressed the legitimacy of convicting a former president. Elliptically, he wants a “meaningful consequence” for the incitement of violence on January 6.
-----
Not so SPAC-tacular: Wall Street’s latest $US100 billion gamble
By Andrew Ross Sorkin
February 11, 2021 — 10.52am
In Wall Street’s usually brash way, a new saying is making the rounds. It isn’t in good taste, but it speaks to a phenomenon that is transforming finance and corporate America.
“I know more people who have a SPAC than have COVID,” several financiers have told me recently. (If you’re wincing, you’re not alone. I am, too.)
SPAC stands for special purpose acquisition company, the biggest thing in financial markets of the moment. Hundreds of these publicly traded shell companies are being created by everyone from KKR, a leveraged-buyout firm, to Alex Rodriguez, a baseball player turned entrepreneur. Just on Tuesday, football player Colin Kaepernick filed for his own $US250 million ($323 million) SPAC.
These vehicles have only one purpose: to find a private company and buy it, usually within two years. SPACs are sometimes known as “blank cheque” companies — as in, investors give them a blank cheque to go buy a business, sight unseen.
-----
https://www.afr.com/policy/economy/why-biden-is-ready-to-go-much-bigger-than-obama-20210210-p5719n
Why Biden is ready to go much bigger than Obama
The US President has learned caution coming out of the gate doesn’t store up political capital to do more things later, it makes it harder.
Paul Krugman
Feb 11, 2021 – 12.36pm
A dozen years ago, just before Barack Obama was sworn in as president amid the Great Recession, I wrote a disconsolate column titled “The Obama Gap”. At a time when many viewed the president-elect as a transformational figure, I lamented the caution of his economic policy. His proposed stimulus, I argued, would fall well short of what was needed.
Sadly, I was right. And as I also warned at the time, Obama didn’t get a second chance; the perceived failure of his economic policy, which mitigated the slump but didn’t decisively end it, closed off the possibility of further major action.
The good news – and it’s really, really good news – is that Democrats seem to have learned their lesson. Joe Biden may not look like the second coming of FDR; Chuck Schumer, presiding over a razor-thin majority in the Senate, looks even less like a transformational figure, yet all indications are that together they’re about to push through an economic rescue plan that, unlike the Obama stimulus, truly rises to the occasion.
In fact, the plan is aggressive enough that some Democratic-leaning economists worry it will be too big, risking inflation. However, I’ve argued at length that they’re wrong – or, more precisely, that, as Treasury Secretary Janet Yellen says, the risks of doing too little outweigh any risk of overheating the economy. In fact, a plan that wasn’t big enough to raise some concerns about overheating would have been too small.
-----
CBO expects $3trn deficit before Biden relief plan
Josh Boak
Feb 12, 2021 – 6.34am
The Congressional Budget Office says the federal government is on track for a $US2.3 trillion ($3 trillion) deficit this year, down roughly $US900 billion from last year when the coronavirus pandemic led Congress to provide historic amounts of financial aid.
Stronger economic growth has helped to reduce the anticipated shortfall for this year. Still, the deficit could soon be revised upward if President Joe Biden’s $US1.9 trillion coronavirus relief package becomes law.
The additional aid — coming after roughly $US4 trillion was approved last year — would add more red ink once enacted, but isn’t included in Thursday’s CBO projections.
Excluding the Biden plan, this year’s deficit will equal 10.3 per cent of gross domestic product, which is a measure of the total value of the economy’s goods and services. The past two years have the highest deficits relative to GDP since 1945.
-----
https://westpaciq.westpac.com.au/Article/46740
The US economy in 2021: stimulus-fuelled strength to be seen from Q2
Elliot Clarke
February 11, 2021
Ultra-accommodative policy and rapidly declining COVID-19 cases will see a sharp acceleration in US growth from Q2.
The past three months has been a defining period for the US. Politically it marked the end of the Trump administration and the beginning of President Biden’s tenure in the White House, importantly with a favourable balance in Congress. Regarding COVID-19, a decisive turn in the US contagion was seen: the daily new case count dropping from around 250k in early January to circa 100k the past seven days.
