Sack Phil Lowe

There are five reasons why Phil Lowe should get boned.

First, after a near decade of failed forecasting at the bank, the Lowe RBA is still resolutely projecting imminent rebounds for wages and inflation.

Second, the Lowe RBA refuses to use underemployment as its key labour market measure over unemployment, when it is the former that correlates with wages in today’s economy.

Third, the Lowe RBA refuses to incorporate immigration into its analysis, allowing the development of a massive output gap in the Australian economy that is killing wages, living standards and class equity:

Fourth, despite APRA’s success last year in containng house prices, the Lowe RBA now insists that it has responsibility for asset inflation, creating a void of diffused responsibility at the heart of monetary policy.

Fifth, the Lowe RBA has pure and simple failed to meet its most basic targets of full employment and inflation within the 2-3% band.

That’s s shocking report card and he’s got to go.

David Llewellyn-Smith


  1. “… Fifth, the Lowe RBA has pure and simple failed to meet its most basic targets of full employment and inflation within the 2-3% band…”

    Perhaps we should sack the government for delegating a fundamental responsibility of government, like employment, to a central bank.

    Perhaps we should be asking the question “Why on earth do we want the Central bank to promote inflation?”.

    Where are all these members of the public who are upset because prices just don’t rise like they used to.

    Most people know prices are rising and the main reason it doesn’t show up in CPI is because the ABS work very hard to make sure that it doesn’t.

    Lots of hedonic adjustments means that price rises only look like price rises to general public. Pointy heads know better than that!

    If the RBA factored in mass immigration and industrial scale wage theft and how it is pushing down wage growth and thereby one driver of inflation, how would that make it any easier for it drive inflation with private bank asset price pumping credit creation?

      • happy valleyMEMBER

        And sending savers and fixed interest income reliant retirees to the grave, by theft of their living wage.

          • And if the RBA can’t create ‘inflation’ to pay off the mortgage, then give the punters negative mortgage rates to accomplish the same.
            There is no viable answer to correct the economic/social imbalances we have now. Either ‘inflation’ arrives and the market sets higher rates to accommodate it ( they will, regardless of the Cash Rate) or deflation arrives and destroys the equity that everyday citizens have been ‘encouraged’ to plough into their houses and super funds.
            To paraphrase Roubini, it’s a lose, lose, lose situation we are in and have been for some 10 years now. And guess what? “They” know it…

        • It’s not just theft of their wage, it’s much worse. For working class and anyone other than those that inherited wealth, NIRP in real terms, is theft of a persons past labour. When inflation takes away the purchasing power of an aged bricklayer with a dodgy back, it takes more than the purchasing power, it takes a period of life he can never replace.

          • +1 and in that Environment doesn’t it kind of make sense to buy multiple properties and rent them out as a way of preserving your wealth? Nathan Birch types may be right all along. Because if they over leverage and go bankrupt so what? The debt is never repaid. Just wait a few years and start again. If they have a good leverage ratio then they may only have to dispose of 1 or 2 assets but keep playing? And if they are conservative enough, sure the portfolio takes a bit, but HODL for long enough and it will all work out.

      • Yes since when has 3% inflation become something to aim for?

        The expected result of using better technology to lower the cost of production is deflation so why anyone would be bothered by 0% is hard to understand.

        Perhaps asset price pumping is the new black.

        • Agree target should be 5%, and treated as a target not a ceiling.
          Good to see you are still campaigning for a synthetic gold standard ie. no inflation. So anytime the equilibrium real rate is 0% or less we are in a recession. Great.

          • Sweeper,

            Good to see you pop up promoting inflation as a policy goal. You could be an exhibit at the Power House museum. “Economic ideas from the olden days”

            No doubt you reckon the ALP keeps losing elections because it lacks the courage to campaign on a platform of a 5% inflation target.

            Sorry you think it is all the fault of journalists writing stuff that few people bother to read.

          • That’s complete nonsense. I suggest, politely, you stick blinkered ideology aside for a sec and employ commonsense instead:

            If you are earning a salary that is going nowhere every year, are you better off if the goods and services you purchase every year go DOWN in price or UP?

