Wry & Dry

Hunt for Red September. Dr. Strangelove. Time to man up.

Hunt for Red September

In a masterclass blending of Machiavelli [1], Sun Tzu [2] and anyone whomever upset Charles de Gaulle [3], PM Jimmy Morrison has shown the first evidence that he does have a spine and bit of leadership. 

And in so doing he has annoyed more people than Chairman Dan's best day on his 2-hour daily media conferences.

1.  The French

Mon Dieu! Yesterday's announcement to scrap Australia's disastrous submarine building contract with France, entered into in 2016 by former Francophile PM Croesus Turnbull, will ensure that Jimmy doesn't get his Christmas hamper of French goodies from the Élysée Palace [4].

France's president, M Macron went nuclear, so to speak, on hearing of the deal. Not that he knows where Australia is. Readers will know that the French, albeit useful chefs, models and keepers of museums, take any slight as a declaration of war. French pride has been pricked. Readers can expect a haughty response when next seeking directions from a Parisian policeperson. 

Cartoon french in the streets

2.  The Kiwis

It must have been a slow day across the ditch. Within a nanosecond of the deal announcement, New Zealand's PM Ms Ardern confirmed New Zealand's policy of banning nuclear powered vessels from New Zealand's territorial waters. That is, until New Zealand needs help to defend itself, because it's navy couldn't defend a pontoon [5].

3.  The Chinese

It was a reaction that was as predictable as an ad from Clive Palmer. "China always believes that any regional mechanism should conform to the trend of peace and development of the times and help enhance mutual trust and cooperation," said Chinese Foreign Ministry spokesman Zhao Lijian. Mr Zhao conveniently forgot China's increasing militarisation of the South China Sea and territorial encroachment on Japan, Philippines, Vietnam and Malaysia. Not to mention Taiwan.

Wry & Dry fully expects further Chinese economic coercion of Australia.

4.  The Greens

Green's leader Adam Bandt labelled the nuclear submarines as "floating Chernobyls", which shows he knows very little about nuclear power technology and even less about history. But a lot about fear-driven marketing: the image would be quite compelling for his disciples.

And Mr Bandt has failed to see the opportunity. When not on active duty, the submarines can be wired into the electricity grid, providing fossil-fuel-free power to Australia.

5.  The Opposition

A Albanese has been politically ambushed for the first time by Jimmy. He will support the deal as he knows if he doesn't it will be an election issue. For now, he's annoyed that his popularity momentum might recede. He says he wants to be involved in all decisions. Thereby suggesting that he really wants to identify with being the Prime Minister.

The reality 1

The vessels will be built in Adelaide, at Australia's Airfix assembly plant. Which given its track record suggests that by the time the first submarine slips down the slipway, China would have already invaded between the flags.

The reality 2

Readers should ignore the cost estimate of $90 billion. By the time the US contractors have engaged in project-creep, the Australian Treasurer of the day won't see much change from well over $100 billion.

What happened to The Pub Test?

Wry & Dry is concerned that Jimmy didn't do a round of the pubs to test that acceptance of his plan. Too late?

Sleepy Joe asleep

Jimmy would have been discombobulated when Sleepy Joe was announcing the deal that he forgot Jimmy's name: "I want to thank... uh... that fella Down Under... Thank you very much, pal."  

The obvious problem in all of this, however, is if that fellah Down Under couldn't deliver a vaccine how will he deliver 8 boats?

[1] Niccolò Machiavelli was an Italian diplomat, philosopher, and historian who lived during the Renaissance. He is best known for his political treatise: The Prince. Machiavelli's name came to evoke unscrupulous acts of the sort he advised most famously in The Prince.  He claimed that politics have always been played with deception, treachery and crime.
[2] Sun Tzu was a Chinese general and military strategist who lived in the Eastern Zhou period of ancient China. He is traditionally credited as the author of The Art of War, an influential work of military strategy.  His works focus on alternatives to battle, such as stratagem, delay, the use of spies and alternatives to war itself.
[3] Charles de Gaulle was a French army officer and statesman who led Free France against Nazi Germany in World War II and later became Prime Minister and then President of France. Famously prickly, aloof and arrogant, he was an excellent manipulator of the media. It is fair to say that the fame of de Gaulle outstrips his achievements, he chose to make repeated gestures of petulance and defiance that weakened the west without compensating advantages to France.
[4] The Élysée Palace is the official residence of the President of the French Republic. It was built in 1722 for a French nobleman, and contains not only the presidential residency but also presidential offices. It is larger than the White House.
[5] The Royal New Zealand navy consists of 2 frigates, 4 patrol vessels, a replenishment oiler and a 'strategic sealift ship' (meaning a ????). 

