What motivates the journalists and commentators in the business press, most especially the Financial Review, to constantly demand interest rate hikes?
Back in 2018, the AFR launched a campaign demanding higher interest rates, led by a coterie of right-wing and neoliberal commentators insisting that the Reserve Bank’s low interest rates were a kind of immoral laxity that needed to be replaced with the rigour of tighter monetary policy. We tracked the campaign at the time, pointing out its persistent fallacies and the obsessions of its advocates.
As we now know, the problem wasn’t that interest rates were too low then, but that they were too high — something the RBA belatedly recognised in 2019 when it cut rates from 1.5% to 1% and then 0.75%, before the pandemic arrived to upset everything.
And for over a year now, the AFR has been on a similar crusade, demanding bigger and faster rate hikes.
As with the 2018 campaign, there’s an element of morality in this mindset: the AFR sees ordinary Australians as needing to be punished, just as it regards ordinary workers as requiring the misery of lower pay packets and more precarious work. It’s the seething contempt for ordinary Australians of comfortable journalists, economists and business figures who know they’ll never have to worry about losing their jobs, or struggling to pay a mortgage or utility bill, or delaying having a kid because they can’t afford it.
But it also seems like the RBA’s failure to increase rates annoys it as much because it gives them nothing to write about, than because the failure means the RBA is mollycoddling Australians. It has to instead insist that even if there were no rate rise now, one would be coming soon enough.
So, according to one AFR journalist yesterday, forget that the RBA held rates steady, governor Michele Bullock “may be forced to deliver a cash rate rise as soon as next month, as several economists warn inflation is running faster than forecast following a spike in oil prices”.
And the AFR‘s senior galah reacted with “the November board meeting will be a crunch time for the new governor”. The reason? Those pesky workers in “labour-intensive services sectors”. Bloody aged care workers pushing up inflation!
Bullock’s post-meeting statement yesterday was carefully parsed to discover that a Melbourne Cup Day rate hike (a favourite obsession this time of year) loomed. Except, the RBA’s commentary about inflation hasn’t changed in months. Here’s what Bullock had to say about inflation yesterday:
Inflation in Australia has passed its peak but is still too high and will remain so for some time yet. Timely indicators on inflation suggest that goods price inflation has eased further, but the prices of many services are continuing to rise briskly and fuel prices have risen noticeably of late. Rent inflation also remains elevated. The central forecast is for CPI inflation to continue to decline and to be back within the 2-3% target range in late 2025.
And here’s Lowe in September:
Inflation in Australia has passed its peak and the monthly CPI indicator for July showed a further decline. But inflation is still too high and will remain so for some time yet. While goods price inflation has eased, the prices of many services are rising briskly. Rent inflation is also elevated. The central forecast is for CPI inflation to continue to decline and to be back within the 2-3% target range in late 2025.
And Lowe in August…
Inflation in Australia is declining but is still too high at 6%. Goods price inflation has eased, but the prices of many services are rising briskly. Rent inflation is also elevated. The central forecast is for CPI inflation to continue to decline, to be around 3.25% by the end of 2024 and to be back within the 2-3% target range in late 2025.
The RBA has been saying the same thing over and over for months, and keeping rates on hold — meaning there’s literally nothing to report. So the business press — which makes its money from convincing investors and businesses that it’s telling them things they need to know — has to invent stories from the most fractional shifts in language in order to maintain a “rate rise looms” narrative.
The rising cost of petrol is a welcome distraction for this crowd, as they think it provides enough reason for another rate hike, as if the Russians and the Saudis will see a 0.25% rate rise in Australia and think “better turn on the spigots”. It’s the same weird logic that drove punitive rate hikes in response to Russia’s invasion of Ukraine or external supply chain problems, both well beyond the capacity of Australian households or even policymakers to influence.
One Nine newspaper commentator pointed out that Bullock’s first statement as governor contained 673 words to say what Lowe said in his final statement in 645 words, and suggested “it is clear word inflation may be a problem”.
That would be better directed at much of the commentary and coverage in the past 24 hours.
None more dismayed at no hike than Newscorpse, who likely has screaming headlines all ready to go. Maximum angst.
Inflation is an incredibly difficult subject to get your head around if you’re a financial journalist. So best not to bother thinking that if petrol and rent go up, they achieve a similar outcome for a similar group (voluntary paupers) as an increase in interest rates.
The truth about unsustainable inflation is too close to home for these people.
An AFR subscription costs $780 a year. A Financial Times premium subscription costs $850, about 9% more. The FT is about 150% as useful as the AFR on Australian issues alone, plus you get the rest of the world thrown in for free.
In other words, they sell $130 worth of annual content for $780. 600% inflation.
I think you are over-rating the value of the AFR.
$13 worth of annual content?
“I speculate – therefore I am.”
How clearer can you be – to a self-obsessed ‘wise monkey’ media that only hear, see and pitch what they want?
Is this sort of elitist(?), numb-nut zombiefied colour-by-numbers verbiage covered by ‘productivity’, by which they’re paid, and by which they ‘qualify’ for pay increases : while their contemptible ‘little/common people’ have to increase their quantity/quality output to qualify for theirs?
“…there’s an element of morality in this mindset: the AFR sees ordinary Australians as needing to be punished, just as it regards ordinary workers as requiring the misery of lower pay packets and more precarious work. It’s the seething contempt for ordinary Australians of comfortable journalists, economists and business figures who know they’ll never have to worry about losing their jobs, or struggling to pay a mortgage or utility bill, or delaying having a kid because they can’t afford it.”
Ain’t that the truth? I can remember that other tiresome neo-liberal pro free market (since when have markets been free) hack Maximillian Walsh from the SMH in 1989 whingeing in one of his diatribes masquerading as critical analysis that Australian workers don’t save and are therefore worthless economically because that was what we needed then. More savings. Then when workers do manage to save by good fortune or through hard work, perseverance, up-skilling, promotion or intelligence, they are told during the pandemic to spend like drunken sailors.
Check it out. Monday 1 May 1989. Dripping with hatred for working people he was yet he never told the readers what harm the likes of our captains of industry and our buccaneers were doing to financial markets, getting the country into debt with bank borrowing to finance their leveraged buy-outs of other companies, putting pressure on our dollar and our national debt. I never heard Max cry and complain about the rising levels of unemployment from 1990 onwards. The AFR is continuing Max Walsh’s long dirty work of demonising Australian workers to such an extent that I think both sets of anti-worker advocates, Max and the current crop of AFR journos, would prefer to live in an experimental free market fascist dictatorship like Pinochet’s Chile whose wealth is overwhelmingly derived from mineral resources.
Our medium, or RW MSM, follow each other in promoting ‘wedges’ on behalf of the LNP whereby permanent fixture and obsessions about inflation, cost of living, interest rates etc.; has people venting and stressing yet it’s not about them, but on behalf corporate and ideological think tanks supporters vs. centre, interest rate increases, taxes, budget expenditure, government etc.