With the Reserve Bank of Australia’s long-awaited interest rate cut rolling out, Crikey readers added their voices to Bernard Keane’s point that it’s a stinging indictment of the government’s “strong economy” illusion. Readers went a step further in accusing the RBA of mismanagement itself. Elsewhere, readers took a similar line in their denouncement of the economic policies that lead to Australia’s productivity crisis.
On the RBA
Simon Mansfield writes: Since 2004, the RBA mismanaged two mining bubbles, two currency bubbles and finally the great housing bubble. The so-called “independent” central bank of Australia has failed over and over for 15 years. It’s independence is a complete fiction with no direct legislative basis and exists purely on the whim of a ministerial note. Maybe time for elected politicians to take actual responsibility for the economy and stop outsourcing the decisions to an overpaid central bank that keeps failing.
On Australia’s productivity crisis
Marcus Hicks: The lost decade, Bernard calls it. Well, guess who has been in office for two thirds of that decade? That would be the Liberal-National Coalition. Not just at a federal level but also at a state level in many cases. So the loss of this decade must surely come from the failed twin strategies of austerity and trickle-down. Time for neoliberals to rip those articles of faith out of their bibles.
John Brooker writes: Scomo and co. trumpeting their alleged superior economic management credentials for the whole of the recent campaign managed to suck a majority of voters into believing it. Most of this was known before the election and, believe it or not, Labor had policies to fix a lot of the Coalition’s blinkered incompetence and adherence to the bankrupt theory of a trickle-down based economy.
Wayne Cusick writes: No doubt the Productivity Commission’s solution to the problem it identified is to sell a government asset — perhaps the NBN.
Scott Grant writes: It might be time to bring the old quote from Alex Carey (Taking the risk out of democracy: propaganda in the US and Australia), out of storage: “The twentieth century has been characterised by three developments of great political importance: the growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy.” We don’t use the word propaganda enough. It describes pretty much the entire output of the Murdoch press and lot else besides.
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Wayne Cusick, I can scarcely contain my laughter on seeing the Abbott-Turnbull NBN described as an ‘asset’. You’re terrible, Muriel…
Crikey is, once again, not only delaying comments for ModBotting but removing them wholesale when one criticises the process.
Here is the stock standard reply – I’ve had to remove the ‘naughty’ word else the ModBot will have conniptions yet again.
Note especially the non mean culpa at the end – “Unfortunately this is out of our control.” – as if there is no sentience among the soft machines in the bunker.
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Try putting a hyphen anywhere in the ‘naughty’ word. It will still make sense.
The doughty citizens of Scunthorpe, UK have refused to change their town’s name despite it falling foul of so many Net filters.
What has become evident since the early aughts and beyond is that Monetary Policy is ineffectual. And thats because Banks don’t source the majority of their capital from central banks and deposit holders but rather other commerical banks. Thats why when the RBA changes rates it’s not actually changing the cost of money (or most of it) for the banks.
This is why during the GFC when the RBA was setting interest rates down, the big four were only passing down a poofteenth of the cut. This is why when APRA tells the Banks to curtail interest only lending it has a bigger impact on the housing market.
It’s time go back to the Keynesian draw board and also review the RBA’s place in the Aussie macro economic milieu IMHO.
PS: So if we want inflation to return we need the RBA to (peveresly) put interest rates up which would trigger higher lending rates which would trigger business to put prices up and for ordinary wage and salary earners to be sticking the hand out for an increase … but would also trigger housing price falls ….
Thats the topsy turvy post GFC world we live in