Don’t Throw Your Hats In The Air Just Yet.

A hike in interest rates next month is a done deal – and it will be the first of many. The virtual certainty of higher rates – presaged by Graeme Wheeler’s speech last week – is presented in the media as bad news for home buyers, and that it certainly is; but its real significance […]

The Same Tired Old Excuses

As job losses reach crisis proportions, and many point the finger at an overvalued exchange rate, we have to put up with the same old tired and ill-informed assertions to the effect that overvaluation is not the culprit. Those who say this usually make two assertions; first, the exchange rate is irrelevant and secondly, there’s […]

Is The Mad Butcher Mad?

The love-in between the Mad Butcher and the Prime Minister, dutifully reported in every detail by complaisant media, is perhaps best described as reciprocal back-scratching – a term that is at least more polite than alternative anatomical allusions that might come to mind. But while Sir Peter Leitch might have every reason, in view of […]

Re-opening the Debate

Something important has happened in New Zealand politics. After two and a half decades in which economic policy has been a no-go area for political discussion, we have at last seen the beginnings of a debate about what is potentially the central issue of our politics. “There is no alternative” was very much Mrs Thatcher’s […]

An Ideological Straitjacket

With inflation falling, a full percentage point cut in interest rates at the end of the month now looks like a done deal. But while a relaxation of monetary policy is both welcome and overdue, it does not remotely measure up to what is now required if we are to ward off what could be […]

Fiscal Stimulus? Not Quite

The decision by the US Federal Reserve to cut interest rates to virtually zero, and the similar steps taken by other central banks, show how desperate are the world’s monetary authorities to avert a deep and entrenched global recession. This is, in effect, their last throw. There is nowhere else to go. If anything were […]

Why Are Interest Rates Not Working?

In theory, it was all so simple. Since inflation could not happen if the money supply was held stable, all you had to do was control the money supply and – no more inflation! The productive economy would rapidly adjust to the new monetarist discipline and would benefit – along with everyone else – from […]