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The Dismal Science
The Australian Institute of Company Directors
Releasing weekly episodes during the coronavirus crisis to bring you the latest on the economic impact of the pandemic.
Sep 18, 2020
49 - Jobs surprise
Surprise good news on the jobs front with unemployment falling below 7 per cent for the first time since the pandemic started. So where are the jobs coming from? Plus house prices, the US fed commits to not lifting interest rates for the long haul, New Zealand goes into recession and the effect unemployment on sleep.
Sep 11, 2020
48 - Life at the outpost
With new data out on the Australian corporate footprint overseas, we ask what's the future of the foreign outpost in a post-pandemic world. Plus a speed round on this week's economic data.
Sep 4, 2020
47 - Abnormal people
The US Federal Reserve has changed the way it makes monetary policy decisions for the world's largest economy. Its former chair Janet Yellen said that the changes would appear subtle to most "normal human beings". So why is it such a big deal for economists? Plus the latest quarterly GDP numbers put Australia officially in its first recession in three decades. This episode was recorded on 3 September.
Aug 27, 2020
46 - On the belt and road
The Federal government looks to curb China's influence in the states, plus the Victorian situation continues to take its toll on jobs and investment.
Aug 20, 2020
45 - Nordic noir
We look at the latest GDP data from Scandinavia and ask whether Sweden has gotten the benefit of a more lenient approach to lockdowns. Plus RBA Governor Philip Lowe responds to his critics.
Aug 14, 2020
44 - Wages freeze
The Victorian second wave seems to have passed its peak but the lockdown continues to weigh down confidence, the RBA's new set of downbeat forecasts and wages growth slows to record lows. Apologies for the *dismal* audio quality on this one. We had some home technical problems in the home studios this week.
Aug 6, 2020
43 - Second quarter blues
The US and Europe experienced ugly contractions in the second quarter, though China seems to be out the other side. Plus what the Victorian restrictions mean for the rest of the economy, the resilience of Australian exports and Zoom fatigue.
Jul 31, 2020
42 - Down, down, prices are down
Australia has just experienced its worst deflation in 70 years. Should we be worried? Plus falling confidence, a rising dollar, more job losses, paid pandemic leave and the Robinhood effect.
Jul 28, 2020
41 - Mini budget, maxi debt
The 'eye-watering' debt and deficit numbers released in the mini budget, the government extends JobKeeper, the RBA governor takes aim at Modern Monetary Theory, and the coronavirus spike in Victoria and NSW continues to weigh on confidence.
Jul 15, 2020
40 - Forward guidance recommended
Should governments be more transparent in their thinking about the economy at a time of uncertainty? Plus the Victorian spike undermines confidence in the recovery and the problems with how global public health is funded.
Jul 2, 2020
39 - Could you leave me with a scar?
Could this recession leave permanent scars on the economy? Plus the Victorian COVID spike dents confidence, the turn in the job market, the Fed buys Apple bonds and twenty years of the GST.
Jun 29, 2020
38 - Prattle, jobs and the IMF
The grim IMF forecasts, record low job vacancies, what the Victorian spike means for the national economy and a very wonky discussion on the future of monetary policy.
Jun 24, 2020
37 - Jobs go low, shares go high
More heartbreaking jobs numbers, the mystery of why sharemarkets are so high when the world is so low and directors call on the government to get radical. It's another long one this week. We've divided the topics up into chapters again. If you skip forward, we won't hold it against you.
Jun 14, 2020
36 - Testing times
Australia's GDP contracted in the first quarter and Australia is now in its first recession in nearly thirty years. Are there any positives we can take from the latest GDP data? Plus New Zealand eliminates coronavirus and Ivan gets a test. We're late getting this one out but we will be back to our regular schedule with another episode this week.
May 29, 2020
35 - What's $60 billion between friends?
Treasury made a $60 billion blunder on JobKeeper. Now what should we do with the spare money? Plus negative interest rates, the death of Oliver Williamson, global trade and superspreading. This is a big episode (every minute represents approx. $1bn of the JobKeeper shortfall). We've divided up the topics into chapters. If you skip forward, we won't hold it against you.
