The Australian Financial Review was supportive of the ex-Reserve Bank Governor, Phil Lowe, telling its readers that he was the “scapegoat” for Albanese and Chalmers “their foolish promise to lift the wages and living standards of ordinary Australians without any plan to do so”.
Poor Phil, he was a man who had the impossible task of trying to fix inflation and it wasn’t his fault and he didn’t do anything wrong and it was all those nasty politicians that spent too much during the pandemic and anyway, it wasn’t a promise to keep interest rates at their current levels until 2024 so anyone who took it as a guarantee only has themselves to blame…
The final point sounding suspiciously like: “You knew what I was like when you married me so how can it possibly be my fault that I said I’d do something and then didn’t?”
Whatever the fairness or otherwise, it does strike me that those who worship money are quick to forgive the transgressions of their fellow travellers while being quick to tell the poor and downtrodden that it was just their lack of enterprise/work ethic/personal quality which found them on struggle street.
Now I don’t mean to be too harsh here but there is something rather strange about a situation where the governor of the Reserve Bank, who has the task of ensuring that inflation is kept under control and that the economy is kept from any shocks, decides that it’s necessary to make a prediction that is so far into the future that anything might happen, argues that it’s not his fault that his prediction was wrong and anyone who listened to him was rather silly because he was just thinking out loud and nobody was meant to take it as a definite thing and the only reason that he did it was so that people had some idea about the future.
Putting aside his unfortunate attempt at fortune telling, the fact remains that, if one of his jobs was to keep inflation under control, then one would have to say that he failed at that rather spectacularly when it’s been necessary to raise interest rates so many times. Of course, the counter argument was that the inflation was nothing to do with Australia and that there was nothing he could do… which sort of suggests that he was just putting up interest rates because he needed to do something and that was something, so he did it even though it was only going to make some people less able to afford to eat, while others reaped the benefit of more income from their savings… which is potentially inflationary.
Some people were saying that Lowe has been proven right by the fact that inflation is starting to come down. This is wrong for two reasons. The most obvious being that if it wasn’t his fault that inflation took off, then how can it be his actions that brought it under control. Once the horse has bolted, you can’t claim credit for shutting the gate and then firing shots at the horse in the hope that you’ll either scare it into going back to the stable or kill it… which makes it easy to catch but any hope of a soft landing for the horse is out of the question. (Just to be clear here for anyone taking the analogy too literally and wondering how it can get back into the stable once the gate is shut: The horse is the economy and the soft landing is the lack of a recession.)
The second is that it’s generally conceded that the inflation wasn’t caused by excessive demand, but by costs and supply problems. Therefore suppressing demand would have had minimal effect on it. I mean, I can say that I sacrificed a virgin chicken every full moon in order to appease the gods of inflation and I was successful because now inflation is retreating. The only real difference between that and Lowe’s strategy is that his didn’t involve cruelty to animals… just mortgage holders, but the RSPCA doesn’t care about them.
Anyway, Lucky Phil has gone and 2023 is the year of good-byes. We also say good-bye to Alan Joyce and we can once again look forward to Qantas only cancelling flights that exist. The incoming head, Vanessa Hudson, has announced the novel idea that she’d be working on improving customer service and that this would actually work to help their main aim of boosting the share price so that the outgoing CEO’s package would be worth more. A source told me that Qantas are developing a radical new concept where people’s luggage will be put on the same flight as they are but this may take some time as it will involve a whole new business model.
In breaking news, Senator Marise Payne has announced that she will be resigning from the Senate at the end of the month. This came as quite a surprise to many as she’d been so quiet lately that most people presumed that she’d quit at the 2022 election.
Whatever, her colleagues wished her well and heaped praise on her achievements even if they couldn’t actually remember about any specifically. Opposition Leader (surprisingly, he is that even though the media report his thoughts on just about everything), Peter Dutton said: “For more than 20 years, Marise has not only been a wonderful colleague, she has also been a dear friend – someone who engages in the battle of ideas in the great Liberal Party tradition.” This being code for: The outgoing senator was argumentative and didn’t always agree with me, even though I’m always right!
The rumour is that Tony Abbott will replace Payne in the Senate, but I’d ignore it because the only person spreading it is Tony himself. Scott Morrison said that he was up for the job, before changing his mind when someone convinced him that he couldn’t be a member of both houses, even if he was five ministers in the previous Parliament.
There’s also a rumour that Scott Morrison will quit Parliament as soon as he gets another job, so that’s not likely to be any time in the life of the current Labor government.
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