These two factors are expected to define the US’ 2021 outlook. By the end of the March quarter, we expect President Biden’s $1.9trn stimulus bill to have been passed with limited change. And, through the middle of the year, the ongoing health and economic burden associated with COVID-19 should dissipate, allowing a return to more normal trading conditions.
-----
Republicans should impeach Trump but cost now will be high
Columnist, co-host of Ten's The Project and academic
February 11, 2021 — 11.45pm
In the lead-up to Donald Trump’s second impeachment trial this week, I’ve been wrestling with a deceptively complex question: does it matter if he’s convicted?
His presidential term is finished, and while a conviction would mean he cannot run again in 2024, it might also mean someone of similar political inclinations – only more competent – takes his place (and his voters) instead. In that scenario, a Trump re-run would have been a better result.
Still, I think a conviction does matter. Not of itself, but because it can only happen with significant Republican help. Democrats condemning Trump for insurrection means little except further polarisation. Republicans doing it is something else entirely.
It would almost certainly tear the party apart and may well drive it into the political wilderness for a generation if a new Trumpist party is created as a result. That is both why it almost certainly won’t happen, and why it would be so heroic if somehow it did.
-----
‘Principled conservatism’: Dozens of former Republican officials in talks to form anti-Trump third party
By Tim Reid
February 12, 2021 — 8.39am
Washington: Dozens of former Republican officials, who view the party as unwilling to stand up to former President Donald Trump and his attempts to undermine US democracy, are in talks to form a centre-right breakaway party, four people involved in the discussions told Reuters.
The early stage discussions include former elected Republicans, former officials in the Republican administrations of Ronald Reagan, George H.W. Bush, George W. Bush and Trump, ex-Republican ambassadors and Republican strategists, the people involved say.
More than 120 of them held a Zoom call last Friday to discuss the breakaway group, which would run on a platform of “principled conservatism,” including adherence to the Constitution and the rule of law - ideas those involved say have been trashed by Trump.
The plan would be to run candidates in some races but also to endorse centre-right candidates in others, be they Republicans, independents or Democrats, the people say.
Evan McMullin, who was chief policy director for the House Republican Conference and ran as an independent in the 2016 presidential election, told Reuters that he co-hosted the Zoom call with former officials concerned about Trump’s grip on Republicans and the nativist turn the party has taken.
-----
Don’t count Republicans out of the running
What happened to the Democratic Party? This is not a question you’re likely to hear at a cocktail party, or were likely to hear back in pre-COVID days when people still had cocktail parties. For the past four years, in capitals around the world and in countless opinion pieces, journal articles and books, the focus has been on the transformation of the Republican Party, the party of Abe Lincoln, into the party of Donald Trump.
This transformation has been the subject of much hand wringing and, occasionally, some genuine inquiry. Even the genuine inquiries, however, have tended to neglect something that should be obvious. In a two-party system, changes on one side are often more or less reactions to changes on the other. In particular, the right-wing party in a two-party system tends to react to developments in the left-wing party.
If the Republican Party has changed, it stands to reason that it has at least something to do with changes in the Democratic Party.
The transformation of the Democratic Party has often been obscured during the past four years by the antics of Trump but is now highlighted in the flurry of executive orders and announcements emanating from the budding Biden administration.
-----
Trump’s impeachment trial a bear trap for Republicans
The Times
February 12, 2021
In Jonathan Lynn’s 1992 comedy My Cousin Vinny, Joe Pesci plays a small-claims personal injury lawyer from Brooklyn with no trial experience suddenly thrust into an Alabama courtroom to defend a young family member and his friend wrongly charged with murder.
The hapless and garrulous lawyer has no clue about court procedures, legal dress or anything else for that matter and the accused seem doomed. But Vinny is nothing if not persistent and his unorthodox courtroom manner eventually produces crucial evidentiary breakthroughs that lead to the family members’ acquittal.
Donald Trump is a well-known aficionado of popular culture and no stranger to unorthodox legal strategies so it’s possible that in mounting his defence this week in his second impeachment trial, he was invoking the spirit of Vinny Gambini.
