Oz for Dummies: Week 38, 2021

(September 20–26) Gladys forcing the way / Dan losing his / Stacia and Marky Mark out of it / What’s the endgame in New Zealand? / Evergrande, neither grand nor forever / Germany in for a new leader …

As predicted, NSW continues to lead the way, with Victoria struggling mightily to keep up at least appearances. Cases numbers in VIC are going up and up and hit a new high on Friday (847, 779 on Saturday, on continued relatively low testing numbers). More troubling, however, is the fact that the O-multiplier (the ratio of cases at the same stage of the Delta outbreaks in VIC and NSW) is well above 2 and keeps also drifting up. It’s a run-away train, likely to end in a train wreck. It will take a 5–6 weeks for the O-multiplier to go under 1. And then there will be at least 3–4 weeks to go.

The Melbourne protests that erupted last Monday and have been ongoing for almost a week now — with (a couple of) hundreds of people being arrested on a daily basis throughout the week — won’t help the case numbers. And there is no end in sight. There is discussion about whether the anti-lockdown movement ‘opportunistically’ latched onto the frustrations of construction workers, with Ben Schneiders suggesting in the that some of the frustrations have to do with the workings and configuration of the CFMEU. Be that as it may, it seems unquestionable that Andrews has lost control of the narrative and that the various anti-lockdown fractions are making inroads. Well-documented police brutality helped. It makes for a volatile situation and I doubt that at the end Andrews’s ratings will be as supportive as they have been until recently. It’s a long way — about 6 weeks in my estimate — before the Victorian roadmap out of lockdown will be implementable. Already now Melbourne has the dubious honor of having beaten Buenos Aires in the longest-lockdown sweepstakes; once the number of deaths will climb — and climb they will, as the state’s hospital and ICU capacity are likely not up to snuff— some fans of Andrews will surely reconsider. I doubt very much that by late October, Andrews will still be the premier of the three most populous states with the best Newspoll approval rating. Testable hypothesis right there. Mark it.

Meanwhile, in NSW things are looking better with the day.

Having announced its roadmap weeks ago and having navigated that fine line between urgency on the vaccination front and giving hope that there is light at the end of the tunnel, Berejiklian (Glayds) is forcing the way and the numbers are going her way: The peak was reached — as is now becoming clear — a couple of weeks ago already, hospitalizations and ICU stays have stabilized and are unlikely to be worse in October — and vaccination rates are stellar; later today more than 60% of those above 15 will be fully vaccinated and more than 85% already have had their first jab. At the pace NSW has been going for the last week (more than 1% per day of those over 15 getting their second jab and about half a percent getting their first jab), NSW one week on will have 70% of those above 15 fully vaxxed and be close to 90% having had their first jab. Stellar numbers, given where NSW started and not even taking into account that among those aged 12–15 the vaccination rates are also going up mightily, currently sitting at almost 40% of those eligible. Yes, please do tell me again about vaccination hesitancy.

“Freedom day” in NSW seems at best a couple of weeks away and that unfailing leading indicator — post-lockdown restaurant bookings — sees it exactly that way. (Berejiklian has made clear that it won’t really be a “freedom day” but a staggered relaxation of restrictions and fortunately restaurants and cafes and gyms and hairdressers opening in covid-safe ways will be among the beneficiaries.) Stop the press: Two friendlies of the Matildas [Oz’s women’s national soccer team] against Brazil confirmed for 23 and 26 October! Go the Matildas!

All said, Berejiklian (Gladys) and her health team have demonstrated how to live with covid without shutting down the joint over and over and over again, and without having the health system completely overwhelmed. Well, to the extent that we can tell and trust the official narrative. It is probably no coincidence that the kind of protests that Melbourne has seen last week have not materialized in Sydney.

Which brings us to Stacia (in Queensland) and Marky Mark (in West Australia). The former, at the beginning of the week, seemed rather smug about Queensland having reached 60 percent first jabs. Which, given that both states are way behind the vaccination leaders (NSW, ACT) (about 20% in first jabs and about 15% in second jabs) comes across as posturing of the kind that both Labor premiers seem to have specialized in for weeks. While geography surely plays a role, the key driver of the vaccination hesitancy in these two states seems to be a lack of urgency which seems in turn the inevitable result zero-covid policies bring about. At this point it seems clear that both states won’t have reached the kind of vaccination rates it requires to live with covid before the end of the year, i.e., almost three months later than NSW. It remains unclear what vaccination rates both premiers would accept to open up the internal borders, nevermind the external borders.

/ What’s the endgame in New Zealand?

Similar questions can be asked for New Zealand where the Ardern government has struggled to keep the Auckland outbreak under control, remains a prominent laggard in vaccination rates among OECD countries (although slightly ahead of Queensland and Western Australia), and where increasingly questions are being asked about the end-game. At the pace of vaccination the country is going right now, the 90% vaccination target (of the population) that Ardern has issued is months off and won’t be reached this year for all I can see. Meanwhile, an economist colleague in Auckland has warned that Ardern has dismantled democratic processes while using “the bully pulpit of her press conferences to engage in blatant political propaganda”; he argues that polls have become meaningless since there is no democratic debate any longer. It’s not a pretty picture he paints of St Jacinda and for that matter of the state of democracy in NZ.

/ Evergrande, neither grand nor forever

Late last week Evergrande, the Chinese property developer, missed an important interest payment deadline and is now in a 30-day grace period. It is unclear what the outcome will be and whether its (near) collapse marks the end of China’s economic miracle, as at least one author has claimed. Others have argued that this is business as usual, that it is simply the fallout of one of Xi’s attempt to improve the financial health of the Chinese real-estate market, and that in the grand scheme of things the travails of Evergrande matter only so much. (It has about $300 billion debt which is less than Australia, with 1/50th the population, has spent so far on its pandemic response. Thus, Evergrande is not too big to fail although a default surely would have considerable ramifications.)

Talking about China, Paul Frijters has an excellent piece over at in which he assesses where the ongoing Chinese reforms (the non-covid policy changes that have happened over the last 20 months) are going. He sees it as “the narrative for ‘a new Cultural Revolution’.”

/ Germany in for a new leader …

Germany is voting this Sunday and the results will be out in the wee hours of Oz Monday morning. I have previewed this federal election in late June here, three months out. Since then the polls have reflected some interesting trends, the most remarkable of which saw, about a month out from the election, the Social Democrats and their chancellor candidate Scholz overtake the Union of CDU and CSU and its candidate Laschet. Over the last ten days or so the polls have hardly moved and the average poll sees Scholz leading Laschet by three percentage points. About half a dozen coalitions are currently possible and at this point Laschet and Scholz are the only serious contenders for chancellor. The Germs are a risk-averse bunch. No experiments! (Keine Experimente!)

And that’s the wrap for week 38 of 2021. All facts, no spin. Oz for Dummies.

EconProf: I post occasionally on whatever tickles my fancy: Science, evidence production, the Econ tribe, Oz politics, etc. Y’all r entitled to my opinions …