G7 – the view from the top is fine, if a bit fuzzy

The omens were good for the G7 summit at Carbis Bay in Cornwall.  Untypical blazing sunshine and a victory for England’s footballers in the Euro Championships put the hosts in fine fettle (qualified only slightly by the NZ cricketers’ series win).  

The first and most important objective was achieved: the world leaders managed to agree not to disagree. Even better, no one called the host, Britain’s PM Boris Johnson, “weak and dishonest”, no matter how much they might have been tempted.

But despite the 25 page summit communique, direction and leadership was a little harder to find.

Continue reading “G7 – the view from the top is fine, if a bit fuzzy”

Alarm bells start clanging in the White House as Biden struggles with his legislative programme

President Joe Biden has passed his first 100 days in office, generally popular, but facing increasing challenges. He commands a bare majority in the Congress – six seats in the lower house and 50-50 in the senate.

On the international stage he has restored much of America’s prestige and reputation, certainly in Europe and Asia.  But there is no movement on trade. Even close friends like Britain can make no progress. 

Biden is unlikely to engage with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) either. 

All this can be put down to strong opposition within the Democrats and the union movement which heavily backed Biden’s campaign.

Nightly television screens are flooded with advertisements “explaining” how Biden will restore the US economy, install a new green energy campaign, by building strong union jobs. In reality, his arguments are not too different from Donald Trump’s “Make America Great Again” campaign pledge. Biden continually pushes a “buy American” line. Continue reading “Alarm bells start clanging in the White House as Biden struggles with his legislative programme”

Thinking big – Biden’s spending programme signals shift in thinking about role of the state in the economy

Here’s a Think Big project of which even Rob Muldoon would have been proud.  US President Joe Biden has launched a $US2.3 trillion infrastructure plan designed to fix roads and bridges, replace pipes, expand broadband internet access and boost funding for research and development.

Might we need something similar here rather than tinkering with light rail and broadcasting?

The infrastructure plans would water the eyes of an old Minister of Works. There’s $US621 billion to modernise transportation infrastructure, for starters.  But then there’s $US400 billion to help care for the aging and those with disabilities, $US300 billion to boost the manufacturing industry, $US213 billion on retrofitting and building affordable housing and $US100 billion to expand broadband access, among other investments

There are plans to modernise 20,000 miles of roadway, build 500,000 electric-vehicle charging stations, replace the country’s existing lead pipes and service lines, repair aging schools, fix the ten most economically significant bridges in the country in need of reconstruction, repair the worst 10,000 smaller bridges, and provide critical linkages to communities.  And plans to replace thousands of buses and rail cars, repair hundreds of stations, renew airports, and expand transit and rail into new communities.

Home care for the elderly and disabled will be expanded. Billions of dollars will go into semi-conductor manufacturing. More of the country’s electricity will be generated from low-carbon sources, with a goal of eliminating carbon emissions from the power grid by 2035. Continue reading “Thinking big – Biden’s spending programme signals shift in thinking about role of the state in the economy”

No need to worry; the consensus says inflation isn’t going to be a problem

Ever since the 2008 financial crisis, pessimists have been saying we are due a global inflation surge. So far they’ve been wrong. The world’s economies, particularly the rich ones, have sucked up fiscal and monetary stimulus and the biggest official concern has usually been that the inflation rate is too low.

But even a stopped clock eventually shows the right time.  Given Covid-induced monetary and fiscal overdrive, might the worriers finally be proved right?

Continue reading “No need to worry; the consensus says inflation isn’t going to be a problem”

US gets in behind vaccine campaign for S-E Asia as Biden reverses Trump’s foreign-policy settings

The United States is quickly making clear it has returned to the world vacated by Donald Trump with President Joe Biden joining Australia, India and Japan to launch one billion doses of anti Covid19 vaccine across South East Asia.  Already he has spoken with European leaders, calming fears over disengagement and NATO.

Next month he will greet Japanese prime minister Yoshihide Suga at the White house, his first official guest.  The White House is carefully managing the 78-year-old president’s timetable and he is expected to accept few foreign leaders in Washington DC.

The Johnson & Johnson vaccine campaign has been crafted with his three partners in “the Quad”. This group  emerged in 2004 when the countries co-operated on disaster relief after a tsunami badly damaged Indonesia. US officials insist it is not anti-China and has no strategic implications.

Japan and the US will pay for the vaccine which will be made in India and distributed by Australia.  US officials say the decision has taken the Quad to a new level and it will now work on other issues including climate change and emerging technologies. Continue reading “US gets in behind vaccine campaign for S-E Asia as Biden reverses Trump’s foreign-policy settings”

Economists expect US stimulus package to trigger fastest GDP growth since 1983

Barely seven weeks into his presidency, Joe Biden has scored a significant victory with the passage of his massive $US1.9 trillion stimulus bill. This provides another round of $US1400 cheques, aid for schools and state governments along with assistance for small businesses.