Just days before the trial began in the US Senate, Trump abruptly parted company with much of the legal team he had originally hired to defend him against the charge of incitement to insurrection. His wrath had been fired, it seems, by disagreements over the strategy they planned to pursue, as well as by the personal tensions that attend almost any interactions with the notoriously prickly former president.
-----
Donald Trump beaten to the book punch by niece Mary
When it comes to post-presidential memoirs, it looks like Donald Trump will be beaten to the punch by his niece Mary Trump, who is set to release a second damning book about her uncle.
Dr Trump, a clinical psychologist with an interest in post-traumatic stress disorder, has written The Reckoning: America’s Trauma and Finding a Way to Heal.
She will argue that Mr Trump, the brother of her late father Fred Trump Jr, turned all of America into a “macro version of my malignantly dysfunctional family’’.
The book will be published in July, with Allen & Unwin securing the Australian distribution rights. It follows the author’s best-selling 2020 book about the Trump family, Too Much and Never Enough.
That book was highly critical of Mr Trump and that will continue in the follow-up, which will accuse him of, among other things, mishandling the coronavirus pandemic.
-----
https://www.afr.com/policy/foreign-affairs/chaotic-america-means-troubled-world-20210212-p571w5
Chaotic America means troubled world
The West pins its hopes on a rules-based liberal order. But that doesn’t work if the US standard-bearer is dysfunctional.
Madeleine Nyst Contributor
Feb 12, 2021 – 12.07pm
We’ve all seen the images and videos. Aided by smartphone technology, the rest of the world got a front-row seat when a violent mob assaulted police officers and forced its way into the US Capitol as part of an insurrection encouraged by former president Donald Trump.
As if we could ever forget the events of that day, it’s been front and centre again this week as Trump’s second impeachment trial began.
The democratic norms that people refer to when talking about the “rules-based order” were shattered as rioters – aided by their inciter-in-chief – attempted to disrupt the peaceful transition of executive power in the world’s leading democracy.
Countries vying for superpower status looked on with glee as America provided perfect fodder for their arguments against democracy.
-----
https://www.afr.com/world/north-america/biden-is-the-big-spender-america-wants-20210213-p5725p
Biden is the big spender America wants
The GOP’s ideological rigidity in a time of economic crisis may matter more, politically, than its rejection of democracy and rule of law.
Paul Krugman
Feb 13, 2021 – 5.47am
The state of US politics is horrifying.
A sustained campaign of lies on right-wing media — echoed by nearly half of the Republican senators — has convinced almost two-thirds of Republicans that the presidential election was somehow stolen.
These lies set the stage for the January 6 attack on the Capitol, but a great majority of Republican senators appear set to acquit Donald Trump for his undeniable role in promoting that attack.
Yet President Joe Biden’s plans to rescue the economy command overwhelming bipartisan support.
My sense is that the remarkably strong public consensus in favour of Bidenomics has largely flown under the radar. To be sure, I’m not saying that the surprising unity among voters (but not politicians) on economic policy compensates for the terrifying fact that one of our two major parties no longer accepts the legitimacy of elections it loses. But it’s still important for America’s future.
-----
America can’t afford to get it wrong on debt and deficits
America’s top policymakers are finally having a serious debate about debt and deficits. If they get it wrong, the Republic itself could be at stake.
Jacob Greber AFR correspondent
Feb 12, 2021 – 4.53pm
In politics the only crisis that really matters is the one you see today. Which is why American fiscal policy – where the consequences of misjudgment are almost always a problem for someone else in a political galaxy far, far away – remains a realm of unprincipled opportunism and can-kicking compromise.
Crisis after crisis have seen presidents and Congress – aided by the Federal Reserve – relentlessly ratchet up a debt-machine that now seems truly unbounded.
Since COVID-19 shut down the US economy and sent markets into a meltdown a year ago, the Fed’s balance sheet has ballooned by $US3.3 trillion ($4.3 trillion), with chairman Jerome Powell promising to continue buying bonds at a rate of $US120 billion per month.
