Joye pwnes McCrann


Over the weekend, Chris Joye responded to Terry McCrann’s impolitic attack of late last week and, in fairness, here it is from the AFR:

Terry McCrann of the Herald Sun…had a panic attack when I questioned the hand that had fed him for so long. McCrann was once known as the “shadow governor” for reliably getting the inside running on interest-rate recommendations before RBA board meetings – until I kicked up a loud fuss about this practice via columns, parliamentary questioning and the ABC. The RBA responded by slapping a five-day media blackout on staff before interest-rate decisions.

Coincidentally, McCrann started getting his rate calls wrong. Other “worded-up” commentators, like Ross Gittins, complained tongue-in-cheek that they’d been taken out of the high-profile RBA prediction game. 

Anyway, McCrann, who avidly cites this column, was surprised I thought it unseemly the last two Treasury secretaries and RBA governors had joined bank boards after leaving office. Contrary to his claims, I don’t think RBA and Treasury officials should be banned for life from financial services. I was, after all, myself an RBA analyst and continue to work in finance.

But I do think if you are running the RBA or Treasury, there should be mandatory gardening leave. I’d advocate 12 to 24 months.

Another baseless McCrann claim was that I believe every bank in the world is insolvent. I never wrote anything remotely like this. What I did say was that when funding markets temporarily closed during the GFC, Australian banks would likely have traded insolvent were it not for government guarantees of their bonds and deposits, and the RBA’s lender of last-resort facilities.

All very sensible stuff and puts McCrann (as well as former RBA boss Ian Macfarlane) to shame.

David Llewellyn-Smith
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  1. McCrann has always been a completely objectionable loud mouth. ‘Tis heartwarming to see him rebuked by someone in a good position to do it.

  2. Hmmm, if McCrann can see the rentier effect at work in “climate policy” I am surprised if he is blind to it in urban planning; I would like to be able to enlighten him.

    I think they are quite closely linked, climate change is one of the major justifications for urban planning fads, and activism regarding both things is heavily supported by some of the world’s wealthiest property and finance big-time-operators.

    • Darwin award.

      Your given 12 information blocks to assemble into any constructed order you wish, observer bias [belief] will ultimately decide that order.

      Now what you might want to consider is the effectiveness of old timey interest rates policy and economic out comes e.g. were not on a gold standard any more…. internationally floating thingy and super charged by computational power.

      skippy… btw planning urban environments is not a fad, humans have been doing it for eons, but, yeah presently it has more to do with developers than sound social policy.

      • Skippy, urban planning, for decades, was based on a sound conclusion that dense urban environments were unhealthy and created social injustices in economic land rent and housing outcomes.

        The reversal of this policy course since the early 1990’s is a combination of rentier class fightback and faddism that is oh so convenient to the rentier class fightback.

        Of course in Britain the rentier class were much more alert and powerful, and 1947 was the date from which “urban growth containment” commenced there. Hence it is well known that the most spacious homes on the market, on average, all date from the 1930’s.

        I quote extensively from an academic’s findings re UK housing, in this comment:

      • H&H

        It might be instructional to inform PB that rentier’s excel at surfing fads, even those that they do not create, hell why even create beyond base trend then you don’t have to expend opportunity costs. All you have to do is search the herd for directional opportunity and skim the cream, rinse and repeat.

        skippy… the consumerist churning mechanism is already in place after decades of Bernays mental ointment.

      • H&H, what I just said is nothing to do with whether CAGW is true or not. You can’t deny that the big money is in favour of certain policy courses that are flat wrong even if CAGW is true.

        Urban planning is just part of this.

        If CAGW is true, we need to draw up a schedule of cost-benefit ratios per strategy, and focus on all the cheapest ones. Trying to achieve transport mode shifts that cost $4,000 per ton of CO2 abated is, shall we say, not smart?

        Then there is the inconvenient outcome that driving industry away from the first world, to the developing world, increases emissions.

        “Rebalancing” first world economies away from production, to finance and land rent, is all only too convenient to the rentier class. And carbon credit trading is merely the next big horse-trading arena to follow MBS’s, CDO’s, derivatives, etc.

        Technological advance and adaption was always the most sensible solution, and the right fiscal incentives always were the best policy course. I wouldn’t even bother to make a fight over whether CAGW was true or not, if I thought the policy strategies being adopted were the obvious best ones, that basically do more net good than harm anyway.

        I am an optimist on the natural evolution of economies, and agree with Jesse Ausubel, one of the brightest minds on the planet, that “carbon will disappear from the global economy anyway” on its past trajectories. Giving it a nudge along with the right fiscal incentives is harmless. The way the rent-seekers are piling into the issue, is wrecking everything, even the actual process of beneficial evolution that was solving the problem anyway, even if arguably too slowly.