The relief package is projected to help propel the US economy to its fastest annual growth in nearly four decades and help reduce poverty although some economists fear it will revive inflation.

Economists surveyed by the Wall Street Journal have raised their average forecast for 2021 economic growth to 5.95%, measured from the fourth quarter of last year to the same period this year. Last month they put it at 4.87%.

The new forecast would represent the US economy’s fastest growth since 7.9% in 1983.

The economists expect consumer prices will rise 2.48% by December over December 2020 earlier and think employers will add an average 514,000 jobs a month over the next four quarters. Continue reading “Economists expect US stimulus package to trigger fastest GDP growth since 1983”

It’s open and shut – lessons from the US on the effects of differing strategies for tackling Covid-19

The debate over opening New Zealand during Covid-19 is picking up.  A year on, tempers and patience are fraying and the government so far displays no indications of longer-term planning.

Two states in the US have recorded contrasting experiences and results.

New York’s Democrat governor, Andrew Cuomo, shut down the state straight away and many of his rigid policies remain in place.  Down south in Florida, Republican Governor Ron DeSantis took the opposite position.

Agreed, New Zealand and the US are vastly different, but the comparisons between the states of New York and Florida demonstrate how returning to an open economy has brought economic advantage.

Andrew Cuomo is something of a raconteur at home centre-stage.  He became a national hero with his daily media conferences urging New Yorkers to double down, bear the costs and consequences.  He was also the most voluble and consistent critic of President Donald Trump who, in the early days, maintained the virus would be gone by spring, or something.

DeSantis was the very opposite.  Reticent, not a convincing public speaker, he was among the first to lift his state lockdown, adopting a strategy of protecting the vulnerable while keeping businesses and schools open.  Significantly, he was close to Trump who by that time had moved his residence to the Sunshine state away from New York. Continue reading “It’s open and shut – lessons from the US on the effects of differing strategies for tackling Covid-19”

Biden has been busy mending fences but keeping progressive Democrats corralled will be challenging

Citizen Donald Trump’s second impeachment trial is over.  Much of the US enthralled and horrified by how close America came to an insurrection on January 6, but President Joe Biden is forging ahead.

Nearly a month into his job, he has set about mending fences with an enthusiasm that belies his years.  He had a torrid two-hour phone call with China’s president  Xi-Jinping, chiding him over his treatment of Muslim Uighurs and upholding Trump’s designation of the situation as “genocide”.

He has promised Beijing tough commercial competition once the US economy revives – due later this year, according to the forecasters. 

Likewise, he was hard-nosed with Russia’s Vladimir Putin, raising the poisoning and imprisonment of Alexei Navalny.

In what so far has been a symbolic gesture, he has returned the US to the UN Human Rights Council, a group of 47 countries whose own record on the subject is debatable. He has ordered a review of arms sales and pulled US support for the civil war in Yemen.  

He says he will soften Trump’s harsh approach to refugees and take in 125,000, up from 15,000. Continue reading “Biden has been busy mending fences but keeping progressive Democrats corralled will be challenging”

Vaccine politics look like normal politics – just more extreme

Point of Order has been consistent in anticipating an irritable post-Brexit relationship between Britain and the EU.  But who would have thought vaccine politics would develop as a major flashpoint, let alone a possible relationship breaker?

Even hyper-critical Brits have had to acknowledge that the UK government is a leader in the global vaccination rollout.  And as more background information seeps into the public arena, the British government’s decisiveness in supporting vaccine development, committing early to contracts and driving mass vaccination is looking better and better.

But the same comparisons spell political danger for European politicians. Co-ordination by the EU appears to have resulted in slowness: slowness in making commitments, in tweaking the production process and in approving the product.

Continue reading “Vaccine politics look like normal politics – just more extreme”

He’s bellicose, vulgar and – what else? – oh, yes, he won’t be attending the inauguration of Joe Biden

Donald Trump’s awful presidency expires at midday on Wednesday [US time] when Air Force One will have deposited him in Florida. He retreats to his Mar-a-Lago resort and Joseph R Biden Junior takes command of the White House.

Trump’s has been an unpleasant presidency, brought about largely by his own bellicosity, vulgarity and occupation of a different universe while being unable or unwilling to accept advice from all but a rapidly dwindling circle of friends and advisers.

From Day One he argued he would be defeated at the next election only by a rigged ballot with fraudulent voting.  This has been a constant from his swearing-in to his departure – and secured the support of at least 60% of Republican voters.

By last Friday, the White House was nearly empty.  This week only the ghosts and a couple of stalwarts remain. Continue reading “He’s bellicose, vulgar and – what else? – oh, yes, he won’t be attending the inauguration of Joe Biden”