            This obsession with the ‘need’ for inflation is the result of adherence to faulty economic theory. The fact that supposedly intelligent people buy into this beggars belief – but perhaps explains why Western economies now find themselves in such a mess.

          • Sweeper,

            Return to the Gold Standard?

            Lol – I have never said anything of the sort. That is just a projection of weirdos who want pollies to campaign on a policy of a 5% inflation target.

            Just because I think pumping asset prices with cheap credit to try to generate inflation is lunacy does not make me a gold bug.

            Don’t be like Karen (aka Skippy)

          • Nil inflation was a deliberate goal and outcome of the gold standard. The price level was the same or slightly lower at the end of the 19th century v the beginning.
            As for weirdos. You won’t find 1 economist with a basic understanding of macro and money illusion who thinks nil inflation is a good idea.
            You will find a heap of ideologues and bondholders who think it’s a good idea. But at least bondholders have enough wit to understand it means higher unemployment – they just don’t care, as long as they get their real yield which they believe they are entitled to under the immutable laws of God and nature.
            Then there are the ideologues pretending to be economists like Friedman, who claimed the CB should target deflation so it can pin its short term rate at zero permanently. To eliminate the shoe leather cost of having to go to the ATM and withdraw cash, or call your broker and sell a few bonds. If the nominal rate is zero, people just walk around with all their nominal wealth in their wallets – and there is no cost to that. What a genius.

          • Sweeper,

            It must hard to be you.

            Unable to address a point and forced to invent stuff so you can have an argument.

            “..Nil inflation was a deliberate goal and outcome of the gold standard..”

            Who said anything about targeting zero inflation other than YOU.

            My criticism was the idea of trying to generate 2-3% inflation by goosing asset prices with central bank driven demand for private bank credit.

            As you well know….. and constantly criticise…I support.


            1. Central bank deposit accounts for everyone who wants one.

            2. Trickle up economics in the form of tax cuts to lowest income earners that are directly monetised by the Central Bank.

            3. Direct monetisation of part of the government deficit.

            This approach of leaving more purchasing power and central bank deposits in the hands of the general public is much more likely to generate demand and put upward pressure on prices than the current model of pumping asset prices with central bank manipulated interest rates and demand for private bank credit.

            Now I appreciate that my approach would not appeal to a “command and control” school of economics fan like yourself who reckons what we need is to go back in time and have 40% of the economy run directly by the state and the other 60% being manipulated by treasury yanking levers on the private bank credit creation system.

            You may hate the idea of public money system where the general public have the freedom to operate deposit accounts at a public central bank and much of the money supply is created directly by the public sector rather than the current model where most of the money supply is in the form of private bank credit and unsecured at call investment accounts at private banks but that probably just reflects the fact that you work at a private bank.

          • Templated 007 response.
            Say A .., Someone explains why A is wrong.
            007: but I didn’t say A, I said B
            And you’re a bank apologist.

          • Sweeper,

            Good idea – I need a template for your tedious ‘throwback to the Command Control 1940’s’ responses.

            You do realise that the ALP got thumped at the end of the 1940s for the kind of policies you endorse and sat in opposition until 1972.

            Though your recent innovation in blaming the journalists for the ALP’s failures at the ballot box might qualify as something new under the sun.

            Kindly point to where I stated that 0% inflation should be a goal of policy or that we should return to the gold standard.

            Apart from keeping a private bank debt centred money supply approach to economic management alive, please elaborate on the advantages of the 5% inflation target that you think will be an election winning platform.

            Then give Albo or the Greens a call and let them know about this red-hot idea.

      • Don’t you know a healthy economy needs to rob its savers and salarymen of 3% per annum. Any good economist knows that.

        And don’t you know that if consumer goods were declining in price by 1% the economy would grind to a halt because everyone would stop buying things? Any good economist knows that too!

        • So true !

          We could solve the obesity problem by announcing forecasts predict food will be cheaper in a year so all the fatties stop eating so they can reap the savings on industrial people chow next year.

