Some examples: we would hope that the electricity industry does not take
advantage of its market position and keep increasing rates, that local
authorities realise they need to set rates increases below inflation for a
change, that the construction materials industry respond to much weaker demand,
that the food industry react to lower international commodity prices with price
cuts, that petrol companies keep cutting forecourt prices, that the transport
industry pass on fuel price cuts, and that the banks pass on interest rate cuts.
Only then will all these firms be playing their proper role in New
On that logic, all we need to do is give everything away free and we will all be rich! Does Mr Bollard understand, for example, what sets petrol prices? Does he really think that oil companies will start selling at a loss just because the governor of the reserve banks wants lower prices?
Well he is right about rates, but who expects the councils to listen?
This is a remarkable speech from a central banker. It goes almost as far as blaming inflation on a rapacious and greedy private sector. Mr Bollard should look a little closer to home: his employer. and himself.
I am reminded of the Blackadder quote:
I care not a jot that you are the son of a certified sauerkraut-snacking loon. It minds not me that you dress like a mad parrot and talk like a plate of beans negotiating its way out of a cow's digestive system. It is no skin off my rosy nose that there are bits of lemon peel floating down the Thames that would make a better Regent than you.
So take a careful look at the picture above, and the one below, and let me know who you think would make a better central banker?