Tim: Every time I read your posts I see a fundamental heart informing a genuinely clear-eyed and humanitarian view of what is happening economically and socially in our society - a heightening inequality with protections for the wealthy. Thank-you.
With regards by the ‘serious people’ of the mainstream media, ALP and LNP to claim that the Greens are ‘crazy’, it shows how disconnected they are. The only fools in the room are them who pretend the RBA is a group of all seeing wizards when they really are representatives of the interests of capital and not regular people.
The fetishisation of this group with ‘independent’ central banking is symptomatic of the abdication of elected governments taking any responsibility for the monetary policy. Your mortgage has gone up? Sorry! We have an independent reserve bank and we won’t act even when we have the power to. Chalmers doing a political theatre piece when he literally has the authority to help people but won’t. The technocrats should always be subject to accountability by an elected representative otherwise we may as well give up on the democracy side of things.
The abandoned proposal by ALP to take that power away earlier shows how they really are true believers in the nonsense that is neoliberalism.
Tim, Jim Kable (thank you both) has identified the rich vein in your commentary - a fundamental heart informing a genuine clear-eyed and humanitarian view of what is happening economically and socially in our society - a heightening inequality with protection for the wealthy." Thank you for the integrity and alignment of your heart and mind that seeks social and economic justice. Thank you for the naming and giving voice to this. Great piece, Tim.
The meaning of "central bank independence' changed radically in the early 1990s with New Zealand taking the lead. Before that, it meant that the Australian Treasurer could not issue orders to the central bank, except through what amounted to a nuclear option of a declaration to Parliament. But it was expected that the government and central bank would discuss and (as far as possible) agree on fiscal and monetary policy (similar rules applied in most places). In the post-1990 version the governmetn and central bank agree on an inflation target (which never changes) and then the central bank does whatever it sees fit to reach that target. This never worked will in NZ, which had a string of recessions induced by monetary policy. But it was highly successful in the US for fifteen years or so, until the GFC.
"Independence allows central banks to resist moves by politicians who may want expansionary monetary policies to boost short-term economic performance, perhaps at the cost of higher inflation in the long run."
Tim, a quick look at the nations economic history will tell you that is just not true. Moderate deficits have been the norm in Australia since 1901, without consistently uncontrolled inflation. The Australian government instructs the reserve bank how much currency to issue, and whom to pay. The RBA is a creature of government.
When governments are preaching the need for austerity, cannot afford to properly fund health, education, and housing in the nation, they never have a problem funding the next forever war, AUKUS, or some other toy for the airforce. Those are choices made by governments.
The Australian government is the sole issuer of the Australian currency. It issues the currency by instructing its bank, the Reserve Bank of Australia.
The actual operations of central banks are well covered by Steven Hail, Bill Mitchell, Steve Keen and many other heterodox economists.
"Put simply, the idea is rooted in the need to maintain price stability and mitigate inflationary pressures that can arise from political pressure."
In fact, Tim, the idea is to allow our representatives to place responsibility for economic decision making into the hands of unelected technocrats, thereby removing themselves from responsibility for the adverse effects of economic decisions, such as increasing unemployment due to interest rate hikes instigated by central banks in the fight against inflation.
These ideas are covered in Clara Mattei's book, "The Capital Order: How economists invented austerity and paved the way to Fascism.
You are correct regarding the drinking of the neocon Kool-aid by "progressive" governments as is evidenced by Albanese and Starmer.
Tim: Every time I read your posts I see a fundamental heart informing a genuinely clear-eyed and humanitarian view of what is happening economically and socially in our society - a heightening inequality with protections for the wealthy. Thank-you.
Another great piece Tim.
With regards by the ‘serious people’ of the mainstream media, ALP and LNP to claim that the Greens are ‘crazy’, it shows how disconnected they are. The only fools in the room are them who pretend the RBA is a group of all seeing wizards when they really are representatives of the interests of capital and not regular people.
The fetishisation of this group with ‘independent’ central banking is symptomatic of the abdication of elected governments taking any responsibility for the monetary policy. Your mortgage has gone up? Sorry! We have an independent reserve bank and we won’t act even when we have the power to. Chalmers doing a political theatre piece when he literally has the authority to help people but won’t. The technocrats should always be subject to accountability by an elected representative otherwise we may as well give up on the democracy side of things.
The abandoned proposal by ALP to take that power away earlier shows how they really are true believers in the nonsense that is neoliberalism.
Tim, Jim Kable (thank you both) has identified the rich vein in your commentary - a fundamental heart informing a genuine clear-eyed and humanitarian view of what is happening economically and socially in our society - a heightening inequality with protection for the wealthy." Thank you for the integrity and alignment of your heart and mind that seeks social and economic justice. Thank you for the naming and giving voice to this. Great piece, Tim.
The meaning of "central bank independence' changed radically in the early 1990s with New Zealand taking the lead. Before that, it meant that the Australian Treasurer could not issue orders to the central bank, except through what amounted to a nuclear option of a declaration to Parliament. But it was expected that the government and central bank would discuss and (as far as possible) agree on fiscal and monetary policy (similar rules applied in most places). In the post-1990 version the governmetn and central bank agree on an inflation target (which never changes) and then the central bank does whatever it sees fit to reach that target. This never worked will in NZ, which had a string of recessions induced by monetary policy. But it was highly successful in the US for fifteen years or so, until the GFC.
"Independence allows central banks to resist moves by politicians who may want expansionary monetary policies to boost short-term economic performance, perhaps at the cost of higher inflation in the long run."
Tim, a quick look at the nations economic history will tell you that is just not true. Moderate deficits have been the norm in Australia since 1901, without consistently uncontrolled inflation. The Australian government instructs the reserve bank how much currency to issue, and whom to pay. The RBA is a creature of government.
When governments are preaching the need for austerity, cannot afford to properly fund health, education, and housing in the nation, they never have a problem funding the next forever war, AUKUS, or some other toy for the airforce. Those are choices made by governments.
The Australian government is the sole issuer of the Australian currency. It issues the currency by instructing its bank, the Reserve Bank of Australia.
The actual operations of central banks are well covered by Steven Hail, Bill Mitchell, Steve Keen and many other heterodox economists.
"Put simply, the idea is rooted in the need to maintain price stability and mitigate inflationary pressures that can arise from political pressure."
In fact, Tim, the idea is to allow our representatives to place responsibility for economic decision making into the hands of unelected technocrats, thereby removing themselves from responsibility for the adverse effects of economic decisions, such as increasing unemployment due to interest rate hikes instigated by central banks in the fight against inflation.
These ideas are covered in Clara Mattei's book, "The Capital Order: How economists invented austerity and paved the way to Fascism.
You are correct regarding the drinking of the neocon Kool-aid by "progressive" governments as is evidenced by Albanese and Starmer.
society not economy
democracy not duopoly
Neat article TD.
cheers