Terry McCrann brilliant on the pending Albanese disaster
Wednesday, 11 May 2022
Labor leader Anthony Albanese is threatening – is promising – to unleash exactly the wages-prices spiral that would send interest rates really rocketing higher and devastate the finances of millions of Australians.
The disturbing indication from Albanese on day one of the election campaign that he hadn’t a clue what had been happening in the economy and indeed how the economy actually worked, turned seriously dangerous on Tuesday.
After loosely talking about wanting “real wage rises”, he went on to make the “obvious” promise – with inflation at 5.1 per cent, as prime minister he would push for wage rises of 5.1 per cent plus.
So, if inflation kicked up to 7 per cent, Mr-Desperately–Wannabe-PM Albanese would have to push for 7 per cent-plus wage rises across the entire economy.
And if inflation then kicked up to 10 per cent, he’d be demanding across-the-board 10 per cent-plus wage rises.
That’s the “easy” disastrous bit: Economic Ineptitude 101.
It’s what, clearly, Albanese and – from their also “I’m utterly clueless about the economy” comments – both wannabe-deputy PM Richard Marles and wannabe-treasurer Jim Chalmers, also don’t understand.
The really disturbing, utterly disastrous course, that a comprehensively clueless Albanese-led government would blunder down, is the way that promoting 5 per cent-plus wage increases when inflation is 5 per cent, is exactly what leads on to 7 per cent inflation.
Then, rinse and mindlessly repeat at 7 per cent, and you are headed for 10 per cent inflation.
That’s exactly the future that would force the Reserve Bank to raise its official cash rate not to the 2-3 per cent it currently intends, but to 5 per cent; and then 7 per cent; and indeed even to 10 per cent and potentially higher.
That’s exactly the future that would see home loan rates go, not to 4 per cent, but to 8 per cent; to 10 per cent and indeed higher.