May 25, 2020
34 - Jobs catastrophe
A record number of Australians lost their jobs in April and now one in five workers is either unemployed or underemployed. Plus the RBA's thinking on the property market, will working from home change the CBD and a rare cameo from our former Chief Economist, Stephen Walters.
May 19, 2020
33 - So what, so what, so what's the scenario?
The Reserve Bank has set out three scenarios for the Australian economy depending on how we go over the next six months in curbing the coronavirus. Plus the horror US jobs report, retaliatory China tariffs and confidence in Australia picks up. We're a little late getting this one out. Apologies to our loyal listeners. We recorded this last week before the Australian jobs numbers were released. We'll have another episode out later this week covering those.
May 10, 2020
32 - Can we live without China?
Rising tensions over the Australian government's calls for an inquiry into the origins of coronavirus have raised old questions about our dependence on China. Plus more bad jobs news and the economics of vaccine development.
May 3, 2020
31 - Inflation to right of us, deflation to left of us
The coronavirus crisis has seen steep spikes in the prices of some goods and dramatic falls in others. Which should worry us more? Plus GDP growth in the US is turning out even worse than expected and we look at research into the media's influence on coronavirus cases.
Apr 25, 2020
30 - Is the cure worse than the disease?
There is some speculation that the lives lost due to the recession could outnumber those from the coronavirus itself. But the evidence from past downturns might surprise you. Plus the latest from China, what's going on with oil prices and the ugly jobs numbers start rolling in for Australia.
Apr 19, 2020
29 - Till debt do us part
After two decades obsessing over budget surpluses, Australia is entering a new normal with a massive run-up in government debt to stop the economy from flatlining during the coronavirus crisis. Should we be worried and how will we ever pay it back?
Apr 11, 2020
28 - How long will this be going on?
With a coronavirus vaccine expected to take 12 to 18 months, smart people are starting to think about what steps we can take till then to quash the virus while getting back some semblance of normality.
Apr 4, 2020
27 - The mitigator's dilemma
As the global economy goes into freefall, policymakers are faced with a dilemma: how do they slow activity enough to halt the spread of coronavirus, while at the same time providing enough stimulus to keep the economy going.
Mar 26, 2020
26 - Corona crisis
Mark and Ivan discuss how bad the coronavirus crisis could get, what the impact might be on GDP and whether there is hope for flattening the curve.
Dec 15, 2019
25 - Unconventional wisdom
Are there any positives to take from the latest GDP numbers? Is the RBA about to embark on QE? And is the property market back?
Oct 27, 2019
24 - Less than one
With Mark back from holidays, we catch up on the RBA's historic rate cut early this month and do a Nobel edition of the number of the week.
Sep 8, 2019
23 - Culture eats strategy for Brexit
Special guest Jamie Smyth of the Financial Times helps Mark and Ivan make sense of the Brexit omnishambles. This episode was recorded on 4 September, the day after Boris Johnson's government lost its majority in the House of Commons and the morning of the start of the fourth Ashes test.
Aug 28, 2019
22 - Oh, inverted world
What the hell is an inverted yield curve and should we be worried? This episode was recorded on 22 August.
Aug 15, 2019
21 - The art of trade war
Finally, we are back! New AICD chief economist Mark Thirlwell joins Ivan to talk about why Mark fell in love with economics, the US-China trade war, whether the RBA has failed and the AICD's number of the week. This comeback episode was recorded on 8 August.
Jun 7, 2018
20 - Scepticism with Chinese characteristics
Stephen and Ivan catch up on the budget and discuss the fragile Chinese economy.
Jan 24, 2018
19 - iPhone X factor
In the first episode of the year, Stephen and Ivan catch up on the 'boomy' November retail sales and the surprising midyear budget review.
Dec 30, 2017
(20)18 - HNY
In this episode, recorded in early December, Stephen and Ivan look ahead to 2018. Will the Reserve Bank continue to stay its hand? Will wages growth finally pick up? And what's the outlook for the Australian and global economies?
