Wry & Dry

Wot! No pink batts. FAANG break-up? The west is different.

I. Wot!  No pink batts

Australian Treasurers since 2008 can thank former Treasurer Wayne Swan for accidentally creating a new rule #1 for Federal budgets.  The Swan Rule is: Do not, under any circumstances, have a budget policy measure that makes any member of government look like, well, a goose.

The Swan Rule arose from his fiscal response to the GFC.  Bowing to pressure from his left wing to "do something for the environment" he announced a scheme funded by we-the-taxpayer to install fibreglass insulation in residential homes.  This became known as the pink batts roll-out.

The blend of its cost ($2.45 billion), its champion (a popular but ageing rock performer) and its subject (pink batts) immediately exposed the policy to endless ridicule, regardless of its good intentions [1].

Which brings Wry & Dry to Jericho Josh's budget [2]. 

Cartoon magic pudding

Wry & Dry has poured over the 169 pages of dry details in the Budget Papers.  Aside from the excess of marketing-speak (e.g. proactive, best-practice, world-class, improved, single-touch (!), innovative, regulator excellence (an oxymoron?), ad infinitum, ad nauseum) there is absolutely no sign of any breach of the Swan Rule. 

Jericho Josh can rest well. 

[1] It was a disaster, eventually costing some $2,500 per home, as well as lives in installation (causing a Royal Commission).  Its benefits as a fiscal stimulatory measure remain opaque. 

[2] If the government is returned at the next election and if Jericho Josh retains his gig, then by the end of that term he will become the fifth longest serving Treasurer, after Costello, Fadden, Keating and Chifley.  Wry & Dry pontificates that if the first if is met, then Jimmy Morrison will retire after 12 months and hand the reins to Jericho Josh.

II.  Apple, Amazon, Facebook, Google: the end is nigh?

It's enough to make John D Rockefeller turnover in his gilded grave [3].  The US House Judiciary Committee said on Tuesday that "Amazon, Apple, Facebook and Google had exercised and abused their monopoly power" and called for the most sweeping changes to antitrust laws in half a century. 

Fat chance.

Cartoon google senator

Firstly, the House Committee split along party lines on the key matter of to break-up or not to break-up.  Predictably, the minority Republicans baulked at recommending the big tech companies be broken up.

Secondly, the US Justice Department has to commence proceedings against the companies.  Does it really consider there is a case against all of them?  Well, it does for one: Readers should expect to see a suit filed against Google next week. 

Thirdly, if the tech companies lose at any stage, they will appeal, of course, all the way to the Supreme Court.  This will take some time.

Finally, currently, the Supreme Court is 5-3 conservative.  Tax-What-Tax-Trump wants to make it 6-3 with the nomination of Amy Coney Barrett to replace the late RBG.  That nomination is expected to be decided upon by the Senate on and from 22 October.  The possible confirmation is now in doubt because of two Republican senators stating they wish to defer consideration until after the election.  And two other Republican Senators have coronavirus and may not turn up. 

Either way, unless the make-up of the Court changes to be more 'liberal', it is unlikely that a case to break up any of Amazon, Apple, Facebook and Google would be successful. 

The only winners in this will be the lawyers.  The partners of whom can now start booking their 2022 Cortina d’Ampezzo [4] vacation.  After buying a lodge there.

[3] Readers will remember the 1890 Sherman Anti-Trust Act, which drove the breakup of, especially tobacco, railway and oil, monopolies.  Notable in the latter was the famous case: Standard Oil Co. of New Jersey v. United States (1911).  This forced Standard Oil (John D. Rockefeller's company) to dispose of the companies it begat: Esso (which became Exxon, which later merged with Mobil to become ExxonMobil); Marathon; Mobil; Chevron; Amoco; Conoco and 11 other oil companies.  Plus 22 other major pipeline and related companies.
[4]  Arguably the best ski resort in Europe at which to be seen. It is in the Dolomites, 2 hours drive from either Venice or Innsbruck.  Family skiers might try Cervinia instead.  

III.  The west is different 

Readers will not be surprised that the good folk of Western Australia are really not interested in the rest of Australia.  Of all Australians, they are least interested in opening their border to others.

Chart WA border

The chart shows clearly that Sandgropers see themselves as something special.  And that contact with we Easterners is, well, abhorrent.  Which brings to mind the spectre of WA Secession... 

IV.  Fly on the wall head

The most interesting part of yesterday's vice-presidential debate was discussion on how long would the fly last on Mr Pence's head.

Photo pence fly

An astute Reader measured fly-time at 2 minutes 3 seconds.  Which is about as much time as the average viewer watched the whole set piece.

Wry & Dry had to admire Mr. Pence's amazingly coiffed hair.  Who is his barber? 

More seriously, the comparison should not be between Mr Pence and Ms Harris.  It should be between each and their respective leaders.  Pence versus Harris as a presidential race would give the globe more confidence in the future of the Yoo-Ess-Ay.

And reduce the need for either zimmer frames or high capacity Twitter bandwidth in the White House.  

