Monday, April 06, 2009

"no reason why we should contemplate a downturn"

Bernie Fraser brought it all flooding back.

I've podcasted his latest speech, (notable also for Steve Keen's very clear explanation of his thinking - worth a listen).

To quote Bernie Fraser, the former Treasury Secretary and Reserve Bank Governor:

"I remember two or three years ago when just about everything was going pretty swimmingly, some commentators were so bold as to declare that the business cycle was dead. Now that was always a pretty wild call, and current events proved that so."

He is right.

Here's what the then Prime Minister said to me in April 2007:

There was “no reason why with careful economic management by experienced people we should contemplate a downturn."

Howard, Australia's second longest serving Prime Minister, was a fool on this question - as were many many others.