On the fiscal side, the independent Congressional Budget Office revealed on Friday (AEDT) that US federal debt is rising so fast it will be bigger than the US economy this year and is expected to grow by $12.6 trillion by 2031. Notably that calculation doesn’t include any of the Biden administration’s big-ticket spending plans.
-----
Glaring facts highlight the danger of Donald Trump
Donald Trump’s impeachment trial may be flawed, but it has served as a searing indictment of his culpability in the Capitol riots and has probably dashed any hopes he had of running for president again.
While Trump will not be convicted in the Senate because so many Republicans are still fearful of crossing him, this public trial has done him enormous damage in the court of public opinion.
This impeachment trial has attracted strong ratings across America, giving voters a new insight into how dangerous the storming of the Capitol was and of how irresponsible Trump’s actions were in inciting them.
Over two days, Democrat impeachment managers put together a compelling case that Trump was guilty as charged of inciting his supporters to storm the Capitol.
-----
Senate acquits Trump of inciting riot at US Capitol
Feb 14, 2021 – 7.56am
Washington | Senate acquits former President Donald Trump of inciting riot at US Capitol, ending impeachment trial. The vote was 57-43.
The vote gives the former president an historic second acquittal in an impeachment trial.
House Democrats, who voted a month ago to charge Trump with “incitement of insurrection,” needed two thirds of the Senate, or 67 votes, to convict him.
The Democrats argued in the short trial that Trump caused the violent attack by repeating for months the false claims that the election was stolen from him, and then telling his supporters gathered near the White House that morning to “fight like hell” to overturn his defeat.
House Democrats wrapped up their impeachment case against Donald Trump on Saturday (Sunday AEDT) after a tumultuous morning in which they gave up a last-minute plan for witness testimony that could have prolonged the trial and delayed a verdict on whether the former president incited the deadly Capitol insurrection.
-----
Impeachment trial: Donald Trump acquitted of inciting insurrection
Donald Trump has accused the Democrats of transforming justice into a “tool of political vengeance,” after the US Senate voted to acquit him of inciting insurrection on January 6.
After a week-long trial, the Senate voted 57 to 43 to convict the former president, short of the two thirds majority needed for a guilty verdict.
All 50 Democrats voted to convict, joined by seven Republicans. Sixty-seven votes were required to convict.
In a statement released minutes after the vote on his second impeachment, Mr Trump claimed the Democrats were attempting to “cancel” opposing viewpoints.
-----
Biden confronted China in call to Xi - and that’s good for Australia
February 12, 2021 — 2.15pm
If anyone was unsure whether Joe Biden would adopt a hard line on China, his first phone call with Xi Jinping should leave no one in doubt.
Biden’s posture on China, so far, has been good for Australia.
There seemed to be a view floating around in sections of the Australian commentariat in recent weeks that Biden’s re-engagement with Beijing could leave Canberra in the dark.
Former public service chief Martin Parkinson on Wednesday said the election of the new US President would make it even more difficult for Australia to manage its deteriorating relationship with Beijing because the US had maintained open channels of dialogue.
-----
He saved the euro, now Draghi is charged with saving Italy, if not Europe
By Jason Horowitz
February 13, 2021 — 3.49pm
Rome: Mario Draghi, a giant of Europe largely credited with saving the euro, has accepted the Italian President’s bid to form a new government, announcing a cabinet of experts mixed with experienced political hands, at once seeking to reassure financial markets and tame a potentially unruly coalition of former rivals.
The former European Central Bank chief, who is expected to easily surpass the formalities of confidence votes in Parliament next week, will be tasked with guiding Italy through a devastating and unpredictable pandemic.
But he also must secure its future by wisely and efficiently spending a once-in-a-generation relief package financed by debt raised for the first time collectively by all European Union countries. If he succeeds, he could set a precedent. If he fails, the EU will be less likely to approve such a package again.
Draghi arrives as prime minister in a position of rare clout in Italian politics.
-----
I look forward to comments on all this!
-----
David.