V.  What was missing?

Jericho Josh's budget was applauded by almost every commentator, with the exception of the usual exceptions. So, was there anything wrong with it?

Err, yes.  It lacked a commitment to or plan for or even a mention of structural reform.  Australia's overall tax system itself is a mess; workplace relations is a regulatory dinosaur and business remains tied up in tape of a red hue.  Sure, times are economically messy.  And the fiscally driven priority is correct. 

But that doesn't prevent the setting of a framework for reform.  Readers will recall that Hawke and Keating undertook significant reforms, as did Howard and Costello [5].  Reform died with the 2007 election.

Wry & Dry senses that Jimmy Morrison is not a reforming Prime Minister, notwithstanding some encouraging noises being made.  Wry & Dry's advice would be for Jimmy not to feast on the best budget response in years.  But rather eat some raw meat and ponder the challenge of some brave reform.

[5] Hawke and Keating had the easier task: they did not have to take their major reforms to an election; Howard & Costello did, successfully, in 1998, as Keating opposed the GST.

VI.  The economics of the winner

Readers will recall last week Wry & Dry posited that a unitary Biden government (i.e. Democrats controlling the Senate and the House as well as presidency) would provide the best GDP growth outcome for the Yoo-Ess-Ay.

Wry & Dry's feathers were stroked when Moody's Analytics, Oxford Economics and Goldman Sachs came to the same conclusion. They put roughly the following numbers on the positive difference a Democrat unitary government would make over a Trump unitary government over the next four years:

  • GDP: +4.8%
  • Employment:  +7 million
  • Per capita income:  +$4,800 

As Wry & Dry also noted, a Democrat government would mean higher inflation and higher US interest rates.

But first catch your hare. [6]

[6]  The apocryphal first line in Hannah Glasse' famous 1747 cookbook, The Art of Cookery (available on Amazon.com); in the recipe for hare soup.  The quote is a proverbial warning against overconfidence.

VII.  Sultan on the move

Turkey's Sultan Recep Tayyip Erdogan's inciting of the war between Armenia and Azerbaijan is a reminder of his somewhat naked ambition.  And his need to flex Turkey's military muscle abroad to keep power at home.

In a most extraordinary speech on Tuesday, he described Turkey's support for Azerbaijan as part of Turkey's quest for its "deserved place in the world order."

Cartoon turkey armpit

Hold the phone!  Wry & Dry pauses for a moment to look at Turkey's place in the world, by ranking Turkey against other countries in some useful metrics:

 Chart turkey

Selected global ranking metrics.  Source: Numbeo, US News, World Bank, World Economic Forum, United Nations, Freedom House, World Population Review, Reporters Without Borders.

No sign there of a "deserved place in the world order".  And Wry & Dry is not sure that inciting a war between Armenia and Azerbaijan is a deserving cause.  Who are you kidding, Mr Sultan? [7]

[7] With apologies to Dad's Army.   

VII.  Unclear on the concept

Tax-What-Tax-Trump said on Monday, "Don't be afraid of Covid, don't let it dominate your life."

Cartoon trump skin

Yessiree, Wry & Dry wouldn't be afraid if he had the best medical team in the country, an in-house private hospital and thousands of minions to do his work.  He doesn't.    

VIII.  Another burr under Tsar Vlad's saddle 

Last week's article about the exploding war between Armenia and Azerbaijan would have been read by Tsar Vlad.  "Как будто Беларуси мало!" [8] he would have muttered.

Cartoon vlad democracy

But wait, there's another problem on his doorstep: what might be civil war in the alphabetically powerful central Asia country of Kyrgyzstan [9].  As with Belarus, an alleged rigged election is the problem.  It's all too complex for Wry & Dry, except to note that the latest report from Wry & Dry's man person on the spot is that "Kyrgyzstan’s government seemed to have descended into near anarchy as political factions failed to unify around a single leader."

In addition to its strategic location, Tsar Vlad is interested in Kyrgyzstan because it has loads of rare-earth minerals, as well as other good things found below ground.   

[8]  "As if Belarus isn't enough!"
[9]  Kyrgyzstan is an Islamic landlocked country of some 6 million folk, bordered by China and three -stans:  KazakhstanUzbekistan and Tajikistan.  It is strategically aligned with Russia.  Its claim to fame is that it is further from the sea than any other country.     

IX.  Auction bargain

Readers may have missed news of the upcoming auction of some 80,000 items from New York's famous Waldorf-Astoria hotel [10].  The hotel is undergoing a complete renovation and "everything must go".  The "everything" includes classic 19th century French furniture from the Windsor Suite, the Cole Porter Suite, the Winston Churchill Suite and the Presidential Suite, amongst others. 

One of the more interesting items is the bedhead from Marilyn Monroe's Suite.  No mention is made in the catalogue of its condition.

Below is Miss Monroe at a 1957 Waldorf-Astoria dinner.  Astute Readers will notice how the white-tied gentleman has eyes only for the food. On the right is playwright Arthur Miller (Death of a Salesman, etc), her then husband.  John F. Kennedy was out of range.