Dr. Strangelove

The 1964 movie Dr. Strangelove [6] satirises what happens when a deranged American general orders a first nuclear strike against the Soviet Union.

Well, it now seems that there is a latter-day Dr. Strangelove.  

Excerpts from the new book “Peril” [7] revealed on Tuesday that General Mark Milley, chairman of the US Joint Chiefs of Staff [8], secretly called his Chinese counterpart General Li Zuocheng to assure him the United States would not initiate an armed conflict. This was because Milley feared that Trump was losing his mind in the last days of his presidency.

Cartoon patton

This is seriously bizarre.  Trump may have been vulnerable to impulsive behaviour, but starting a war with China, or anybody else, wasn't one of them. General Milley's decision to be frightened to the extent of believing that Trump would push a button, and so then picking up the phone to Emperor Xi's #1 general suggests a dangerous blend of General Jack Ripper (as in Dr. Strangelove) and General Macarthur. 

The latter was fired by President Truman for wanting to invade China during the Korean War.

A muscular President would fire Milley. But Biden is not muscular. And says that he won't.  

[6] One of the great movies, directed, produced and co-written by Stanley Kubrick.  Peter Sellers plays three roles: the US president (Merkin Muffley), an RAF Group Captain (Lionel Mandrake) and Dr Strangelove himself.
[7]  By Washington Post associate editor Bob Woodward [7] and political correspondent Robert Costa. Woodward, with fellow journalist Carl Bernstein, brought to light the Watergate scandal, that brought down US president Richard Nixon.  Readers should use the lockdown to watch "The Post" and then "All The President's Men". 
[8] The body of the most senior officers within the US Department of Defense, that advises the president.

Time to man up

The man who, aged 22, courageously flew a helicopter in the Falklands War [9] has this week somehow has lost his bottle [10].

Prince Andrew, Duke of York and holder of other titles has been accused of, well behaviour unbecoming of a gentleman. And then some. Readers will recall that the Duke is being sued by Virginia Roberts Giuffre, who claims she was sexually assaulted by him.

The Duke has been issued a summons to appear in a New York court room. His UK lawyers' initial strategy was to stonewall and avoid actual service of the summons by hiding in what Wry & Dry would term a castle, somewhere in Scotland. And, therefore, not have to appear, or be represented at the court hearing in New York.

His US lawyer told him that wouldn't help. At all. And so that lawyer appeared, vigorously denied the allegations [11], asked for discovery of documents.

This is going to end in tears. If the Duke has nothing to hide, he should not hide. And if he has, then he should man up. And face the music. As Dickens said...

Cartoon andrew waistcoat

[9] An undeclared war between Argentina and the UK in 1982. Argentina invaded the Falkland islands and its territorial dependency South Georgia and the South Sandwich islands. A royal Navy task force was quickly established and sailed south.  The chances of a British counter-invasion succeeding were assessed by the US Navy, according to historian Arthur L. Herman, as "a military impossibility". Ten weeks after the Argentinian invasion, its force surrendered.  This hastened the downfall of its military government. In the UK, the Thatcher government, bolstered by the successful outcome was re-elected with an increased majority.
[10] To lose one's nerve, courage or resolve.
[11] Surely one of the most over-used courtroom claims.

Meanwhile, just off the coast of Japan...

... North Korea tested its latest ballistic missile.  And so did South Korea.

The difference was that the one from north of the DMZ was delivered from a train, the one from south from a submerged submarine.

Which leads Wry & Dry to ponder if the North Korean railways run like those in Victoria, i.e. late, the war would be over before the north's train was out of its siding.

Elections upcoming - what to expect

Readers will know that the Canadians go to the polls on Monday. And in a poll turnaround, it now looks as though incumbent woke PM, Justin Trudeau will be re-elected. The popularity of the leader of the Conservatives, Erin O'Toole, has dipped as he is against any form of vaccine-mandate. And anti-vaxxers demonstrating against Mr Trudeau seems to have drawn a sympathy vote for him. But the outcome won't be known for many days.  

