He is the lucky lucky lucky Governor of the Reserve Bank of Australia (RBA)!
And he is telling all those whinging union officials, struggling families & businesses at tipping point in Australia to stop their whining & cheer up! But don't expect the RBA to help!
I believe Mr Stevens sees our two speed economy as "Miners" (good) & the rest or "Whiners" (bad). And he wants the "whiners" to shut up & go away! They are spoiling the party!
Stevens is lucky because unlike his counterparts in other developed countries who have to work with near zero official interest rates which have severely blunted their monitory controls, Mr Stevens took over as Governor with Australia's official rates at around 4.25%.
And he's had enough of the old whining structurally unsustainable businesses! Now that he's reluctantly has had to admit the suffering amongst most sectors of the business & drop the official interest rates to 3.5% he says enough is enough! Structural changes are inevitable & it has nothing to do with RBA & its monitory levers if many businesses collapse in the coming months!
Whilst he does have a point in macroeconomic terms & structural changes seem to be inevitable regardless of the RBA monitory intervention or lack of it, the main point that is getting more traction & is supported by high profile economic luminaries such as Professor Paul Krugman, is that our economy, like Europe & USA could do & in fact is in need of expansionary stimulus. This is essential in order to combat lack of liquidity, deflationary pressures, lower consumer spending & confidence & other issues which are depressing many sectors of the economy. Structural changes alone will not address these issues.
More & more consumers attempt to save & payback debt. This is causing massive problems for business. These huge problems such as the deflationary pressure on prices & skyrocketing labour costs, unlike what Mr Stevens is saying, can not be dealt by business without monitory and fiscal stimulus in the economy to increase consumer confidence & spending.
So, no wonder he wants us to cheer up & see the glass half full! He's no different in that respect to the Prime Minister & her lucky Treasurer! He is in other words, like the Government, is attempting to take the credit for Australia's overall healthy economic results & growth, almost all of which are due to the mining boom, an industry which employs a mere 200,000 people out of 12,000,000 currently in the workforce. The growth in a multi speed economy, which Mr Stevens conveniently divides to "Miners" & the rest ie the "Whiners"!
And why should he let the struggling businesses in the ever whining retailing, construction, tourism, manufacturing & hospitality industries spoil his 15 minutes in the limelight when all they have to do is to accept & undergo the inevitable structural changes?
Pull the other leg Mr Stevens!
