A couple of Bertie’s college friends now run a successful cricket coaching academy. When the old love for the maidans resurfaces, Bertie pays a visit to their academy just to watch young cricketers practise. Last Sunday, when Bertie was sitting in the shade watching the kids toil, one particular batting drill caught his eye. He was later told that it was called ‘Range Hitting’. The idea was to try and hit every ball for a six, irrespective of where it was pitched.
This was completely the opposite of what Bertie was taught as a kid. The mantra then was always to hit the ball along the ground, and if anyone hit it in the air, he would be met with a volley of affectionate words from the coaches. The errant batter would then have to run around the ground in full batting gear. The exhausted kid would be told that even the great Don Bradman had hit only six sixes in his entire Test career, and if hitting the ball in the air was what he liked, he should play tennis-ball cricket.
After the batting drill, Bertie asked his friend Dan about it. Dan shook his head with the disgust of a classical dancer asked to teach Bollywood dancing. “It’s white-ball cricket, Bert,” he said. “Cricketers are now selected for their ability to hit sixes. So, we have to start early with the kids. The times have changed,” he sighed.
What was taboo earlier had become desirable now, and the virtues of yesteryears had turned into liabilities. Bertie tried to think of parallels to this in other spheres, and a comment from an American macro thinker came back to him. “You guys are fiscal hawks,” the man had said about India’s fiscal policy. Bertie had dismissed him as being too dramatic at the time. After all, one of the slides in his investor deck lauded the government’s conservative fiscal stance.
But now Bertie started wondering if fiscal conservatism was like playing the ball along the ground in the era of white-ball cricket. The coaches approve of it; the purists applaud, but you may end up scoring less than what could have been. Germany, Bertie recalled, was loosening its debt-brake rule; the US deficit was at a record high even when the economy was doing alright; and, all put together, the Chinese deficit was in excess of 10% of GDP. Everyone seemed to be range-hitting.
When faced with any macroeconomic confusion, Bertie’s go-to man is his economist friend Ron. Bertie narrated his range-hitting hypothesis to him, concluding that even India should start hitting the fiscal ball in the air to amp up growth. Ron gave this some thought and then asked Bertie a seemingly unrelated question. “Are you familiar with the hat, haircut, and tattoo framework of decision-making?” Bertie indicated that he was not.
“Well, it’s about how easy it is to reverse a decision if you realise that you’ve gotten it wrong. A hat can be changed almost instantly, a haircut in a few weeks, but a tattoo is almost permanent. Therefore, you can choose a hat on a whim, but you should think really long and hard before inking your body.”
Bertie was getting a sense of where this was going. Ron continued, “Let’s say one batter decides to start range hitting. What does the failure scenario look like? She gets out while doing it. If it happens a lot, she may lose her place in the side.”
“But this can be reversed easily. Once she realises it isn’t working, she can course-correct. In our framework, I would put it close to a haircut.” Bertie agreed. “But think about the failure scenario of loose fiscal policy—inflation, a mutiny in bond markets, maybe a currency crisis. A near-permanent dent to hard-earned macro stability.”
Ron smiled. “That, to me, is more irreversible than even a tattoo.”
Bertie saw Ron’s point and once again felt happy about the fiscal policy slide in his presentation.
Bertie is a Mumbai-based fund manager whose compliance department wishes him to cough twice before speaking and then decide not to say it after all.