Cartoon canada vax

And in two weeks Germany goes to the polls, without Angela Merkel on the ballot. It is entirely likely that the new government will be a three-party coalition - a very left-leaning one at that. 

The Social Democrats now heads the polls with 26%, ahead of the Christian Democrats with 21%. The SDP will probably form government with the Greens and the Free Democrats.

The SPD’s wish list has the appearance of a Corbynista dream: a wealth tax; higher dividend and capital gains taxes; seriously high carbon taxes; a €45bn annual infrastructure increase; a Big State revival of social housing; a squeeze on buy-to-let property owners; a rent freeze in the big cities; and a 30% rise in the minimum wage.

Good grief. This might be the remaking of central EU.

Tough times

More 'ardship. James Packer has put his yacht on the market.

A mere $280m will get a Reader a sleek craft with plenty of history. It can accommodate 22 guests in 11 suites and has crew of 11.

This is the ideal lockdown-avoidance family home. 

Who is in charge

Older Readers will remember the famous 1974 UK general election, in which the feeble PM Ted Heath ran his election campaign on the line, "Who governs Britain?", meaning he or the unions. The answer came back: the unions. He got the DCM.

Then there was Margaret Thatcher's poll tax, which resulted in mass riots and civil disobedience. She got the DCM from her own party.

In each case, the policy became a referendum on leadership.

Work with Wry & Dry on his point, because he has one.  

Sleepy Joe signed an executive order requiring all American public workers and contractors to get vaccinated by 25 November or face indefinite suspension. The order also covers every business in the United States with over 100 employees.

 Cartoon biden vaccine mandate

If workers accept the mandate, or it is taken to the Supreme Court and rejected, it will make little difference.

However, if enough of the American public refuse (smarter ones quoting Henry David Thoreau [12], other perhaps Charles Parnell [13]) and there is mass civil disobedience, then Sleepy Joe has another problem.

[12] 1849 American author of 'Civil Disobedience'
[13] Irish nationalist leader, who, in 1879, urged evicted tenants not to use violence but to socially ostracise the successor tenants. 

Unclear on the concept

The plonking of Labor's Deputy Senate Leader (Kristina Keneally [14]) into a safe House seat in New South Wales at the expense of a local talented, young and successful woman of Vietnamese heritage has outraged political tragics across the spectrum. The reality is, it doesn't matter.

What was interesting is that Labor Leader Anthony A came (late) to defend the boning of Tu Le, saying that Ms Keneally was "another great Australian migrant success story."

Wry & Dry suggests that a "great Australian migrant success story" would be when your recent forebears fought to arrive here, without funds, support or English. And you have succeeded economically and socially.

Ms Keneally is American, from a prosperous family in Ohio and graduated from university there. Her husband, an Australian, worked for the Boston Consulting Group.

"Ardship?  Maybe not.

[14] Wry & Dry will not touch upon her political career, but observes he once had lunch with Ms Keneally and a handful of others. She was undoubtedly the most charismatic politician he has met. And, importantly, whilst speaking with him didn't allow her eyes to wander to see who else was in the dining room. 

Clear on the concept

There has been a great deal of adverse commentary from the glitterati about JobKeeper. And how some $13 billion was paid to companies that later made a profit.

One of the smarter and more objective commentators on matters economical is Chris Richardson, from Deloitte Access Economics. Wry & Dry will quote from the man:

"...the Reserve Bank estimated it [JobKeeper] saved "at least 700,000" jobs, as did Treasury.

Yes, it's entirely true that it could have saved those 700,000 jobs more cheaply...  Australia and the world had never dealt with a crisis that moved as fast as Covid-19 did.  Never.  Every moment lost in reacting would have lost more jobs. So JobKeeper was thrown together in a handful of days.

..Governments aren't built for speed. Yet speed was exactly what Australia needed. And it was exactly what we got.

If you are demanding perfection amid a pandemic, you've got the wrong yardstick."

Nicely said. 

Wry & Dry notes that JobKeeper was fully supported by A Albanese. If fact, AA wanted to spend more, extending it to short-term casual employees and foreign visa-holders. Not to mention wanting to bailout Virgin Airlines. And the words "Pink batts" will always haunt any Labor leader. 

