by PAUL COLLITS – THIS week the mighty Reserve Bank of Australia, cheerleader for printing money no one has, increased interest rates yet again, plunging millions of Australians further into hoc and, for many, despair.
The purpose of this monetary carnage is to curb inflation. You know, the cost-of-living crisis. (The same crisis that apparently caused nearly two-thirds of us to reject the Voice to parliament recently.)
As The Sydney Morning Herald noted: “On 13 occasions from May last year, the Reserve Bank Board has lifted the cash rate. It has now been pushed up by 4.25 percentage points – the biggest increase in the shortest period in 40 years. The last time the bank was so aggressive, the country ended up in the deepest recession since the 1930s.”
This crisis will, in all likelihood, make the Albanese Government a one-term wonder.
To borrow from a previous famous election campaign, the Dutton message might simply be “ask yourself – are you better off than you were three years ago?”
What is the main cause of inflation? As any students of Milton Friedman would remember, it has more than a little to do with money supply.
It isn’t rocket surgery. During “COVID exceptionalism”, as former Victorian Premier Daniel Andrews termed it, we had:
- Almost zero output, as the whole economy was sedated;
- A trillion dollars hosed up against the proverbial by the government of Scotty from Astra Zeneca and the other fiscal bandits sitting around the National Cabinet table; and
- The Reserve Bank printing money like an inebriated seafaring matelot.
This is as perfect a recipe for hyper-inflation as one is likely to find.
One of the more surprising developments during the pandemic economic pause – where many were under-employed, working from home and/or raking in taxpayer-funded JobKeeper, JobSeeker and similar scams – was the COVID real estate boom. It went viral!
People, especially those of the laptop class, with both money and time on their hands and the unexpected bonus of sudden mobility, went off and caused a massive property bubble. A substantial contributor to inflationary pressures.
Then we had the lockdown-driven supply chain ruptures. Causing shortages of all sorts of things, and increasing demand for smaller supply, causing … more inflation.
Now we have prospective mass immigration, adding to housing shortages and so putting a floor under rents and house prices. More inflation.
Of course, the banks and business generally want more and more migrants to prop up spending in the economy – the spending that is taken out by the interest rate hikes.
You couldn’t make this up. It is all economics 101.
And so the spendathon and the lockdowns turned into a death spiral for the economy.
During the pandemia, the only critics of the lockdowns allowed to get their opinions into the media were those (idiots) calling for even harsher and longer lockdowns.
The Guardian headlined this week: “Almost half of Australian mortgage holders under financial stress…”
Channel Nine has also chipped in: “Interest rate hike means you need almost three median incomes to afford the average Australian house.”
It was a reminder of the earlier madness of another prime minister and Treasury head (Kevin Rudd and Ken Henry) and another cash splash engineered to “solve” some other exaggerated “crisis”. Go big, go early, go households!
Apparently ScoMo was all but ignored by fellow summiteers at the much-discussed Alliance for Responsible Citizenship (ARC) conference in London the other week.
That was a bit harsh, though richly deserved in his case. Harsh? Well, the room was full of those who have been royally rogering their countries for decades, including (especially?) during the COVID scare, and who now have found their principles. As Cory Bernardi has acidly noted.
No, ScoMo isn’t Robinson Crusoe. From all reports, COVID totalitarianism wasn’t high on the ARC agenda.
No doubt, as Bernardi suggested, because it suited the many political delegates present to park the whole mess. Just don’t talk about it!
Those of whom we expected so much more, helped drive the collapse of sense, proportion, reason, moral compass and spine in our governance institutions.
Primarily among them was our medical establishment. Having lost its grip on reality and science, it wanted its cut from the emerging irrational panic.
This story is a timely reminder of the madness of the day and of the fact-free, proportion-free decision-making of those in power, afflicted by a lethal combination of cluelessness and panic.
Remember PPE? Or ventilators (that killed people)? Distancing? Silly masks? Queues going around the block for useless, misleading PCR tests for tens of thousands of people who were not remotely ill?
Or the conga line of COVID criminals who have slithered out of the building? With names like Gunner, Andrews, Hazzard, Berejiklian, Morrison, McGowan, Hunt, Skerritt and Sutton. Send them the bill for your latest mortgage rate rise.
Still no COVID inquiry of consequence or consequences. Only stories like the PPE disaster, public sector pay rises, more clueless, Yes-voting public servants off to Canberra as part of an ever-expanding government sector, an exponential increase in business bankruptcies, masses of people simply exiting the economy, radical decarbonisation, and ever more migrants to plug the gaps.
It behooves us to reflect on cause and effect in public policy, on political class responsibility and on the continuing long tail of the COVID policy lunacy.
Every single interest rate rise, the fruits of inflation driven by spending madness and printing money that no one had, should set off our anger afresh. I suspect it won’t.
The crimes of COVID totalitarianism did not end in 2022, not by a long stretch.
US publisher Jeffrey Tucker asks: “When governments and central banks behave in unbearably stupid ways, it is worth asking whether there might be a point to the madness.”
Other than venal self-preservation on the part of the political class, there isn’t one.PC