Oct 16, 2017
17 - Retail of woe
Stephen and Ivan talk about the 'terrible' August retail sales and the better than expected FY17 budget position.
Oct 16, 2017
16 - Change in the change
In this catch-up episode recorded in September, Stephen and Ivan talk about June quarter GDP and the August jobs report. Then AICD policy adviser Matt McGirr comes in to explain the newly passed safe harbour reforms.
Sep 8, 2017
15 - I dream of Gini
Stephen and Ivan talk inequality.
Aug 12, 2017
14 - Dollar dazzler
Stephen and Ivan discuss the recent spike in the Australian dollar, what it means for the RBA's growth forecasts and whether you should be buying foreign currency for that overseas holiday now.
Jul 27, 2017
13 - Labour market Lowedown
Stephen and Ivan do a close reading of RBA governor Philip Lowe's latest speech on the labour market.
Jul 26, 2017
12 - Take a minute
Stephen and Ivan take look at why the minutes from the RBA board's July meeting moved markets, as well as the June jobs numbers.
Jul 4, 2017
11 - In the realm of the census
For this comeback episode, we catch up on the latest economic data, Ivan asks for a pay rise and we dive into the census.
Jul 3, 2017
10 - BONUS EPISODE: Jeff Gramm talks shareholder activism
In this bonus episode of The Dismal Science, Ivan interviews Jeff Gramm, hedge fund manager and author of Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism. The book, which was on the AICD's summer reading list, traces the history of shareholder activism through eight famous shareholder letters and touches on many themes relevant to directors, including the relationship between board and management, director independence, the role of proxy advisers and the perils of groupthink.
May 14, 2017
9 - Taxes, not axes
It's our bumper Budget episode: axes are out, taxes are in. RIP 2014.
May 5, 2017
8 - Of budgets and birthdays
It’s Stephen’s birthday and it’s the budget! What a time to be the AICD Chief Economist. Discussed in this episode: [1:01] May RBA decision [1:14] Copy-and-paste March decision [1:40] April RBA decision [1:45] April RBA minutes [2:53] AICD Director Sentiment Index [3:35] 2H16 Director Sentiment Index [5:31] NAB March Business Survey [6:03] Consumer confidence still subdued [6:32] Treasurer’s good/bad debt speech [6:37] Badgerys Creek airport [6:41] Inland rail [6:52] Company tax cut [6:59] Stephen on tax reform [7:52] South Australia renewables debate [8:35] Budget countdown [8:58] Treasurer’s flags housing package [9:29] Negative gearing changes ruled out [9:52] Retiree incentives to downsize [10:06] Salary sacrificing a deposit [10:21] Barbecue stoppers [10:53] AICD’s negative gearing position [11:43] Health and education good debt? [12:17] $50bn infra package [12:20] 2014 $50bn promise [12:48] Stephen on infrastructure debt [13:18] Snowy hydro…
Apr 30, 2017
7 - On target
This week Stephen and Ivan take credit for the Treasurer getting religion on debt and discuss inflation coming back within the Reserve Bank’s target range. Discussed in this episode: [0:42] Treasurer’s good/bad debt speech [1:00] Stephen on infrastructure debt [2:16] Morrison’s 2016 position [3:43] Net operating vs net cash balance [3:55] Jim Chalmers' Better Budgeting [5:23] Operational vs capital budgets [6:13] Stephen on 1Q17 CPI data [6:24] RBA’s inflation target [9:12] RBA early adopter of inflation targeting [9:20] NZ pioneers inflation targeting [9:37] Gold standard [9:39] Monetary policy regimes [9:44] Milton Friedman’s k-percent rule [10:58] Nod to the monetarists [15:40] Expansions don’t die of old age [15:55] Wage-price spiral [16:20] Japanese deflation [16:47] Deflation and the Depression [17:13] Disinflation [17:34] Quantitative easing [17:55] Calculating CPI [18:42] Include housing in CPI? [21:29] Unexpected brief 2016 deflation [21:…
