Michael Pascoe writes:

Now that it’s too late to matter,
Reserve Bank Governor Ian Macfarlane has broken his mandarin’s silence
to say the main plank in the Coalition’s last election campaign was
totally wrong.

The Governor didn’t quite word it like that, but that’s pretty much what he told the Australian Business Economists dinner.

you can remember that last election, the main issue was the allegation
of higher interest rates under Labor, the sort of interest rates that
caused the last recession. (No, it wasn’t about Mark Latham being a
loose cannon – the extent of his rat baggery wasn’t self-publicised at
that stage.)

The RBA remained imperiously silent during the
campaign, but last night the Governor suggested the recession we had to
have was in fact a triumph, not a failure. As the Smagequotes him:

The episode in Australia that returned us to a
low-inflation and stable-growth economy is regarded as a policy error,
whereas in America it is regarded as a policy triumph.

I think
some of the economic interpretations are completely wrong. And even
more than that, the political interpretations are completely wrong.

Gee, nice timing, Guv.

Sweetie and John Howard might laugh about getting away with it now, but
they also might feel a certain level of discomfit about having an RBA
Governor who is suddenly prepared to publicly tell them they’re
“completely wrong.”

Macfarlane finishes up in September – he
has nothing much to lose now by speaking his mind. That could make him
an embarrassment.

The only hold over him at this stage is the
little matter of succession. The RBA would like one of its own to take
up the top job – but too much independence might see an outsider more
closely aligned to Coalition thinking get the nod.

Let’s see…any bankers been conspicuous Liberal Party benefactors lately?