The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Friday, September 24, 2010

The RBA wants the govt to tighten fiscal policy--pronto

In today's AFR we have RBA front-man Alan Mitchell calling on the Gillard government to tighten fiscal policy to reduce the burden currently being placed on monetary policy. This is smart. If the RBA is forced to hike five times, as the likes of Paul Bloxham predict, it will place tremendous pressure on the non-resources sectors of the economy. The other casualty will likely be the housing market, which the RBA may not be entirely displeased about. A little nominal price depreciation will not give the Bank too much heart-burn. And we would almost certainly see some real and probably nominal declines in housing costs if the Bank does lift the cash rate by 1.25 percent. Interestingly, Mitchell's call today echoes that of RBA director, Warwick McKibbin, earlier in the week. That is, both are doing the RBA's bidding.