You may recall that yesterday the RBA’s John Edwards made news by arguing that there was no mining boom, there is no adjustment after it and that it’s all good, roughly speaking. Alan Kohler swallows the happy pill today and dances the jig of short memories:
…Two serious questions emerge from his work: first, as the barman said to the horse, why the long face? And second, how can the success be sustained?
Dr Edwards answers the first question thus: because it’s felt that “only a crisis can motivate worthwhile change”.
So even though participants in the economic debate are well aware of Australia’s record of achievement, the whole tenor of the debate is often influenced by the premise that the Australian economy has failed in order to promote reform.
I think there is a little more to it than that: economic commentary that just says everything is fine and that nothing needs to change doesn’t seem very weighty, not really worth the price of admission.
It behooves me to recall that it was the RBA that led the national debate through the 150 year terms of trade and “mining boom”. When Edwards joined the board in mid 2011 the bank was very actively considering whether or not to blow up the economy to “make room” for it.
My own short memory tells me that Edwards was working in the Middle East at the time of his appointment so maybe he missed it. MB was just about the only voice of sanity in the marketplace of ideas at the time with every commentator, every official, every parliamentarian drunk on Australian exceptionalism. The book that captured it all was the widely quoted “Australian moment” which argued fulsomely that this time it’s different, to great applause.
To describe the past few years as “cherished gloom” among the elite is ludicrous. It was an era defined by an optimistic punt on endlessly shipping dirt to China that was uniformly endorsed by the elite, including Messrs Edwards and Kohler. Outside of carbon mitigation, the notion of “reform” was even farther afield than was Mr Edwards.
That Kohler celebrates Edward’s attack on the “black armband account of Australian economic history” even though it was the “doomsayers” that rightly foresaw the crisis-level interest rates currently abroad is one dizzying pirouette.
