Correction: Britain’s gas crisis means Europe’s gas crisis

Remember the 1970s?  We were going to run out of oil and everything revolved around energy prices.

America got into wars because of it and built an enormous strategic stockpile; NZ had carless days and the hydrocarbon developments of Think Big, the last of the great state-directed development projects (well … until the renewables project, national fibre broadband and the distortions of the Resource Management Act that is).

Europe’s natural gas crisis has the potential to head in a similarly dominating direction.

Continue reading “Correction: Britain’s gas crisis means Europe’s gas crisis”

New Zealand’s absence from AUKUS is very much part of the debate

The immediate reaction in the UK to the AUKUS announcement was focused less on the UK’s new commitment and more on the lamentations of French politicians at the loss of a $90 billion Australian submarine deal.  It was left to former PM Theresa May to probe unsuccessfully the extent of Britain’s obligation to defend Taiwan.

Chuckles aside, you might think that anything which outrages France and China has something going for it.  

Continue reading “New Zealand’s absence from AUKUS is very much part of the debate”

While Biden’s challenges grow, Christie shows signs of limbering up for a tilt at the Republican nomination

America spent the weekend commemorating the 9/11 attacks on the World Trade Centre in New York, the Pentagon in Washington DC and at Shanksville, Pennsylvania where the fourth terrorist-commandeered aircraft crashed.

President Joe Biden led proceedings along with former presidents George W Bush, Barak Obama and Bill Clinton.  Donald Trump was conspicuous by his absence – intentional on the part of the White House.

The public mood appears pessimistic, reflecting the cost of 9/11, the loss of some 7000 US servicemen and women in the wars in Afghanistan and Iraq and the resurrection of  the Taliban, aligned with a perception that the US has lost both respect and its way in the world.

Trump continues to tease supporters and opponents alike over whether he will run in 2024.  Most analysts and pollsters feel his decision won’t be made until after the mid-term elections in November 2022 – and how Biden and the Democrats rate in the polling.

Biden has had an awful August and early September. Even his own advisers agree the withdrawal from Afghanistan was botched, leaving many behind and unnerving allies around the world.

The South of the US suffered a hurricane which caused billions of dollars of damage from New Orleans to New York and caused several deaths.

California’s wildfires rage unchecked and the state is rapidly running out of electricity thanks to low hydro lake storage in neighbouring states and the state government’s decision to shut down nuclear, coal and gas-fired power stations. Continue reading “While Biden’s challenges grow, Christie shows signs of limbering up for a tilt at the Republican nomination”

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”