OK, I’ll bite. It’s the end of the week and I’m tired. It’s really not worth your or my time but I should at least note a new haymaker thrown at MB (or similar) by Stephen Koukoulas (“the Kouk”). A little excerpt gives the flavour:
For the recession doom merchants, the trade data also means that the hefty 1 percentage point contribution to GDP in the March quarter from net exports is likely to have a follow up 0.5 percentage point or so contribution in the June quarter when the national accounts are released in early September.
Of course, mining investment might fall 50 per cent next year or the level of inventories may be further depleted and therefore subtract from growth or wages and profit growth might fall precipitously. A new Abbott government may cut spending aggressively in his bid to return to budget surplus which would also subtract from GDP growth. But these speculative musings sit in contrast to the hard data over the past month which has been more or less as the Reserve Bank and Treasury forecasts them so recently.
…In its latest forecasts in the Statement on Monetary Policy, the Reserve Bank includes a scenario where GDP growth hits 4 per cent by mid-2015. The Reserve’s worst case for GDP growth over the next two years is 2 per cent.
I’ll back the Reserve Bank over those musing about a recession, any day.
It’s all very well to talk about hard data and only pick that which supports your case. I see a gentle uptrend in property prices and a modest rebound in dwelling investment like everyone else. But what I also see is a NAB survey that’s stuck in mud, a D&B survey that’s deteriorating, persistently high household savings with no sustained rebound in retail sales, a triptych of AiG surveys stuck in recession, defiantly low consumer confidence and credit growth, ANZ jobs ads trending down, unemployment trending up, falling bulk commodity prices with a looming glut in iron ore, sub-trend growth and highly credible private surveys showing a mining investment cliff ahead. None of these things are remotely controversial among serious-minded economists.
That doesn’t necessarily mean recession, no. But it sure as Hell does warrant some tough questions about how to make sure we avert one.
The Kouk is obviously attacking MB (or similar) today – ‘he who must no be named’ – which is fair enough, but in doing so he completely mis-characterises the discussion that is underway. The recent debate about the prospect or otherwise of a recession is about risk and how to manage it. It’s not “doom-mongering”. It’s not “mischievous”. It’s fulfilling a civic duty to assess current and approaching conditions, debate the options for addressing them, and ensure that the greatest possible number of Australians enjoys the greatest possible prosperity (or avoids the worst of potential pain).
That is, it’s about being a decent business media outlet. Something the Kouk and his employer have forgotten all about.