Two chances 

The OECD has urged the Australian government to undertake 'genuine tax reform'.  On the wish list are the usual suspects: increase and broaden the GST (no from Liberals, no from Labor); lower superannuation tax concessions (political suicide); and reduce CGT concessions (no and no).

Add to the parties positions the mindsets of the respective leaders:  PM Jimmy Morrison is a marketing guy: reform to him is an increased sales bonus.  Opp Leader Anthony A is desperate to win to ensure that Willy Shorten doesn't otherwise get the gig - he is risk averse.  

So there are two chances of any tax reform happening.

There goes the female neighbourhood

Norway has given its female Prime Minister Erna Solberg the DCM, to be succeeded by a bloke.  Thus the possibility of four concurrent Scandinavian female prime ministers (Magdalena Andersson is expected to become Sweden's PM in November, adding to Denmark's Mette Frederiksen and Finland's Sanna Marin) is lost.   

Wishful thinking

Readers will know that Sleepy Joe has to somehow balance the books.  Well, get close.  Well, near.  Well, look as though he is trying.

Sleepy Joe wants to spend US$3.5 trillion on boosting the economy.  And he has a plan to raise $2.9 trillion of that:

  • raise the corporate tax rate to 26.5% from 21%
  • impose a 3% surtax on individual income above $3.5m
  • raise the minimum tax on U.S. companies’ foreign income to 16.5% from 10.5%
  • raise the top capital gains tax rate to 28.8% from 23.8%
  • raise the top individual tax rate to 39.6% from 37%. R

And Australians thought that Willy Shorten's modest tax increases were a bit rich.

Snippets from all over 

1. RBA chief teller speaks out

RBA Governor Philip Lowe said the lockdown would cause a sharp contraction in the economy in Q3, down at least 2%, but was confident the economy would rebound once restrictions were eased in Q4. 

Wry & Dry comments: He also said that interest rates are not expected to rise from record lows until 2024.  That's another 2.5 years of property speculation - unless APRA squeezes the banks.

2. No gas

The United States and the European Union have agreed to aim to cut emissions of methane (natural gas) by at least 30% compared to 2020 levels by the end of the decade and are pushing other major economies to join them

Wry & Dry comments: Hmm, you wouldn't want to be a major exporter of natural gas...

3. Quis custodiet ipsos custodes? [15]

The US audit watchdog has fined Big Four accounting firm KPMG Australia $US450,000 ($615,000) over “widespread” cheating on tests designed to ensure partners and staff act with integrity and have the relevant skills for their work.

Wry & Dry comments: Good grief.

[15] A Latin phrase found in the work of the Roman poet Juvenal from his Satires. It is literally translated as "Who will guard the guards themselves?"

4. Emperor Xi's xenophobia increases

Chinese police are using a new anti-fraud app installed on more than 200m mobile phones to identify and question people who have viewed overseas financial news sites, according to individuals summoned by the authorities.

Wry & Dry comments: The app is mandatory for many government agencies. Wait for a nationwide mandate.

5. Emperor Xi's markets' purge increases

Beijing wants to break up Alipay, the superapp owned by Jack Ma’s Ant Group which has more than 1bn users, and create a separate app for the company’s highly profitable loans business, as it intensifies a crackdown on China’s big tech groups. 

Wry & Dry comments: Big Brother gets bigger: Ant will be required to turn over user-data to a new and separate credit scoring joint-venture that would be partly state-owned. 

And, to soothe your troubled mind...

Last words...

"It is truly outrageous that the federal government is having to add billions of dollars to its budget deficits, this year and for at least the next three years, to allow the only government in Australia, and indeed one of few in the world, running budget surpluses to run even bigger ones.

 - Economist Saul Eslake, writing in Wednesday's AFR, on the corrupt GST deal that ends up costing we-the-taxpayer billions, to the benefit of the government of Western Australia.

Readers should peruse Western Australia’s surplus boosted by a ‘corrupt’ GST bargain (afr.com) for essential lockdown reading.

 

PS A reminder that the opinions in Wry & Dry do not necessarily represent those of First Samuel, its employees or directors.

 

Cheers

Anthony