It was foresight, not hindsight, Grant
In response to growing criticism of the Reserve Bank allowing inflation to hit 7.3%, Grant Robertson labelled critics as having hindsight. Well that was a mistake, as it allowed the NZ Initiative to respond showing their many many criticisms over the last four years. They include:
- Mar 2018: Warned about price stability
- Aug 2019: Published a research note about the loss of Reserve Bank focus
- Oct 2019: Highlighted loss of economists at Reserve Bank
- Oct 2019: Criticized the decision to cut OCR 50 points instead of 25
- Apr 2020: Warned about funding deficit spending through the central bank
- May 2020: Warned against RBNZ monetarising govt debt
- Jun 2020: Warned against money printing
- May 2021: Warned the current path would end in inflation
- June 2021: Warned against using balance sheet to but climate bonds instead of reducing debt
Think how much better we would be off if the Government or the Reserve Bank had listened!
Professor Robert MacCulloch also notes:
Yes, the RBNZ was flagging future negative interest rates and Quantitative Easing even before the Coronavirus Pandemic. The NZ Initiative fully warned the Finance Minister of the implications. We had perfect foresight. There is not one grain of hindsight in the Wheeler-Wilkinson Report, contrary to the Minister’s assertion.
Basically it was smearing the critics for being right!
As for forecasting the rise in inflation, this blog commented in April 2021, “Our prediction is that the cost of living is on the way up in NZ and interest rates will be going up sooner rather than later”. In May 2021 we wrote, “Amusingly (if that’s the right word?) the RBNZ’s Monetary Policy Committee seems to be the only group in the country which doesn’t think prices are on the rise”. Why? Since in May 2021 the ANZ’s Business Outlook survey showed inflationary pressures were soaring. “Reported costs are through the roof”, said ANZ chief economist Sharon Zollner”.
And these statements were made whilst the RBNZ was still printing money!
So Hindsight Economics, is it, eh Grant? No, that’s your style of economics. Folks like Wilkinson, Hartwich & Crampton at the NZ Initiative, former Governor Wheeler & me, we do Foresight Economics. We do so to try to prevent inflation & cost-of-living crises like the one you threw us into. We put in effort to help serve the public interest – my work for doing so is unpaid – and all you can do, Grant, is put us down for political purposes.
Again, think if they had listened!