 Marilyn Monroe and her husband playwright Arthur Miller (right) pictured with American financier Winthrop Aldridge (left) in 1957

PS.  Interested Readers should note that the online auction commences on 17 October.

[10]  The hotel is now owned by the Anbang Insurance Group, of China.

X.  Bookies' corner

Biden: $1.40  (last week: $ 1.57)

Trump: $2.80  ($2.40)

Source: Sportsbet.

Snippets from all over 

1.  New York apartments cheapest since 2013 

The costs of renting an apartment in New York has fallen to its lowest level since 2013.  

Wry & Dry comments:  And apartment listings tripled from a year earlier to 15,923; the largest monthly inventory in records dating back to 2006.

Anecdotal evidence in Melbourne suggests the same trend. Young folk moving back home with parents and fewer international renters have caused a surge in vacancies and a drop in rental cost.

2.  Samsung booms

Samsung Electronics announced preliminary Q3 results.  Sales were up 7% on the year and profits zoomed 58%.

Wry & Dry comments:  Wow.

3.  No change

The Chief Teller of the Reserve Bank left interest rates unchanged.

Wry & Dry comments:  Wry & Dry notes that some non-bank financial institutions are offering home loan rates below 2%, but Readers should read the fine print on fees.

4.  Sweden to outperform

Sweden will outperform its Nordic neighbours as well as escaping the depths of recession expected to befall the euro-zone and US, according to forecasters at Danske Bank.  They predict Swedish GDP will shrink less this year and grow more next year than the rest of Scandinavia and Finland. 

Wry & Dry comments:   His lips are sealed.

5. Four per cent

Future Fund Chairman Peter Costello says that a 4% return after inflation is a realistic aspiration for investors in the current low-interest rate world. 

Wry & Dry comments:  He also said that "the days of double-digit investment returns are long-gone."  RIP.

And, to soothe your troubled mind ...

Miscellany 

Last words ...

I was too fat when I got Covid.

 -  Boris Johnson, UK Prime Minister.

He added that it was a "teachable moment" for Britain to address obesity.  Wry & Dry is waiting for a similar reflection from Tax-What-Tax-Trump.

A lightly salted absurdity ...

Deepak, Wry & Dry's Uber driver ... 

...grunted as Wry & Dry opened the door to the jalopy.

“Happy Days!” cried Wry & Dry jovially.

“For some,” said Deepak in a somewhat nasal tone.

“You appear to have misplaced the sticky tape, Deepak, or are you for sale?” chuckled Wry & Dry pointing to a length of Steri-strip taped to Deepak’s suspiciously inflated proboscis.

“I’m free to a loving home, if that’s what you mean,” Deepak muttered unhappily.

“What happened? Did the mother-in-law hit you again, or your wife?”

“Undetermined…” Deepak said hesitantly, then continued; “it all started with Nancy.”

“Nancy Pelosi?”

“That’s the one,” Deepak replied, with more than a hint of revulsion.

“The plastic variety or the real one?” asked Wry & Dry, recalling the Barbie-esque, brunette that, according to Deepak’s daughter Amulya, was responsible for flushing her soft toys Sir Donald Trunk and the unfortunate bear, Bernie Sanders down the toilet.

“Both,” said Deepak.

“I see,” said Wry & Dry, thinly veiling his confusion. Followed by; “do go on,” in his most pastoral of tones.

“Amulya and the girls were watching the presidential debate. Even little Sevita was watching.”

“And Sachin?”

“With me of course, I’m teaching him ‘Man Things’.”

“Of course, and naturally, and then what? “encouraged Wry & Dry.

“I was explaining to Sachin that it was good to see a nation in the safe hands of such powerful statesmen. And that it was lucky that we didn’t have to listen to a debate between that Kamala Harris woman and that dreadful Nancy Pelosi, whatever side they are on. It was a mistake to say it in front of the ladies.”

“Actually, they are on the same side.  And your comment was, well, fatal.  I’m surprised all you ended up with is a steri-strip!” exclaimed Wry & Dry.

“It was all a bit of a blur after that,” said Deepak.

“Yes, I can imagine… but what do you recall before the incident?”

“When I wasn’t looking one of them threw the Nancy Barbie doll at me, and clunk.”

“Bulls-eye brutalised by Nancy Pelosi! Some might say you are a lucky man!” cried Wry & Dry with delight.

“Humph, I don’t share your humour,” said Deepak pulling into the curb.

“Just one last question, who did it?”

“No idea, all four of them perched on the couch cackling hysterically. No one would admit to anything.”

“It’s an estrogen thing, makes them all very conspiratorial. That and the broomstick,” said Wry & Dry, tapping his nose for effect.

“Ha ha,” said Deepak. “I’m returning home to the coven, see you next week Mr. Wry & Dry.”

Wry & Dry laughed happily as he alighted at his office. 

  -    From the quill of Mrs Wry & Dry 

 

Cheers

Anthony