Apr 22, 2017
6 - Talk infra to me
This week Stephen and Ivan talk about making infrastructure sexy again, as well as the latest labour market data and the ongoing jobs/housing dilemma of the RBA. Discussed in this episode: [0:59] February jobs disaster [1:11] Stephen on the March jobs numbers [1:48] Jobs report sceptics [2:35] 2014 ABS error [3:42] April RBA minutes [5:42] ANZ's job ads data [5:54] NAB business survey [7:03] Polling is getting harder [9:08] Blueprint for Growth [11:30] Snowy Mountains Scheme [12:14] PM’s Snowy reboot [13:12] Keynesian stimulus [13:17] Governor Lowe on infrastructure [14:34] Grattan Institute on infrastructure [14:59] Cost-benefit analysis [15:02] NBN’s lack of cost-benefit analysis [15:13] NBN cost estimates [15:33] Infrastructure Australia [15:38] Infrastructure Australia priority list [16:22] AICD’s Director Sentiment Index [18:02] South Australian energy crisis [18:20] Elon Musk to the rescue [20:12] Stephen on infrastructure borrowing…
Apr 8, 2017
5 - The Blueprint
This week Stephen and Ivan talk about the regulator crackdown on interest-only loans and the AICD's Blueprint for Growth, which outlines our national reform agenda. Discussed in this episode: [0:46] APRA interest-only loan crackdown [0:57] RBA Governor's property warning [1:14] Bank executive comments [1:33] APRA’s original 2014 restrictions [3:44] RBA’s April interest rate decision [4:05] Council of Financial Regulators [4:41] Glenn Stevens on ‘crazy’ house prices [5:17] RBA turns downbeat [5:27] Surprise jobless rate increase [6:07] AICD’s Blueprint for Growth [7:06] AICD education programs [7:37] Stephen on infrastructure [7:50] Negative gearing escalation [8:14] Morrison: “We have a spending problem.” [8:49] Morrison: “We have an earnings problem.” [9:14] 2016 budget spending GDP share [14:07] Superannuation tax concessions cut [14:12] SME company tax cuts [14:22] Tax efficiency [15:15] Regressive tax [15:35] Land tax [16:17] Mil…
Mar 31, 2017
4 - Safe harbour
On this episode of The Dismal Science, Stephen and Ivan talk Brexit and welcome their first guest, AICD Senior Policy Adviser Lysarne Pelling, who came in to discuss proposed safe harbour laws that could save companies from painful insolvencies. Discussed in this episode: [0:59] UK triggers article 50 [1:15] Stephen's reaction the day of the Brexit vote [1:35] Maastricht Treaty [2:09] >50% of UK trade is with the EU [2:24] Gloomy forecasts for UK economy [3:58] Requirement EU 27 unanimity [4:11] Nationalist parties on the rise in Europe [4:58] Impact on UK financial services [9:55] Draft insolvency law reforms [10:41] When does safe harbour apply? [10:52] Severe penalties for insolvent trading [12:27] Insolvency law in UK and Singapore [13:24] Arrium administration's effect on Whyalla [15:43] Distressed debt funds [15:55] US Chapter 11 provision [16:51] Productivity Commission on an Australian Chapter 11 [19:20] Email Lysarne your thoughts [20:00] RBA cas…
Mar 23, 2017
3 - Is it a bubble?
In this special episode of The Dismal Science, Stephen and Ivan discuss the housing market. Is it a bubble? Should regulators be concerned? And what can we do to make housing more affordable? Discussed in this episode: [0:48] Avocado toast [0:57] Housing affordability in the budget [4:49] Australian household debt [6:29] APRA concerns (paragraph 5) [6:55] RBA's subtle shift on housing [9:28] NINJA loans [11:20] "Get a good job that pays good money." [15:19] Superannuation housing plan under consideration? [19:21] Sydney annual house appreciation [19:59] Sydney's average house-to-income ratio (second only to Hong Kong) Tweet at us @aicdirectors or message us on Facebook with feedback on the show or suggestions for upcoming topics.