          The “we gotta have inflation” crowd are just a bunch of poor souls trapped in a “what is good for bankers is good for Australia” paradigm.

          Unfortunately we are talking about 90% of those downunder claiming to be “economists”.

          Have a listen to Chris Joye’s theories on Japanese inflation in yesterday’s podcast. Most amusing. Apparently it is impossible to have inflation if house prices are falling. He must be eating them!

          • Jumping jack flash

            The problem is that there is no distinction between the inflations. There is just inflation and inflation is good.
            CPI at 3% is terrible if wages are inflating at 0.6%, but, inflation is inflation.

            The same goes with money. Money is great, it doesn’t matter if the money was earned through the arduous transformation of raw materials into finished products and then sold for profit, or magicked up as nonproductive debt which then requires interest to be “found” from somewhere else in order to pay it. Money is money. There is no distinction.

            Its a categorisation issue. Economists are people and people are fundamentally lazy. Economists couldn’t be arsed thinking about how they could classify and then account for different types of inflation, they just lump it into the same basket and hope for the best. Same goes with the differences between money and debt. Nobody cares because its just too hard to keep track of.

    • Pfh007 – its simple. We are a CAD country; more of us are in debt than save. In addition the debt size completely dwarfs our savings. On the whole, like every other western country, our interest is in the rest of the world working for cheap so we can enjoy a higher than earned lifestyle with our debt commitments to that getting weaker over time (i.e get something for nothing via third world labor). May not be pleasant but that’s the truth as I see it.

  2. The RBA numpties have just gone through a rate cutting cycle right down to the lowest bounds when there was absolutely no need. They should have actually been raising rates.

    So, then of course when you’re cutting rates when there’s no real need to do so and you’re concurrently running an inundating immigration program, what do you think’s going to happen? Unemployment ain’t going to improve.

    But, of course only real reason that the RBA cut rates was simply a knee-jerk reaction to the Australian property price declines. Any other reason simply means that the RBA board is incompetent and has an inadequate understanding of the Australian economy.

    Australia has now been put in a very precarious position. The welfare of Australians is at high risk now thanks to the behaviour and actions of the current RBA board. God help the country should commodity prices collapse.

    • doc, it’s not that they would have done any better – they are all hostage to the self-same faulty theoretical nonsense, so in answer to your question: no, the next guy would have done the same. Economics is a closed shop – a group of people all singing from the same song-sheet, not an original thought among them.

      The fact that a moron like Thomas Piketty is lauded among the economics establishment is proof of the barren-ness of any any deep intellectual grasp of the subject.

  3. People voted for Scotty to make house prices great again. Scotty told Phil to make house prices great again. Phil made house prices great again.

    I suspect no one will be getting fired because everything is working out just fine (for now anyway).

  4. I agree it’s unfair, when I was assessed as a poor worker I got let go but then Phil can do it for years and gets to keep his job.

    • TailorTrashMEMBER

      Yes indeed …..couldn’t imagine Phil lasting too long in any private employer with a series of hockey stick charts like have been posted on here repeatedly over the years
      ……and picking up a cool million for it too ……….no wonder all the Indians are getting citazenship as fast as they can …..there is safe easy dosh in them government jobs

  5. Jumping jack flash

    Phil knows which side his bread is buttered on. He knows the mechanics of the New Economy.

    Don’t hate the player, hate the game.

    • And he knows how the game is played, he won’t be unemployed for long after his current gig.


  6. buttzilla fifteen

    I once again call MB to ban PfH and Peachy, they add NOTHING except Murdoch rhetoric and propaganda.
    I have to scroll too much these days, meh.

    • Once again?

      Haven’t seen much from buttzilla over the last decade. Still saving up for a membership are you?

      Murdoch rhetoric?

      Your comprehension skills clearly need a lot of work if you think anything I say has any connection to Murdoch.

      Murdoch is hard wired corporatist and has plenty in common with those ‘progressive’ lefties who hope to run the economy by yanking on large levers.