Political fight over Reserve Bank interest rates and cost of living heats up

A war of words has broken out over the Reserve Bank, with National calling for a pandemic-period monetary policy inquiry and Finance Minister Grant Robertson hitting back by describing Christopher Luxon as “captain hindsight”.

The fight as Parliament resumed came courtesy of an essay written by Reserve Bank governor Adrian Orr’s predecessor Graeme Wheeler and economist at the New Zealand Initiative Bruce Wilkinson.

In the essay – highly unusual for an immediate former central banker in New Zealand – Wheeler lashed his successors for running ultra-loose monetary policy and accused central bankers around the world of being far too confident in their ability to manage inflation.

On the back of the report, the National Party has called for an independent inquiry into the Reserve Bank’s monetary policy response from March 2020 until late 2021 “to better understand the lasting impact of key decisions, the length of stimulus and any lessons that can be learned for the future”.

Oh now Aloha Luxon wants to play Captain Hindsight does he?

Yes the Government printing billions to keep the market from panic inadvertently enriched the wealthiest by a Trillion (although I’m guessing that Trillion has taken. unit of a battering recently), but that was textbook Central Bank response set against a Financial landscape where $25Trillion has been printed and pumped into asset and stock super inflation since 2008 so getting virginal now after the super orgy of capitalism seems a tad twee from National!

They did the exact same thing with Key during the 2008 Great Recession so let’s cut the bullshit.

Late Stage Capitalism is upon us, how will we found a new degrowth model in the face of geopolitical shockwaves severing ‘Just-in-time’ supply chains compounded by war and ever intensifying climate events?

That’s the question we need to be answering, not some navel gazing exercise trying to apportion blame for decisions made blind in the heat of a once in a century pandemic.

The coming economic recession will be incredibly damaging, we urgently need solutions, not more political point scoring blame games.

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